The Shanghai Composite Index jumped initially and then pulled back, closing slightly lower. The power sector led the gains, while high-priced stocks experienced another collective sharp decline. [Stock Market Closing Review]

The market jumped initially and then pulled back throughout the day, with the three major indices showing mixed changes. Among the stocks that hit the upper limit yesterday, only 3 advanced, while 2 hit the lower limit. The total turnover of the Shanghai and Shenzhen markets reached 1.11 trillion yuan, up 4.55 billion yuan from the previous trading day. On the futures market, the hot topics were scattered, with more stocks rising than falling, and over 2,800 stocks gaining across the market. By sector, power stocks collectively surged, with more than 10 stocks, including Xichang Electric Power, hitting the upper limit. Computing power stocks rebounded, with Tuowei Information hitting the upper limit. The unified market concept stocks once surged, with Changlian Shares hitting the upper limit. On the downside, high-position stocks fell sharply again, with Guofang Group and others hitting the lower limit. At the close, the Shanghai Composite Index fell 0.07%, the Shenzhen Component Index rose 0.39%, and the ChiNext Index rose 0.59%.

By Sector

On the sector front, the power sector continued its strong performance, with Jiuzhou Group, Huayin Electric Power, Changyuan Electric Power, Hunan Development, Xichang Electric Power, Mingxing Electric Power, and Shaoneng Shares all hitting the upper limit. On the news front, data released today by the National Energy Administration showed that in Q1 this year, China's wind and PV power generation added a combined 74.33 million kW of new installations, bringing the cumulative installed capacity to 1.482 billion kW, surpassing thermal power for the first time.

Institutional research reports pointed out that with the introduction of new energy market entry policies, the industry is expected to see four positive developments: stabilization of expected returns, improvement of existing projects, increase in new scale, and resumption of mergers and acquisitions, as well as increased industry concentration. It is recommended to focus on leading enterprises and regional targets with poor or rapidly declining electricity prices. However, it should be noted that the current leading power stocks are relatively speculative, and with the overall sector's full-scale breakout today, some mid-to-lower-tier stocks also showed accelerated gains, which could be seen as a short-term climax signal. It is expected that the divergence in the power sector will intensify next week.

The tourism sector strengthened again, with Tianfu Culture & Tourism and Three Gorges Tourism hitting the upper limit, while Zhongxin Tourism, Xi'an Tourism, Guilin Tourism, and Nanjing Commercial Tourism led the gains.

On the news front, as the Labour Day holiday approaches, the tourism market continues to heat up. Since this week, online hotel and flight searches have surged significantly, marking the arrival of the booking peak for the Labour Day holiday. Data shows that as of now, the number of bookings for domestic travel during the Labour Day holiday has more than doubled YoY. Among them, the booking increases for self-driving tours, independent travel, and group tours are particularly significant. In addition, the core businesses of online travel platforms, such as hotels and tickets, have seen increases of over 70%.

Against the backdrop of rising expectations for policies to expand domestic demand, the market expects service consumption to be one of the key supported directions. The cultural and tourism industry, with its large capacity, wide range, high resilience, and strong driving force, is expected to stand out in the internal rotation of consumption after a short-term correction in the previous days. In the future, attention can still be paid to the low-absorption opportunities of potential beneficiaries in the industry chain, such as hotels, scenic spots, and OTAs.

Computing power stocks rebounded, with Tuowei Information, Hongbo Shares, and Tianyu Digital hitting the upper limit, while Maixinlin, Hongjing Technology, and Yunsai Zhilian led the gains. On the news front, Shenzhen released "Striving to Take the Lead and Be a Pioneer in Promoting New Industrialization," stating that it will accelerate the planning and construction of general computing power, intelligent computing power, and supercomputing power around the three elements of artificial intelligence computing power, algorithms, and data, and support enterprises in using computing power, models, and corpora resources at low cost.

Tianfeng Securities stated that domestic computing power remains highly prosperous, with a surge in demand for computing power leasing and intelligent computing centers. In 2022, China's intelligent computing power scale was 259.9 EFLOPS, and it is expected to reach 1,117.4 EFLOPS in 2027, with a five-year compound growth rate of 33.9%. High-end computing power resources are scarce, and computing power leasing has a high return rate. In addition, computing power stocks have experienced a long period of consolidation, and the previously high congestion has been basically alleviated. In the future, attention will be paid to whether there are new event-driven catalysts to drive the repair expectations in this direction.

By Stock

At the stock level, high-position stocks fell sharply again, with Guofang Group, Lifang Pharmaceutical, Shuangcheng Pharmaceutical, Guoguang Chain, and Youfu Shares all hitting the lower limit. In addition, stocks such as Anji Food, Zhongxin Fluoride Materials, and Tianbao Infrastructure also showed obvious pullbacks after hitting the upper limit during the session. As of today's close, the advancement rate of consecutive limit-up stocks was only 20%, with only 3 stocks remaining at 3 consecutive limit-ups or more. As emphasized yesterday, the one-day return of high-position popular stocks does not mean that short-term risks have been completely resolved. Especially in the current environment of existing game play, market divergence remains large, leading to intensified short-term fluctuations in high targets. It is worth noting that the consecutive limit-up speculation has not completely receded. Tianyuan Shares and BBK both advanced to 6 consecutive limit-ups, and it is expected that some high-position stocks will still fluctuate under their influence, but the overall short-term sentiment is still more inclined to recede. Therefore, it is still necessary to remain cautious at this stage and wait for the market to determine a new leading theme with better continuity.

Post-Market Analysis

Today, the market jumped initially and then pulled back slightly throughout the day, with the three major indices showing mixed changes. At the stock level, although more stocks ultimately rose than fell, the distribution of market hot topics was still scattered and lacked sufficient continuity. The sharp decline in high-position stocks also caused short-term sentiment to weaken again. Overall, the market is still viewed as a weak consolidation pattern. Part of the reason is that the current period is the end of the annual report and Q1 earnings disclosure, and some companies with disappointing or explosive earnings may be announced intensively in the near future. On the other hand, the approach of the Labour Day holiday has also caused the recent market to be somewhat affected by the long holiday effect. Therefore, at this time period, most funds still choose to wait and see, so patience is required to wait for the arrival of the market turning point.

Market News Focus

1. The Political Bureau of the CPC Central Committee: Accelerate the Implementation of More Proactive and Effective Macro Policies, and Timely RRR and Interest Rate Cuts

Cailian Press, April 25th, the Political Bureau of the CPC Central Committee held a meeting, emphasizing the need to accelerate the implementation of more proactive and effective macro policies, make good use of more proactive fiscal policies and moderately loose monetary policies. Accelerate the issuance and use of local government special bonds and ultra-long-term special treasury bonds. Secure the bottom line of the "three guarantees" at the grassroots level. Timely RRR and interest rate cuts, maintain ample liquidity, and increase support for the real economy. Create new structural monetary policy tools, establish new-type policy financial tools, support technological innovation, expand consumption, and stabilize foreign trade. Strengthen the consistency of policy orientation.

2. The Political Bureau of the CPC Central Committee: Continuously Consolidate the Stable Situation of the Real Estate Market, and Continuously Stabilize and Activate the Capital Market

Cailian Press, April 25th, the Political Bureau of the CPC Central Committee held a meeting, pointing out the need to continue to make efforts to prevent and resolve risks in key areas. Continue to implement the local government debt resolution package policy, and accelerate the resolution of local government arrears to enterprises. Strengthen the implementation of urban renewal actions, and promote the renovation of urban villages and dilapidated houses in an orderly manner. Accelerate the construction of a new model for real estate development, increase the supply of high-quality housing, optimize the policy for the acquisition of existing commercial housing, and continuously consolidate the stable situation of the real estate market. Continuously stabilize and activate the capital market.