China's A-Shares Close Mixed: Shanghai Index Down 0.26%, Chip Stocks Surge Unexpectedly

The market experienced a dip followed by a recovery today. A sudden surge in the chip sector during the afternoon session led to gains on the ChiNext and STAR Market boards, significantly narrowing the losses on the Shanghai Composite Index. Total market turnover reached 2.3 trillion yuan for the day, with more stocks rising than falling across the two exchanges. On the market front, the chip sector showed unexpected strength in the afternoon, with stocks like Hua Hong Semiconductor Limited, Biwin Storage Technology Co.,Ltd., and Hunan Goke Microelectronics Co.,Ltd. soaring over 10%. Analysts suggest that while positive rumors concerning HUA HONG SEMI have been circulating, the upcoming GTC 2026 conference by NVIDIA might also be a primary catalyst for the semiconductor sector's surge. Additionally, reports of price increases by wafer foundries such as UMC, Vanguard, and Powerchip served as another driving factor.

In other hot sectors, the deep-sea technology concept strengthened, with stocks like Oriental Ocean, Shenkai Shares, and Ocean King hitting the daily limit-up. The PCB concept was also active, with Jin An Gu Ji, Chaoying Electronics, and Zhuolang Intelligent reaching the limit-up. The shipping sector advanced in the afternoon, with China Merchants Energy Shipping and HNA Technology hitting the limit-up. On the decline, energy storage and green power concepts continued to adjust, with China Nuclear Engineering&Construction Corporation Limited and Power Construction Corporation Of China,Ltd touching the daily limit-down. The coal sector weakened, with Zhengzhou Coal Industry&Electric Power Co.,Ltd. falling sharply.

Looking at individual stocks, 2,843 companies advanced, 2,494 declined, and 152 closed unchanged across the two exchanges. A total of 63 stocks hit the daily limit-up, while 13 stocks hit the limit-down. At the close, the Shanghai Composite Index fell 0.26% to 4,084.79 points, with a turnover of 1.0372 trillion yuan. The Shenzhen Component Index rose 0.19% to 14,307.58 points, with a turnover of 1.2881 trillion yuan. The ChiNext Index gained 1.41% to close at 3,357.02 points.

**Capital Flows** Today, major funds primarily focused on sectors like baijiu (white liquor), diversified finance, and passenger vehicles. Stocks with significant net inflows from main funds included China Oil Capital, Kweichow Moutai Co.,Ltd., and Shunna Shares.

**Key News Recap** 1. **Three Ministries: Aim to Double National Fuel Cell Vehicle Ownership by 2030 Compared to 2025** The Ministry of Industry and Information Technology, the Ministry of Finance, and the National Development and Reform Commission issued a notice on carrying out pilot projects for the comprehensive application of hydrogen energy. It states that by 2030, hydrogen energy should achieve large-scale application in various fields within city clusters, with the average end-user price of hydrogen dropping below 25 yuan per kilogram, and striving to reach around 15 yuan per kilogram in some advantaged regions. The national stock of fuel cell vehicles should double compared to 2025, aiming to reach 100,000 units. Expanding the scale of application will drive innovation and breakthroughs in hydrogen application technology, processes, and equipment, achieving iterative upgrades in fuel cells, electrolyzers, storage and transportation devices, and materials, thereby fostering hydrogen energy as a new economic growth point and supporting a comprehensive green transition in economic and social development.

2. **National Technical Committee for Satellite Internet Systems and Service Standardization Approved** It was learned today (16th) that the State Administration for Market Regulation has officially approved the establishment of the National Technical Committee for Satellite Internet Systems and Service Standardization. In recent years, with the accelerated construction of low-earth orbit satellite constellations, the application of satellite internet has been expanding in areas such as direct-to-cell phone connectivity, emergency communications, marine fisheries, transportation and logistics, and communication support in remote areas. China's satellite internet industry ecosystem is becoming increasingly active, and industrial capabilities are strengthening.

3. **Zhipu Releases World's First Lobster-Optimized Large Model GLM-5-Turbo, Simultaneously Raises API Price by 20%** Today, Zhipu officially released the world's first general large model, GLM-5-Turbo, deeply optimized specifically for lobster-related scenarios, and simultaneously increased the API price for GLM-5-Turbo by 20% upon release. According to evaluation results from the end-to-end lobster benchmark ZClawBench, GLM-5-Turbo showed significant improvement over GLM-5 in OpenClaw scenarios, leading several mainstream models overall in multiple key tasks. Simultaneously, Zhipu also launched lobster-specific packages for individual and enterprise users.

**Market Outlook** 1. **CSC Financial: Profound Impact from Middle East Situation, China Faces Strategic Opportunities** The US-Iran conflict has entered a stalemate phase, causing sharp fluctuations in crude oil prices. China's diversified crude oil imports, along with its energy structure transformation and strategic petroleum reserves, will provide a buffer. However, amid global risk appetite disturbances and domestic market liquidity constraints, A-shares may continue to experience volatile trading in the short term. A prolonged US-Iran conflict could bring three main impacts: 1) Higher central oil prices, rising global inflation, and disruption to the Fed's interest rate cut pace; 2) Accelerated loosening of the petrodollar system, with China potentially becoming a global capital safe haven, benefiting RMB-denominated assets; 3) Possibly creating strategic opportunities for China. Leveraging its dual-pillar energy foundation of 'coal + new energy,' China can not only ensure its own energy security but also potentially become a leader in the global energy transition. Key sectors to watch include: coal, coal chemicals, power equipment, utilities, petroleum and petrochemicals, and the AI industry chain. Thematic focuses include: lithium battery, nuclear power, energy storage, and wind power.

2. **Zhongtai Securities: Energy Security Assets May Continue Benefiting Short-Term** The duration of the US-Iran conflict has exceeded market expectations. Regarding A-shares, the market theme this week remained dominated by 'risk aversion.' As the geopolitical conflict persists and crude oil futures prices rebound, this week's trading focus remained concentrated on energy and defensive sectors. Heavy-asset sectors like coal, utilities, and power equipment, along with oil energy substitution sectors, performed relatively well. Looking ahead, the US-Iran conflict may show a trend towards 'prolongation.' Energy security assets might continue to benefit in the short term, while caution is needed for tech sectors, especially those vulnerable to negative spillover effects from overseas markets. Investment recommendations: Main theme one: Energy security and 'conflict beneficiary' assets. Main theme two: Tech export chains driven by energy transition and military expansion. Main theme three: Internal differentiation within tech – prioritize directions driven by domestic logic.

3. **Industrial Securities: A-Shares Expected to Become More 'Domestically Driven' Subsequently** As the conflict evolves, the core contradictions in market pricing are undergoing two major changes. First, the trading focus is shifting from 'rising intensity' to 'negotiation volatility.' Second, the market is beginning to price in the impact of high oil prices on the economy and policy direction. After these two changes are confirmed, and as the market's marginal reaction to negative news gradually dulls while the advantage of domestic policy certainty becomes prominent, A-shares are expected to subsequently become more 'domestically driven.'