On July 27th, China's three major A-share indices opened lower but climbed throughout the day, with the ChiNext Index rising 3%. The new energy sector staged a recovery, driven by strong lithium battery concepts. The ChiNext New Energy ETF (159076), which is heavily weighted in lithium battery and solar stocks, traded high throughout the day and rallied in the final minutes to close up 3.04%. Technically, the index reclaimed its 5-day and 10-day moving averages. If it can hold above these levels and the 5-day MA flattens or turns upward, the likelihood of a short-term bottoming process may increase.
Among constituent stocks, Xin Qiang Lian surged 11% to lead the gains, while Dier Laser, Defu Technology, and Tongguan Copper Foil all rose over 7%. Sunwoda, Contemporary Amperex Technology Co., Limited (CATL), and Lead Intelligent Equipment were among the top performers.
On the news front, the top holding of the ChiNext New Energy Index, CATL, announced a plan to repurchase A-shares through a centralized bidding process using its own funds or self-raised capital. The total buyback amount will be no less than 20 billion yuan and no more than 40 billion yuan, with a maximum repurchase price of 573 yuan per share. The repurchased shares will be cancelled to reduce the company's registered capital. This 40 billion yuan buyback scheme sets a new record in A-share history. Additionally, the company disclosed that its combined sales of power and energy storage batteries in the first half of 2026 grew by approximately 60% year-on-year, with energy storage batteries accounting for about one-quarter. Capacity utilization is nearly saturated, and the company is optimistic about the AI data center (AIDC) business prospects.
Dongwu Securities pointed out that demand expectations for leading companies in the supply chain are improving, and valuation recovery for the lithium battery and energy storage sectors appears likely. After a period of deep correction, downstream demand for lithium batteries is gradually recovering, and production plans are increasing month-over-month. With sector valuations still near the bottom, the upcoming peak season could drive strength in the sector. Opportunities in overseas power batteries and energy storage businesses are vast, and the firm suggests positioning in battery manufacturers and high-quality leaders across the entire industrial chain. For the energy storage sector, with both domestic and international demand exploding simultaneously, global energy storage installations will maintain a high growth rate, making residential, commercial, industrial, and large-scale storage leaders all attractive investment targets.
Nomura Oriental International Securities Research Institute noted that the market has entered a window for verifying semi-annual report performance. It favors sub-sectors with strong medium-to-long-term fundamentals and potential for upward earnings revisions, which could lead to a "double-hit" of valuation recovery and earnings outperformance. They recommend focusing on three key themes for potential earnings surprises: (1) Energy Storage: Global demand remains high, with AI computing power storage opening new incremental space. Global storage installation demand continues to grow strongly, and the deployment of AI data center computing clusters is driving up storage demand, improving the industry's full-year outlook. Domestic storage supply chains have complete production capacity, cost, and delivery advantages, providing strong earnings visibility. (2) Power Equipment: Long-term grid investment cycles are thriving, with AI demand spillover boosting export profitability. Domestic grid construction and renovation investment is maintaining a long-term high cycle, while global new power system construction is accelerating. Incremental power supply and distribution demand from the AI computing industry is continuously spilling over to the domestic power equipment chain. (3) Industrial Control: The mass production of humanoid robots is approaching, and demand for automation equipment is recovering. The recovery of domestic manufacturing investment in 2026 is driving a revival in industrial automation demand.
[Seizing on the Energy Transformation! Heavily invested in Lithium and Solar] The ChiNext New Energy ETF (159076) focuses on the mid-to-upstream segments of the new energy sector, providing a single-click investment in the core lithium battery, solar, and wind power tracks. Its top ten holdings account for over 60% of the weight, with the top five including power industry leaders like Sungrow Power Supply, CATL, Inovance Technology, EVE Energy, and Robotechnik. This makes it well-positioned to capture the beta returns from the multiple demand drivers of lithium batteries, solar, and new energy vehicles.
Institutional viewpoints are sourced from: Dongwu Securities, July 26, 2026, "Commentary on CATL's 2026 Interim Report: Strong Shipments and Stable Performance, Buyback Shows Confidence in the Leader"; Nomura Oriental International, Power Equipment and New Energy Industry Weekly Report, July 26, 2026, "Focusing on Investment Opportunities from Earnings Surprises in the Reporting Season."
Reminder: Market volatility may be significant recently, and short-term gains or losses do not predict future performance. Investors must invest rationally based on their own capital situation and risk tolerance, paying close attention to position and risk management.
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