Market sentiment turned cautious as the failure of direct US-Iran negotiations triggered a rise in oil prices and reduced global risk appetite. Foreign capital outflow intensified, leading the Hong Kong market to open lower and close down 1.22%. However, mainland Chinese equities showed resilience, with the ChiNext Index hitting its highest level since 2015 and the Shanghai Composite Index breaking through the 4,100-point barrier.
The stalled negotiations cannot be attributed to the US side, which was keen to engage and had dispatched a delegation led by Vance. Iran declined to participate, citing the US's refusal to lift its maritime blockade and its presentation of excessive demands that infringed upon Iranian rights, rendering the talks a waste of time. Subsequently, the US administration appeared to backtrack on its threat of military action if no agreement was reached by the deadline, instead announcing a temporary ceasefire extension at Pakistan's request. No new deadline was set, likely reflecting an awareness that further compromise would be necessary without a deal, an undesirable outcome. This round clearly favored Iran. Nevertheless, assuming sustained calm would be premature, as further provocative actions or military engagement remain distinct possibilities.
Additionally, yesterday's testimony from a Federal Reserve official, emphasizing policy independence, was interpreted by markets as hawkish. Consequently, investors adopted a highly cautious stance today, opting for preemptive risk reduction.
Despite the broader caution, the fundamental strength in the technology sector, particularly photonics, remains undeniable, with major players heavily investing. Reports indicate Advanced Micro Devices (AMD) is collaborating with a partner to develop Co-Packaged Optics (CPO) solutions. This follows Nvidia's announcement in March of a $4 billion investment in two photonics technology companies, underscoring its strong commitment to the CPO technology pathway. In the A-share market, leading optical module manufacturers surged to record highs. Zhongji Innolight (300308.SZ) rose over 3% intraday, touching a historic high of 893.20 yuan, with its total market capitalization approaching 1 trillion yuan, reaching 991 billion yuan. Eoptolink (300502.SZ) jumped over 7%, also setting a new record and surpassing a market cap of 600 billion yuan, marking a 43% gain year-to-date. Changguang Huaxin (688048.SH) hit the 20% daily limit up to a new peak, while Dongshan Precision (002384.SZ) also rose by the limit to a record high, achieving a market capitalization of 341.3 billion yuan. The rally was broad-based across the sector, with the CPO index surging approximately 9.94% over the past week.
In Hong Kong, CIG (06166), mentioned previously, saw another significant afternoon surge, gaining over 21%. Speculation circulated regarding the company's deep collaboration with Meta on NPO solutions and a strategic cooperation agreement with a Nokia subsidiary for a tripartite NPO project involving customer AMD. The company is reported to be fully integrated into the technological ecosystem of major North American firms.
Overnight, US semiconductor leaders surged. AMD closed up 7.8%, reaching its highest closing level since October 29, 2025, while Intel gained 5.48%, also hitting a record high. Persistent supply-demand imbalances prompted AMD and Intel to announce price hikes in March and April, respectively. Ongoing iterations in server CPUs are expected to drive upgrades in PCIe generations and lane counts, creating incremental demand across the related supply chain. Related Hong Kong-listed stocks, including PCIe Retimer supplier Montage Tech (06809) and PCIe slot provider FIT Hon Teng (06088), rose over 8% and 2%, respectively.
The fiber optic cable sector received a boost from ongoing Middle East tensions, which are causing supply shortages and price increases for helium, a key inert gas in optical preform production. This constrains fiber supply. First-quarter fiber output and sales grew nearly fivefold year-on-year, accompanied by significant price increases. YOFC (06869) surged over 17%.
Reports indicate that semiconductor clients, including Samsung Electronics and SK Hynix, have been notified by Japanese suppliers of disruptions in the procurement of raw materials for products like photoresist via their South Korean subsidiaries. This strengthened expectations for domestic substitution in memory chips, benefiting GigaDevice (03986), which rose over 2%. Foundry HUA HONG SEMI (01347) advanced over 4%.
Silicon carbide substrates are increasingly seen as a core foundation for the energy transition and AI infrastructure, with demand growing robustly. Their high-frequency, low-loss advantages make them crucial for improving power conversion efficiency in xEVs, PV energy storage, and data centers, acting as energy efficiency multipliers. Key player TYAdvanced (02631) gained over 2%.
The consumer sector saw strength in Heytea (02589), which continued its upward trend. The company operates in the expansive 10-20 yuan mass-market beverage segment, where leading players have significant room for market share consolidation. Heytea's strengths in northern and lower-tier markets position it well for sustained leadership, and its stock rose nearly 14%.
Media reports suggested Apple agreed to purchase DRAM chips from Samsung Electronics at twice the original price. Apple has reportedly raised its 2026 iPhone shipment target to 240 million units and is aggressively procuring memory capacity. Apple supply chain company Cowell E (01415) climbed over 8%.
The "2026 Global 6G Technology and Industry Ecosystem Conference" opened in Nanjing, featuring the launch of China's first Pre6G trial network in the city. Previously highlighted stock ZTE (00763) rose over 6%.
CATL (03750) hosted a tech event, unveiling new products including its third-generation Shenxing super-fast-charging battery, a lighter third-generation Kirin battery, a condensed matter battery offering 1,500 km range, and a second-generation super hybrid battery. Sodium-ion battery mass production is scheduled for Q4, with super-fast charging and sodium batteries being key highlights. Lead Intelligent (00470), which possesses full-process capabilities and intellectual property in sodium-ion battery equipment, gained over 2%.
PATEO (02889) announced a strategic cooperation agreement with Horizon Robotics to jointly promote AI innovation in smart cockpits, autonomous driving, and robotics, focusing on Qualcomm Snapdragon and Huawei Kirin computing platforms. The company is reportedly the sole supplier achieving mass production delivery on both major AI cockpit platforms. Internationally, cooperation with a European luxury OEM is deepening, with products slated for 2026 delivery, and progress is smooth with another international OEM. The stock surged nearly 25%.
Sector Focus: New guidelines jointly issued by the Central Committee and the State Council emphasize stricter control of fossil fuel consumption and vigorous development of non-fossil energy and new energy storage systems. While the push for new power systems is clear, pure green power generation often faces profitability challenges. Therefore, energy storage is likely the primary beneficiary. Key related stocks include CATL (03750), Sigen (06656), CALB (03931), Lopal Tech (02465), and REPT Battero (00666).
Stock Spotlight: Akeso (09926): Clinical Trials Progress, Strong Growth Potential for Innovative Products. At the 2026 AACR annual meeting, the company presented positive Phase II data for its novel PD-1/CTLA-4 bispecific antibody, cadonilimab, combined with chemotherapy for first-line advanced pancreatic cancer. The company reported 2025 revenue of 30.56 billion yuan, up 43.9% year-on-year.
Analysis: The excellent recent data represent a step forward towards commercialization. The company's innovative pipeline continues to deliver, accelerating growth for its products. Two first-in-class bispecific antibodies, cadonilimab and ivonescimab, were newly included in the National Reimbursement Drug List (NRDL), driving rapid sales expansion. 2025 commercial sales grew 51.5%, primarily due to the NRDL inclusion and new first-line indications. All 12 indications for its five self-developed drugs are now covered by the NRDL. The sales force expanded to about 1,300 people, covering oncology and specialty drugs. Future innovative products are expected to be approved in stages, providing sustained growth momentum. Ivonescimab has established a multi-line treatment layout in lung cancer; its Phase III trial for first-line PD-L1 positive NSCLC showed a 49% reduction in risk of disease progression or death compared to pembrolizumab. Partner Summit has submitted a BLA to the FDA. Cadonilimab demonstrated significant overall survival benefit in long-term follow-up for first-line gastric cancer, becoming the only I-grade recommended first-line immunotherapy in CSCO guidelines regardless of PD-L1 expression, and an international multi-center Phase III trial has commenced. In autoimmune and metabolic diseases, two new commercial products were added, with NDAs accepted for two others. Next-generation ADC drugs have entered Phase II trials for combination therapy with bispecific antibodies, marking the start of the "IO2.0+ADC2.0" combination therapy phase, potentially overcoming the narrow therapeutic window of existing ADCs. The company possesses a valuable innovative pipeline with strong potential for overseas expansion, ensuring a steady stream of future product approvals and growth drivers.
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