On August 14, China's A-share market saw all three major indices close higher, though with diverging performance, as the ChiNext Index led the charge. By the close, the Shanghai Composite Index edged up 0.01% to 3927.18 points, the Shenzhen Component Index rose 0.45% to 14,354.31 points, and the ChiNext Index jumped 1.12% to 3626.30 points. The STAR 50 Index was nearly flat at 1717.68 points, while the Beijing Stock Exchange 50 Index fell 0.94% to 1087.52 points. Total trading volume on the Shanghai and Shenzhen exchanges reached 2.1428 trillion yuan, shrinking by about 408.1 billion yuan from the previous session. Across the market, 2,400 stocks rose and 2,970 fell, with 64 hitting the daily limit up and 10 hitting the daily limit down, resulting in a profit-taking effect of about 43%.
In terms of sectors, communications equipment, glass fiber, electronic chemicals, minor metals, non-metallic materials, and gaming posted gains, while utilities, film and television, real estate, securities, baijiu, and pharmaceuticals declined.
Where to start
Driving factors
1. Zhongji Innolight plans to acquire a 10.47% stake in Jones Tech for 1.747 billion yuan. Combined with the approval of the first national standard for data center liquid cooling, the CPO and liquid cooling direction surged, leading the communications equipment sector higher.
2. Industry chain sources reported that NVIDIA is advancing its Feynman platform with customized HBM and CPO, while SMIC management noted that Chinese internet companies' hardware investments exceeded expectations, with computing power companion chips in short supply. This boosted the optical communication and optical chip sectors.
3. China's enforcement of rare earth export controls has entered a substantive phase. July rare earth export volumes fell 17% month-on-month to a four-month low, while average export prices doubled year-on-year. Combined with rising prices of praseodymium-neodymium oxide, the rare earth permanent magnet and minor metals sectors strengthened.
4. Honghe Technology's interim net profit surged 334% year-on-year, with orders booked through 2027. Meanwhile, Nanya raised prices for copper-clad laminate substrates, supporting the electronic cloth and glass fiber sectors.
5. Two-day trading volume shrank to 2.14 trillion yuan. The Shanghai Composite Index and STAR 50 were nearly flat, while the ChiNext Index led gains, highlighting clear divergence in index performance.
Why just 10 ASX 200 shares?
Hot sectors
1. CPO/Optical Communications: The communications equipment sector rose 3.63%. Aladdie, Jones Tech, and Fuxin Technology hit their 20% daily limit up, while Hengtong Optic-Electric and Cambridge Technology also hit their daily limits. News that Zhongji Innolight plans to acquire a 10.47% stake in Jones Tech for 1.747 billion yuan, coupled with the approval of the first national data center liquid cooling standard and industry chain rumors of NVIDIA's early Feynman platform deployment, drove the CPO and cooling sectors higher.
2. Rare Earth Permanent Magnets/Minor Metals: The minor metals sector rose 3.04%, with China Rare Earth, Jintian Copper, and Huahong Technology hitting their daily limit up, while Northern Rare Earth gained 4%. The enforcement of rare earth export controls, July's 17% month-on-month decline in export volumes to a four-month low, and a doubling of average export prices year-on-year, combined with pre-holiday restocking expectations for the traditional peak season, triggered a value revaluation of the rare earth industry chain.
3. Glass Fiber/Electronic Cloth: The glass fiber sector rose 4.31%, with Sinoma Science & Technology up 7.48% and China Jushi up 5.94%. Honghe Technology's 334% year-on-year surge in interim net profit and orders extending to 2027, along with Nanya's price hike for copper-clad laminate substrates, kept AI computing power demand pushing electronic cloth prices higher.
Adjustment sectors
Utilities, film and television, real estate, baijiu, and pharmaceuticals led the declines. Meiyan Jixiang and Huayin Electric Power hit or neared their daily limit down, while Jingtou Development experienced a "sky-ground" board. These sectors had previously seen significant gains, and the day's declines highlight clear sector rotation in the market.
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