Over the past week (March 2 to March 6), the three major A-share indices collectively declined. As of the close on March 6, the Shanghai Composite Index stood at 4124.2 points, down 0.9% for the week; the Shenzhen Component Index was at 17172.6 points, down 2.2% weekly; and the ChiNext Index closed at 3229.3 points, falling 2.4% over the week. Specifically, only 22.47% of individual stocks recorded weekly gains, with 83 stocks rising more than 15% and 41 stocks falling over 15%. Classified by Shenwan primary industry sectors, Petroleum & Petrochemicals led the gains, while sectors like Coal, Utilities, and Agriculture, Forestry, Animal Husbandry & Fishery also advanced. In contrast, Media, Nonferrous Metals, Computers, and Electronics were among the sectors that declined. Which stocks led the gains and which led the declines? 21 Investment Insights provides a weekly analysis.
Middle East hostilities propelled international crude prices higher, with the top performer,
The leading stock,
Market sentiment was influenced by ongoing US-Israel-Iran tensions, with fluctuating reports regarding the "reopening" or "blockade" of the Strait of Hormuz causing significant volatility in international oil prices.
According to Jiemian News, a report released on March 6 by the Joint Maritime Information Centre (JMIC) indicated that vessel traffic through the Strait of Hormuz had nearly halted, dropping to its lowest level since the key waterway was effectively closed over the weekend. The JMIC stated that recent assessments of shipping signals showed the number of transiting vessels had fallen to single digits, with only two confirmed commercial transits observed in the past 24 hours, both involving cargo ships rather than oil tankers.
According to CCTV News, Iranian military spokesman Abolfazl Shekarchi stated on the evening of March 6 local time, "We reiterate the security of the Strait of Hormuz and confirm our control over it, but we will not close it." Shekarchi added that vessels associated with Israel or the United States would not be permitted passage.
On March 6 local time, international crude oil futures settled significantly higher, hitting their highest levels since October 2023. Both US crude (WTI) and Brent crude recorded their largest weekly percentage gains since records began in 1983 and 1991, respectively. The WTI April futures contract settled up 12.21%, accumulating a 35.6% gain for the week.
CITIC Securities noted in a research report that for the Middle East, almost 100% of major oil producers' exports rely on the Strait of Hormuz. For Asia, the primary buyers of Middle Eastern oil are China, Japan, South Korea, and India, making crude shipments through the Strait highly influential on energy prices in Asian economies. Future oil price movements critically depend on potential disruptions to Hormuz traffic, for which the report outlined four scenarios: (1) If only Iranian exports are disrupted, the impact is relatively limited, with an estimated short-term oil price increase of about 10%. (2) A 25% decline in crude shipments through the Strait would have a relatively manageable impact, potentially driving short-term prices up by 20%. (3) A 50% reduction in Hormuz crude traffic would have a very significant effect, potentially doubling oil prices in the short term. (4) A complete halt to crude shipments through the Strait would have an uncontrollable impact on prices, with oil likely surging over 300%. As an oil and gas equipment manufacturer, the company stands to benefit directly from rising energy prices.
Soochow Securities pointed out that rising energy prices, post-conflict regional reconstruction, increased global focus on energy security, and the Middle East's energy transition are expected to stimulate short, medium, and long-term increases in capital expenditure within the oil and gas industry, driving growth in demand for equipment and component procurement. Following the outbreak of the Russia-Ukraine conflict in 2022, global oil and gas prices experienced high volatility, improving cash flow for oilfield service companies and leading to increased capital expenditure, with a shift towards LNG and deep-water projects.
Regarding financial performance, the company issued its 2025 annual earnings forecast on January 29, projecting full-year net profit attributable to shareholders to be between 4 million and 6 million yuan, achieving a turnaround from a loss compared to the previous year. This improvement was attributed mainly to overseas market expansion, cost control, and contributions from non-recurring gains and losses.
In contrast, collective share reductions by major shareholders and executives contributed to Hongxing Shares (001209.SZ) becoming the week's worst performer, declining over 34%. Other significant decliners included Liancheng CNC (920368.BJ), Hexin Instrument (688622.SH), Hetai Mechanical & Electrical (001225.SZ), and Shenghui Integration (603163.SH), all falling more than 25% for the week.
The poorest performer, Hongxing Shares, operates in the textile and apparel industry. Public information indicates the company's main business involves the R&D, design, production, and sales of home apparel. Its primary products include loungewear, underwear, accessories, and fabrics. In secondary market trading, Hongxing Shares rose 1.16% on March 6. However, looking at the week, the stock hit a historical high since July 2021 early on Monday before continuously retreating, resulting in a cumulative weekly decline of 34.69%.
The negative sentiment was driven by recent announcements of planned share reductions by multiple major shareholders and executives, totaling up to 1.05% of the company's shares.
On January 21, Hongxing Shares announced that its controlling shareholders and actual controllers, Zhou Demao, Ke Guomin, Guo Jingxuan, and their acting-in-concert parties, Shantou Runying and Shantou Zhoumi, planned to reduce their holdings by up to 1.277 million shares via centralized bidding, representing no more than 0.99% of the total share capital excluding shares in the repurchase专用 account. Board Secretary and CFO Liu Genxiang planned to reduce up to 32,000 shares (0.02%), and Vice President Cheng Shengxiang planned to reduce up to 47,300 shares (0.04%). The total planned reduction by these shareholders and executives was up to 1.05% of the shares.
On February 25, Hongxing Shares announced that it had received notices from Liu Genxiang and Cheng Shengxiang stating that their respective share reduction plans had been fully implemented.
On March 4, Hongxing Shares disclosed that between February 12 and March 5, shareholder Shantou Runying had reduced its holdings by a total of 89,900 shares, representing 7.04% of its intended reduction amount, and shareholder Shantou Zhoumi had reduced its holdings by 59,700 shares, representing 4.68% of its intended reduction amount.
Regarding earnings, on January 29, the company released its annual performance forecast, estimating full-year 2025 net profit attributable to shareholders to be between 17 million and 21 million yuan, a year-on-year decrease of 73.84% to 78.82%. It projected attributable net profit after deducting non-recurring gains and losses to be between 8.5 million and 12.5 million yuan, a decrease of 69.06% to 78.96% compared to the previous year. The company cited intense industry competition, a decline in comprehensive gross profit margin, and underperformance in its offline channel business as reasons for the forecast.
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