On April 20, the Shanghai Composite Index demonstrated strength throughout the trading session with oscillating gains, while the Shenzhen Component Index reached a new high not seen in over four years. Kweichow Moutai Co.,Ltd. reclaimed its position as the A-share market's stock with the highest price. At market close, the Shanghai Composite Index was up 0.76%, the Shenzhen Component Index rose 0.55%, and the ChiNext Index declined by 0.02%. The combined trading volume for the Shanghai and Shenzhen markets reached 2.58 trillion yuan, an increase of 153.2 billion yuan from the previous trading session.
Sector performance was mixed. The commercial aerospace concept remained strong all day, boosting the defense sector. Nearly twenty constituent stocks, including China Satellite and China Satcom, surged by the daily limit. AI hardware stocks such as those in fiber optic cables, optical modules, liquid cooling, and glass substrates continued to show active trading, with companies like Woguang Photoelectric, Tongding Interconnection, and Shengyang Co. hitting the upper limit. The Hainan sector gained strength in the afternoon, with Jurun Da Auto Parts rising over 5%. The power and grid equipment concepts also advanced, with stocks like Sun Cable, Tongda股份, and Langfang Development reaching the limit-up. The computing power leasing concept strengthened, with Heli Ta and Sanren Xing封板. The chemical fiber sector moved higher, with Suzhou Longjie and Xinxiang Chemical Fiber涨停.
Additionally, sectors including industrial gases, lab-grown diamonds, and photovoltaic equipment posted gains. On the downside, pharmaceutical and medical stocks faced downward pressure, with Enhua Pharmaceutical and Aotaibio falling over 6%. The real estate sector performed weakly, with World Union and Hefei Urban Construction dropping nearly 3%. The energy metals sector continued to weaken in the afternoon, with Boqian New Materials declining over 5%. The battery industry chain trended lower, with Jinyang Precision falling nearly 9%. Retail stocks retreated early in the session, with Yonghui Superstores and Hefei Department Store Group dropping over 3%. Furthermore, sectors such as securities, coal mining, and steel showed weaker performance.
Regarding key stocks, Kweichow Moutai Co.,Ltd. experienced narrow price fluctuations during the session. However, as Yuanjie Technology's shares declined more noticeably during the same period, Kweichow Moutai's stock price surpassed it, allowing the liquor maker to regain its status as the A-share market's highest-priced stock.
Looking ahead, Guotai Haitong believes the upward momentum in Chinese stocks is far from over, anticipating the market could reach new highs. Guojin Securities pointed out that, under different potential scenarios for geopolitical risk evolution, the energy sector might be a common beneficiary.
**Notable Sectors:**
1. **Commercial Aerospace Concept Shows Sustained Strength** The commercial aerospace concept remained strong throughout the day, boosting the defense sector. Nearly twenty constituent stocks, including China Satellite and China Satcom, hit the daily limit. *Analysis: The catalyst appears to be news from the National Space Administration's press conference for the 2026 "China Space Day," indicating密集 space missions for 2026, including the Tianwen-2 asteroid probe and the Shenzhou-XXIII manned mission, alongside flight tests for reusable rockets.*
2. **Liquid Cooling Server Concept Remains Active** The liquid cooling server concept strengthened, with Kangsheng Co. achieving its fourth limit-up in seven days and Invic soaring to a record high. *Analysis: Institutions note that the value of liquid cooling systems varies with chip power and rack architecture. They anticipate hybrid cooling (85% liquid, 15% air) for GB200/GB300 computing trays shipping in 2025, transitioning to 100% liquid cooling for future models like the Vera Rubin NVL72 from 2026, suggesting a potential global shift towards full liquid cooling.*
3. **Fiber Optic Concept Rallies Collectively** The fiber optic concept experienced a rapid upswing, with Tongding Interconnection hitting its second limit-up in three days, ZTT reaching the limit-up, and Changfei Fiber and Hengtong Optic-Electric following suit. *Analysis: Industry reports indicate a "volume and price rise" trend in the fiber optic sector this year. A producer in Jiangsu reported nearly a fivefold year-on-year increase in Q1 production and sales, with prices surging significantly; for instance, G.657.A2 fiber prices rose approximately 650% from 32 yuan per core-kilometer last year to 240 yuan this year.*
**Institutional Perspectives:**
**Guotai Haitong: Chinese Stock Market Momentum Far From Over** The upward trend in Chinese stocks is not finished, and the market is poised to reach new highs. Key factors include: 1) Reduced domestic concerns post-2024 and a changed perception of US sanctions by 2025, with the 2026 US-Iran conflict potentially highlighting China's industrial advantages and leading to a global reassessment of Chinese assets. 2) The emergence of risk boundaries has eased market anxiety, with expectation downgrades largely complete, allowing the market to refocus on endogenous growth logic. Recent capital market reforms signal a commitment to stability. A clearer market bottom could strengthen the influx of new funds amid declining risk-free returns. 3) Fiscal stimulus and rising inflation in 2026 should stabilize traditional industries. Meanwhile, facing large market demand and the US-China computing gap, investment in emerging industries will accelerate. China's competitive manufacturing sector is going global, with rising ROE and the emergence of multinationals, suggesting potential upward revisions to 2026 growth forecasts. Confidence in the market's continued ascent is warranted.
**Dongfang Securities: Beware of Geopolitical Volatility, Embrace Security Theme** While Middle East tensions eased last week, market pricing already reflected this, leading to lower oil prices, falling US bond yields, and a significant equity market rebound. Looking forward, geopolitical situations could remain volatile, and the negative impact of high oil prices remains a concern. As key economic data is released in early May, market expectations for the economic outlook will be adjusted. Instead of frequently switching strategies based on geopolitical noise, focusing on the medium-term security theme, which offers greater certainty of benefit, is preferable.
**Guojin Securities: Energy Sector a Potential Beneficiary Across Geopolitical Scenarios** The direction of Middle East geopolitical conflicts remains highly uncertain, with conflicting statements from the US and Iran on key issues. Future developments could follow two paths: 1) Gradual de-escalation of risks as negotiations progress, or 2) A secondary escalation of conflict or supply chain issues if inventories deplete, exacerbating tail risks. Under the first scenario, once supply chain shocks subside, the AI-driven tech boom could be sustained. Considering likely increases in overseas AI capex and data center power demand in Q1 2026, against a backdrop of underinvestment in energy infrastructure relative to AI growth, tech expansion could drive demand for energy-related physical assets, potentially reigniting a rotation from tech to manufacturing and resources. Under the second scenario, given that global crude reserves average around 45 days of consumption and may have been partially depleted during the recent conflict, supply chain concerns could resurface. In this case, traditional energy assets would become the primary market haven. It's noteworthy that recent negative correlation between sovereign bond yields and energy independence hints at emerging growth constraints related to inflation expectations and energy dependencies.
Comments