The ChiNext Index of the A-share market continued its strong performance on May 13, breaking through the 4000-point level during the afternoon session. Previously, it had only briefly surpassed 4000 points during intraday trading on three occasions from June 3 to 5, 2015, but closed below that level each time. Additionally, the Shenzhen Component Index rose above 16000 points, reaching its highest level since February 19, 2021, with a cumulative gain of over 18% for the year.
Computing hardware stocks maintained their upward trajectory, with Foxconn Industrial Internet hitting the daily limit-up. Its trading volume ranked first among all A-share stocks. Earlier, Avary Holding, Shengyi Technology, Tongfu Microelectronics, RoboTechnik, and Eoptolink Technology also saw significant gains.
The storage chip concept continued its strong rally. Dapu Micro surged over 19%, with its market capitalization exceeding 270 billion yuan. Jiangsu Yoke Technology, Wanrun Technology, and Demingli hit the daily limit-up. Shenzhen Kaifa, Jiangbolong, Biwin Storage, and JCET Group followed with notable increases.
In contrast, baijiu (Chinese liquor) stocks experienced a collective decline. Yingjia Distillery and Anhui Gujing Distillery fell over 3%. Jiangsu King's Luck Brewery, Shanxi Fenjiu, and Luzhou Laojiao dropped more than 2%. Wuliangye, Yanghe Brewery, Shede Spirits, Sichuan Swellfun, Jiugui Liquor, and Kweichow Moutai all declined over 3%. The only exception was Huangtai Wine, which registered a slight gain, making it the sole baijiu stock to advance in the sector this year.
A recent research report from Everbright Securities noted that the ChiNext Index's key metrics remain among the top performers across major indices, characterized by high growth, high profitability, and relatively low valuation. However, from a trading perspective, while the index's current valuation is on the higher side, it is also supported by strong fundamentals, making a sustained trend reversal less likely. The index is expected to exhibit strong, range-bound fluctuations.
Meanwhile, Industrial Securities suggested that despite intense competition within the ChiNext board, the AI sector still maintains a relatively higher probability of success. Specifically, the profitable momentum in the AI segment could attract capital away from other sectors. Even if the broader market corrects, funds are more likely to flow out of other areas to speculate on an AI rebound, thereby enhancing the relative attractiveness of AI plays. This dynamic could lead to more pronounced adjustments in other sectors.
Regarding individual stocks, Industrial Securities highlighted the need to monitor whether market trends might shift. Two potential scenarios could unfold: first, further differentiation within the AI sector, where companies with solid earnings support or deep ties to industry giants continue to outperform, while other stocks retreat; second, a potential rotation into sectors that have underperformed in the current rally but possess strong growth prospects, such as new energy or power grid equipment. If new market themes fail to gain traction, the index might undergo a phase of consolidation before new opportunities emerge.
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