On September 9, A-share indices showed mixed results, with the Shanghai Composite and Shenzhen Component indices edging up while the ChiNext and STAR 50 indices slipped, presenting a clear picture of structural market movement. The shipping sector took off as VLCC route freight rates surged, propelling multiple stocks like China Merchants Energy Shipping and Haitong Development to hit their daily limit. Meanwhile, agriculture-related stocks continued their strong run, with global sugar prices climbing due to climate-driven production cuts and trade policy disruptions, making sugar substitute concepts notably active. Within the tech sector, optical fiber and PCB stocks maintained their leading positions, although performance varied across the board.
The market is currently in a phase of bottoming-out volatility, but the fundamentals of hard tech remain solid. Semi-annual reports confirm strong order backlogs in sectors like optical modules, high-end PCBs, and HBM packaging and testing. Coupled with the Ministry of Industry and Information Technology's "15th Five-Year Plan" for computing power to underpin long-term demand, and continuous catalysts from overseas players like OpenAI, Nvidia, Qualcomm, and Amazon, plus rising prices for upstream materials like copper and copper-clad laminates, the logic of simultaneous volume and price increases across the AI supply chain remains unbroken. The current divergence in tech stocks is largely a trading-level rotation and valuation adjustment, with some long-term capital viewing the pullback as a strategic entry point into the computing power mainline.
Mixed performance for most sectors amid high volume in select concepts
While major A-share indices were mixed today, with the Shanghai Composite and Shenzhen Component up 0.28% and 0.15% respectively, and the ChiNext and STAR 50 down 0.14% and 0.48%, the broader market showed less breadth compared to Monday's broad rally, with less than 30% of sectors ending in positive territory. However, this included not only traditional sectors like transportation and agriculture but also hard tech concepts such as optical fiber and PCB. On the news front, by the end of August, daily earnings on the Saudi-China VLCC route had climbed to around $656,000, a more than tenfold increase year-over-year. Similarly, the Oman-China VLCC route saw daily earnings rise to roughly $220,000 from about $131,000 a month prior. This backdrop fueled a strong rally in ocean shipping concepts, with stocks like China Merchants Energy Shipping, Haitong Development, and Nanjing Port hitting their daily limit, and others like COFCO Maritime and Lianyungang Port also posting significant gains.
In the persistently active agriculture sector, alongside the continued strength in seed stocks, sugar substitute concepts surged recently, with Hongmian Co., Huakang Pharma, and COFCO Technology all locking in two consecutive daily limit ups. The core drivers behind this rally are EU beet production cuts due to El Ni帽o and production reduction expectations in India and Thailand. This has subsequently led to shifts in India's import-export policies, disrupting the global sugar trade balance and amplifying the rise in international sugar prices. Industry insiders suggest that as supply-demand gap expectations ferment, concentrated short-covering and a shift towards long positioning have magnified short-term price volatility. Given that sugar prices are currently at low levels with a high safety margin, this commodity is attracting market attention.
Among tech concepts, while Monday's wave of limit-up moves wasn't replicated, optical fiber and PCB concepts still led the gains. Despite overnight losses in US major indices, US tech and semiconductor sectors strengthened against the trend, highlighting a clear divergence between indices and sectors. This divergence sends a key signal: capital is concerned about rate pressures weighing on index heavyweights but remains bullish on the industrial prosperity of AI computing hardware. Looking at the A-share market, it's again at a critical juncture, with the broader index oscillating, leaving opportunities primarily structural. The relative strength of US tech stocks is having a positive impact on A-share computing power chain sectors like PCB, memory, and optical chips. While current A-share indices face multiple headwinds and the bottoming-out phase persists, the prosperity logic of the tech mainline is gaining recognition from foreign capital.
The high-activity logic for the tech mainline remains intact
Despite escalating short-term trading disagreements, the solid prosperity foundation of hard tech industries remains unchanged, and the "orders-capacity-profit" chain validated by recent semi-annual report disclosures hasn't broken. On the policy front, a long-term demand anchor is being set. The MIIT's "15th Five-Year Plan" not only establishes a target of 9800 EFLOPS for intelligent computing power but also outlines 26 key tasks, including 400G and above high-speed transmission, accelerating the construction of a national integrated computing network, and 6G commercialization. This implies clear order visibility for optical communications, PCB, servers, liquid cooling, and other parts of the chain for years to come.
Semi-annual reports have already confirmed the order thickness. In the first half of this year, the aggregate net profit attributable to shareholders of A-share AI computing power companies surged 114.21% year-over-year. Among individual stocks, optical module leader Zhongji Innolight saw its H1 net profit jump 241.7% YoY, with orders from major clients already scheduled into 2027. High-end PCB leader Shennan Circuits also confirmed on a conference call that its orders extend to 2027. WUS Printed Circuit has orders booked through the year's end with production at full capacity. In the memory segment, Longsys and Biwin Storage have secured long-term upstream agreements. JCET's advanced HBM packaging and testing orders are at full capacity. These are tangible revenues and cash flows, not just concepts.
Global AI capital expenditure continues to increase. With OpenAI releasing GPT-6, Nvidia extending its computing power visibility to 2028, and Qualcomm and Amazon announcing a multi-generational custom AI chip partnership, overseas cloud providers keep revising their capex upwards. Record-high copper prices, rising prices for copper-clad laminates and electronic yarn, and tight supply of industrial silicon, resins, and basic chemical raw materials in northern Shaanxi, all point to a medium-to-long-term trend of simultaneous volume and price increases across the supply chain. In other words, the tech stock divergence on September 9 is more about trading-level "high-low switching" and valuation digestion rather than a reversal of the industry logic. The net capital inflows into core targets like Zhongji Innolight and YOFC suggest that long-term funds are also viewing the current divergence as a window for positioning.
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