On June 16th, the A-share market experienced a rise followed by a pullback, with the three major indices closing mixed. The Shanghai Composite Index ended in negative territory, while the ChiNext Index had earlier surged over 2.5%. At the close, the Shanghai Composite Index was down 0.11%, the Shenzhen Component Index was up 0.93%, and the ChiNext Index gained 1.72%. More than 2,700 stocks across the market advanced, with over a hundred hitting their daily upper limit. The total turnover for the Shanghai and Shenzhen markets reached ¥3.06 trillion, an increase of ¥33.5 billion from the previous trading session.
In terms of sector performance, the PCB (Printed Circuit Board) concept surged, with over ten constituent stocks hitting the daily limit. Huazheng New Material and Nuode Shares secured their second consecutive limit-up, while Xingsen Technology and Shandong Fiberglass also hit limit-ups, reaching new all-time highs. The power grid equipment sector was active, with China XD Electric achieving a second straight limit-up, and Wangbian Electric and Great Wall Electric also hitting the upper limit. The optical communication concept repeatedly strengthened, with Taichenguang soaring over 15% to set another new record high. The rare earth permanent magnet concept saw a midday rally, with Shenghe Resources hitting the daily limit.
On the downside, the port and shipping sector adjusted, with Cosco Shipping Energy Transportation, Ningbo Ocean Shipping, and Nanjing Port all declining. Among notable stocks, lithium battery leader EVE Energy opened sharply higher in the morning session, igniting interest in interim report performance. By the close, EVE Energy's shares were up over 13%, ranking first on the Wind individual stock popularity list. The company released its first-half performance forecast the previous evening, expecting net profit for the first half of this year to be between ¥3.13 billion and ¥3.371 billion, a year-on-year increase of 95% to 110%. Adjusted net profit is projected to be between ¥2.43 billion and ¥2.6 billion, up 110% to 125% year-on-year.
Key Sector Highlights
PCB Concept Surges
The PCB concept experienced a significant rally, with over ten constituent stocks hitting their daily upper limit. Huazheng New Material and Nuode Shares secured their second consecutive limit-up, while Xingsen Technology and Shandong Fiberglass also hit limit-ups, reaching new all-time highs. Analysis: International institutions project that the global AI optical module PCB market will grow from $620 million in 2025 to $3.77 billion by 2028, a more than fivefold increase in three years, with a compound annual growth rate of 83%, far exceeding the optical module's 60% growth rate for the same period.
Power Grid Equipment Sector Active
The power grid equipment sector showed strong activity, with China XD Electric achieving a second straight limit-up, and Wangbian Electric and Great Wall Electric also hitting the daily limit. Analysis: Industry analysis points out that global grid investment, combined with AI computing infrastructure build-out, suggests the high-growth cycle for transformer exports could last at least 2-3 years. Chinese companies are accelerating their capture of international market share, leveraging advantages in delivery times.
Optical Communication Concept Strengthens Repeatedly
The optical communication concept continued to gain strength, with Taichenguang surging over 15% to set another new record high. Analysis: Huatai Securities notes that MPO connectors, as essential passive components for high-density optical networks, possess a lagging-cycle attribute relative to the optical module market. They are poised for volume and price increases against the backdrop of surging global demand for 800G/1.6T optical modules. The global MPO market size is expected to grow from $1.8 billion in 2023 to $6.1 billion in 2028, representing a compound annual growth rate of 22%.
Rare Earth Permanent Magnet Concept Sees Midday Rally
The rare earth permanent magnet concept experienced a midday rally, with Shenghe Resources hitting the daily limit. Analysis: Overseas prices for rare earth metals have been rising for the past two months, with some varieties like dysprosium and terbium seeing price increases exceeding 200%. Concurrently, the "Regulations for the Implementation of the Mineral Resources Law" officially took effect yesterday, formally listing 36 critical minerals, including rare earths, tungsten, lithium, cobalt, gallium, and germanium, in the national strategic mineral resources catalog, further strengthening expectations for the control of strategic mineral resources.
Institutional Perspectives
Soochow Securities: No Clear Signal of Trend Reversal for Tech Stocks
Has the tech stock rally peaked? Soochow Securities believes that, from the current stage, neither the industrial nor the liquidity environment has shown a clear signal of a trend reversal. At the industrial level, large-scale commercialization of AI is still in its early stages. Beyond coding, the potential in areas like AI agents and physical AI has not yet been fully realized. On the liquidity front, the positive feedback mechanism between financing expansion and capital expenditure expansion continues. The key going forward is to observe the evolution of two paths: whether the industry first completes a commercial closed-loop and achieves self-sustaining growth, or whether a global liquidity tightening makes financing difficult to secure. Which arrives first will determine the continuation or inflection point of the tech rally.
Zheshang Securities: Market Consensus Highly Concentrated, Structure Strengthening, Breadth Needs Improvement
Zheshang Securities maintains a neutral-to-optimistic view on the market, considering factors such as domestic and international situations, economic cycles, domestic policies, fund flows, market sentiment, and broad-based valuations. From a market structure perspective, the fact that the top 5% of stocks by turnover account for over 45% of the total market turnover indicates a highly concentrated market consensus, with a strengthening structure but room for improvement in breadth. Looking ahead, the technical position of the ChiNext Index, one of the leading indices, is currently similar to that around February 2021, with the medium-to-long-term trend still favorable, remaining in a pattern of "safe medium-term trend."
Tianfu Securities: Tech Sector Sustainability Needs Confirmation from Today's Volume and Performance
The Middle East situation is expected to reach a "resolution," greatly alleviating short-term market pressure and allowing sentiment to rebound. Benefiting from related medium-to-long-term expectations, the decline in oil prices has also suppressed the Federal Reserve's inclination to raise interest rates within the year. In summary, a combination of market expectations and sentiment release led to yesterday's significant rally in tech hardware. The slight contraction in market volume was the only minor flaw in yesterday's performance, but considering the pre-Dragon Boat Festival effect and the upcoming Federal Reserve's June policy meeting, it is understandable that some funds chose to remain观望 (on the sidelines). Strategically, it is advisable to control position sizes and maintain a balanced allocation. The sustainability of the tech sector needs confirmation from today's trading volume and sector performance. The Nasdaq also opened with a gap up overnight. If Japan and South Korea can接力 (sustain) the related sentiment, the positive tech sentiment may continue. However, considering the pre-holiday period and the policy meeting, a cautious optimism is warranted, avoiding盲目追高 (blindly chasing highs).
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