The market experienced volatile adjustments yesterday, with the three major indices opening lower, briefly rallying, and then retreating. The combined trading volume for the Shanghai and Shenzhen markets was 2.89 trillion yuan, a decrease of 450.5 billion yuan from the previous trading day. By sector, oil and gas stocks bucked the trend to rise, the memory chip concept saw a rapid surge, and the robotics concept performed actively. At the close, the Shanghai Composite Index fell 0.09%, the Shenzhen Component Index declined 0.2%, and the ChiNext Index dropped 0.36%.
In today's morning brokerage briefings, China Securities highlighted that computing power remains a key growth theme. Huatai Securities noted that China's semiconductor materials sector has vast potential for import substitution, with leading companies poised to benefit significantly. CICC suggested the Federal Reserve may find it difficult to cut interest rates within the year.
China Securities emphasized that computing power remains a key growth theme for industry allocation. It is anticipated that domestic computing power, after a short-term correction, will soon see renewed capital inflows. The focus is expanding from core hardware like memory chips, optical modules, and PCBs to "computing power+" segments such as liquid cooling, computing power leasing, and power supply. Benefiting from the explosive growth in energy storage demand for AI computing centers, the lithium battery industry is experiencing new structural incremental demand. Representative stocks in this sector delivered outstanding first-quarter performance, with upward momentum extending across the entire industry chain. Furthermore, recent policies related to the "six networks" in China are significantly benefiting infrastructure and power grid construction, boosting their growth prospects.
Huatai Securities pointed out that global semiconductor material suppliers are primarily from Japan, South Korea, Europe, and the United States, leaving substantial room for import substitution in China. By 2025, the localization rate for high-end photoresists in China is expected to remain low; for cleaning materials, it is around 15%; for electronic specialty gases, about 30%; for high-end sputtering targets, approximately 5%; for wet electronic chemicals, about 44%; and for 5N-grade high-purity alumina, around 15%. Huatai Securities believes that the expansion of domestic memory and wafer fabs is likely to accelerate the localization process for semiconductor materials, with leading companies standing to benefit significantly.
CICC observed that recent U.S. inflation data has repeatedly exceeded expectations, while the job market shows signs of stabilization. Bond selling has intensified, and market concerns about inflation continue to rise. Concurrently, peace talks between the U.S. and Iran have seen no substantive progress, and the Strait of Hormuz remains effectively closed, making it difficult to mitigate the upward risks in energy prices. Under a baseline scenario, it is projected that U.S. PCE inflation may stay above 3.5% for the full year, with core PCE inflation above 3%, both significantly higher than the Federal Reserve's 2% policy target. In this context, the Federal Reserve's policy stance is expected to shift toward greater caution, making further interest rate cuts within the year unlikely (previously, the next cut was anticipated in the fourth quarter). After the new chairman takes office, establishing policy credibility will be a top priority. Timely communication of clear anti-inflation signals to the market is both appropriate and necessary for stabilizing expectations. For the market, this implies an increased likelihood of marginally tighter U.S. dollar liquidity, potentially putting continued pressure on assets driven primarily by liquidity.
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