On April 17, China's A-share market opened with mixed performance across the three major indices, with the ChiNext Index continuing its upward trajectory. As of 9:45, the Shanghai Composite Index had declined by 0.18%, the Shenzhen Component Index had risen by 0.36%, and the ChiNext Index had advanced by 0.85%. Notably, a shift in market leadership is underway, characterized by a contest between emerging favorites and traditional stalwarts. Shares of Yuanjie Semiconductor Technology Co.,Ltd. demonstrated sustained strength during the session, surpassing CNY 1,410 to overtake Kweichow Moutai Co.,Ltd. as the new highest-priced stock in the A-share market. Since September 24, 2024, Kweichow Moutai Co.,Ltd. has accumulated a gain of nearly 20%, while Yuanjie Semiconductor Technology Co.,Ltd. has surged by approximately 1500%. In early trading, shares of the long-revered Kweichow Moutai Co.,Ltd. fell more than 4%, following the release of its 2025 annual report, which marked the first yearly decline in both revenue and net profit since its listing.
Sector performance showed the battery industry chain remaining active repeatedly, with one stock hitting its seventh consecutive limit-up. The minor metals concept also strengthened, with one company opening at the daily limit and another briefly approaching it. CPO concept stocks performed strongly, with one firm rising over 10% and another gaining more than 7%. Conversely, baijiu stocks opened lower, with two companies falling by the daily limit and Kweichow Moutai Co.,Ltd. dropping over 4% initially.
Looking ahead, one chief strategist stated that the current market movement represents not a mere rebound but a counteroffensive, primarily driven by optimism regarding profit recovery following the turn to positive PPI. Regarding opportunities, another equity strategist expressed that after the market stabilizes, growth and cyclical styles are favored medium-term. A "slow bull" market tends to benefit growth stocks, while narrowing or positive PPI declines, combined with a recovery in industrial enterprise profit growth, are expected to drive outperformance in cyclical sectors.
**Hot Sectors**
1. **Battery Industry Chain Remains Active** The battery industry chain continued to see repeated activity. One company marked its seventh consecutive limit-up, while several others saw their shares pull higher. Analysis suggests that demand for energy storage remains at full capacity, and price increases for lithium carbonate have been absorbed. Considering system cost reductions for large battery cells and extended loan terms for projects, the acceptable price threshold for lithium carbonate in domestic medium-return energy storage projects has increased. Domestic energy storage bidding in January-February rose 55% year-on-year, and the gradual introduction of capacity electricity prices nationwide is expected to accelerate progress. Global energy storage demand for 2026 is maintained at over 1000 GWh, representing 60% growth. Overall lithium battery demand for 2026 has been revised upwards to 34% growth, exceeding 2750 GWh, indicating a significant improvement in the supply-demand dynamic.
2. **Minor Metals Concept Strengthens** The minor metals concept strengthened, with one company opening at the daily limit and another briefly approaching it. Several other related stocks followed with gains. Catalyzing this movement, one company released its first-quarter report showing net profit attributable to shareholders of CNY 1.144 billion, a year-on-year increase of 313.00%. Net profit attributable to shareholders after deducting non-recurring gains or losses was CNY 1.198 billion, up 323.42% year-on-year.
**Institutional Views**
One securities firm asserts the current trend is a counteroffensive, not a rebound, centered on optimism for profit recovery with PPI turning positive. Based on positive PPI changes, the 2026 year-on-year net profit growth forecast for A-shares excluding financials has been upgraded, with the core reasoning being that cyclical resources and manufacturing sectors, which account for nearly half the market, are more sensitive to PPI changes and are expected to contribute greater earnings elasticity during the PPI recovery process.
Another securities firm indicates that A-share corporate profits are entering an upward cycle, with high earnings realization visibility in the technology sector. The factors driving the stock market higher are becoming clearer: first, profit recovery as corporate earnings enter an upward cycle, particularly in tech; second, industrial upgrading, with enhanced global competitiveness in new energy, AI, and semiconductors, and a shift in China's export structure towards higher value-added goods; and third, valuation advantages, as the equity risk premium for A-shares remains significantly higher than global markets, highlighting their attractive valuations. Due to short-term uncertainties from geopolitical risks, investors should maintain a relatively balanced allocation across growth and value, as well as large and small caps. After market stabilization, growth and cyclical styles are favored medium-term.
A third major securities firm's research report points out that explosive growth in Token usage, driven by applications like AI Agents and multimodality, is causing a compute power shortage in China. Domestic large language models actively adapting for inference tasks present acceleration and volume expansion opportunities for local compute power manufacturers. It is projected that shipments of domestic compute power chips will at least double by 2026, providing strong growth momentum for chip design companies, advanced process manufacturing, advanced packaging, advanced storage, and related supply chains.
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