At midday on August 31st, China's three major stock indices opened lower collectively and fluctuated weakly during the morning session, presenting a divergent market pattern characterized by an index pullback, widespread declines among individual stocks, and a coexistence of defensive plays and thematic hotspots. As of the midday close, the Shanghai Composite Index fell 0.20% to 3,944.46 points, the Shenzhen Component Index dropped 1.00% to 13,812.99 points, and the ChiNext Index declined 1.29% to 3,380.15 points. More than 3,000 stocks across the market were trading lower. The combined half-day turnover for the Shanghai and Shenzhen markets stood at 1.31 trillion yuan, representing a decrease of 112.1 billion yuan compared to the same period in the previous trading session. During the morning session, main capital inflows were directed toward sectors such as culture and media, banking, and film and television theaters, while outflows were recorded from electronics, semiconductors, and new energy industries, with the electronics sector experiencing net outflows exceeding 8 billion yuan.
Market Overview: Trading hotspots were relatively scattered. On the upside, sectors including liquid cooling servers, short drama and film/TV theaters, real estate, coal, and agricultural seed industries performed actively. The banking sector rallied against the trend, with Bank of China surging over 4% and China CITIC Bank rising more than 2% to hit a new historical high. On the downside, sectors such as precious metals/gold, CRO/innovative drugs, photovoltaic equipment, and semiconductors declined. Overall, the indices pulled back collectively with more stocks falling than rising, as capital flowed out of high-position sectors like electronics and non-ferrous metals, rotating toward liquid cooling servers, banks, and media.
Hot Sector 1: Liquid Cooling Server Concept Strengthens Against the Trend
The liquid cooling server concept continued to climb during intraday trading. Rongyi Precision hit the 30cm limit-up, while multiple stocks including Guanlong Energy, Kangsheng Shares, Jinfu Technology, and Jindi Shares also hit their daily limits. Tongfei Shares surged over 10%, Haiou Shares touched the limit-up, and stocks such as Xinpeng Shares, Qiangrui Technology, and Dayuan Pump followed with gains.
Commentary: According to reports from CCTV Finance, as 10,000-card intelligent computing centers accelerate their deployment, chip power consumption continues to rise, making traditional air cooling insufficient to meet cooling demands. Liquid cooling has become a "must-have option" for computing power deployment. At a high-end AI server production line in Jinan, Shandong Province, a batch of liquid cooling servers is undergoing accelerated assembly and testing, with delivery and production imminent. Meanwhile, orders for CDU assembly lines for liquid cooling core equipment components in Laixi, Qingdao, Shandong, have been scheduled through the end of December. Data from CCID Consulting indicates that China's liquid cooling data center market is expected to reach 15.98 billion yuan in 2025, representing a year-on-year growth of 45.2%.
Hot Sector 2: Short Drama and Film/TV Theater Concept Gains Momentum
The short drama concept strengthened with volatile trading. Multiple stocks hit their daily limits, including Mango Excellent Media, China Broadcast, Huanrui Century, Shanghai Film, and Bona Film. Zhihu Technology and Chinese Online also followed with gains.
Commentary: On the news front, China's first satellite-broadcast AIGC long-form drama "Journey to the West: The Later Chapters" premiered on August 31st. Produced by Mango TV and aired during Hunan Satellite TV's prime-time slot, it is the first drama nationwide to adopt a "review-while-broadcasting" model following the issuance of the "Radio and Television 21 Measures." Additionally, according to media reports, IMAX China's 2026 summer box office season recorded its strongest performance since entering China 25 years ago, with summer box office revenue surpassing 723 million yuan as of August 29th, a year-on-year increase of 39%.
Hot Sector 3: Real Estate Sector Shows Counter-Trend Activity
The real estate sector was active during intraday trading. 5i5j and Shenzhen Properties both hit the one-word limit-up at the open. Stocks such as Tefa Service, ShiLianhang, Financial Street, and Zhongjiao Development opened at the limit-up but subsequently retreated, closing with gains of 10.26%, 5.58%, 3.14%, and 4.70%, respectively.
Commentary: On the policy front, the People's Bank of China and the National Financial Regulatory Administration jointly issued the "Opinions on Reforming and Improving Real Estate Credit Management to Accelerate the Construction of a New Real Estate Development Model" on August 28th, which specifies that development loans will adopt a lead bank system and extends the maximum term for individual housing loans from 30 years to 40 years. Concurrently, the Ministry of Housing and Urban-Rural Development, the Ministry of Natural Resources, and the National Financial Regulatory Administration released the "Notice on Improving the Sales System for Commercial Housing," requiring local governments to vigorously and orderly promote the sale of commercial housing on a completed-property basis.
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