A-share hard-tech "dual innovation" sector suffered another sharp decline today, with multiple popular AI computing power stocks including "Yi Zhong Tian" plunging collectively. Among them, Eoptolink Technology Inc.,Ltd. (ASX: 300502) dropped more than 12% during intraday trading (closing down 12.28%), Zhongji Innolight Co.,Ltd. (ASX: 300308) fell more than 8% intraday, and Suzhou Tfc Optical Communication Co.,Ltd. (ASX: 300394) also declined more than 7% during the session. From being the darlings of the second quarter that investors flocked to buy, to now facing massive sell-offs, the dramatic cooling of the capital market is truly lamentable.
As of today's close, all three major A-share indices fell collectively. The Shanghai Composite Index dropped 1.48% and lost the 3,700-point integer mark, the Shenzhen Component Index fell 2.96%, and the ChiNext Index plunged 4.37%. Industry sectors showed widespread declines, with only medical aesthetics, robotics, and construction machinery sectors rising against the trend.
Near the midday close, screenshots circulated in multiple trading groups claiming that "private funds with assets in the billions in the Jiangsu-Zhejiang region had blown up, forcibly liquidating positions in Eoptolink and Zhongji Innolight." A reporter immediately called several securities firms in Hangzhou to inquire about the situation, and relevant securities firm executives said, "We haven't heard of similar news for now." However, some private fund managers stated, "Judging from market conditions, there are indeed some characteristics of a stampede, including yesterday's CATL."
On October 21 (this Wednesday), CATL, the largest weight in the ChiNext Index, plunged 12.03% due to earnings falling short of expectations (continuing to fall 3.29% today), dragging the ChiNext Index down continuously. Financial reports show that the company achieved operating revenue of 165.221 billion yuan in the third quarter, a year-on-year increase of 58.58%; net profit attributable to shareholders of the listed company was 21.246 billion yuan, up 14.54% year-on-year; non-GAAP net profit was 18.862 billion yuan, up 14.86% year-on-year.
Today, the stock prices of "Yi Zhong Tian" (Zhongji Innolight, Eoptolink, and TFC Optical Communication), which rank second, third, and fifth in ChiNext weights, fell further, adding insult to injury for the already weak ChiNext Index. On the news front, Nvidia announced yesterday at the GTC Berlin conference that it will partner with six major supply chain partners to significantly expand production, with the most closely watched item being plans to collaborate with Taiwan's Siliconware Precision Industries (SPIL). Some views suggest that the fact that Nvidia's official CPO expansion announcement did not include mainland manufacturers may signal a "divergence" between existing routes and next-generation routes.
Additionally, the continued fermentation of institutional position adjustment reports has exacerbated pressure on the dual innovation sector. Yesterday, the Zhongou Digital Economy Mixed Initiation A fund managed by Feng Ludan of Zhongou Fund significantly reduced its optical module positions in the third quarter: Zhongji Innolight holdings dropped from 889,300 shares to 575,000 shares, and Eoptolink from 1,781,400 shares to 1,286,200 shares. Although this is "lagged disclosure" as of the end of the third quarter, under the current relatively fragile market sentiment, the narrative of "collective holding collapse" has still amplified selling pressure to some extent.
It is worth noting that while the dual innovation sector underwent sharp corrections, some mysterious market funds were also balancing market movements. At midday today, multiple broad-based ETFs saw trading volume surges, with E Fund's ChiNext ETF exceeding 8.7 billion yuan in turnover and ChinaAMC's STAR 50 ETF exceeding 7.6 billion yuan. Prior to this, on October 16, broad-based funds including CSI 300 ETFs and SSE 50 ETFs also showed abnormal volume increases, which is typically seen as a signal of "national team" intervention to support the market.
Li Qiusuo, chief analyst of strategy research at CICC, stated that the main reason for the recent market adjustment is the suppression from external disturbances, including tightening overseas liquidity expectations, pressure during the tech stock earnings verification period, and repeated geopolitical tensions dragging down market risk appetite. "At the 2026 Financial Street Forum Annual Meeting, the central bank and securities regulator introduced a series of incremental policies to stabilize capital market expectations and release multiple positive signals." He believes that after continuous adjustments, the mid-term cost-effectiveness of overall A-share valuations has further improved, and the structural overvaluation problems faced by some sectors in the first half of the year have also been largely alleviated, with the full year expected to usher in the best performance period in the past five years. Additionally, the restructuring of the global monetary order and tech narratives still provide support for A-shares.
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