China's three major A-share indices closed higher on Thursday, with the Shanghai Composite Index advancing 0.94%, the Shenzhen Component Index gaining 1.72%, the ChiNext Index climbing 2.25%, the Beijing Stock Exchange 50 Index rising 1.79%, and the STAR 50 Index jumping 2.88%. Total market turnover reached 2.09 trillion yuan, expanding by 256.4 billion yuan from the previous session, while more than 4,200 stocks finished in positive territory.
Leading sector gains were seen in new listings, semiconductors, automotive chips, memory chips, and lithography equipment, while automobile manufacturing, coal mining, aquaculture, pork, and banking sectors lagged behind. The new shares segment continued its upward trajectory, with C Shengu (601091) at one point surging nearly 300%, C Xinwei climbing more than 90%, and Tengxin Precision, Dianke Siyi (301689), and Tuolunsi (301583) all hitting their daily limit. Semiconductor stocks demonstrated considerable strength, with Tuolunsi, Shengjing Micro (603375), and Huatian Technology (002185) reaching limit-up, while Dongwei Semiconductor, Aojie Technology, and National Technology (300077) posted significant gains. Photovoltaic equipment names strengthened in the afternoon session, with Yamadun (002623) locking in the daily limit and Laplace, Beiteli (301697), Aiko Solar (600732), and Canadian Solar also advancing. The auto manufacturing segment remained subdued throughout the day, with Zotye Auto (000980), JMC (000550), and Ankai Bus (000868) among the notable decliners.
At the index level, the positive overnight performance on Wall Street and higher openings in Japan and South Korea provided a favorable backdrop. The market opened higher and maintained momentum, with noticeably expanding volume indicating that external capital is beginning to enter. To sustain this upward trajectory, turnover will need to remain consistently elevated around 2.5 trillion yuan with a "price-volume synchronous advance" pattern; otherwise, a pullback remains a distinct possibility.
Semiconductor, photonics, and the threefold resonance
A notable feature of Thursday's session was the synchronized strength across semiconductor and optical chip sectors, with advanced packaging, memory chips, and computing power chips all posting gains. This broad-based rally stems from a three-way convergence of top-level policy design, overseas industry signals, and domestic pricing dynamics. This week, the Ministry of Industry and Information Technology and the National Development and Reform Commission jointly issued the 15th Five-Year Plan for the Electronic Information Manufacturing Industry, setting a target of 30 trillion yuan in revenue for enterprises above designated size by 2030 and a research and development investment intensity of 3.5%. Critically, "photonics" has been elevated to the level of industrial foundational capability, covering key areas such as integrated optical chips and co-packaged optics. As the guiding document for this planning cycle, its significance lies not in individual subsidies but in shifting the policy focus from isolated measures to whole-chain collaboration, providing clearer industrial logic for domestic substitution efforts.
On the international front, NVIDIA CEO Jensen Huang announced at the Scottish AI Summit that the company's chip sales are projected to approximately double by 2027 as artificial intelligence penetrates into healthcare, manufacturing, and financial services. This optimistic outlook lifted global chip stocks. Meanwhile, Intel's improving yields at its 18A node and smooth production ramp-up have further reinforced the narrative of strengthening global semiconductor demand. Confidence transmitted from overseas leaders served as a direct catalyst for market sentiment in the A-share market.
Domestic pricing signals are equally robust. Twelve-inch silicon wafers have experienced their first full-scale price increase in three years, with variations across sizes and applications, particularly notable gains in AI/high-performance computing premium wafers. HBM supply remains tight, with projected capacity gaps of 50% to 60% by 2026, and SK Hynix's capacity already sold out in advance, prompting domestic memory chip makers to raise prices. TSMC recorded its highest-ever August revenue, up 53.3% year-over-year, while Omdia data shows global semiconductor revenue exceeded 425 billion USD in the second quarter, also a record. The AI server expansion is transmitting through the chain from server shipments to critical component shortages to upstream capacity additions to equipment orders. Morgan Stanley research is bullish on the advanced packaging track, projecting the domestic market to reach the 100-billion-yuan level by 2029. This price-volume resonance at the industry level provides confidence for capital to transition from policy-driven catalysts toward earnings realization.
The bewildering surge of C Shengu
Thursday's session featured a truly remarkable spectacle: C Shengu, which listed just yesterday, surged again dramatically, touching an intraday high near 300%. Calculated from its IPO price of 4.39 yuan, the cumulative gain over two days exceeded 15-fold. Intraday, the stock ranged from a low of 14.68 yuan to an astonishing high of 82.59 yuan, representing an intraday amplitude of more than five times. Even seasoned investors admitted they were completely baffled by the move.
The explosive rally in C Shengu can be attributed to four converging factors: an extremely low offering price, a minuscule free float, the resonance of scarce theme exposure, and a shift in market capital style. Shengu Group's issue price of 4.39 yuan per share is the lowest for any new A-share listing this year, creating a very low barrier for small-scale capital participation. Of the company's total 3.11 billion shares, only 211 million are in free float, putting the tradable market value below 7 billion yuan, meaning relatively modest capital can trigger significant price swings. Stylistically, the company is a leading supplier of large compressors for the energy and chemical sectors and high-end nuclear main pumps, deeply tied to major energy state-owned enterprises including the "three barrels" and "five power generators," placing it firmly in the market-favored "new quality productive forces" category. Additionally, the broader new stock segment rallied today, with Tengxin Precision, Tuolunsi, and others hitting limit-up, amplifying participation appetite through sector-wide momentum.
Despite the apparent excitement, participation in such stocks is not recommended. The surge is fundamentally a one-time institutional phenomenon created by an exceptionally small float combined with the absence of daily price limits, unrelated to any improvement in the company's fundamentals. Data indicates that the company's attributable net profit for January through September is projected to decline between 23.83% and 8.13% year-over-year, with earnings actually in a contraction phase. For investors, the core lesson from this risk case is simple: avoid blindly chasing highs and return to fundamental analysis. The era of speculative new stock trading based purely on "code" has passed; IPO normalization has eroded supply scarcity. Combinations of extremely low offering prices and tiny floats rise quickly but fall even faster. When sentiment fades, prices will inevitably revert to earnings reality. Rather than speculating amid violent candlestick fluctuations, investors would be better served studying genuine profitability, industry positioning, and growth narratives. Investing is not about speed but about vision and steady hands; only a return to fundamentals can prevent becoming the last holder of the bag.
Outlook for the coming sessions
Looking ahead, with the Federal Reserve rate decision now out and the Bank of Japan's rate hike concluded, short-term negative factors have been largely absorbed. The next focus should be on volume dynamics; if trading activity stabilizes and expands further, the market retains upward momentum. In the medium term, as domestic growth-support policies continue to take effect, the A-share market retains repair potential after digesting external shocks. For asset allocation, technology remains the medium-term main line, but the beta from broad-based rallies will be harder to capture. The next phase of returns will increasingly come from internal stock selection, balancing with pro-cyclical directions such as policy-backed infrastructure, property, and domestic consumption. Dividend assets maintain their value as core holdings. Overall, the medium-term picture for A-shares is one of reasonable valuations and clear policy support, consistent with a gradual bull market formation, though the upward slope depends on policy implementation outcomes and the pace of incremental capital inflows.
Disclaimer: Market risk exists, and investment requires caution. Under no circumstances does the information or views expressed in this article constitute investment advice to any person. Market data is supported by Tonghuashun iFinD. This content is for reference only and does not constitute investment recommendations. Anyone acting on this information does so at their own risk.
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