The three major A-share indices closed lower, with trading volume below 1.7 trillion yuan. CPO concept stocks surged against the market trend.

China A-share’s three major indexes pulled back together today. As of the close, the Shanghai Composite fell 1%, closing at 3880.10 points; the Shenzhen Component fell 0.99%, closing at 13352.90 points; the ChiNext Index fell 0.73%, closing at 3149.60 points. Trading value across the Shanghai, Shenzhen, and Beijing markets totaled only 188.9B yuan, shrinking by 1889 billion yuan from the previous day.

Sector and industry themes showed a broad-based decline. Public utilities, power, coal, advertising and marketing, photovoltaic equipment, chemical materials, agriculture, forestry, animal husbandry and fisheries, wind power equipment, and film and theater line sectors led the decline. Only communication equipment, electronic chemicals, and rare earths rose against the trend.

On individual stocks, the number of advancing stocks exceeded 700, and nearly 40 stocks hit the daily limit. CPO-concept stocks surged higher against the trend: Deckor 20cm hit the daily limit, while LuxTech, Robotech, and Zhilifang rose more than 10%.

Industry capital flows: 8.18B yuan net inflow into communication equipment

In terms of industry capital, as of the close, communication equipment, diversified financials, automation equipment, and others ranked among the top in net inflows. Among them, communication equipment recorded a net inflow of 8.18B yuan.

For net outflows, batteries, photovoltaic equipment, power, and others ranked among the top in net outflows. Among them, batteries recorded a net outflow of 6.9B yuan.

Today’s Key News

The US announces it will impose a 100% tariff on imported patent drugs and pharmaceutical ingredients

On April 2, the US White House issued a statement saying that the US President Trump signed a document that day. Pursuant to Section 232 of the Trade Expansion Act of 1962, the US will impose a 100% tariff on imported patent drugs and pharmaceutical ingredients. This measure also provides a pathway for exemptions or tariff reductions. It is intended to pressure pharmaceutical companies to reach agreements with the White House on drug pricing and the reshoring/return of the industry, among other matters.

Iran and Oman are drafting an agreement, aiming to “regulate” passage through the Strait of Hormuz

According to reports cited by domestic media from Iran’s official media on Thursday, Iran and Oman are drafting an agreement aimed at implementing “passage supervision” for the transport of vessels through the Strait of Hormuz, while also emphasizing that it will not restrict vessel passage. The report said that Kazem Garibabadi, Deputy Minister in charge of legal and international affairs at the Iranian Ministry of Foreign Affairs, stated that the transport of tankers through this key waterway “should be carried out under the supervision and coordination of the two countries, Iran and Oman.”

Beyond Meta and Tesla! SpaceX reportedly raises its IPO target valuation to over $2 trillion

According to reports citing insiders, SpaceX, Musk’s rockets, satellites, and artificial intelligence company, has raised its target valuation for its initial public offering (IPO) to more than $2 trillion. This lays the foundation for a future listing that could become the largest stock listing in history.

Two departments jointly deploy a new round of crackdowns on illegal and criminal “black-and-gray” industries clusters in the financial sector

On April 2, the Economic Crime Investigation Bureau of the Ministry of Public Security and the Inspection Bureau of the State Administration of Financial Regulation held a video conference to jointly deploy efforts to carry out a new round of crackdowns on clusters of illegal and criminal activities in the financial sector’s “black-and-gray” industries. This is intended to further rectify disorderly practices by illegal financial intermediaries, firmly safeguard financial regulatory order, and effectively protect the legitimate rights and interests of financial consumers, so as to provide high-level security in support of high-quality financial development.

Favorable policy tailwinds for the computing power industry again! Several concept stocks have recently drawn capital attention

The Ministry of Industry and Information Technology announced the launch of a Inclusive Computing Power Enabling Action, and for the first time explicitly proposed exploring innovative business such as “computing power banks” and “computing power supermarkets.” Analysts noted that “both price and volume rising” has become a prominent feature in the Token market of large-model makers, and underlying support systems such as computing power, networks, and data scheduling are expected to continue benefiting.

**　　Institutional Views**

**　　CITIC Securities: In April, the A-share market may be dominated by consolidation, focusing on the dividend defense and energy security main lines**

CITIC Securities’ research report states that in April, the A-share market may be mainly characterized by consolidation, with the core variable still being uncertainty in the Middle East situation, which limits upside room for the index. It continues to suggest taking a steady allocation strategy: while holding onto dividend assets (banks, transport, and public utilities) to hedge volatility, also lay out energy security themes such as power equipment and new energy (lithium batteries and photovoltaic). Key risks to watch include whether April’s geopolitical conflicts will unfold with more-than-expected intensity; whether a tightening of marginal overseas liquidity triggers a synchronized downturn; and the dense period of earnings report releases—where major volatility could be caused if individual stock performance falls short of expectations.

CITIC Securities: Global value of the innovative drug industry stands out; next comes a period of dense data catalysts

CITIC Securities’ research report says that since 2026, China’s innovative drug BD transaction amounts have grown beyond expectations, and the industry’s global competitiveness has been further enhanced. In the domestic market, rapid volume expansion has occurred; based on 2025 annual reports, leading innovative drug companies saw their innovative drug revenues grow quickly under new-product drivers. biopharma companies have gradually entered the profit-turning point. Recently, multiple international academic conferences are coming up, and many innovative drug pipelines have entered a period of dense data catalysts. In summary, we believe the innovative drug industry’s global value has become prominent; next it will enter a period of dense data catalysts. We recommend paying attention to: ① leading innovative drug companies are likely to see earnings releases; ② core pipelines are about to receive major data readout catalysts; ③ pipeline assets with global potential becoming internationalized are expected to accelerate realization. In summary, we maintain a “outperform the market” rating for the innovative drug sector.

Haitong Securities: Disruptions from the Middle East situation affect market risk appetite; dividends still have value as a base position

Haitong Securities’ research report states that in recent years, with rising global macro uncertainty, increased demand from domestic residents for asset allocation, and a decline in the central level of broad social investment return rates, dividend strategies have received more and more attention. At present, dividend valuations relative to growth are at a low level. With disturbances from the Middle East situation affecting market risk appetite, dividend strategies still have value as a base position. Haitong Securities optimizes the dividend strategy from two aspects: stock selection and timing. 1) From the perspective of stock selection: based on dividend stability, earnings quality, and industry-neutral optimization, Haitong builds a high-dividend, industry-neutral portfolio following its strategy, and based on free cash flow combined with growth and a relative strength factor of capital expenditures, it constructs Haitong’s free-cash-flow-growth and stable portfolio. 2) From the perspective of timing: it focuses on environments for excess returns under three scenarios—risk appetite down, inflation up, and rising betas in a range-bound market—then, combined with Haitong’s quantitative timing model by the quantitative team, it sees a bullish stance on dividends.

Guotai Junan: Positive on MicroLED optical communications development potential

MicroLED is moving from display applications into penetration in optical communications. It breaks limitations of traditional laser solutions and copper connections, offering clear advantages in power consumption, reliability, cost, and transmission distance. In 2026, more product implementations are expected, and in 2027 and 2028 they are expected to gradually transition into mass production; potential market space could exceed $20k. Upstream components such as MicroLED chips and other parts, upstream equipment, and midstream packaging/testing manufacturing steps are all expected to benefit, and China’s domestic industrial chain may face significant development opportunities.