A-share midday report | The index opened high, with the innovation index rising over 1% intraday, and hard technology such as computing power hardware continued to lead the gains.

On June 22, A-shares opened high and low. As of the time of writing, the Shanghai Composite Index rose by 0.11%, the Shenzhen Component Index rose by 0.68%, and the ChiNext Index rose by 0.91%. In terms of the market, the fiber optic concept was repeatedly active. Shenzhen SDG Information hit the limit-up and continued to reach a historical high. Stocks such as Hengtong Optic-Electric, Tongding Interconnection Information, Yangtze Optical Fibre And Cable Joint Stock, and Jiangsu Etern followed the uptrend. The cultivated diamond concept collectively strengthened, with Henan Huanghe Whirlwind hitting the limit-up, and stocks such as Sf Diamond Co., Ltd., HFZS, Henan Liliang Diamond, and Beijing Worldia Diamond Tools also rising. The glass substrate concept was active again in the morning, with Triumph Science & Technology hitting the limit for the second time in three days, and stocks such as WG Tech(JiangXi)Group, Wuhan DR Laser Technology Corp., Boe Technology Group, and Suzhou Delphi Laser also rising. Looking ahead, China Securities Co., Ltd. believes that with the vigorous development of the global AI computing power industry and the intensifying differentiation between the general AI industry and traditional industries, AI computing power is expected to continue to perform as a core theme in the current bullish market in the long term. In the short term, the Shanghai Lujiazui Finance & Trade Zone Development Forum and other domestic policy dividends are expected to continue to drive the growth of the entrepreneurship and innovation sector, and the expectation of a rate hike by the Federal Reserve has not dampened the uptrend of global technology stocks. It is anticipated that the ChiNext and the STAR Market will continue to maintain their strong performance. Key Sectors: 1. Repeated activity in the fiber optic concept The fiber optic concept was repeatedly active, with Shenzhen SDG Information hitting limit-up and reaching a historical high, and stocks like Hengtong Optic-Electric, Tongding Interconnection Information, Yangtze Optical Fibre And Cable Joint Stock, and Jiangsu Etern following the uptrend. 2. Collective strength in the cultivated diamond concept The cultivated diamond concept showed collective strength, with Henan Huanghe Whirlwind hitting limit-up, and stocks such as Sf Diamond Co., Ltd., HFZS, Henan Liliang Diamond, and Beijing Worldia Diamond Tools rising by more than 15%. 3. Renewed activity in the glass substrate concept The glass substrate concept was active again in the morning, with Triumph Science & Technology hitting the limit for the second time in three days, and stocks like WG Tech(JiangXi)Group, Wuhan DR Laser Technology Corp., Boe Technology Group, and Suzhou Delphi Laser rising. Institutional views: China Securities Co., Ltd.: Continues to be optimistic about AI computing power as a core theme in the current bullish market China Securities Co., Ltd. believes that with the vigorous development of the global AI computing power industry and the intensifying differentiation between the general AI industry and traditional industries, AI computing power is expected to continue to perform as a core theme in the current bullish market in the long term. In the short term, the Shanghai Lujiazui Finance & Trade Zone Development Forum and other domestic policy dividends are expected to continue to drive the growth of the entrepreneurship and innovation sector. The expectation of a rate hike by the Federal Reserve has not dampened the uptrend of global technology stocks, and it is anticipated that the ChiNext and the STAR Market will continue to maintain their strong performance. High valuations and trading structures are likely to be the main reasons for the subsequent phase shift in technology themes. It is believed that the ChiNext Index still offers the best value for money among major broad-based indices after the sharp rise, with a valuation advantage of 10% to 12.5% and still 32.3% away from the previous high point of the price-to-book ratio. The short-term performance of the STAR 50 index is more driven by overseas mapping (Philadelphia Semiconductor Index, Korean Composite Index), expectations of "dual listing", and expectations for interim report performance. Therefore, the STAR 50 index is expected to continue to perform strongly in the short term, but caution is needed against a sharp drop in overseas semiconductor sectors or the impact of the realization of related catalytic events. Zhongtai: Continuing to focus on internal diffusion of technology, value style still needs to wait Regarding the subsequent market style, Zhongtai believes that the technology market may continue, and a value reversal is not yet present. The upcoming meeting of the Politburo is expected to focus on the deployment of new productive forces and technological innovation, and the policy focus is not expected to shift in the short term. Looking ahead, the upcoming listing of Changxin Technology may constitute a new catalyst for an uptrend. From the regulatory perspective, the stable operation of Changxin Technology after listing is likely a major consideration for the regulators, and the valuation at issuance is expected to be controlled at a relatively low level. If Changxin performs strongly after listing, it will directly create two clear transmission paths: one is to directly drive the revaluation of the domestic semiconductor equipment sector, and the other is to lead the overall upward trend of the STAR 50 index. Besides the chip theme, other sectors are also worth tracking. Expectations for interim performance in the power equipment and new energy sectors remain good, with fundamental support still in place. Non-ferrous metals benefit from the trend of a weakening US dollar, but the strongest elasticity is concentrated in small metal varieties combined with the AI industry chain, rather than traditional cyclical non-ferrous metals. Founder: Attention needed on the possibility of style rebalancing by the end of the month Founder's assessment of the market trend: On June 13, it was suggested that the second important buying point of the year is approaching. Although last week only had four trading days, the rebound in various indices was significant, with the entrepreneurship and technology sectors leading the gains, and significant divergence in industry styles, with value styles experiencing a sharp decline. The key focus of the market is whether the style differentiation will continue or converge. If there is a style rebalancing, what are the potential directions? Regarding the first question, Founder believes that there is a possibility of a phase of rebalancing as the quarterly report disclosure window approaches the end of June. The recent strength of the US dollar and uncertainties in US-Iran negotiations may lead to a temporary swing from previous optimistic expectations, but looking ahead, the scarcity of the technology boom in the third quarter remains strong. As for the second question, potential directions for style rebalancing should focus on high cutting in AI internals, mainly at the application end, as well as the recovery of value styles after being oversold. This article is reproduced from Tencent Stock Selection, GMTEight Editor: Chen Siyu.