Key Points from Brokerage Morning Meetings: Tungsten Price Center Expected to Continue Rising

The market declined rapidly in the afternoon session yesterday, with the ChiNext Index leading the losses. The combined turnover of the Shanghai and Shenzhen markets reached 142 million yuan for the day, up 129 billion yuan from the previous session. Sector-wise, port shipping, beauty and personal care, innovative drugs, and rare earth permanent magnets were among the top gainers, while Huawei Ascend, defense, semiconductors, and software development were among the biggest decliners. At yesterday's close, the Shanghai Composite Index fell 0.44%, the Shenzhen Component Index dropped 0.86%, and the ChiNext Index lost 1.17%.

At today's brokerage morning meetings, Huatai Securities noted in its 2025 mid-year outlook that attention should be paid to the AI technological revolution as well as defense and self-sufficiency themes. China International Capital Corporation (CICC) believes the tungsten price center is expected to continue rising. Huaxi Securities suggested adopting a rotation strategy to play the tech rally.

Huatai Securities 2025 Mid-Year Outlook: Focus on AI Tech Revolution, Defense, and Self-Sufficiency Themes

Huatai Securities' 2025 mid-year outlook stated that the restructuring of global order is simultaneously altering asset pricing patterns. Multiple macro themes including tariff policies, global economic prospects, and geopolitical shifts are intertwined, leading to increased volatility across asset classes and weakened trends. In an uncertain environment, higher demands are placed on valuation, safety margins, odds, and ergodicity. The firm recommends responding through high odds and low correlation strategies. At the asset level, it advises maintaining operational flexibility, leveraging odds for left-side positioning during adjustments, and seeking structural opportunities in regional and industrial logic. With the US dollar trending weaker, non-US assets may show relative outperformance, European assets offer higher win rates, while emerging markets like Hong Kong stocks present better odds. Focus areas include the AI technological revolution, domestic demand sectors under fiscal expansion, as well as defense and self-sufficiency themes.

CICC: Tungsten Price Center Expected to Continue Rising

CICC noted that in the short term, the tightening supply-demand situation persists, coupled with the stimulative effect of overseas tungsten product premiums. The firm believes tungsten prices have entered a bull market channel and may continue breaking historical highs. Long-term, the supply-demand gap for tungsten is projected to expand from 18,300 mt in 2024 to 19,100 mt by 2028. The global tungsten supply-demand gap as a percentage of primary demand is estimated at -18.4%, -16.6%, -17.0%, -16.8%, and -17.4% from 2024 to 2028 respectively, with the tungsten price center expected to keep rising.

Huaxi Securities: Play Tech Rally With Rotation Strategy

Huaxi Securities pointed out that overall, expectations of easing China-US trade relations have boosted market risk appetite, with the tech sector continuing its rebound since late May. Notably, despite improving trade relations, international clues remain chaotic, indicating the "chaotic era" persists. Preparations should be made for potential reversals, avoiding excessive trading in single directions. Meanwhile, the main theme of the market remains unclear. Before the narrative of the technology sector is further strengthened, it is necessary to adopt a rotation strategy to participate in the technology market, "take profits when they are good" after achieving certain gains, and then look for sectors at low levels for appropriate positioning. If the technology market experiences a significant correction, it means that the STAR 50 Index will once again approach its position before the technology market rally in February. The expectation of market stabilization funds and substantive progress in the technology sector may provide solid support, offering a better opportunity to participate in the recovery of the technology market.