China's three major A-share indices opened with mixed results. The Shanghai Composite Index increased by 0.05%, while the ChiNext Index fell by 0.57%. In terms of sector performance, consumer electronics, optical communication, and liquid cooling server segments led the gains. In contrast, innovative pharmaceuticals, tourism, and cinema chains were among the top decliners.
Looking ahead, one securities firm noted that the market is showing clear signs of becoming desensitized to geopolitical tensions. The firm believes that the current round of position replenishment is not yet complete, although the strength of reversal factors during the recovery phase is noticeably weaker than in the past, with a clear narrowing of sector focus. Regarding first-quarter earnings reports, companies that have already disclosed their results show significantly higher profit elasticity than revenue elasticity, with improved profit margins being a common trend. The technology and cyclical sectors have demonstrated particularly strong momentum, with "China's dominant manufacturing, AI infrastructure, and non-bank financials" identified as the three main drivers of first-quarter growth. From an allocation perspective, the underlying logic for portfolio construction continues to revolve around the revaluation of pricing power in China's dominant manufacturing sectors.
Another securities firm expressed the view that the upward trend in Chinese stocks is far from over, despite significant market divergence. The firm anticipates that Chinese stocks are likely to reach new highs in the near future, recommending themes such as AI infrastructure, robotics, and commercial aerospace.
A separate securities company pointed out that as the market enters the final stages of the "earnings report effect," investors should place greater emphasis on growth logic and changes in performance. Last week, the market continued to focus on heavyweight stocks on the ChiNext board, with simultaneous strength seen in new energy, CPO, and large financial sectors. As the ChiNext Index continues to hit new highs, more incremental funds are expected to engage in active trading, either by chasing popular themes or by accumulating positions in undervalued sectors. However, as the earnings season winds down, some individual stocks may face negative pressure from disappointing financial results, making it crucial for subsequent investments to carefully evaluate growth trajectories and earnings developments.
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