Pre-market plan for April 7

1. Emotional Layer
   The broader market has been declining for two consecutive days. The market’s profit-making effect has remained sluggish, with the number of red-board stocks staying below 900 for two straight days. The number of stocks hitting the daily limit (downward) increased from 5 on Thursday to 24 on Friday. The breakdown is as follows: 6 in electric power, 4 in pharmaceuticals, 1 in commercial space, 3 in coal-to-chemicals, 3 in cross-border e-commerce, 2 in rail transit, 1 in batteries, 1 in breeding, and 2 in other categories. The current multi-day limit-up lineup and overall market sentiment are showing a divergence. Considering the level of weakness in sentiment today, we expect there to be an outlook for a sentiment rebound tomorrow.

2. Theme Breakdown

1. Pharmaceuticals Sector
   On Friday, the sector showed an “ice and fire in parallel” pattern: within the sector, 4 stocks closed at the daily limit up, while 4 stocks hit the daily limit down (Runud Pharmaceuticals, Two-sided Needle, Lianhuan Pharmaceutical, and Zhongyuan Concord). Before the close, the earlier sector standout stock MinoVya (美诺华) saw a plunge, but the high-leverage leader Tianjin Pharmaceutical (津药药业) with a solid order queue remained largely unaffected.

(1) Tianjin Pharmaceutical (6-to-7): Reviewing the sector’s context, after Huadian Liaoneng’s limit-down board break on March 26, lithium batteries and pharmaceuticals became the two most sustainable themes at that time. Lithium batteries started on March 20 and strengthened for three consecutive days from March 24 onward. Pharmaceuticals started on March 26 as well, also strengthening for three consecutive days, and ultimately won in the PK between the two major themes (on March 30, when lithium batteries had a big divergence, there were no limit-up boards that day, and the theme fully weakened). After the pharmaceuticals sector experienced a major divergence on March 31, it still retained a lifeline (3-limit board Tianjin Pharmaceutical + 4 first-time limit-ups). Compared with commercial space, which surged after divergence in lithium batteries, the pharmaceuticals sector has stronger resilience.

From a trading-timing perspective, Tianjin Pharmaceutical’s move from 3 to 4 is the best entry point. The move from 4 to 5 depends on a large-volume divergence turning into consensus to break through, but in reality it still topped with a one-word board. The move from 5 to 6 instead showed a healthy pattern with a large-volume opening auction and turnover on the board. In addition, the 龙虎榜 (top buy/sell leaderboard) shows that East Asia Qianhai Securities’ Zhejiang branch (the “three-board group” and the Todeng lineup) bought 30 million in succession. At present, this stock no longer has the advantage of initial positioning, and the expected value for subsequent games has dropped significantly.

(2) Next to watch: If Tianjin Pharmaceutical continues to advance, you may mainly focus on recognizable targets within the sector—trend-based low-entry opportunities in MinoVya, Shuanglu Pharmaceutical, and Wanbangde, as well as China Pharmaceutical (中国医药) for the move from 1 to 2.

2. Electric Power Sector
   Although the sector’s old leaders Yuanneng Holding and Huadian Liaoneng did not hit limit-down, on Friday there were already 6 stocks in the sector that hit limit-down. This indicates that divergence in the sector has intensified and signs of a pullback are clear. This theme is now in a phase of “fighting while retreating.” It is not recommended to keep blindly betting on trades; risk avoidance should be prioritized.

3. Optical Communications Sector
   Currently, the sector has 2 stocks at the 2-board level and 8 stocks at the first-board level, but both 2-board stocks are mid-position follow-through shares related to Tianjin Pharmaceutical, with limited participation value. As the only theme that can be “tested” besides pharmaceuticals, most first-board stocks within the sector are trend-based names, and the probability of later producing a multi-board leading stock is relatively low.

Trading guidance: For board-chasing, pay attention to Tongyu Communications (通宇通讯) for 1-to-2 and Huashengchang. For trend-based low-entries, watch Hangdian Co., Ltd. (杭电股份) and Farsun Victory (法尔胜).

Warm reminder: This is only a personal review and reconstruction of market行情, and does not constitute any investment-related advice.