On October 18th, the market collectively witnessed a strong rebound, with the ChiNext index surging by more than 10% at one point. However, since reaching a phase high on October 8th, both indices and most individual stocks have experienced some degree of divergence and adjustment. During this period, a group of stocks refused to decline and continued to rise, even setting new highs.
Overall, these strong performers are mainly distributed in the fields of software, IT, diversified finance, real estate building materials, and other areas, involving high market attention topics such as Huawei's HarmonyOS and real estate building materials. It is worth mentioning that behind the strong rise of these stocks, there are also factors such as sector logic and fundamentals driving them.
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Many stocks' prices have surpassed previous highs.
On October 8th, major market indices rose to phase highs, such as the Shanghai Composite Index reaching 3,674.40 points, the Shenzhen Component Index reaching 11,864.11 points, and the ChiNext Index reaching 2,576.22 points. After that, the aforementioned indices have all experienced varying degrees of decline and are currently in a relatively stable state.
The market as a whole has maintained a high level of activity. In terms of turnover, on October 16th, the market turnover was 1.39 trillion yuan, continuing to be above the trillion-yuan turnover mark. From September 25th to October 16th, the turnover has been maintained above the trillion-yuan mark for 11 consecutive trading days.
At the same time, many stocks have continued to perform strongly after a round of strong increases. According to incomplete statistics, from October 9th to October 16th, there were 109 companies with a gain of more than 10%, and the stock prices of the aforementioned companies have all surpassed the high point on October 8th on October 16th.
Overall, these companies are involved in multiple fields such as computers, real estate building materials, chemical industry, non-bank finance, transportation, power equipment, and communications.
For example, in the transportation sector, Chongqing Road and Bridge's main business is road and bridge toll collection. From September 12th to October 8th, the company's stock price experienced a round of strong increases, with a cumulative increase of nearly 60% during the period. The stock price reached a high of 5.98 yuan on October 8th, and there was a pullback on October 9th. After that, the company's stock price started another round of strong rebound. For example, from October 10th to October 16th, it rose by 36% in total. As of the close on October 16th, the company's stock price was reported at 6.95 yuan, surpassing the high point on October 8th (see attached chart).
Upon further observation, there are some targets that have continued to rise without following the market differentiation and adjustment. For example, in the communications field, Hytera Communications, whose main business is wireless communication systems, has multiple concepts such as low-altitude economy and internet finance. Looking at the secondary market performance, on October 9th, the company's stock price continued to hit the daily limit despite market adjustments. From September 19th to October 16th, over 15 trading days, the company's stock price has nearly doubled. It is worth mentioning that on October 18th, the company recorded its 13th daily limit in 17 days.
In addition, many companies in other industries have recently achieved strong leadership.Huawei Hongmeng Concept Ignites Computer Stocks
From an industry perspective, according to the analysis, among the stocks that have risen sharply and broken through previous highs, there are many companies in the computer industry, mainly involving software development, IT services, and other targets, totaling 15 companies.
Looking further, among them, many companies are involved in the Huawei Hongmeng concept stocks, such as Airong Software, Changshan Beiming, Sifang Jingchuang, Runhe Software, Yuxin Technology, Changle Technology, etc.
Huawei Hongmeng is the logic of domestic substitution. In the recent rebound market, the sub-technology main lines related to domestic substitution have been continuously explored by funds, and many leading companies have already seen a breakthrough in trading volume.
Recently, Huawei Hongmeng concept stocks have experienced several rounds of strong increases. For example, on October 14th, the sector's increase exceeded 6%; on October 16th, it rose by more than 1%. On that day, more than 10 stocks, including Changle Technology, Junyi Digital, Tianyi Shares, Jiahe Intelligence, Rongke Technology, etc., all increased by more than 10%.
Behind the market's focus on the Huawei Hongmeng concept, it may be related to relevant events stimulated by Huawei. According to Huawei's terminal news on the 15th, it will hold the original Hongmeng Night and Huawei Full Scene New Product Launch on October 22nd. Since the release of the Hongmeng system, concept stocks have repeatedly attracted market attention. According to a report by the well-known research institution CounterpointResearch, the Hongmeng system's share in the Chinese market in the first quarter of 2024 has already surpassed Apple's iOS (mobile operating system), becoming China's second-largest mobile operating system.
With the heating up of the Huawei Hongmeng concept, many stocks have been continuously speculated by the market, such as Changshan Beiming. From September 10th to September 30th, the company's stock price has continuously closed several limit-up boards, with a cumulative increase of 86% during the period. After the "National Day" holiday, it continued to rise, from October 8th to October 16th, with a cumulative increase of 75%. During the same period, it also closed several limit-up boards. On October 17th, the company's stock price once again reached the limit-up board during the trading day.
In the current third-quarter report window period, many Huawei Hongmeng concept stocks have released performance forecasts, among which many companies are expected to increase. For example, Ruiming Technology expects to achieve a net profit of 209 million yuan to 229 million yuan in the first three quarters, a year-on-year increase of 156.51% to 181.09%.
Take Tailong Micro as another example; it expects to achieve a net profit of about 59.6122 million yuan in the first three quarters of 2024, a year-on-year increase of about 58.61%. The company stated that the expected increase in performance is related to the growth of revenue from IoT products and audio product lines domestically and internationally, the gradual alleviation of the semiconductor industry's supply chain tension this year, sufficient industry supply chain capacity, and optimized costs.
The real estate and building materials industry chain also has many stocks on the list.Recently, there has been a surge of positive news related to real estate, with many places adjusting or canceling purchase restrictions, stimulating the real estate sector and the construction materials and decoration industry chain to become more active.
For instance, on October 16th, real estate stocks such as Sunshine Co., Financial Street, Nanguo Property, Gemdale Corporation, Wan Ye Enterprise, Cinda Real Estate, and China Communications Construction all closed at their daily limit. On the same day, construction material stocks including Qinglong Enterprise, Sichuan Shuangma, Western Construction, Sifang New Materials, Asia New Energy, and Sichuan Jinding also closed at their daily limit.
Among the companies with the highest increase in stock prices since October 9th, there are also many real estate and industry chain companies on the list, such as Cinda Real Estate, Yu Development, and Wan Ye Enterprise.
On October 16th, Cinda Real Estate's stock price closed at 5.40 yuan, reaching a new high in the past year and a half. It has risen by more than 15% since October 9th. Looking at a longer period, the company's stock price has started to rebound since September, with an increase of 80% since then. The company disclosed on September 24th that it plans to increase its capital by 349.5 million yuan to participate in the development of the Wuhu Xinhua Bang Industry Investment Partnership project.
In the construction materials sector, companies such as Qinglong Enterprise, Huili Shares, Sichuan Jinding, and Western Construction also made the list. For example, Qinglong Enterprise's stock price has closed at its daily limit for three consecutive days from October 14th to October 16th, with an increase of 48.81% since October 9th. The company's main business is water conveyance pipelines, and on October 14th, the company announced that it had won a procurement project worth 96.323 million yuan. It stated that the project win is expected to have a certain impact on the company's performance from 2024 to 2026.
In addition, many construction and decoration stocks have also seen a strong rebound since October 9th, such as Inner Mongolia Grassland Ecology, Chengdu Road and Bridge, and Chongqing Construction.