Major indices narrowed their losses in the afternoon session. The Shanghai and Shenzhen stock exchanges recorded a combined turnover of 2.18 trillion yuan, down 304.8 billion yuan from the previous trading day. Over 3,700 stocks declined across the market. At the close, the Shanghai Composite Index fell 0.64%, the Shenzhen Component Index dropped 1.44%, and the ChiNext Index declined 1.55%. Sector-wise, metals and technology continued their correction, while film, finance, and transportation sectors showed relative strength.
Currently, the market has been experiencing low trading volume for multiple days since January 29th. Concurrently, the external environment has become complex recently, with U.S. markets undergoing significant volatility. Against this backdrop, sectors that saw substantial gains earlier, such as metals, communications, and semiconductors, have begun to correct, while assets at relatively lower levels are starting to rotate. Investors are advised to be mindful of risks and exercise particular caution regarding chasing rallies, adopting a wait-and-see approach. Opportunities may arise for strategic buying at lower levels, but associated risks must be carefully considered.
Looking at China's film industry performance in 2025, a recovery is evident compared to 2024. As of December 31, 2025, total box office revenue reached 51.818 billion yuan, a year-on-year increase of 21.9%, recovering to 80.8% of the peak level seen in 2019. By quarter, the first quarter of 2025 performed exceptionally well, primarily driven by strong box office results from high-quality domestic films during the Spring Festival period in February, with "Nezha: The Devil's Child Stirs the Sea" topping the all-time Chinese box office chart.
On the policy front, in August 2025, the National Radio and Television Administration issued and implemented the "Several Measures to Further Enrich TV Screen Content and Promote the Supply of Radio, Film, and Television Content" (the "21 NRTA Measures"). To meet consumer demand, certain regulations were adjusted. Among the 21 measures, the removal of the 40-episode cap, relaxed restrictions on the quantity of period dramas, elimination of the mandatory one-year interval between seasons, and promotion of the introduction and broadcast of outstanding foreign programs are particularly attractive to users, benefiting the industry's long-term development.
Furthermore, empowered by AI, AI-generated animated series have emerged as a significant new trend. Nearly 47,000 such series were launched throughout 2025, with approximately 60% of them released between September and October. The number of new releases declined in November, potentially due to the migration of short drama copyright operations and adjustments to the review system, indicating a trend of "decreasing quantity but increasing quality." The average viewership increase for new AI-generated series reached 3 to 5 times that of ordinary works, driving the development of higher-quality content.
With the Spring Festival peak season approaching, the film and television sector is expected to gradually strengthen. Several films have already been scheduled for the 2026 Spring Festival, including "Blades of the Guardians: Wind Rises in the Desert," "Awakening Silence," "Pegasus 3," "Panda Plan: Tribal Adventure," "Boonie Bears: Always Bears," and "Starry Dream." Overall, this year's Spring Festival lineup features diverse themes, with some IPs continuing from last year's releases and boasting strong star-studded casts. Interested investors may consider the Film and Television ETF (516620).
Today, the Semiconductor Equipment ETF opened lower but fluctuated and recovered during the session, closing slightly down by 0.17%. The Communication ETF, however, traded below its opening price throughout the day and closed down 2.47%.
The primary reasons for today's decline include a complex internal and external environment and weak investor sentiment. Regarding U.S. markets, recent sharp declines in the software sector have led the broader market downward, with panic spreading to the hardware sector, causing widespread losses except for a few stocks with strong alpha performance. Overnight, the Nasdaq fell 1.77%, and the S&P 500 declined 0.51%. In the A-share market, persistently low trading volume has triggered profit-taking at higher levels, with rumors concerning CPO (Co-Packaged Optics) exacerbating the selling wave, keeping pressure on technology stocks.
However, fundamental progress should also be noted. In overseas computing power, recent financial reports highlight strong sector vitality. Previously, market expectations for North American cloud providers' capital expenditure growth in 2026 were around 40%. However, Meta recently guided for 2026 capital expenditures between $115 billion and $135 billion, with a midpoint of $125 billion, representing a 73% increase compared to the $72.2 billion in 2025. Google guided for a midpoint capital expenditure of $180 billion in 2026, significantly higher than the analyst consensus of $119.5 billion, approximately double Alphabet's 2025 capital expenditure of $91 billion. As of this writing, Amazon has not yet released its earnings. Following high investment in the last two quarters, Microsoft's spending is expected to decline sequentially next quarter due to seasonal factors. Overall, capital expenditures are likely to exceed market expectations. Additionally, guidance from major manufacturers like TSMC remains very positive, indicating the sustained momentum of the AI industry wave should not be overly doubted.
Regarding CPO, while its penetration rate in 2026 might exceed market expectations, its impact should be assessed clearly without panic. Currently, within the Nvidia ecosystem, the Scale-Out market is primarily dominated by pluggable optical modules, while Scale-Up relies mainly on copper connections and PCBs. Subsequently, CPO is expected to penetrate the rapidly growing Scale-Up market, whereas the Scale-Out market will likely continue to be led by pluggable optical modules. Furthermore, CPO penetration in Scale-Up could potentially bring incremental revenue to current leading optical module manufacturers, as the substitution relationship between the two technologies is not yet significant.
In the memory sector, major manufacturers like Sandisk and SK Hynix have reported doubling performance trends and hold positive outlooks for the future. ASML has also indicated strong demand for memory capacity expansion. The global Wafer Fabrication Equipment (WFE) market size for 2026 has been revised upward to $135 billion, reflecting an improvement in industry sentiment. Domestically, the listing and capacity expansion of memory manufacturers are ongoing, providing multiple catalysts.
In summary, based on Q4 2025 earnings previews for A-shares and recent U.S. financial reports, the technology industry trend remains favorable. However, given the current complex internal and external environment, both A-share and U.S. markets face multiple pressures from capital flows and sentiment, potentially leading to oversold conditions. Opportunities for strategic positioning at lower levels may be worth monitoring. For specific selections, firstly, the optical module segment within the overseas computing power theme continues to show high vitality, with capex from companies like Google and Meta significantly surpassing expectations; the Communication ETF (515880) may be worth continued attention. Secondly, the semiconductor equipment sector stands to benefit from memory capacity expansion; the Semiconductor Equipment ETF (159516) could be monitored.
Risk Warning: Investors should fully understand the differences between systematic investment plans (like regular fixed-amount investments) and savings methods such as lump-sum deposits. Regular fixed-amount investing is a simple strategy to promote long-term investment and average cost, but it does not eliminate the inherent risks of fund investment, guarantee returns, or serve as an equivalent replacement for savings. Whether equity ETFs, LOFs, or structured funds, these are securities investment fund products characterized by higher expected risk and higher expected returns, with risk and return profiles generally higher than hybrid funds, bond funds, and money market funds. Funds investing in STAR Market or ChiNext stocks involve specific risks related to the investment targets, market systems, and trading rules, which investors should note. Short-term price changes of sectors/funds mentioned are presented solely as supplementary material for analysis and are for reference only, not constituting a guarantee of fund performance. Mention of short-term individual stock performance is for reference only, does not constitute stock recommendations, and does not predict or guarantee fund performance. The views above are for reference only and do not constitute investment advice or promises. When considering purchasing relevant fund products, please pay attention to regulations regarding investor suitability, complete a risk assessment beforehand, and purchase fund products matching your own risk tolerance. Funds carry risks, investment requires caution.
MACD golden cross signals have formed, and certain stocks have shown favorable performance.
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