March 5, 2025

AI Power Fuels Market Rebound

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On January 7, the A-share market exhibited a remarkable rally across all major indices, exhibiting robust momentum and vitalityBy the close of trading, the Shanghai Composite Index saw a rise of 0.71%, reflecting stable support from traditional heavyweight sectors and an increasing market sentiment regarding macroeconomic recoveryThe Shenzhen Component Index outperformed significantly with an increase of 1.14%, indicating strong upward momentum in growth sectors such as technology and consumer stocksThe ChiNext also rose by 0.7%, while the Sci-tech Innovation 50 Index soared by an impressive 2.86%, underscoring the leading position of technological innovation in the marketOn that day, over 4,100 stocks across both exchanges recorded gains, with a transaction volume of approximately 1.08 trillion RMB, indicating abundant capital liquidity that further propelled market growth.

The AI computing power concept led the gains, with Taicheng Light (300570.SZ) surging by 20%, Tonghe Technology (300491.SZ) increasing by 14.8%, Oulutong (300870.SZ) climbing 12.54%, and Zhaolong Interconnect (300913.SZ) rising over 11%. Additionally, Zhongheng Electric (002364.SZ) saw a gain of 10%.

In terms of news, Microsoft announced plans to invest $80 billion in building artificial intelligence data centers in fiscal year 2025, aiming to strengthen the computing power support for its Azure cloud computing services and consolidate its leading position in the global cloud computing and AI sectors

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Meanwhile, ByteDance is expected to have capital expenditures reach 160 billion RMB in 2025 to create a self-controlled large-scale data center cluster that will provide a robust computing foundation for its AI business, facilitating the ongoing development of features such as supporting the Doubao big model.

The consumer electronics sector also showed commendable performanceDerun Electronics (002055.SZ) rose by 10% as the company continuously expanded its business boundaries in automotive electronics and consumer electronics, enhancing product competitiveness through the development of new connectors and flexible circuit board technologyLens Technology (300433.SZ) saw an increase of over 7%, standing out as a leading company in window protective glass for smart terminals, leveraging advanced glass processing techniques and automated production to meet the demand for lightweight, high-strength screens in consumer electronic products

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Anker Innovations (300866.SZ) grew by 6.75%, driving innovation in charging technology and smart hardware, with its gallium nitride fast charging products receiving wide acclaim in the global marketChangying Precision (300115.SZ) saw a rise of 5.32%, using precision mold manufacturing and CNC processing technology to provide high-quality products in consumer electronics precision component manufacturing.

According to a research report from Guotai Junan, mobile phones and other consumer electronics are set to benefit from the expansion of new subsidies and the catalysis of new technologies and products at CES 2025. The National Development and Reform Commission proposed subsidies for personal consumers purchasing digital products, including smartphones, tablets, and smartwatchesAs a result, 3C product manufacturers and supply chain companies may see benefits

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CES 2025, as a barometer for consumer electronics trends, is expected to lead a new round of technology and product innovations, focusing on AI-enabled consumer electronics upgradesSmart wearable products like AI-enabled glasses are worthy of ongoing attention.

The semiconductor sector also demonstrated active performance, with Cambrian (688256.SH) rising by over 10%, Rockchip (603893.SH) up by 10%, Haiguang Information (688041.SH) increasing by 9.68%, and Zhongke Blue Communication (688332.SH) climbing over 8%.

In related news, NVIDIA's CEO Jensen Huang announced at this year's CES that Blackwell has fully entered production, with all major cloud service providers establishing systems to offer approximately 200 different models and configurations from about 15 hardware manufacturers

This news has significantly boosted expectations for the semiconductor industry, particularly in the realm of AI computing power chips.

The controlled nuclear fusion concept gained strength, with Yongding Co(600105.SH), Dongfang Tantalum (000962.SZ), Yingliu Co(603308.SH), and Dongfang Precision (002611.SZ) all rising by 10%.

CITIC Securities' research report indicates that nuclear fusion is expected to become the ultimate energy source in civilian power generationAs the industry's interest continues to surge amidst a clearly defined technological pathway and increased investment from various countries, the pace of commercialization of fusion reactors is anticipated to exceed market expectationsThe global market size for nuclear fusion devices is expected to reach 2.26 trillion RMB between 2030 and 2035, with components such as high-temperature superconducting tapes and vacuum chamber first walls having significant investment value.

On the downside, sectors such as influenza medication, weight loss drugs, and traditional Chinese medicine faced declines, with Plankton Pharmaceuticals (002864.SZ) dropping over 8% and Guilin Sanjin (002275.SZ) decreasing by 7.43%. Additionally, coal stocks also exhibited weakness, with Anyuan Coal Industry (600397.SH) and China Coal Energy (601898.SH) both declining.

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