【Focus Recap】After the continuous correction in the market, there was a widespread decline in local volume. Disagreements within the green energy industry chain intensified, and the commercial aerospace concept surged against the trend.

Why Did the Green Energy Industry Chain Experience a Split Today?

Financial Associated Press, March 26 - Today, 39 stocks hit the daily limit, and 18 stocks were suspended, with a limit rate of 68%. Xineng Taishan, Hunan Development, and Rongjie Co., Ltd. achieved three consecutive limits, while Meinuohua had four limits in five days. Huadian Energy had eight limits in thirteen days, and Dashengda had five limits in seven days. The market experienced fluctuations and adjustments, with the three major indices retreating over 1%. The Sci-Tech Innovation 50 Index fell over 2%. The total trading volume in the Shanghai and Shenzhen markets fell below 2 trillion yuan, a decrease of 236.2 billion compared to the previous trading day. On the market, the hot spots were weakly rotating, with over 4,400 stocks declining. In terms of sectors, oil and gas, lithium batteries, coal, and banking sectors led the gains; while sports, military industry, insurance, and cloud computing sectors led the declines. By the close, the Shanghai Composite Index fell by 1.09%, the Shenzhen Component Index fell by 1.41%, and the ChiNext Index fell by 1.34%.

Analysis of Popular and Consecutive Limit Stocks

The advancement rate of consecutive limit stocks dropped to 17.39%. Previously, the highest consecutive limit stock, Huadian Liaoneng, fell back at the end of the session, stopping at 8 consecutive limits, which brought the number of stocks with three consecutive limits down to four. As the power sector experienced significant internal divergence, the related sectors of the new energy industry chain, such as power grid, energy storage, and wind and solar equipment, faced widespread declines, with previously popular stocks like Guosheng Technology and ShunNa Co., Ltd. both hitting the daily limit. The traditional defensive direction of the large financial sector also continued to diverge, with the banking sector performing strongly against the trend, while diversified finance, insurance, and brokerage sectors all fell to varying degrees. Ruida Futures hit the daily limit down, and leading insurance stocks such as China Life and Ping An of China also reached new lows for the year. As international oil prices rose by over 2% in the afternoon, oil and gas and chemical sectors showed partial recovery. The current negative correlation between energy lines and indices continues. With the situation in the Middle East remaining deadlocked, the market lacks further fundamental guidance in the short term, and the disorderly rotation between hot spots may become the norm again.

Mainline Hot Spots

Recent data shows that domestic supply and demand for power and energy storage batteries are both strong. In the first two months of this year, the cumulative sales of power and energy storage batteries in China increased by 53.8% year-on-year, with energy storage battery sales growing by 67.3% year-on-year, and new installed capacity for new energy storage increasing by 472% year-on-year. The lithium battery industry chain has gained popularity against the trend, with lithium ore stock Rongjie Co., Ltd. achieving three consecutive limits, and electrolyte stocks like Haike Xinyuan, Shida Shenghua, Tianji Co., Ltd., and Huasheng Lithium Electric all rising significantly. Similar to the main rising trend in the fourth quarter of last year, the overall capacity-limited electrolyte and diaphragm materials are still likely to become highly elastic segments that benefit significantly from the surge in domestic and foreign energy storage installation demand. However, the continued uncertainty regarding Zimbabwe’s export policies may pose challenges; if lithium salt prices rise too quickly in the short term, it will hinder price transmission to the downstream demand side, thereby restricting the upward space of the entire lithium battery industry chain. Coupled with today’s high-level correction in the wind and solar industry chain, the lithium battery sector is still unlikely to stand out in the current weak market sentiment.

Data from the National Energy Administration shows that by the end of February, the cumulative installed power generation capacity nationwide was 3.95 billion kilowatts, a year-on-year increase of 15.9%. The National Bureau of Statistics is promoting collaborative electricity computing, and the proportion of green electricity in new computing power facilities will exceed 80%, driving an explosion of local green electricity direct connection projects to data centers. The green energy industry chain continues to show internal polarization, with Hunan Development, Mid-Fujian Energy, and Huadian Energy achieving consecutive limit upgrades, while low-priced stocks like Guangxi Energy and Shenzhen Nande A are experiencing catch-up gains. However, with the high-profile stock Huadian Liaoneng repeatedly hitting the limit down during the day, it triggered significant fluctuations and divergences in mid-tier stocks like Shaoneng Co., Ltd. and Zhejiang Xineng. Stocks that were previously popular due to collaborative electricity computing, such as Yunnan Energy Holdings and Jinkai New Energy, showed signs of breaking down in the afternoon. Therefore, the green energy sector still faces significant short-term pressures, particularly for some mid-tier stocks within the sector that are unlikely to escape the adjustment cycle. However, it is still worthwhile to pay attention to low-priced high-performing varieties with clean chip structures from before.

Space Exploration Technologies Corp. (SpaceX) announced plans to complete its IPO in June this year, with a fundraising scale potentially exceeding $75 billion and a target valuation of $1.75 trillion. This IPO is expected to become the largest initial public offering in history. The commercial space concept saw a counter-trend surge in the market, with Zaisai Technology achieving two consecutive limits, while Zhongchao Holdings, Shenjian Co., Ltd., and Western Materials all hit the daily limit. Xice Testing briefly reached a 20% limit up in the afternoon. With SpaceX’s fundraising scale and target index exceeding previous expectations, U.S. commercial space concept stocks rose to varying degrees last night, and the clear progress of SpaceX’s future IPO positively boosted sentiment within the sector. However, in the recent sector, the leading stocks are mainly rebounds from last year’s popular stocks that had fallen sharply, and the lack of new popular varieties within the sector does not favor the continuation of the sector’s rebound.

With the situation between the U.S. and Iran in a stalemate, Goldman Sachs raised its oil price forecast for the second time in less than two weeks. In the afternoon, both WTI and Brent crude oil futures prices rose by about 3%, driving the energy chemical industry chain to be active against the trend. Coal chemical concept stocks like Jinmei Technology and Xinghua Co., Ltd. and gas stocks like Lanyan Holdings hit the daily limit, while Shouhua Gas, Kaitian Gas, and Qianeng Hexin all surged significantly. Based on international oil prices and fluctuations in domestic energy, chemical, and black series futures prices, the uncertainty of the Middle East situation has been relatively fully digested. Furthermore, the unexpected speed and total amount of G7 oil reserve releases effectively hedged short-term oil price fluctuations. Thus, even if the Middle East situation fluctuates again, the impact on the market is likely to gradually diminish. Therefore, for the oil and gas and chemical sectors’ pulse-style market, short-term chasing highs may still encounter volatility risks.

Market Outlook

After two consecutive days of broad rally, the index briefly surged this morning before again entering a weak bottom-seeking trend. The number of individual stocks that had previously seen over 4,800 stocks in the green fell to nearly 4,500 today, with the number of non-ST limit-up stocks also dropping below 40. In terms of the Shanghai Composite Index, the current 60-minute Bollinger middle track continues to effectively suppress the index, causing it to fall below the 5-day moving average and fill the gap left by the previous day’s jump. In terms of volume, the total trading volume in the two markets fell below 2 trillion yuan. Although the bullish counterattack momentum is relatively limited, the previous short-selling momentum has been released to a considerable extent. Therefore, the chances of a short-term deep decline in the index are also not high. Thus, after a temporary balance is reached between the bulls and bears, whether the bulls can quickly recover the 60-minute Bollinger middle track and the 5-day moving average remains the primary goal for the index to break free from the phase adjustment. Otherwise, there is still the possibility of retesting the 3,800-point integer level to form a double bottom.

Today’s Limit-Up Analysis Chart

(Financial Associated Press, Jin Haoming)