Afternoon report: Shanghai Composite Index dips then rebounds, up nearly 1%, green energy and military industry sectors both strengthen.

From: Financial Link

1. 【Morning Market Review】

Financial Link, March 24 - The market rebounded after hitting a low in the morning session, with the Shanghai Composite Index rising over 1% during the day. The ChiNext Index narrowed its losses, and there was a clear divergence between the yellow and white lines. Small and medium-cap stocks showed strong performance, with the micro-cap index rising over 2%. The total trading volume in the Shanghai and Shenzhen markets reached 1.32 trillion yuan, a decrease of 143.2 billion from the previous trading day. More than 4,500 stocks rose across the market. In terms of sectors, the green electricity concept continued to strengthen, with Huadian Liaoning Energy achieving seven consecutive limits, Shaoneng Co. recording four limits in five days, Liaoning Energy with two consecutive limits, and Disen Co. hitting a 20% limit up. The military industry sector strengthened, with Changcheng Military Industry, Hunan Tianyan, and Construction Industry reaching limit up. The shipping sector experienced a volatile rise, with China Merchants Industry hitting limit up. The computing power chip concept rebounded, with Muxi Co. rising over 15% and Moore Threads rising over 9%. On the downside, the storage chip concept experienced a volatile decline, with Purun Co. dropping over 9%. By the market close, the Shanghai Composite Index rose by 0.95%, the Shenzhen Component Index rose by 0.26%, and the ChiNext Index fell by 0.79%.

In terms of individual stocks, there were 47 stocks hitting limit up in the morning session (excluding ST and newly listed stocks that haven’t opened), with a limit up rate of 70%. There were five stocks with consecutive limits: Huadian Liaoning Energy with seven consecutive limits, Zhongli Group with three consecutive limits, and Tuori New Energy, Xuelang Environment, and Liaoning Energy with two consecutive limits.

The military industry sector led the gains, with Construction Industry, Changcheng Military Industry, and others hitting limit up, while stocks like Fujirui, Northern Long Dragon, Inner Mongolia First Machinery, and Jieqiang Equipment also saw significant gains.

The 14th Five-Year Plan has made overall plans for the high-quality advancement of national defense and military modernization, accelerating the update and replacement of advanced weaponry in the construction of new domain and new quality combat forces, ushering in a new development period for military equipment.

The green electricity concept continued to strengthen, with Huadian Liaoning Energy achieving seven consecutive limits, Shaoneng Co. recording four limits in five days, Liaoning Energy with two consecutive limits, and stocks like Disen Co., Huayin Power, Huaguang Huaneng, and Zhongli Group hitting limit up.

In terms of news, on March 23, the National Bureau of Statistics announced that it will work with relevant departments to vigorously promote the collaborative project of computing power and electricity, ensuring that the application of green electricity in newly built computing power facilities at hub nodes reaches over 80%, maximizing the supporting role of green electricity.

Huatai Securities pointed out that the blockade of the Strait of Hormuz has gradually established market confidence in the volatility of fossil energy prices, which is an important positive signal for China’s non-fossil energy, which has been dragged down by a decline in primary energy prices over the past three years. They reiterate a bullish outlook on the power sector, including green electricity such as water, nuclear, wind, solar, and biomass.

Port shipping has shown a volatile strengthening trend, with China Merchants Industry and COSCO Shipping Energy hitting limit up, while stocks like Air China Ocean Shipping, China Merchants Shipping, Ningbo Ocean Shipping, and HNA Technology saw significant gains.

CITIC Securities believes that there are structural opportunities in the valuation and asset sides of oil transportation that are expected to continue. The supply chain reorganization brought about by geopolitical conflicts has become the core driving factor of this round of oil transportation cycle. Geopolitical events such as those in Iran have reinforced the cyclical momentum of the oil transportation industry, making it likely for leading oil transport companies’ profits to reach new highs by 2026.

The computing power chip concept rebounded, with Muxi Co. rising over 15%, Moore Threads rising over 9%, and stocks like Chiporiginal, Cambricon, Jinhaitong, and Canxin Co. also following suit.

Guojin Securities believes that under the dual-sided pressure of strong supply and demand logic, it is predicted that the computing power industry chain will enter a “full-chain inflation” cycle in 2026, with the industry’s prosperity spilling over from core chips to AIDC, cloud and computing services, supporting power equipment, and servers.

Overall, the morning session saw a rebound after hitting a low, with the three major indices showing mixed results, the Shanghai Composite Index rising nearly 1%, and the ChiNext Index narrowing its losses. The green electricity concept maintained its strength, with Huadian Liaoning Energy achieving seven consecutive limits. Additionally, the military, shipping, and computing power chip sectors also showed volatility in strength during the session. However, on the other hand, previously popular sectors like oil and gas, and lithium battery have entered a period of adjustment. Generally speaking, after a series of adjustments in the indices, the market has welcomed a recovery, but it should be noted that the trading volume has significantly decreased compared to yesterday, reflecting a strong wait-and-see sentiment. It is expected that after an initial broad rise, the market may again fall into differentiation, making it crucial to grasp the rhythm of rotation between hotspots.

Morning Limit-Up Analysis Chart

2. 【Market News Focus】

3. Six Departments: Steadily Promote Rural Water Supply Price Reform

The Ministry of Water Resources, National Development and Reform Commission, Ministry of Finance, Ministry of Ecology and Environment, Ministry of Agriculture and Rural Affairs, and National Bureau of Disease Control recently jointly issued a notice on “Further Strengthening the Operation and Maintenance of Rural Water Supply Projects.” The notice proposes to steadily promote rural water supply price reform. It specifies that when formulating and adjusting prices, cost monitoring or surveys should be conducted strictly according to regulations, and in addition to maintaining public welfare and safeguarding people’s livelihoods, factors such as water supply costs, production capacity utilization, farmers’ affordability, and financial subsidies should be comprehensively considered; non-residential and residential water prices in rural areas are priced according to different principles; integrated urban-rural projects will implement the same price for rural areas and the respective towns; exploring the implementation of a two-part water price system of “basic water price + metered water price”; and improving the water fee collection mechanism.

2. National Bureau of Statistics: Will Deepen the Implementation of a New Round of High-Quality Data Set Construction Action Plan

The State Council Information Office held a press conference on the Ninth Digital China Construction Summit. Liu Liehong, a member of the party leadership group and director of the National Bureau of Statistics, stated at the meeting that in the next steps, they will continue to promote data empowerment for innovative development of artificial intelligence, and collaborate with various parties to deeply implement a new round of high-quality data set construction action plan. This includes six special actions: strengthening foundation expansion, tackling annotation challenges, improving quality and efficiency, empowering applications, managing services, and releasing value, with the demand of scenarios as the guiding principle, accelerating the promotion of pilot works, and creating a technically feasible, practical, convenient, and quality-assured AI-Ready high-quality data set, achieving an increase in both the quantity and quality of high-quality data set supply.

(Financial Link)