On May 29th, market rumors regarding an extension of a US-Iran ceasefire agreement triggered significant volatility. Overnight, the three major US stock indices closed at record highs, while oil prices largely stabilized after repeated clarifications, the US dollar weakened, and gold regained buying interest. In the A-share market, the three major indices opened higher but experienced sharp fluctuations and consolidation, closing collectively lower by the midday break. As of the midday close, the Shanghai Composite Index fell 0.37%, the Shenzhen Component Index declined 1.00%, the ChiNext Index dropped 1.14%, and the STAR 50 Index plunged 3.63%. The combined half-day turnover for the Shanghai and Shenzhen markets reached 2.12 trillion yuan, an increase of 332.9 billion yuan from the previous trading session.
Sector-wise, the major consumer sector saw another rally, with China Tourism Group Duty Free Corporation Limited hitting the daily limit-up. The real estate sector continued its upward trend, with Vanke A and several other stocks reaching the limit-up. The power sector maintained its gains, with Huaneng Mengdian securing its third limit-up in five days. The lab-grown diamond concept remained active, with Sifangda and Huifeng Diamond both surging over 11%. Conversely, the technology sector experienced a pullback, led by the decline in the STAR 50 Index, with the semiconductor and computing hardware industry chains rising initially before retreating. The glass substrate concept continued to weaken, with BOE A approaching the daily limit-down. The A-share memory chip sector saw ongoing adjustments, with Nike Equipment, NationalChip Technology, and Runxin Technology falling over 8%, followed by declines in Fudan Microelectronics, Shanghai Xinyang, and Liyang Chip.
Looking ahead, China Merchants Securities suggested focusing on the technology main theme, sectors with high export prosperity, and areas at an inflection point of capacity clearance for recovery. Key attention should be paid to high-prosperity continuations within the technology theme, such as electronics (semiconductors) and machinery equipment (automation equipment), as well as high-end manufacturing with export advantages and directions showing recovery at capacity clearance inflection points.
**Hot Sectors** **1. Major Consumer Sector Rallies Again** Approaching the midday break, the major consumer sector saw another surge. China Tourism Group Duty Free Corporation Limited hit the daily limit-up, Jiugui Liquor sealed its limit-up, Yizhi Konjac rose over 10%, followed by gains in Zhongbai Group, Haixin Food, Huanlejia, Huazhi Wine, and Kuaijishan. *Commentary: Recently, the market has experienced high-level volatility, increasing risk-averse sentiment among funds. The low-valuation major consumer sector has attracted defensive allocation funds. The liquor sector saw a collective rally on May 27th (with Shuijingfang and Shede Spirits hitting limit-up) and has continued to draw fund attention. Currently, the food and beverage sector's valuation remains in the lower range of the past five years, highlighting its value.*
**2. Real Estate Sector Continues Upward Momentum** The real estate sector maintained its upward trajectory. Vanke A, Greenland Holdings, and Shanghai Industrial Development hit the daily limit-up, following earlier gains including Xiangjiang Holdings' five consecutive limit-ups, with Sunshine Holdings and Everbright Jiabao also reaching limit-up. Huafa股份, Financial Street, Rongsheng Development, Gemdale Group, and Poly Developments followed with increases. *Commentary: The State Council issued the "15th Five-Year Plan for Urban Renewal." The plan proposes comprehensively assessing urban stock assets and resources, promoting classified disposal of supplied but undeveloped land and projects under construction, and revitalizing idle and inefficient old factories, commercial office buildings, commodity housing, and public housing. It aims to accelerate the establishment of a new development model for real estate and improve basic systems for commercial housing development, financing, and sales.*
**3. Power Sector Sustains Gains** The power sector continued its upward movement. Huaneng Mengdian achieved its third limit-up in five days, preceded by limit-ups in Jinkong Power, Jiangsu Guoxin, Shennan Electric A, Guangdong Electric Power A, and Guang'an Aizhong. Huadian Liaoneng rose 8%, followed by gains in YUNENG HOLDINGS, Jiangsu Xinneng, Hunan Huayin Electric, and Jinkai New Energy. *Commentary: China Southern Power Grid's electricity load刷新ed a historical record, increasing by 1.83 million kilowatts or 0.71% compared to the previous peak, nearly one month earlier than in previous years.*
**Institutional Views** **China Merchants Securities: Focus on Technology Main Theme, High Export Prosperity, and Capacity Clearance Inflection Points** Considering multiple dimensions such as mid-cycle景气, profitability,筹码 distribution, valuation, trading, cycle stage, and track value, the current recommendation is to布局 around the technology main theme, sectors with high export prosperity, and areas at an inflection point of capacity clearance for recovery. Key focuses include: 1) High-prosperity continuation areas within the technology theme, such as electronics (semiconductors) and machinery equipment (automation equipment); 2) High-end manufacturing with export advantages, such as power equipment (batteries, grid equipment) and national defense军工 (maritime equipment, aviation equipment); 3) Areas showing recovery at capacity clearance inflection points, such as non-ferrous metals (industrial metals, metal new materials) and basic chemicals (chemical products, chemical raw materials).
**China Galaxy Securities: AI Drives Data Centers Towards Token Super-Factories** A China Galaxy Securities research report posits that Tokens are the smallest units for AI large models to process information, capable of precisely measuring computing power,显存, and power consumption. As the value载体 for the AI computing economy, they are akin to the "water, electricity, and coal" and core production factors of the AI era,推动 data centers to become intelligent factories for Token规模化 production. Token generation speed is highly correlated with hardware performance, making hardware the core driver of Token economic growth. AI is driving the transformation of data centers into Token super-factories, leading to comprehensive upgrades in core components such as PCBs and passive components.
**CITIC Securities: Renewed Supply Disruptions in Mining Sector, Continued Recommendation for Aluminum Sector Opportunities** A CITIC Securities research report indicates that the Guinean government plans to finalize bauxite adjustment policies in June, heightening risks of bauxite supply constraints. This may stabilize bauxite and alumina prices, benefiting resilient aluminum enterprises with high self-sufficiency rates in bauxite and alumina. Domestic electrolytic aluminum destocking is accelerating, while overseas shortage risks persist. The report continues to recommend opportunities for布局 in the aluminum sector at low levels, with a focus on investment themes of strong resources, high growth, and high dividends.
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