Shanghai Composite Index rises 25.58% in the Year of the Snake; institutions expect the technology sector to regain momentum after the holiday

February 13th, the A-share market experienced fluctuations and adjustments. Frontline hot topics such as AI applications and space photovoltaics faced corrections, dragging major stock indices lower. By the close, the Shanghai Composite Index was at 4,082.07 points, down 1.26%; the Shenzhen Component Index at 14,100.19 points, down 1.28%; the ChiNext Index at 3,275.96 points, down 1.57%; and the STAR Market Composite Index at 1,809.18 points, down 0.38%.

The Year of the Snake lunar market rally has come to an end. Looking at the entire year (February 5, 2025, to February 13, 2026), the market only experienced short-term volatility in early April last year, then steadily rose with fluctuations. The Shanghai Composite increased by 25.58% cumulatively, the Shenzhen Component by 38.84%, the ChiNext by 58.73%, and the STAR Market by 64.20%.

Funds Focus on High-Performing Annual Reports

Yesterday’s trading continued the sector rotation pattern, with some high-performing annual report sectors showing notable gains. Storage chip concepts strengthened against the trend, with Deep Technology hitting the daily limit, Micro Nano rising over 14%, and Damingli, Jiangbolong, Langke Technology, and Jingce Electronic rising over 3%. Industry leaders SMIC Micro saw a slight increase of 0.30%.

On the evening of February 12th, SMIC disclosed its investor relations activity record. When discussing industry outlook for 2026, SMIC’s co-CEO Zhao Haijun stated, “Over the past two months, we have communicated extensively with industry chain partners. We see that the strong demand for storage driven by AI has squeezed the supply of storage chips for mobile phones and other applications, especially in the mid-to-low end sectors, causing terminal manufacturers in these fields to face shortages and rising prices.”

Considering multiple factors, SMIC provided guidance for 2026: first-quarter sales are expected to be flat quarter-over-quarter, with gross margins between 18% and 20%; sales revenue growth in 2026 is expected to surpass the industry average, with capital expenditures roughly unchanged from 2025.

According to a research report from Orient Securities, orders related to AI, storage, and mid-to-high-end applications are increasing. Looking ahead, the company is expected to leverage its technological reserves and leading advantages in BCD, analog, storage, MCU, and high-end display driver segments to maintain a favorable position during this industry cycle.

Several other storage chip companies also forecast strong 2025 performance. According to earnings forecasts, module leader Jiangbolong expects net profit between 1.25 billion and 1.55 billion yuan, up 151% to 211%; Damingli expects net profit of 650 million to 800 million yuan, up 85% to 128%. Buwei Storage and Langke Technology also forecast significant growth or turnaround.

In addition to storage chips, yesterday’s computer equipment and breeding sectors, with positive outlooks for 2025, attracted capital attention, and their leading companies’ stock prices rose. Looking ahead, starting in March, listed companies’ annual reports will enter a busy disclosure period, with institutions generally advising focus on high-performing sectors.

CITIC Securities’ research report states that, based on earnings forecasts, the proportion of A-share listed companies with positive earnings surprises in 2025 is increasing. The biggest highlights are in technology, finance, and cyclical sectors, showing a structural pattern of “technology-driven, external demand-supported, and financials as ballast.” Notably, industries such as basic chemicals, electronics, pharmaceuticals, non-ferrous metals, and machinery lead in exceeding earnings expectations, while the auto, power, and utilities sectors also rank high in companies surpassing expectations.

Post-Holiday Tech Mainline Expected to Resume

In the last week of the Year of the Snake, the market still exhibited clear sector rotation, with no definitive hot mainline emerging. Many institutions believe that after the Spring Festival holiday, from the perspectives of event catalysts and calendar effects, the tech mainline represented by AI is expected to return.

Xingye Securities’ chief strategy analyst Zhang Qiyao stated in a report that from mid-February, the macro data release window begins, and data on domestic prices and social financing will be worth watching for signs of macro improvement. U.S. non-farm payrolls and CPI data are also expected to calibrate monetary policy expectations. Additionally, domestic and international AI application-related events are likely to unfold intensively around the Spring Festival. After a period of accelerated rotation and cooling of the mainline, macro and industry catalysts are expected to once again guide market structure and reinforce mainline consensus.

“From the perspective of relative win rates, after the Spring Festival, technology manufacturing, resource products, and infrastructure chains are expected to perform notably better,” Zhang said. He explained that historically, market risk appetite tends to increase after the holiday, favoring growth sectors like TMT and advanced manufacturing; meanwhile, the peak construction season in March and April could further boost resource and infrastructure sectors through rising prices.

The strategy team at Bank of China Securities reviewed the past three years’ Spring Festival market trends and emphasized the potential for event catalysts in the AI sector during the holiday period.

The team noted that over the past three Spring Festival windows, major global AI industry events have occurred, triggering rallies in tech stocks after the holidays. For example, during the 2023 Spring Festival, the attention on ChatGPT surged, leading to significant gains in A-share tech stocks afterward; in 2024, numerous overseas AI catalysts emerged, such as OpenAI’s release of the Sora video model and Google’s Gemini 1.5 large model, making AI a key focus post-holiday; in 2025, DeepSeek’s emergence drew global investor attention, with Chinese AI assets rising sharply in the first week after the holiday. Overall, the current timing cannot ignore the rapid progress of the global AI tech industry and the potential for event-driven catalysts.

(Article source: Shanghai Securities News)