On May 14, A-shares experienced volatile adjustments in the morning session. The ChiNext Index fell over 2% intraday with a swing as high as 3% (it had risen over 1% at the open), while the Shanghai Composite Index and the Shenzhen Component Index both declined more than 1%. By the midday close, the Shanghai Composite Index was down 1.02%, breaching the 4200-point level. The Shenzhen Component Index fell 1.60%, and the ChiNext Index dropped 1.93%. The combined half-day turnover for the Shanghai and Shenzhen markets reached 2.27 trillion yuan, an increase of 296.9 billion yuan from the previous trading session.
On the market, chemical stocks bucked the downtrend and strengthened. Propylene oxide and fluorochemical sectors led the gains, with stocks like Hongqiang Shares and Hongbaoli hitting the limit-up. Pork stocks saw a volatile rebound, with Tianbang Food and Tianyu Biology locking in limit-up boards. The semiconductor industry chain remained active, with photolithography machines, industrial gases, and silicon carbide concepts rising again. Stocks such as Jingsheng Co., Ltd., Zhongchuan Special Gas, and Heyuan Gas surged by the limit-up or over 10%. Optical fiber and optical module concepts continued their upward trend, with Kechuan Technology, Changyingtong, and Zhongli Group hitting limit-up. The photovoltaic concept strengthened early in the session, with Xiecheng Integration and others reaching limit-up. The computing power leasing sector saw repeated strength, with Huasheng Shares locking in a limit-up board. The shipping sector rose intraday, with China Merchants Energy Shipping hitting limit-up. The robotics concept remained active, with Julun Intelligent surging straight to a limit-up. Additionally, sectors like gas and banking showed some performance.
On the decline, energy metals and minor metals sectors retreated, with Yongshan Lithium dropping nearly 7%. The power grid equipment concept continued to weaken, with Tongda Shares hitting limit-down, and stocks like China XD Electric, Sifang Co., Ltd., and Mingyang Electric falling over 5%. The PCB concept declined, with Tongguan Copper Foil dropping over 10%, and Shenghong Technology, Hongban Technology, and others falling more than 7%. The military and commercial aerospace sectors moved lower, with Dianke Lantian, China Great Wall, and Taijia Shares hitting limit-down. Cultural media stocks declined, with China Online, CITIC Press, and Zhangyue Technology falling over 5%. The lithium battery sector pulled back, with Fengyuan Shares touching limit-down. Additionally, sectors like medical devices, gas turbines, and software development performed poorly.
Looking ahead, a research report stated that from a medium-term perspective, it firmly believes the A-share market will continue its volatile upward trend, as overall valuations remain at reasonable levels. The resonance between the restructuring of the international order and China's industrial innovation trend is the core driver behind this market rally and the revaluation of Chinese assets. The steady progress since the 924 period is expected to continue.
**Hot Sectors** 1. **Chemical Sector Bucks Trend** The chemical sector remained active against the market, with Hongqiang Shares, Hongbaoli, and Yonghe Shares hitting limit-up. *Analysis: Institutional analysis suggests the chemical industry is at a critical juncture at the cycle bottom, poised for an upturn. Geopolitical conflicts are accelerating the clearing of overseas supply, highlighting the scarcity of China's core chemical assets. The industry is transitioning from cyclical gaming to value revaluation.*
2. **Pork Concept Shows Volatile Strength** The pork concept exhibited volatile strength, with Tianbang Food securing its second limit-up in four days and Tianyu Biology hitting limit-up. *Analysis: It is pointed out that recent industry capacity has decreased due to policy adjustments and supply pressure. Concurrently, prices have fallen below the full cost line. It is expected that industry-wide losses will lead to capacity reduction, with the sector's景气度 bottoming out and stabilizing. In the medium to long term, the hog farming industry still maintains a relatively favorable central profit margin. Following the African Swine Fever outbreak, many companies expanded rapidly with low-quality capacity, resulting in a wide variance in industry costs. Leading companies have ample room for释放超额利润.*
3. **Power Grid Equipment Concept Under Pressure** The power grid equipment concept faced pressure, with Tongda Shares hitting limit-down, and China XD Electric, Sifang Co., Ltd., Mingyang Electric, and others falling over 5%. *Analysis: Despite today's setback for power grid equipment stocks, many institutions remain optimistic about the sector's future development. A research report view suggests that whether through direct green power connections or computing-power synergy, it represents a revaluation of renewable energy's worth. The green power sector is expected to see valuation repair, recommending power generation companies with rapid growth in wind and photovoltaic capacity.*
**Institutional Views** **View 1: Firmly Optimistic on A-Shares' Continued Volatile Upward Trend; Focus on High-Growth and Cyclical Improvement Themes** A research report stated that both the All-Share Index and the ChiNext Index hit new historical highs yesterday, with the A-share "924行情" persisting for nearly two years. From a medium-term perspective, it firmly believes the A-share market will continue its volatile upward trend, as overall valuations remain at reasonable levels. The resonance between the restructuring of the international order and China's industrial innovation trend is the core driver behind this market rally and the revaluation of Chinese assets. The steady progress since the 924 period is expected to continue. In terms of allocation, growth still holds an advantage for 2026, but its relative performance compared to other sectors may收敛. After three years of de-capacity cycles, coupled with policies like "anti-involution," an increasing number of pro-cyclical industries are expected to benefit from supply-demand rebalancing. It is advised to focus on themes of high景气度 growth and cyclical improvement.
**View 2: A-Shares to Stage Structural Slow-Bull Market in Second Half of 2026** A May 14 research report stated that A-shares will演绎 a structural slow-bull market in the second half of 2026, driven by structural景气度 and fund clustering, suggesting investors follow an "景气度为纲" strategy, focusing on two main景气度 lines: "computing power bull" and "recovery bull." The AI computing power主线 is far from全面泡沫化; monitor景气度 diffusion across the entire industry chain. The "PPI-external demand" driven "recovery bull" is another key主线 for the year.
**View 3: Rapid AI Industry Development; Vast Space for Optical Interconnect Growth** A research report pointed out that according to LightCounting, the market size for Ethernet optical modules (100G and above) and CPO is预计 to grow 65% year-on-year in 2026, exceeding $50 billion by 2031. According to CignalAI, the OCS market size有望 grow from over $400 million in 2025 to over $2.5 billion by 2029. Optical modules are undergoing rapid iteration from 400G to 800G/1.6T. Each speed upgrade imposes higher performance and quantity demands on upstream components like optical isolators and WDM filters, creating vast market space for communication optical components. The development towards miniaturization, arrayization, and integration in consumer electronics, AR/VR, and optical通信 drives optoelectronic components towards complex film systems, ultra-precision processing, and小型化集成化. New micro-nano optical components like microlens arrays, diffractive optical elements (DOE), beam homogenizers (Diffuser), and metasurface optical elements are achieving规模化 application, enabling functions like wavefront control, array integration, and wavefront conversion difficult for traditional optics, significantly compressing optical system volume. They have become key supporting components in AR/VR and optical通信. Leading traditional optics companies, leveraging积累 in精密光学 technology, are gradually expanding into the optical通信 field,注入强劲的增长动能.
**View 4: A-Share Market Sectors Like Tech and Energy/Chemicals Expected to Maintain High景气度** A research report表示 that in China, Q1 GDP growth exceeded expectations, achieving an overall "开门红" for the economy, with exports and PPI being the most notable structural features. It is预计 that no加码 of总量性 policies is necessary, with结构性 policies focusing on supporting technological innovation and "anti-involution." Overseas, the U.S. economy continues to cool, European energy shocks have altered growth expectations, and Japan faces economic uncertainty from imported inflation. It is预计 that after assuming the Fed Chair role in May, there will be one rate cut in the second half of the year, and the Bank of Japan may hike rates by 25 bps in June. Regarding asset allocation, A-share market sectors like technology and energy/chemicals are expected to maintain high景气度, government bond rates may fluctuate at low levels, and caution is advised towards海外 bonds.
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