Will large-cap value stocks stage a year-end comeback? On November 5, A-share power and new energy-related themes surged across the board, with significant gains in ultra-high voltage (UHV), smart grids, virtual power plants, vanadium batteries, BC batteries, sodium batteries, and photovoltaics.
The UHV index led the rally, with concept stocks like Canergy Power hitting a "30cm" daily limit up, while Jinguang Electric recorded a "20cm" limit up. Other gainers included Shenma Electric, Sun Cable, Tbea Co.,Ltd., and Baobian Electric.
Tbea Co.,Ltd. (600089), a leader in the UHV sector, has shown strong momentum recently. The stock closed at a record high of CNY 24.11 per share, with blocked orders exceeding 305,200 lots. Its A-share market cap surpassed CNY 120 billion. In the first three quarters, the company reported a net profit of CNY 5.484 billion, up 27.55% YoY.
Dongwu Securities believes grid investment will continue growing through 2025, benefiting globally competitive leaders driven by domestic and overseas demand, particularly firms with technical advantages and order backlogs in UHV and smart grids.
ICBC Hits Record High On November 5, ICBC’s stock rose to a historic high of CNY 8.21 per share, closing with an A-share market cap of CNY 2.19 trillion, trailing only Agricultural Bank of China. Other stocks hitting record highs in the past 10 sessions include Tbea Co.,Ltd., Baofeng Energy, CMOC Group, New China Life, Agricultural Bank of China, and Sanhua Intelligent Controls.
Dongwu Securities notes that after the extreme rally in tech growth stocks in Q3, small-cap growth’s outperformance over large-cap value has reached historic highs, signaling a potential rotation toward low-valuation, high-dividend value sectors.
CSC Securities suggests that after late October’s bullish sentiment, A-shares may enter a consolidation phase, with possible shifts in market leadership and style. Q3 fund reports show electronics allocations exceeding 25%, STAR and ChiNext exposure above 40%, and growth-style weighting over 60%—all decade highs—hinting at structural adjustments. Seasonally, large-cap value tends to outperform year-end as profits are realized.
Large-Cap Value Stocks Lag Year-to-Date As of November 5, large-cap value constituents averaged an 8.93% gain YTD, underperforming the SSE Index. Transsion Holdings, China Communications Construction, Sinopec, Daqin Railway, and Yanghe Brewery were among the decliners.
Transsion fell 24% YTD, the steepest drop. The smartphone maker reported a 44.97% YoY decline in Q3 net profit to CNY 2.148 billion, citing competitive pressures and supply chain costs. The company highlighted its AI initiatives, including locally tailored "practical AI" products like AI PCs and glasses, aiming to drive innovation in emerging markets.
Dividend Yield Appeal Large-cap value stocks’ average 12-month dividend yield stood at 4.05%, well above the A-share average. Thirteen stocks, including COSCO SHIPPING Holdings, Gree Electric, Yanghe Brewery, Zhejiang Energy, and Huaxia Bank, offered yields over 5%, with COSCO leading at 10.59%.
53 Large-Cap Value Stocks Trade Below Industry P/E Analysts suggest stocks trading below industry P/Es may be undervalued. Data shows 53 large-cap value stocks—over 80% of the cohort—fall into this category, with 22 at less than half their sector P/E, such as Huayu Automotive, COSCO SHIPPING Holdings, China Merchants Shekou, Transsion, China Mobile, and China State Construction.
Huayu Automotive’s P/E of 9.1x is just 0.31x its industry average. The auto parts leader posted a 4.79% rise in Q3 net profit to CNY 4.688 billion, with social security and pension funds among top holders.
Among these 53 stocks, 34 have over 20% upside based on consensus target prices. China Pacific Insurance tops the list with 42.44% potential, followed by China Everbright Bank (40.65%). Others with significant upside include China Merchants Shekou, China State Construction, China Communications Construction, China Unicom, and China Telecom.
Disclaimer: This content is for informational purposes only and does not constitute investment advice. Investors should proceed at their own risk.
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