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As the title suggests, my limited vocabulary is insufficient to describe the explosive nature of the satellite market rally.
Also hitting limit-up is the Media ETF, as an AI application... The last time the media sector surged like this was back in 2015. Last Friday's piece on the satellite sector mentioned numerous risks, given the utterly exaggerated gains. But judging by the sentiment in the comments section, people are more inclined to jump on the bandwagon first and figure things out only after they're already invested and potentially stuck. For those who can't hold onto satellite stocks, can't hold through big rallies, and are prone to selling too early— Today, a friend commented even more pointedly: if you can't hold, then go get a job; if you can't hold, then go work in a factory. Can't hold when it's rising, can't hold when it's falling—can you even hold a wrench steady? Can you hold onto a screw? Well said. I have no retort. We often say that the power of Beta is formidable, and a bull market often brings a double boost from subscriptions and net asset value. After the significant rally in the first week of 2026, the total ETF assets under management at ChinaAMC have reached 999 billion yuan, having grown by 42 billion yuan this year already, equivalent to the size of a small-scale asset management firm. Factoring in today's substantial gains, ChinaAMC's AUM breaking through the 10 trillion yuan mark is almost a certainty, making it the first fund company in China to achieve this milestone, highlighting the Matthew effect.
The Ghost of 2015 It was previously said that this market rally resembles 2015, and judging by the current pace, there is indeed some similarity. First, there are similar macroeconomic pressures. In 2015, China faced the "triple pressures," with GDP growth falling below 7%, declining returns in the real economy, and the state hoping to help enterprises raise funds and overcome difficulties through the stock market. In 2025-2026, China faces "deflationary pressures" and a "property market seeking a bottom," similarly requiring an active capital market to boost confidence and the wealth effect for households. Second, both periods feature top-down policies and grand industrial narratives with promising prospects. In 2015, the "Belt and Road" initiative was the national strategy, and "Internet Plus" was the industrial narrative. Currently, "enterprise globalization + anti-involution" is the overarching strategy, while the underlying narrative has expanded from last year's AI computing power to satellites, commercial aerospace, and AI applications. So far, the several major bull markets in A-shares, while ultimately leaving a mess, have not hindered substantial industrial development. For example, in 2007, the big financials surged, and afterwards, the Big Four banks did indeed gradually become world-class banks. In 2015, the "Internet Plus" sector skyrocketed; although leading stocks delisted, internet companies in Hong Kong, applications, and unlisted top internet unicorns did indeed reach world-class status. In 2020, new energy stocks soared, and the results are there for all to see. Third, there's a touch of "dream valuation" in both. The chart below compares valuations with the hot sectors and core broad-based indices of 2015. Constrained by limited profitability, the valuations for the satellite and STAR Market sectors are already higher than those of the core media and ChiNext sectors during the previous cycle.
The PE ratio of the CSI Satellite Index is roughly 380x. For comparison, the Han Dynasty lasted 422 years, the Song Dynasty 319 years, the Tang Dynasty 289 years, the Ming Dynasty 276 years, and the United States is only 250 years old this year. I feel that using "dream valuation" to describe the satellite sector is somewhat conservative; it should be called "star valuation" to better reflect the intensity of this round of commercial aerospace. In contrast, small caps are relatively better off. The current CSI 1000 Index has a PE of around 50x, still some distance from the peak PE of the CSI 500 Index back then. Large caps, especially blue-chip broad-based indices like the SSE 50, have not reached the high valuations seen in the last cycle. But judging by investor sentiment, making money in the stock market seems much easier than working a job. It's unclear when people might start talking about "quitting the boss" and when stock talk will fill the streets and alleys. For now, I prefer to keep a large portion of my portfolio in undervalued sectors, while gradually taking profits on broad-based indices and popular sector indices. Still Watching the Unloved "Old Guards" Finally, as the strong 2026 "Spring躁动" begins, the sectors playing the role of the backdrop are banking and oil & petrochemicals—a familiar feeling has returned.
On the other hand, the trio of optical module stocks still aren't getting much love from capital. I compared the price trajectory of CATL from 2018 to 2021 with that of Zhongji Innolight from 2023 to the present.
For high-growth sectors in the A-share market, three years is often a critical hurdle, after which the sustainability of the growth momentum becomes key. This time, the high-growth phase for Yizhongtian has lasted longer because it involves being a supplier to major overseas clients, leading to good profit margins and a sufficiently long growth cycle. Whether it will follow the same path as the previous cycle for photovoltaics and new energy is uncertain and depends on the attitude of overseas giants towards AI hardware and capital expenditures. Of course, the current adjustment in optical modules has nothing to do with their growth prospects or fundamentals; it's primarily due to capital being drawn away by the satellite and AI application themes. If one remains bullish on AI hardware, then now might be an opportunity to add positions. There's a relatively high probability that attention will return to optical modules after this wave of hype subsides. That's all.
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