A-shares closing review: The Shanghai Composite Index retakes 3,900 points, the ChiNext Index rises over 2% to surpass 3,300 points, power stocks surge, CPO and communication concept stocks climb higher, while oil, gas, and photovoltaic equipment stocks continue to decline.

Ask AI · Are Power Stocks’ Rally Related to the Green Energy Strategy?

On March 25, China A-shares continued to rebound. The three major stock indexes rose with volatility. The Shanghai Composite Index returned above 3,900 points; the ChiNext Price Index stood above 3,300 points. As of the close, the Shanghai Composite rose 1.3% to 3,931 points, the Shenzhen Component rose 1.95%, and the ChiNext Price Index rose 2.01%. The trading value across the Shanghai and Shenzhen markets was 2.18 trillion yuan. More than 4,800 stocks across the whole market rose, including 105 stocks that hit the daily limit, with “limit-up” stocks expanding for 2 consecutive trading days.

On the trading board, power stocks kept surging, with more than a dozen stocks hitting the daily limit, such as Tongbao Energy, Huadian Energy, and Energy-Saving Wind Power. The CPO and optical communications sectors moved higher, with many stocks such as Changfei Optics and Hangdian Co., Ltd. hitting the daily limit. Communication cable stocks strengthened, and multiple stocks including Hemaip Technology hit the daily limit. In addition, sectors such as the F5G concept, communications equipment, and fiberglass manufacturing led in gains. Also, the proposed U.S.-Iran ceasefire plan was exposed; oil and gas stocks kept falling, with Tongyuan Petroleum down more than 7%. The photovoltaic equipment sector was weak, with Yubang New Material leading the declines. Coal stocks generally fell across the board, with Lu’an Environmental Energy down more than 5%. A small number of sectors, including inverters and thermal coal, recorded declines.

Hot Sectors

Token concept gains momentum, compute power stocks surge

Token concept explodes, compute power stocks surge; 263 and Oryed hit the daily limit. The tourism and hotel sector rose and strengthened, with Guilin Tourism hitting the daily limit.

On the news front, the National Data Administration said that in early 2024, China’s average daily Token (token) call volume was 100 billion. By the end of 2025, it would jump to 100 trillion. In March this year, it has already surpassed 140 trillion, increasing more than 1,000-fold over two years.

Power sector surges

Power sector surges; green power concepts lead the way. More than a dozen constituent stocks hit the daily limit. Huadian Liaoning hit an 8-day consecutive limit-up. Shaoneng Co. achieved 5 limit-ups in 6 days. Yue Dianli A delivered 4 limit-ups in 6 days.

China Citic Securities stated that “green fuels” and “computing power-and-electricity coordination” have been written into the government work report, corresponding respectively to China’s energy independence and AI competition strategy. Driven by the dual rigid high-growth demand for green fuel production and green power supply for data centers, it is expected that by 2030, these two major demand drivers could pull demand for nearly 465GW wind turbines, driving extraordinary buoyancy in the wind power sector.

CPO concept stays active

The CPO concept performed actively, with Mingpu Optics and Magnetics, Aired, and Keyuan Technology all hitting the daily limit.

On the news front, in the U.S. market, optical communications-related concepts led gains, with Lumentum up 10%, setting a new all-time intraday high. Coherent rose 6.78%. In addition, China has refreshed optical communications transmission records: for the first time, on 10.3-kilometer 24-core single-mode fiber, it achieved real-time bidirectional transmission capacity of 2.5 petabits per second (Pb/s).

Semiconductor equipment concept strengthens

Semiconductor chip industry chain stays active, with Baicheng Co., Ltd. and Guofeng New Material reaching the daily limit.

On the news front, SK Hynix announced a plan to raise about $10 billion by listing in the United States. SK Hynix will use potential proceeds to build artificial intelligence infrastructure, such as building a semiconductor cluster in Yongin, South Korea, and expanding production capacity for storage products.

Institutional Outlook

CICC: This may be a relatively low point for A-shares in the medium term; the deeper pullback brings an opportunity to position

CICC said that this may be a relatively low point for A-shares in the medium term, and that the deeper pullback has created a good opportunity to set up positions. Although the near-term price action still carries some uncertainty, after going through the adjustment, the market’s risks have been further released, and valuations are at a relatively reasonable level. In the medium-term view, there has been no fundamental change to the macro environment the market is in. The logic supporting “stability with steady progress” for the A-share market still holds. The release of risk and the pullback after declines also provide better opportunities for positioning.

Guoxin Securities: During short-term volatility, market style may rebalance

Guoxin Securities believes that during short-term market volatility, market style may rebalance, and some “old-guard assets” with relatively low valuations could gain an advantage in stages. From the medium-term main line, however, areas representing economic transformation and upgrading and the security theme—such as artificial intelligence (AI) and advanced manufacturing—remain the core allocation directions. These areas have real industrial policy support and fundamental backing, and after adjustments, they are more likely to lead the market into a new phase of行情.

Caitong Haitong: From lagging gains and risk aversion to Taco 2.0

Affected by the mid-term election, the impact of stock market risk and inflation risk on Trump will be greatly raised, which may prompt the U.S. side to ultimately compromise or withdraw troops—i.e., Taco 2.0. Most Asian economies are oil-importing countries. Similar to the U.S. stock market, if a turning point emerges in the Iran conflict, emerging market stock markets would also become the main beneficiaries.