On the morning of March 24, the A-share market opened higher and rebounded. The Beijing Stock Exchange 50 Index and the STAR Composite Index rose over 1%, while the Shenzhen Component Index and the CSI 300 Index also bottomed out and recovered. The ChiNext Index, however, opened high but trended lower, ending the morning with a slight decline. More than 4,600 stocks advanced, although trading volume showed a shrinking trend.
Sector-wise, defense and military industry, pharmaceuticals and biotechnology, optical communication, and shipping and ports led the gains. A few sectors, including oil and gas extraction, aquaculture, motor manufacturing, and batteries, experienced declines.
Pharmaceutical and biotechnology stocks attracted significant capital inflows from major investors during the morning session. The CXO concept led the rally, with the sector index opening high and surging over 3%. Fujiang Pharmaceutical Holdings Co., Ltd. hit the 20% limit-up within just about one minute after opening high. Menova Pharmaceutical Corporation also reached the 10% limit-up in approximately 10 minutes, marking its second limit-up in three trading sessions. Biocytogen Pharmaceuticals (Beijing) Inc. hit a new all-time high.
Sub-sectors such as medical services, innovative drugs, immunotherapy, and assisted reproduction also saw substantial gains. Wanbangde Pharmaceutical Holding Group Co.,Ltd. hit the limit-up just before the noon close. Companies like Kingley Bio-Med and International Medical Center Co., Ltd. were among the top gainers.
According to Wind real-time monitoring data, as of the noon close, the Shenwan pharmaceutical and biological industry saw a net inflow of over 4.2 billion yuan from major funds. Seven stocks, including WuXi AppTec Co., Ltd., Fujiang Pharmaceutical Holdings Co., Ltd., and Wanbangde Pharmaceutical Holding Group Co.,Ltd., each attracted net inflows exceeding 100 million yuan.
On the news front, on the 23rd, the world's first hexavalent rotavirus vaccine administered its first dose in Shanghai. This product is an oral, hexavalent, reassortant, live attenuated rotavirus vaccine covering six serotypes, achieving for the first time full coverage of the dominant G-type strains currently prevalent in China.
Rotavirus is the primary pathogen causing rotavirus gastroenteritis, prevalent worldwide and one of the common types of infectious gastroenteritis in the population. Currently, no other hexavalent rotavirus vaccine is available globally.
CITIC Securities stated that the innovative drug sector has shown continuous signs of recovery recently, with pipelines related to immuno-oncology performing particularly strongly. This trend is expected to drive a valuation rebound for the innovative drug sector. With improving cost-effectiveness for allocating to innovative drugs and clearer first-quarter earnings expectations, the sector presents phased allocation opportunities. The firm recommends focusing on innovative pharmaceutical companies with solid clinical progress and internationalization capabilities, emphasizing core metrics such as pipeline richness, clinical advancement pace, and overseas licensing progress.
The optical communication concept opened significantly higher in the morning, with the sector index rising over 2% intraday. Zhongli Group opened with a limit-up, marking its third consecutive day of hitting the limit-up. Xinneng Taishan Co., Ltd. also opened with a limit-up. Companies like Tongding Interconnection Information Co., Ltd., Zhongyuantong, and Tongguang Cable Co., Ltd. reached limit-up or rose over 10%.
Recently, the Ministry of Industry and Information Technology issued a notice regarding the organization of the 2026 Urban "Millisecond Computing" Special Action, clarifying the first batch of implementation areas covering 50 cities across 31 provinces. According to the ministry's deployment, the action sets three specific goals: interconnect latency between computing centers below 1 millisecond, access latency to computing resources at key sites below 1 millisecond, and latency for end-user computing applications not exceeding 10 milliseconds. By 2027, a nationwide urban millisecond computing network capability system is planned to be basically formed, with coverage of the urban computing 1-millisecond latency circle reaching no less than 70%.
The core carrier for millisecond-level latency is high-speed optical networks, supported by optical modules, optical fibers and cables, and high-end switches and routers. Demand for high-end optical modules, particularly those with low latency and high bandwidth, is expected to increase significantly.
LightCounting estimates that current demand for optical modules already exceeds supply by more than double. Demand for 800G optical modules will remain strong, and 1.6T optical modules are expected to enter large-scale volume production by 2026. Overseas major clients have already revised their 2026 procurement plans upward to 20 million units.
Galaxy Securities believes that, on the basis of sustained demand growth, capacity constraints will remain the main bottleneck restricting the development of optical communications in 2026. Given that Chinese optical module manufacturers lead in global market share and are still increasing it, opportunities for upstream penetration in the industrial chain are ample during the "15th Five-Year Plan" period.
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