Weekend three major events, three directions for next week

Friday’s correction was characterized by reduced volume but widespread gains. Lithium batteries, pharmaceuticals, and chemicals rotated, with divergences in the power sector. Over the weekend, there was a flurry of news, and upon review, three directions are most worthy of attention. [Taogu Ba]

1. Lithium Batteries: Supply Shock + Demand Surge, Trend Established
   Zimbabwe has banned the export of lithium concentrates, and Australian mines have halted production due to a shortage of diesel, leading to a contraction in global lithium resource supply. At the same time, high oil prices are driving energy transition, resulting in strong demand for lithium batteries. March production increased by 22% month-on-month, and expectations for April continue to rise. Rongjie Co. hit the fourth board, and Ganfeng Lithium reached its daily limit, with the sector’s structure complete.
   Institutions believe that lithium batteries are a direct beneficiary of the “high oil prices forcing the replacement of new energy,” and the certainty of first-quarter performance is high. Next week, watch: whether Rongjie Co. can continue to reach new heights, and the follow-up strength of Shida Shenghua, Haike Xinyuan, and others.

2. Nuclear Medicine: From 0 to 1, a New Face in the Theme
   China’s Spallation Neutron Source has achieved medical α isotope production at the curie level, breaking the dependence on imports, and nuclear medicine prices are expected to drop by 60%. This is the most “technologically advanced” news of the weekend. Related stocks: Dongcheng Pharmaceutical, China General Nuclear Technology, China National Nuclear Corporation, etc. However, the nuclear medicine sector is small and prone to emotional fluctuations; either it is hard to buy, or if purchased, it could turn out to be a pitfall. It is suitable for short-term quick in-and-out trading.

3. Aircraft Engines: Extended Range Hybrid, New Power for Drones
   CCTV disclosed that the 60kW extended range hybrid system test was successful, allowing airplanes to “fly on electricity and generate power with fuel.” This is a breakthrough in power solutions for small drones and eVTOLs. Sichuan Tianfu Lightweight Power (not listed) and Beijing Electric Qingshi (not listed), with related A-share stocks including Aero Engine Corporation of China and AVIC Xi’an Aircraft Industry Group. The theme is relatively new, but the maturity of the industry chain is low, so it should be viewed as a concept for now.

Other Directions
Power: The synergy in computing power is still present, but high-level groupings are loosening. Huadian Liaoning Energy surged and then retreated, while low-level Xineng Taishan and Guangxi Energy made up for losses. If the index stabilizes next week, the power sector may recover, but it is more suitable for low buys.
Chemicals: BASF has raised prices, and the Strait of Hormuz is impacting the transportation of chemical products. Jinko Technology hit the second board, while Sulihua Co. and Jinzhe Da made their first boards. The logic of chemical price increases remains intact, but there is differentiation within the sector; select strong stocks.
Computing Power: The Guizhou computing power voucher will be implemented on April 1, and Huawei’s chip testing is going smoothly. Aorui De rebounded, and Farsens and Hangdian Co. reached their daily limits. Computing power has been adjusting for a long time and has demand for a rebound.

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