【Focus Review】The ChiNext Index shrank in volume for a fourth consecutive day of decline, with both markets' total turnover dropping below 1.7 trillion yuan, hitting the lowest level this year. Funds continue to favor the optical communications sector.

Cailian Press, April 3 — Today, 36 stocks hit the daily limit, 12 stocks saw boards fail, and the board-lock rate was 75%. Tianjin Pharmaceutical hit six consecutive limit-ups, Xinneng Taishan notched 7 boards in 9 days, Huiyuan Communications and Chongyao Holding both achieved two consecutive limit-ups, and Suli Co., Ltd. reached 3 boards in 6 days.

The market remained volatile and adjusted throughout the day. The three major indexes opened higher and then fell. The Shanghai Composite Index once again broke below the 3,900-point level. The divergence between large- and small-cap indexes was obvious, with the micro-cap stock index falling by over 3.5%. Total trading volume across the Shanghai and Shenzhen markets was 1.66 trillion yuan, a contraction of 186.5 billion yuan compared with the previous trading day. On the trading front, market themes were relatively messy, with more than 4,700 stocks across the board declining. By sector, CPO, cross-border payments, and lithography machine sectors led on gains; sports, coal, agriculture, and chemical sectors led on losses. As of the close, the Shanghai Composite fell 1%, the Shenzhen Component fell 0.99%, and the ChiNext fell 0.73%.

Analysis of Popular Stocks and Consecutive Limit-Up Stocks

The rate of advancing to the next stage for consecutive limit-ups dropped to 16.66%. Among yesterday’s consecutive limit-up stocks, only the top-tier stock Tianjin Pharmaceutical achieved a successful advance. As for yesterday’s first-time limit-up stocks, only 2 succeeded. The “losing money” effect on high-level stocks was released again. Overnight, international crude oil prices surged by more than 10%, but sectors benefiting from the higher oil price—oil and gas, chemicals, and coal—actually saw broad pullback patterns. In the coal-to-chemicals segment, prior popular stocks such as Jincheng Coal Technology, Yunmei Energy, and Xinghua Co., Ltd. all hit the limit-down. Meanwhile, the earlier three-consecutive-limit-up stock Xinzhonggang nearly staged a “limit-up/limit-down” move intraday, putting continued pressure on the green electricity concept, which had already weakened in performance. Shenan Electric A, Mindong Electric Power, and Leshan Electric Power all were sealed at the limit-down. Despite a strong rally in U.S. tech stocks overnight, funds in the computing power direction further concentrated toward the optical communications segment. The ongoing increase in the number of individual stocks hitting limit-down indicates the current market is still in an extremely low-risk-appetite, deeply depressed state, and the “losing money” effect on low-quality and small-cap stocks continues to be released.

Mainline Hot Topics

Yesterday, the Ministry of Industry and Information Technology issued a notice, proposing to promote the deployment of technologies such as all-optical switching, reduce network latency from compute-power application terminals to servers, and improve interactive user experience. Driven by this news, the OCS concept surged and led strongly throughout the day among computing hardware stocks. Deko Li, Tengjing Technology, Guangju Technology, ZhiliFang, and Changguang Huaxin all refreshed historical highs. Growth-trend small-cap stocks such as Weiteng Electric, Yitian Shares, and Huashengchang also reversed and hit limit-up to accelerate. Based on research reports from multiple brokerages, some overseas big manufacturers have been gradually securing OCS orders, mainly covering customers such as Google and Meta. Meanwhile, the Ministry’s latest policy positions OCS all-optical switching as a baseline underlying technology for compute-power networks. The logic is that this niche has a resonance in both domestic and overseas demand. As another major popular direction on the hardware side—the optical fiber industry chain—continues to show major players making iterative new highs, which has led to a steady stream of low-position small-cap stocks emerging. This creates a generally positive, healthy uptrend pattern. However, the performance of heavyweights such as Yangtze Memory and Hengtong next week remains crucial. If a consecutive high-level, high-volume-but-stagnating pattern appears, investors should still be wary of fund profit-taking pressure on some pure follow-the-trend theme small caps.

Yesterday, the Ministry of Industry and Information Technology also proposed exploring innovative business models such as “compute-power banks” and “compute-power marketplaces,” supporting small and medium-sized enterprises in depositing idle compute-power resources. The compute-power leasing concept turned active against the trend during the day. Compute-power scheduling-related stocks, Sitech and Zhizhen Technology, both hit limit-up. Junyi Digital and Eastmoney Guoxin saw both jump more than 10% intraday. And as Step 3.5 Flash new version updates were released consecutively by Stepwise Star recently, and after the completion of the share reform news, related concept stocks such as Yunse Zhilian saw straight limit-up in the afternoon. CNEC Communications, Feile Audio, and Xinhua Media also briefly surged. However, the pricing-rise concepts such as Tencent Cloud, which previously led the compute-power leasing industry chain, have been relatively weak recently. Some popular names such as Hongjing Technology and AURORA also showed signs of further weakening in performance. Therefore, the current activity in the compute-power leasing concept is still largely based on only a batch of low-position stocks that some funds are trying to go long within the broader sector, and its sustainability is still hard to describe as optimistic.

SEMICON China 2026 exhibition shows that, driven by AI compute power, the global semiconductor industry is entering a new growth cycle, with advanced packaging, memory, and other areas becoming the focus. The semiconductor industry chain stayed active against the trend throughout the day. Benefiting from a surge in helium prices triggered by developments in the Middle East, China Ship Special Gas sealed a 20-centimeter limit-up. Huate Gas closed up nearly 10%. In addition, the device side—which has shown solid performance recently—remained strong. Combined with the M&A restructuring concept, Jiuzhou Yiguai sealed a 20-centimeter limit-up, and Jintuo Shares, Blueing Equipment, Delong Laser, Huaxing Yuanchuang, and others all ranked among the top gainers. Moreover, domestic compute-power chip stocks such as Moore Threads, Hanhui Shares, and Cambrian also remained active against the trend. With the profitability of major global chip giants showing results above expectations, and domestic major compute-power chip enterprises completing IPO financing, there is ample “ammunition” for the semiconductor industry chain’s expansion boom. Upstream sub-segments such as equipment and materials are still deeply benefiting. However, at present, the走势 of overseas tech stocks remains highly uncertain, and the constraints on the domestic semiconductor industry chain’s performance cannot be ignored.

On April 2, U.S. Eastern Time, the White House officially announced a 100% tariff on imported patent drugs and pharmaceutical ingredients. The purpose of this move is to apply pressure through tariffs, forcing pharmaceutical companies to bring production back to the U.S. or accept pricing agreements. Under the disruption from the above news, the previously active pharmaceutical industry chain showed differentiation in performance. The top-tier stock Tianjin Pharmaceutical advanced to a six-consecutive-limit-up. Chongyao Holding advanced to a two-consecutive-limit-up. Lemei Pharmaceutical and China Medicine both hit limit-up. But Huanlian Pharmaceuticals, China Yuanxie, and Rundo Shares each closed at limit-down. Judging from the scope of this tariff increase, patent drugs—which are among the primary targets—are not the main categories that Chinese pharmaceutical companies export to the U.S. And the impact on potential BD transactions is also more limited. By contrast, CXO companies with global capacity layout and innovative drug companies whose primary overseas expansion model is BD transactions are more likely to benefit from this round of global supply-chain restructuring wave.

Outlook for the Next Phase

Against the backdrop of highly uncertain conditions in the Middle East, risk-avoidance sentiment in the market has risen sharply, causing the market to experience a shrinking-volume, broad-based downtrend for the entire day. More than 4,700 stocks fell. And because Shanghai-Shenzhen-Hong Kong Stock Connect was closed today, total trading volume across the two markets dropped below 1.7 trillion yuan, setting a year-to-date volume level for the low point. Since last year’s Qingming holiday was followed by a severe hit with a single-day decline of more than 7%, it is reasonable that today’s elevated risk-avoidance sentiment. With today’s counts of stocks hitting limit-up and limit-down being fairly balanced, and based on signs that yesterday’s consecutive-limit-up stocks saw only 1 stock successfully advance, after short-term market sentiment hit a low point, the probability of a rebound next week is not low. However, active funds continue to narrow their focus, concentrating on areas with relatively certain earnings growth such as compute-power hardware. Still, they are prone to being affected by fluctuations in overseas stock markets. From the perspective of indexes, today’s laggard micro-cap stocks fell again by breaking below the 6-month line on expanding volume accompanied by bearish candles. The ChiNext Index has continued to weaken in sync recently, indicating that the “losing money” effect in micro and small caps has already been spreading into some high-position, high-weight stocks within the growth track. For these types of stocks, short-term performance still depends highly on their annual reports and first-quarter results.

Today’s Limit-Up Analysis Chart

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