Brokerage Morning Meeting Highlights | Positive Outlook on Investments in the Power Industry Chain

Yesterday, the market rebounded in the afternoon, with the Shanghai Composite Index slightly in the red. The intraday performance of the index showed the yellow line significantly stronger than the white line, led by small and micro-cap stocks. The total turnover in the Shanghai and Shenzhen markets reached 18.3 trillion yuan. Sector-wise, innovative pharmaceuticals and CRO concepts saw a recovery, with strong performances from agriculture, liquid-cooled servers, retail, and tourism sectors. On the downside, resource stocks like precious metals and lithium mines experienced significant corrections. By the close, the Shanghai Composite Index rose by 0.19%, the Shenzhen Composite Index fell by 0.35%, the ChiNext Index dropped by 1.00%, and the Sci-Tech 50 Index rose by 0.14%. China Securities Co., Ltd. is optimistic about the investment prospects of the power industry chain; Huatai believes that negative feedback from funding has not yet formed; and CICC believes that the supply and demand landscape for tantalum and niobium is being reshaped, leading to a strategic value reassessment. China Securities Co., Ltd.: Optimistic about the investment prospects of the power industry chain In July 2026, the US transformer price index rose again, increasing by about 4% month-on-month. In addition to rising raw material prices, supply-demand tension remains an important factor driving price increases. North American grid investments are expected to enter a long-term upward trend; amidst stricter approvals and tight equipment supply, the number of AIDC planning remains on a growth path, and end demand stays high. Major overseas power equipment companies continue to achieve new high cumulative orders, exacerbating supply-demand imbalances. Chinese companies are deeply benefiting from the global supply-demand imbalance, entering a prolonged golden period of international expansion. With the advantage of a complete power equipment industrial chain in China, increasing investment in AI computing power in North America, the urgent transformation of energy in Europe, and tightening supply-demand in lithium batteries, sectors like new energy, energy storage, lithium batteries, and power grids are expected to rise. Huatai: Negative feedback from funding has not yet formed As the market rebound enters its later stage, the core contradiction in the funding landscape is shifting from an influx of new funds to whether existing funds can absorb potential selling pressure. Typically, systemic negative feedback requires a transmission chain of "market pullback - trading funds corresponding reduction - allocation funds reducing positions," but this chain has not yet formed: 1) Last week, financing funds turned to a slight net outflow, and investor participation waned, indicating decreasing trading heat; however, the financing guarantee ratio remains relatively high. The net inflow scale of the top stocks during the week and the previous month increased, with no signs of passive deleveraging. 2) ETF shares turned to net subscriptions, and net outflows of funds narrowed, which means the caution in trading funds has not spread to concentrated redemptions of allocation products, while net inflows of foreign allocation funds provide some external buffer; 3) Considering the diffusion of the market's profitability effect, insurance funds may generate some rebalancing demand, but if the subsequent adjustment in magnitude and speed significantly increases, insurance and pension funds might also reduce risk exposure in stages. Overall, the current situation is closer to testing the absorption capability after the trading heat cools down, rather than systemic negative feedback in funds. Future focus should be on whether financing outflows accelerate, whether ETFs turn into continued net redemptions, and whether insurance and pensions shift from rebalancing absorption to passive position reduction. CICC: The supply and demand landscape for tantalum and niobium is being reshaped, leading to a strategic value reassessment The vulnerability of supply in the tantalum and niobium industry is evident, with external disruption risks increasing, while strategic emerging sectors like AI, new energy, and commercial aerospace are generating new demand. The tightening of supply and demand, coupled with geopolitical dynamics, is expected to drive up price centrality. In light of profound changes in industry competition, the vertical integration of the entire industrial chain in the tantalum and niobium industry has major strategic significance. Companies with secure upstream resources, expanding midstream capacities, and technological barriers in the downstream are expected to significantly benefit. This article is reproduced from "Caixin Network," edited by Liu Jiayin at GMTEight.