A-share closing review | Indexes rise significantly, Shenzhen Component Index and ChiNext Index both up more than 1%, and the price increase theme breaks out across the board

February 25th, the A-share market opened high and continued to rise, with a slight downturn in the afternoon followed by another rise, with the ChiNext Index and the Shenzhen Component Index both rising by more than 1%. At the close, the Shanghai Composite Index rose by 0.72%, the Shenzhen Component Index rose by 1.29%, and the ChiNext Index rose by 1.41%. The total turnover of the Shanghai and Shenzhen markets was 2.46 trillion yuan, an increase of 260.5 billion yuan from the previous trading day. On the market, stocks in the rising sector showed strength, with small metals, precious metals, and other non-ferrous sectors seeing large gains, with multiple stocks, including Ningxia Orient Tantalum Industry, Guangxi Huaxi Nonferrous Metal, China Tungsten and Hightech Materials, hitting the limit up. Steel stocks fluctuated higher, with Inner Mongolia BaoTou Steel Union and Lingyuan Iron & Steel hitting the limit up. Oil and gas stocks remained active, with Geo-Jade Petroleum Corporation hitting the limit up, and Tong Petrotech Corp. rising by over 14%. The rare earth permanent magnet concept rose, with multiple stocks hitting the limit up, including China Northern Rare Earth and China Nonferrous Metal Industry's Foreign Engineering and Construction. The semiconductor industry chain continued to strengthen, with equipment and materials leading the way. Commercial aerospace concepts continued to rise in the afternoon, with Addsino Co., Ltd. and Xinghuan Technology hitting the limit up or rising by over 10%. In addition, the paper, forestry, smart grid, fiberglass, and PCB sectors all showed performance during trading. In terms of decline, the film and television theater sector continued to adjust, with Hengdian Entertainment and Bona Film Group hitting the limit down for two consecutive days. The AI application concept showed weaker trends, with IReader Technology hitting the limit down. Mining power leasing concepts fluctuated lower, while banking, insurance stocks showed weaker trends, and the automotive industry chain performed poorly. Looking ahead, Dongguan Securities believes that from a technical analysis perspective, the Shanghai Composite Index closed with a bullish candlestick, successfully reaching 4100 points, showing signs of bottoming out in the short term. Historical data shows that A-shares often see a high probability of a rising index after the Spring Festival, significantly increasing the likelihood of a rise. Popular sectors: 1. Non-ferrous metal sector rises: Small metals, precious metals, and other non-ferrous sectors saw large gains, with multiple stocks hitting the limit up, including Ningxia Orient Tantalum Industry, Guangxi Huaxi Nonferrous Metal, and China Tungsten and Hightech Materials. Comment: BOC International released a research report stating that entering 2026, with the market entering the second stage of the bull market, driven by profits, under the drives of "anti-inner ring" and expanding domestic demand, the narrative of domestic re-inflation strengthens, and the strong cyclical attributes of non-ferrous metals are expected to be reflected, while financial attributes and industrial trends will bring revaluation opportunities to the industry. 2. Steel stocks fluctuate higher: Steel stocks fluctuated higher, with Inner Mongolia BaoTou Steel Union and Lingyuan Iron & Steel hitting the limit up. Comment: According to incomplete statistics, as of February 10th, a total of 27 listed companies in the steel industry have issued performance forecasts, with 15 companies reporting positive net profits attributable to mothers, accounting for 55.5% of the companies that issued performance forecasts, with profit ranges from 0.07 billion yuan to 3 billion yuan. 3. Oil and gas concepts continued to be strong: Oil and gas concepts continued to be strong, with Geo-Jade Petroleum Corporation hitting the limit up, and Tong Petrotech Corp. rising by over 14%, as well as Xinjiang Zhundong Petroleum Technology, Sinopec Oilfield Service Corporation, and Shandong Molong Petroleum Machinery following suit. Comment: On February 25th, the WTI crude oil benchmark price from the China Business Society was $66.31 per barrel, up 1.36% compared to early this month ($65.42 per barrel). 4. Rare earth permanent magnet concept rises again: The rare earth permanent magnet concept rose again in the afternoon, with Shenghe Resources Holding hitting the limit up, setting a new historical high. Previously, China Northern Rare Earth, China Rare Earth Nonferrous Metals, China Nonferrous Metal Industry's Foreign Engineering and Construction, and Inner Mongolia BaoTou Steel Union hit the limit up, while China Rare Earth Resources And Technology hit the limit, and Jl Mag Rare-Earth, Xiamen Tungsten, Yantai Zhenghai Magnetic Material, Jiangsu Huahong Technology, and others followed suit. Comment: According to the pricing of rare earth products at the Baotou Rare Earth Products Exchange, prices of praseodymium neodymium oxide, metal praseodymium neodymium, metal neodymium, dysprosium oxide, and terbium oxide all saw general increases after the holiday, with average prices on February 24th ranging from 882,000 yuan/ton to 643,800 yuan/ton, an increase of 4,160 yuan/ton, 3,170 yuan/ton, 8,000 yuan/ton, 17,000 yuan/ton, and 11,800 yuan/ton respectively compared to pre-holiday prices. 5. Semiconductor industry chain fluctuates and strengthens: In the afternoon, the semiconductor industry chain's upward trend expanded, with GRINM Semiconductor Materials 20cm hitting the limit up, and Shenyang Fortune Precision Equipment, Konfoong Materials International, Peric Special Gases, and Piotech Inc. all rising by over 10%. Guangdong Cellwise Microelectronics, Omat Advanced Materials, Fujian Acetron New Materials, and Grinm Advanced Materials were among the top gainers. Comment: On February 24th, the official website of the Shanghai Stock Exchange showed that the Shenghe Micro-crystal rectangular IPO has successfully passed the review of the Shanghai Stock Exchange's Listing Audit Committee. If the final issuance is successful, Shenghe Micro-crystal will become the first listed company in the A-share market with wafer-level advanced packaging as its core business. 6. Commercial aerospace concept continues to rise: The commercial aerospace concept continued to rise in the afternoon, with Addsino Co., Ltd. hitting the limit up, following Chongqing Zaisheng Technology Corp., Keshun Waterproof Technologies, Xinghuan Technology, Anhui Shenjian New Materials, Piesat Information Technology, YaGuang Technology Group, and Essence Fastening Systems. Comment: Recently, during the 63rd session of the United Nations Space Commission's Technology Subcommittee, Chinese commercial aerospace company representative Blue Arrow Aerospace announced that China's reusable rocket Zhuque III plans to conduct recycling tests again in the second quarter of this year. Institutional views: Dongguan Securities: A-shares often see a high probability of a rising index after the Spring Festival, significantly increasing the likelihood of a rise. Dongguan Securities believes that from a technical analysis perspective, the Shanghai Composite Index closed with a bullish candlestick, successfully reaching 4100 points, showing signs of bottoming out in the short term. Short-term indicators such as RSI and KDJ rebounded from the oversold zone, indicating that there is a technical recovery demand that has been partially released. Overall, the technical aspect of the market is still a weak rebound, and a trend reversal requires continuous volume growth and an effective breakthrough above the moving average resistance. During the Spring Festival holiday, major global assets showed a general uptrend, with AI and resources becoming market focuses. Historical data shows that A-shares often see a high probability of a rising index after the Spring Festival, significantly increasing the likelihood of a rise. China Galaxy Securities: Focus on three main lines. China Galaxy Securities stated that after the Spring Festival, under the catalysts of policy expectations, liquidity support, and industrial trends, the market is likely to see an upward trend while needing to closely monitor short-term disturbances in market sentiment due to overseas uncertainties. Before and after the two sessions, the A-share market may be driven by policy catalysts around industry main lines and theme opportunities, showing characteristics of "rotation of policy hotspots and rapid style changes". The market logic in March will gradually shift from "policy expectations" to "performance realization", with the disclosure of listed companies' 2025 annual reports and subsequent 2026 first-quarter reports becoming market focal points. In terms of allocation opportunities, focus on: 1. The "anti-inner circle" concept driven by improved supply and demand patterns and industry profit recovery, as well as high-value dividend assets with clear valuation logic, such as non-ferrous metals (precious metals) benefiting from price increases, and the petroleum and petrochemical industry, as well as basic chemicals, steel, cement, building materials, finance, and other sectors. 2. During the Spring Festival holiday, hotspots such as Siasun Robot & Automation and AI big models received widespread attention, and may present structural highlights after the holiday. With the accelerated evolution of a global once-in-a-century change, China's economy is transitioning to new quality productivity, with key sectors such as semiconductors, artificial intelligence, new energy, military industry, and aerospace worth focusing on. Central China: The influx of incremental funds into the market will provide a solid foundation for the market's upward trend. Central China believes that the cooling of margin financing funds before the Spring Festival, narrowing net outflows of ETFs, and the resurgence of equity-type public fund issuances, continuous increases in the number of private fund filings, and a record high of weekly net inflows of A-shares by overseas mutual funds, both active and passive, indicate nearly the end of trading fund volatility, with stock-type public fund issuances returning, private fund filings continuously improving. As of early February, weekly net inflows of A-shares by overseas mutual funds set a record for several months. The influx of incremental funds into the market will provide a solid foundation for the market's upward trend. Considering the performance of domestic and foreign markets during the holiday and the latest macro dynamics, short-term adjustment pressures on the market have been partially relieved, but upward slopes will tend to flatten, and the index is likely to show a pattern of wide fluctuations and structural differentiation. Caixin Securities: A-shares are likely to remain volatile in the short term. Caixin Securities believes that the overall risk appetite of funds still has room for improvement at present, so in the short term, A-shares are likely to remain volatile, focusing on directions with higher certainty, such as sectors with good performance. In the medium term, the current economic fundamentals, macro policies, and overseas markets do not support A-shares breaking out into a trending market. Therefore, it is advisable to control positions reasonably, patiently await further clarification of macro factors, and wait for the market to spontaneously choose a breakthrough direction and main sectors. Huatai: The appearance of domestic smarts Siasun Robot & Automation on the Spring Festival Gala is expected to ignite market enthusiasm. Huatai's research report stated that before and after the Spring Festival, the smart driving and Siasun Robot & Automation sectors performed relatively strongly, especially with the four major domestic Siasun Robot & Automation companies appearing on the Spring Festival Gala, driving high growth in orders and capital attention, accelerating the commercialization of Siasun Robot & Automation. Looking ahead, for Siasun Robot & Automation, the phenomenal exposure on the Spring Festival Gala is pushing Siasun Robot & Automation from an "industry hotspot" to "popular consumer awareness", with intensive industrial capital adding to the momentum, and Tesla's Gen3 launch imminent, which may bring further catalysis; for smart driving, the synchronous acceleration of regulations in China and the US, combined with the expectations of FSD's entry into China, Robotaxi's overseas deployment and the commercialization of closed-loop L4 scenarios are proceeding in parallel, with significant medium-term configuration value in the sector. This article is reprinted from "Tencent self-selected stocks", GMTEight editor: Chen Xiaoyi.