March 12 Review Notes

Today, the index experienced normal volume contraction and fluctuation, with trading volume still around 2.4 trillion yuan. There are still about 4,000 stocks declining, more falling than rising. Everyone can clearly see that the index has been maintaining a sideways trend recently, mostly small gains when it rises, and most declines are above 3,500. This reflects an interesting social phenomenon: prices are soaring rapidly, but wages are not increasing. The index remains volatile, with daily declines of around 3,500 stocks and small gains when it rises. When it falls, you lose more; when it rises, your gains are limited. This is the current situation of the big A-shares market, with poor profit effects. Because there is no main theme in the market now, sector rotations are rapid, making it hard to predict the rhythm. For example, the previously strong power grid equipment sector has also fallen significantly today. [Taogu Ba]

Oil prices surged quite a bit today, maintaining above 95 during the session. The Middle East situation has not eased, so the third and fourth order of commodity price increases still performed well today. Whether it’s crude oil, coal, chemicals, or agricultural products, they all rose nicely. The chemical sector is very large and has started rotating, with different chemical products taking turns to perform. So, remember one thing now: don’t chase highs. If you want to buy, only buy on dips. If there’s no chance to buy on dips, just let it go. The market never lacks opportunities to make money, but chasing highs might get you hung on the tree the next day because sector rotations are too fast.

After 1 p.m. today, the wind power sector showed obvious movement. This was because the UK announced that starting April 1, it will cancel import tariffs on wind turbine components. This news stimulated the entire wind power sector, which surged sharply. The sector jumped from a 1-point loss to over 4 points in the green. This is definitely a positive signal for wind power. It’s actually a positive sign for the entire new energy sector because, given the current global instability, energy security and importance are being re-emphasized by countries. When the Middle East is at war, oil prices soar, causing huge volatility. If regional conflicts continue, how will non-oil-producing countries ensure their energy supply? With AI development, will their own countries have enough electricity to support future AI globalization? These are critical questions that have been brought to the forefront by the Middle East conflict, affecting national economy and development.

Therefore, I believe the UK’s move to cancel wind turbine component tariffs is expanding the country’s energy sources. Wind and solar are different from traditional oil and natural gas—they don’t require pipelines or sea transport, just local installation. They are convenient and quick energy sources. Nuclear energy is also an option, but its technical requirements and maintenance are much higher than wind and solar. This UK action signals Europe’s renewed embrace of Chinese new energy. Today’s positive news for wind power suggests that solar is not far behind. Many countries abroad are vast and sparsely populated, with good conditions for developing new energy. Coupled with the recent Middle East war, European countries are likely to accelerate their renewable energy development to diversify away from traditional energy sources. Walking on two legs is always more stable than on one.

The development of wind and solar energy depends on supporting infrastructure—energy storage. Storage is an essential link in the new energy sector. It’s like “new oil,” with energy storage being the tank and pipeline for “new oil.” Recently, CATL’s financial report was very impressive, with net profit growth making upstream and downstream industries proud. Whether at industry peak or trough, CATL’s energy storage segment has always been highly profitable, with a very strong profit growth rate. It’s like photovoltaic equipment manufacturers such as Jiejia Weichuang, which still make huge profits despite the industry’s ups and downs. Therefore, the entire midstream of new energy, led by CATL, is a highly valuable investment target. That’s why I’ve always said that Yiwei Lithium’s stock below 60 yuan is very cost-effective. As the development of new energy progresses, energy storage will continue to sell well. This year, the demand for energy storage is expected to grow over 50%, and raw materials like lithium carbonate are likely to break through 200,000 yuan. These are all parts of the industry chain, so choose the segment and good companies you prefer.

Regarding individual stocks, let’s start with Sany Heavy Industry. Buying on dips today was fine, and it even saw increased volume. Its decline was mainly due to sector influence, and its trend closely follows the engineering machinery sector. After falling below 5%, it recovered to close with a 3% gain, indicating support. So, there’s no need to worry; just buy on dips. How low you buy depends on your skill and luck—no one can predict intraday movements. When you feel a certain level offers good value, you can buy. If it drops further, don’t worry—let others buy lower. You don’t need to spend all your luck on timing the buy; leave some for selling and other opportunities.

HuaMing Equipment was bought at around 8 yuan below the current price. I think that level was oversold and at a good valuation point for me. I don’t mind closing at a 9% gain, leaving room for others. The electric grid equipment sector fell 1.5%, but that wasn’t much—mainly because it had risen a lot before. The reason for the previous rise was market confidence. The entire sector is currently at a high, with HuaMing reaching a new high. It’s normal for stocks at new highs to experience significant intraday declines as profit-taking occurs. If you’re worried about high prices, avoid high-flying stocks.

As for the sector, the midstream of new energy development includes energy storage, followed by grid equipment. Since renewable power generation needs to be consumed, grid equipment—like transformers—is crucial. Whether it’s the US’s AI development or Europe’s renewable energy and AI growth, they all depend on grid infrastructure. AI’s ultimate goal is electricity, not computing power. While computing power is currently scarce, electricity demand will grow with AI development. I believe long-term, grid equipment is a promising sector. The key device is the transformer, and HuaMing’s load switches are comparable to “optical modules” in the semiconductor industry. HuaMing’s industry position is similar to CATL’s monopoly in lithium batteries—perhaps even more significant. From July 2025, its stock rose from 15 yuan to over 38 yuan, doubling. I still believe that, given the importance of electricity now and in the future, HuaMing’s current valuation is not the end. The company is seeking a Hong Kong listing, which will boost its future development. I remain optimistic about HuaMing Equipment. Among the “Hua” companies, HuaMing, HuaYou, and HuaXi, one has already gained 400%, and the other two have increased about 100% in the past year. I see room for further growth, so I favor electricity and HuaMing. The support level is around 31.5 yuan; strong support is at 29.5 yuan. These are key levels to watch.

Yiwei Lithium remains my strategy: buy on dips. How low you buy depends on your skill—personally, I’m optimistic about Yiwei’s reversal this time. The stock is trending upward, with a target of 100 yuan, as I mentioned earlier in my 40,000-word stock trading notes, where I included Yunnan Copper and Yiwei Lithium because I’m long-term bullish. After the recent shakeout, I expect Yiwei to reach 100 yuan this year, possibly hitting 90 yuan before Huayou Cobalt. Let’s see how it plays out.

HuaYou and Greenmei—let me reiterate my view. I’ve already sold them and won’t re-enter until the Middle East conflict ends or the non-ferrous metals sector stabilizes above 13,000 points. In the short term, I believe the entire non-ferrous sector will continue to pull back, so I won’t re-establish positions in these two stocks for now.

Hengrui and Huadong Medicine are good for low buying near support levels. The Hong Kong biotech sector can also be bought at around 1,000 points.

Zhongchong Shares I added a small position at the end of today’s session because I have a feeling it’s near the bottom. Although support isn’t close, I don’t mind since I bought little—if it falls further, it’s no big deal.

Let’s go, everyone. I feel that the big A-shares market is abnormal, like a calm before a storm. Currently, the Middle East conflict is causing big volatility in Hong Kong, South Korea, Japan, and the entire Asian market, but the big A-shares index remains stable, with small fluctuations. This is partly because foreign capital isn’t much, haha. But now, with external markets unsettled, the big A-shares are surprisingly calm, which can attract foreign investment. I have a feeling a big wave is coming—either a rapid rally or a sharp correction. I plan to base my decisions on this. The index has rarely moved more than 1% up or down in the past two months, so I’ll use 1% as a key indicator. If one day the index suddenly surges more than 1% intraday, I’ll consider a new rally starting and will increase positions at the close. Conversely, if the index drops more than 1% suddenly, I’ll start reducing positions, expecting a major correction. Since current fluctuations are small, a sudden large move signals abnormality. I’ll follow the trend accordingly. This is just my personal trading approach for reference.