On March 11, the market maintained its recovery momentum. By the midday close, the Shanghai Composite Index had gained 0.05%, the Shenzhen Component Index rose 0.85%, and the ChiNext Index advanced 1.74%. The combined turnover for the Shanghai and Shenzhen markets reached 1.67 trillion yuan in the morning session, an increase of 70.2 billion yuan from the previous trading day.
Gainers included lithium battery concepts such as lithium iron phosphate, sodium-ion batteries, solid-state batteries, and electrolytes, which saw a broad surge. Companies like Zhongyi Technology and Weiling Co. hit the daily limit up, while Contemporary Amperex Technology Co. Limited (CATL) rose over 6%. Photovoltaic concepts, including inverters, space photovoltaics, and photovoltaic equipment, also rallied collectively, with Guosheng Technology and GCL Energy Technology Co. Limited reaching the limit up. Optical fiber and cable, communication equipment, optical modules, and 6G concepts remained strong, with Tianyi Co. and Changfei Optical Fiber among the gainers. The MicroLED concept rebounded, with Huaxing Yuanchuang rising over 10%. The brain-computer interface concept strengthened, with International Medical Center hitting the limit up. Chemical concepts like titanium dioxide, phosphorus chemical, and chemical raw materials also rebounded, with Jinpu Titanium Industry reaching the limit up.
On the downside, gas turbine and transformer concepts pulled back, with Jereh Group falling over 6%. Concepts such as sea-based rocket recovery, satellite internet, and commercial aerospace declined. Military-related concepts, including aircraft carriers, aero-engines, military informatization, and military electronics, retreated across the board. Oil services, petroleum concepts, shale gas, and the oil and gas industry chain continued to decline. Precious metals like gold and silver, along with minor metal concepts, remained weak. AI application concepts, including AI marketing, AI programming, Sora, and AI comics, weakened collectively. Consumer sectors such as food and beverage and retail continued to decline. The lobster concept saw further adjustments, while pharmaceutical concepts like innovative drugs and weight-loss drugs weakened again.
Looking ahead, Everbright Securities noted that the overall tone of the National Two Sessions has been steady, which could lay a solid policy foundation for stock market gains. Additionally, the market is entering a period of intensive data and policy validation over the next month. Overall, opportunities in the equity market are expected to outweigh risks, with performance likely to be promising.
**Hot Sectors** 1. **Lithium Battery Concepts Surge Broadly** Lithium battery concepts, including lithium iron phosphate, sodium-ion batteries, solid-state batteries, and electrolytes, rallied across the board. Companies like Zhongyi Technology and Weiling Co. hit the daily limit up, while CATL rose over 6%. *Commentary: CATL recently released a surprisingly strong performance report, leading major institutions such as HSBC Qianhai, Nomura, and Jefferies to collectively raise their target prices.*
2. **Optical Fiber Concepts Remain Strong** Optical fiber and cable, communication equipment, optical modules, and 6G concepts continued to show strength, with Tianyi Co. and Changfei Optical Fiber among the gainers. *Commentary: According to Kaiyuan Securities, as of March 4, the price of G.652.D single-mode fiber rose from 18 yuan/km before the New Year to 85–120 yuan/km, a surge of nearly 650%. The price of G.657.A1 single-mode fiber increased from 23 yuan/km to 115–135 yuan/km, up nearly 487%.*
3. **Chemical Sector Sees Volatile Rebound** The chemical sector experienced a volatile rebound, with Jinpu Titanium Industry, Yuegui Co., and Baichuan Co. hitting the daily limit up. *Commentary: Ongoing geopolitical tensions in the Middle East and disruptions to shipping in the Strait of Hormuz have pushed up international oil prices, providing cost support for chemical products. Analysts point out that Iran is a major global exporter of sulfur, and the already tight global supply situation has intensified. This may further increase costs for sulfuric acid-based titanium dioxide, reducing the likelihood of price declines.*
4. **Superhard Materials Concept Continues Strength** The superhard materials concept remained strong, with Huanghe Whirlwind securing two consecutive limit-ups, and companies like Power Diamond, SF Diamond, and Hui Feng Diamond following the trend. *Commentary: A Kaiyuan Securities research report noted that synthetic diamonds, with their extreme thermal conductivity,超高 hardness, and excellent material stability, are entering thermal management in computing systems and high-end manufacturing. The industry is transitioning from "traditional industrial consumables and consumer substitutes" to "high-end manufacturing materials in the AI era."*
**Institutional Views** **Everbright Securities: External Disturbances May Gradually Ease, Market Performance Looks Promising** External disturbances are expected to gradually diminish, and market performance is likely to improve. Although the situation in the Middle East remains highly uncertain, the peak impact on domestic market sentiment may have passed. The market is expected to return to its own rhythm. The steady tone of the National Two Sessions provides a solid policy foundation for stock market gains. Over the next month, the market will enter a period of intensive data and policy validation. Overall, opportunities in the equity market are expected to outweigh risks.
**China Securities Co., Ltd.: Optical Modules Likely to Maintain Strong Demand** Compared to traditional cloud computing networks, AI training networks are shifting from leaf-spine to fat-tree architectures, significantly increasing the number of switches and optical modules. As data traffic grows, the demand for higher-speed optical modules also rises. The 800G optical module market began scaling in 2023 and is expected to maintain rapid growth from 2024 to 2026. The 1.6T optical module is set to start shipments in 2025, with scaling expected in 2026. The entire optical module industry chain is entering a prosperous cycle with both volume and price increases.
**CITIC Securities: Short-Term Uncertainties May Continue to Push Up Tanker Freight Rates** A CITIC Securities research report stated that disruptions to shipping in the Strait of Hormuz are reshaping the energy landscape. According to Kpler data, approximately 10 tankers are expected to dock at Yanbu Port, easing concerns about "price without market." The number of VLCCs is likely to increase further. The shipping distance from Yanbu Port/Strait of Hormuz to Qingdao Port has risen by about 18%. Considering the shipment capacities of Yanbu Port and Fujairah Port, if the supply gap is filled by the U.S. Gulf, the shipping distance could increase by over 30%. In the short term, strategic inventory releases and supply chain adjustments may mitigate the geopolitical impact of U.S.-Iran tensions, but restoring partial shipping capacity through the Strait of Hormuz remains key. Post-disruption, compensatory demand is expected to keep tanker freight rates high. If vessel utilization is constrained, rates could rise further. The historical concentration of VLCC capacity is reshaping pricing mechanisms, with "quasi-alliances" enhancing shipowners' bargaining power. Alliances like Sinokor, MSC, and Trafigura, with their rental surpluses, may further expand capacity, increasing concentration. Short-term uncertainties are likely to continue pushing freight rates higher, without altering the expectation that oil shipping leaders could achieve record profits by 2026.
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