Today's market session featured a dip-and-recover pattern. By the close, the Shanghai Composite Index gained 0.86% to 3986.30 points, the Shenzhen Component Index rose 0.44% to 14015.00 points, the ChiNext Index was up 0.42% to 3438.68 points, and the Beijing Stock Exchange 50 Index added 0.14% to 1065.29 points. Total turnover across the three boards reached 2.1453 trillion yuan, expanding by 27.6 billion yuan from the previous session. More than 3,100 stocks advanced across the market.
In terms of sector performance, AI video, film and TV entertainment, coal mining, liquid cooling servers, banking, electronic components, and Apple concept stocks led the gains. Precious metals, photovoltaic equipment, innovative drugs, energy metals, cultivated diamonds, automobile manufacturing, and airport shipping sectors were among the laggards. On the trading front, the debut of China's first AI-produced long-form drama "Journey to the West: The Sequel" on satellite TV sparked the short-drama concept, with multiple stocks hitting their daily limit, including Rongxin Culture, Mango Excellent Media, and CCTV China Pioneer Media. China Online and Liujin Technology also posted notable gains.
The liquid cooling server segment saw multiple stocks strengthen, with Jinfu Technology, Haioo Shares, and Jindi Shares sealing their daily limit-up boards. This followed reports that liquid cooling production lines in Shandong and Guangdong provinces are running at full capacity, with orders for core equipment such as CDUs already booked through the end of 2026. The banking sector also performed actively, with Bank of China and China CITIC Bank reaching new highs once again. Additionally, AI hardware-related stocks fluctuated upward in the afternoon, steadily recovering earlier losses.
On the downside, the "hawkish" debut of the new Federal Reserve Chair at Jackson Hole pressured international gold prices, dragging gold equities lower. Hunan Silver, Chifeng Gold, and Xiaocheng Technology were among the top decliners. The real estate sector opened strongly but retreated sharply during the session. I Love My Home, Shenzhen Properties, and Tianjin Infrastructure maintained their limit-up status, while China Merchants Shekou, Shenzhen Shenfang A, and Jingneng Real Estate gave up gains and pulled back.
At the index level, the market opened broadly lower today due to weekend headwinds, including the hawkish remarks from the Fed Chair. Technology growth stocks and precious metals sectors faced collective pressure. However, in the afternoon, coordinated strength from brokers, computing power, and cultural media sectors drove all three major indices into positive territory, culminating in a full-session close in the green. Currently, the market shows clear "downside support," as every sharp intraday dip attracts bargain-hunting capital. That said, the current turnover levels are insufficient to break the market out of its consolidation range. For further upside momentum, turnover needs to expand and stabilize at around 2.5 trillion yuan; otherwise, the sustainability of any upward move remains questionable.
It is worth highlighting that Sungrow Power, the leading PV inverter manufacturer, suffered another heavy sell-off today, plunging more than 8% intraday before closing down over 6%. Its total market capitalization now stands at 189.7 billion yuan, and the stock has lost nearly 20% over just the past three trading sessions. From its late-May peak of 191.71 yuan to roughly 90 yuan today, this former new-energy blue-chip stock has seen its share price halve within just three months.
This sharp decline is essentially the concentrated release of dual negative catalysts: an earnings "explosion" and a policy "black swan." On one hand, the half-year report delivered a "sell-the-news" shock, with fundamentals breaking down across the board. Over the weekend, Sungrow Power released its interim results, which stunned the market: H1 revenue came in at 30.912 billion yuan, down 28.99% year-on-year; net profit attributable to shareholders fell 32.01% to 5.259 billion yuan; and non-GAAP net profit plunged 42.96%. By region, domestic revenue collapsed from 18.1 billion yuan to 8.2 billion yuan, a dramatic 55% drop, due to the sharp decline in domestic PV installations and the company's proactive decision to abandon loss-making projects. In the Middle East, revenue cratered from 5.7 billion yuan to 1.1 billion yuan—an 91% slump—owing to the high base effect from last year's massive Saudi project. While management acknowledged that "results were not good," the sheer magnitude of the decline clearly exceeded market expectations.
On the other hand, a US ban has dealt a "precision strike" against inverter exports, casting a shadow over the company's international prospects. More concerning than the earnings slowdown is the policy blow from across the Pacific. On July 1, foreign media first reported that the Trump administration was drafting an inverter import ban, sending Sungrow Power shares near the limit-down that day. Then on August 26, the US President formally signed Executive Order No. 14420, citing a "national emergency" to prohibit the US government from procuring, importing, or installing certain foreign-made large-scale power system equipment, with inverters and battery energy storage systems explicitly named. The order covers transmission systems at 69kV and above and authorizes the Secretary of Energy to impose stringent conditions such as "disconnection, replacement, or removal" on already-installed equipment—meaning the existing market is also under threat.
The ordeal of Sungrow Power serves as a stark reminder for market participants on three fronts. First, global expansion does not equal risk hedging; policy exposure is the true "gray rhino." The US market contributes 15%-20% of the company's revenue, and once the ban takes effect, this proportion transforms from an advantage into a liability. Management's explicit statement that it "will not consider localizing production in the US" further raises questions about its long-term overseas outlook.
Second, no matter how attractive the track, performance ultimately remains the deciding factor. New energy is a long-term growth sector with a deep moat, but Sungrow Power's interim report reveals a harsh truth: when domestic installations slow and overseas project high bases fade, the high-growth narrative is far from unbreakable. Once earnings stall, valuation re-rating is often sharp and brutal.
Third, bargain hunting is not a casual endeavor; when the inflection point is unclear, it is wise to observe more and act less. Having fallen 20% in three trading days, the stock may indeed be oversold in the short term, but with policy uncertainty and the earnings inflection point still unclear, rushing in to "catch a falling knife" carries extreme risk. Rather than speculating on a rebound, it is better to wait for clearer fundamentals and policy clarity—after all, a good company still needs a good price, and good prices often arrive amid unsettling noise.
Looking ahead, as market turnover expands and investor risk appetite gradually recovers, close attention should be paid to volume changes. If turnover can continue to expand moderately and stabilize at 2.5 trillion yuan, the sustainability of an upward advance will be assured. If volume contracts again, it would suggest that investor confidence has not been fully restored by today's volume-backed rally, and continued consolidation remains more likely. On a medium-term horizon, the structural bull market pattern for A-shares remains intact. The first half saw gains driven primarily by valuation, while the second half is expected to shift toward earnings as the core driver. Domestic liquidity conditions remain accommodative, policy signals for economic stability are clear, retail participation potential has yet to be fully unleashed, and fundamental recovery provides solid support for the market. Investors may adopt a barbell allocation strategy, maintaining a stance that is "aggressive when attacking, defensive when retreating," to better navigate the market landscape ahead.
Note: Market risk exists, and investment requires caution. Under no circumstances should the information or opinions expressed in this publication be construed as investment advice to any individual. The content is for reference only and does not constitute investment advice. Investors who act on this information do so at their own risk.
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