A-shares midday review | GEM index fell 1.71% in the morning, high-priced stocks collectively plummeted, consumer stocks such as liquor rebounded.

On August 20th, the A-share market experienced a volatile adjustment in the morning session, with the ChiNext Index leading the decline. The half-day trading volume was 1.51 trillion yuan, down 135 billion from the previous trading day. By midday closing, the Shanghai Composite Index fell by 0.06%, the Shenzhen Component Index fell by 0.66%, and the ChiNext Index fell by 1.71%. Orient believes that overall, the market is gradually entering a high-level volatile zone, with the diminishing impact of marginal positive factors. In late August, there will be a busy period for interim report disclosures, and the market is expected to focus on performance trends, with defensive strategies prevailing. On the market, anti-"involution" themes rebounded against the trend, with sectors such as non-ferrous metals, steel, oil and gas, and photovoltaics leading the way. Multiple stocks, including Yunnan Luoping Zinc & Electricity and Yunnan Lincang Xinyuan Germanium Industry, hit the daily limit. Military stocks showed strong gains with stocks like Shaanxi Zhongtian Rocket Technology and Sichuan Chengfei Integration Technology Corp. Ltd. hitting the daily limit. Consumer stocks like liquor continued to rebound, with Jiugui Liquor hitting the daily limit for the second consecutive day. Consumer electronics concepts like AI phones and AI glasses showed strength, with Kunshan Kersen Science & Technology hitting the daily limit for four consecutive days. On the downside, high-flying stocks collectively experienced large declines, with stocks like Beijing Teamsun Technology hitting the daily limit. The previously hot computing power hardware stocks underwent corrections, with declines in sectors like film and television, pharmaceuticals, and semiconductors. Looking ahead, China Galaxy believes that with active trading in the market, sector rotation around the AI industry chain, anti-"involution", and non-bank financial sectors are to be expected. Popular sectors: 1. Military sector on the rise: Military stocks showed volatile gains, with stocks like Shaanxi Zhongtian Rocket Technology and Sichuan Chengfei Integration Technology Corp. Ltd. hitting the daily limit, and other related stocks following suit. 2. Consumer electronics concepts strong: Concepts like AI phones and AI glasses showed strength, with Kunshan Kersen Science & Technology hitting the daily limit for four consecutive days, and other related stocks also rising. Institutional views: 1. Guotai Haitong: Expecting new highs in the stock market. Guotai Haitong believes that the A-share market still has the potential for new highs. The main drivers for stock valuations have traditionally been company performance, risk-free interest rates, and risk appetite. However, institutional changes also play a crucial role in the Chinese market, sometimes even decisively. The main focus should be on large financials, high-quality blue chips, and emerging technologies. Additionally, the upcoming traditional peak season for consumer electronics production in August and the potential industrial catalysis of new product launches in September should also be observed. Other sectors like domestic military industries are expected to continue growing, with frequent order catalysts in areas like Siasun Robot & Automation field. 2. China Galaxy: A-share market entering a new stable state. China Galaxy believes that with accelerating investor entry and accelerated redistribution of wealth into financial assets, the trend of increasing risk appetite will drive the market upwards. With active trading in the market, there is potential for sector rotation around the AI industry chain, anti-"involution", and non-bank financial sectors. During the interim report disclosure period, focus should be on opportunities in upstream non-ferrous metals industry, midstream steel, machinery equipment, power equipment sectors, as well as non-bank financial, agriculture, forestry, animal husbandry, electronic industries. 3. Orient: Market gradually entering a high-level volatile zone. Orient believes that the high trading volume and post-market margin financing balance exceeding 2 trillion yuan on Tuesday indicate a relatively hot market period. While bond financing and capital inflows have grown significantly, they still fall short of the extreme heat seen in the market last year and the lively market after the Chinese New Year. This suggests that the market is not overly overheated, and daily fluctuations and retracements may actually be beneficial for future market development. Overall, the market is gradually entering a high-level volatile zone, with the diminishing impact of marginal positive factors. In late August, there will be a busy period for interim report disclosures, and the market is expected to return to focusing on performance trends, with defensive strategies prevailing.