As August transitions into September, the tug-of-war between bullish and bearish forces in the market has intensified, with trading volumes shrinking as the index consolidates near its bottom. Many believe that in such a state, meaningful opportunities are scarce. However, the reality paints a different picture — a number of stocks across multiple sectors (both tech and non-tech) have recently hit new highs. For instance, the leading player in the optical communications theme has surged against the market trend, gaining more than 1,000%, while liquid cooling concept stocks like Seagate Technology (SZ: 301898) and Feilong Auto Components (SZ: 002536) have also broken through to fresh peaks.
On September 4th, driven by the Federal Reserve's latest dovish signals and a retreat in expectations for a September rate hike, major A-share indices rallied strongly, with most concept sectors bouncing back. So, what exactly is the core theme for September? Will optical communications and liquid cooling continue to deliver big gains? Who will be the next Shenyang Yuanda Intellectual Industry Group (SH: 600811) or Seagate Technology (SZ: 301898)? Today's discussion will focus on these key questions.
Liquid Cooling Concept Stocks See Multiple Limit-Ups as Leading Names Double
Recently, we've highlighted the liquid cooling sector, and its momentum has persisted, with repeated waves of limit-up moves across the board. For example, on September 3rd, nearly 10 stocks hit their daily upside limits. Now, what other opportunities in this theme deserve attention?
Between late August and early September, the liquid-cooled server concept took the market by storm. Looking at related stocks, the liquid-cooled server segment surged over 30% in the month from August 3rd to September 3rd, leading the market. Many stocks in the sector have posted substantial gains, with some already doubling (see Figure 1).
Performance among these stocks can be broadly categorized into two types. First, those hitting new highs, such as Seagate Technology (SZ: 301898), Jones Tech Plc (SZ: 300684), and Feilong Auto Components (SZ: 002536). Seagate Technology leads the pack with a gain of over 150%. In July, the stock fell more than 30%, but it reversed course in August, recovering all losses and pushing to new highs. The company's subsidiary is an authorized distributor for a major data center liquid cooling equipment provider. Jones Tech, mentioned in previous articles, saw its share price enter a streak of limit-ups after announcing a share transfer agreement with a major optical module maker on August 13th. Between August 14th and 18th, it recorded three consecutive 20% limit-up days, with its stock price nearly doubling in the past month. In the data center liquid cooling and chip thermal management space, the company supplies high-performance thermal interface materials, vapor chambers, and liquid-cooled cold plates. Feilong Auto Components hit a limit-up on September 3rd and briefly touched another on September 4th before opening. From August 4th to September 3rd, its stock also doubled, with its liquid cooling products primarily focused on electronic pump series.
Second, there are stocks experiencing rotation from low or relatively low positions. Guangdong Jutao (SZ: 002855) is a typical example of low-position rotation, securing four consecutive limit-ups from August 31st to September 3rd. The hype is tied to its venture into a key material for the liquid cooling sector — its liquid-cooled silicone oil can be used in immersion cooling and other heat dissipation scenarios. Other names in this camp include Xichuan Mining (SZ: 301057), Shandong Xinhua Pharmaceutical (SZ: 000756), Zhejiang Jindee (SH: 603757), and Hong Sheng Group (SH: 603890).
In the liquid-cooled server space, some stocks have surged, while others remain at lower levels. In the long run, the liquid-cooled server theme is not just a short-term sentiment play; it presents ongoing rotational opportunities.
Beyond the 10x Surge of Yuanda Intellectual: Over 300 Stocks Hit New Highs Since July
Early September has opened with market fluctuations. Looking at September 2nd and 3rd, the indices exhibited a similar pattern — consecutive lower shadows with shrinking volume. Amid the intense battle between long and short capital, the focus is whether we are seeing the calm before dawn or the eve of a storm. In reality, however, many stocks are performing stronger than expected.
Previously, hard tech sectors led by AI computing power dominated for a long stretch. Now, dividend styles, undervalued styles, tech lines, and non-tech lines are all getting their turns — a shift that has become particularly evident in the recent market. Tech sectors such as liquid-cooled servers, reducers, CPO, humanoid robots, PCB, NVIDIA-related plays, and glass substrates have all seen varying degrees of rebound, with liquid-cooled servers being the strongest. Meanwhile, major financials (banks, insurance), pharmaceuticals, new energy, and consumer sectors have also seen a host of stocks rising against the broader trend.
July saw a major market correction, with August marking the beginning of a recovery. Which companies have staged the strongest rebound? Let's look at the data. A striking figure worth noting: over 300 stocks have hit new highs since July, with most having recouped their July losses and some showing remarkably sharp gains (see Table 1).
These stocks share several characteristics. First, they exhibit deep oversold bounces with V-shaped reversals, as seen in cases like Shenzhen Qiangda Circuit (SZ: 300671) (see Figure 2) and Hangzhou Huaxing Chuangye (SZ: 300427). Second, some show resilience against market volatility, with continuous gains — their share prices didn't fall in July and hit new highs in August, such as China Merchants Bank (SH: 600036). Third, there are slow bull runners hitting record highs, like Shenyang Yuanda Intellectual Industry Group (SH: 600811) and the earlier-mentioned Feilong Auto Components (SZ: 002536). These not only reached new highs since July but also set all-time highs, trending upward over an extended period. Notably, since its low in April last year, Shenyang Yuanda Intellectual Industry Group has appreciated tenfold (see Figure 3).
It's important to note that external markets still face several disruptive factors, including tensions in the Middle East and expectations for Fed rate hikes. The latest data shows that the US ADP private payrolls for August came in at just 38,000, the lowest since January this year. This key metric has led to a downward revision in market expectations for a Fed rate hike. Looking ahead, several crucial data points are on the horizon: the non-farm payrolls report due Friday evening and subsequent CPI data. Additionally, the Fed's September 15-16 policy meeting and the accompanying rate decision will be closely watched. On September 3rd, Fed Governor Waller signaled that if upcoming data confirms inflation pressures are cooling, he would lean toward supporting keeping rates unchanged at the next policy meeting. Currently, the target range for the federal funds rate stands at 3.50% to 3.75%, and it has been held steady across all five meetings so far this year (see Figure 4).
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