Meta description: Power stocks surge as China’s record heatwave drives electricity demand to new highs, driving gains for firms like YN Energy. Meanwhile, Pop Mart and Lao Feng Xiang Gold experience sharp declines amid profit-taking.
Market Recap Highlights
- – China’s power sector soars with stocks like YN Energy up 10%, fueled by unprecedented electricity consumption during extreme heatwaves.
- – Chip stocks rebound strongly, led by Cambricon’s 6% jump on AI processor demand.
- – Hong Kong-listed Pop Mart falls 5% and Lao Feng Xiang Gold tumbles 13%, reversing recent highs.
- – Trading volumes surge past ¥1.5 trillion, signaling intense market activity.
Market Momentum Shifts Amid Extreme Weather
A-shares climbed with Shanghai Composite rising 0.51% by mid-afternoon, supported by banking rebounds before partial retreats. The real stunner was the power sector’s vertical leap as China grapples with furnace-like temperatures. Southern Power Grid reported unprecedented peak loads of 252 million kilowatts – straining infrastructure as citizens cranked up air conditioning nationwide. This power demand surge transformed utilities into market darlings overnight.
YN Energy and Huayi Power Lead Gains
Hebei’s YN Energy Holdings electrified markets with an instant 10% daily-limit surge. Close competitor Huayi Power charged toward the ceiling before settling at 9.8% gains. These aren’t isolated spikes – Huayi logged 3 limit-ups in 7 sessions as investors placed big bets on generators set to profit from tariff increases and emergency coal imports approved last week.
Infrastructure Strain Creates Opportunities
Chinese grid operators face dual pressures: ensuring stable supply while preventing overloads like Weifang’s brief outage affecting 100,000 households. Industry experts predict thermal plants will run at 90%+ capacity throughout July, significantly boosting coal demand and lifting China Shenhua Energy’s shares 3.8%. As Beijing prepares contingency plans targeting energy-intensive industries, savvy traders ride this power demand surge.
Chip Stocks Rebound with Robotics Sector
Semi-conductor shares shook off geopolitical worries as Cambricon’s AI processors gained traction – fueling 6% intraday rises before cooling to 5% gains. Kinghelm Electronics followed suit as supplies normalized post-US-China tariff pauses. Simultaneously, automation stocks flourished.
Cambricon Momentum Sparks Broader Rally
Cambricon CEO Chen Tianshi (陈天石) confirmed increased chip orders from Baidu and Tencent Cloud deployments. This revealed pent-up industrial demand, lifting shares like TSMC spinoff Hua Hong Semiconductor 5% and Shanghai Fullhan Microelectronics 4.7%.
Automation Investments Accelerate
Chinese robotics firms surged:
– Zhongda Lide: Hit daily limit on industrial motor sales.
– Jiangsu Leili: Rose 9% on EV battery assembly contracts.
Analysts cite China’s national robotics action plan subsidies driving this robot renaissance as factories scramble to replace workers amid record heat hazards.
Hong Kong Stock Market Volatility
While mainland indices climbed, Hong Kong saw violent swings. Retail darling Pop Mart plunged 5% while luxury jeweler Lao Feng Xiang Gold crashed 13% intraday. This abrupt reversal highlights market fragility after their stellar June climbs.
Lao Feng Xiang Gold’s Wipeout
Prestigious gold retailer Lao Feng Xiang Gold peaked Tuesday at HK$1,108 per share before tanking. Market makers flagged concentrated selling by LVMH-linked funds re-allocating ahead of Europe tariffs. The severity stunned investors – especially since NASDAQ-traded competitor Luk Fook Holdings gained steadily.
Bubble Trouble Hits Pop Mart
Toy empire Pop Mart’s 5% drop resembled profit-taking after Q2 earnings projections disappointed. Major holder Sequoia Capital China pared holdings amid slowing North American Blind Box sales. However, Dalian Wanda Group invested strategically via its theme park arm, suggesting positioning for recovery ahead of Universal Studios Beijing partnerships.
Technical Strategy Impact
With volume exploding past ¥1.5 trillion – up ¥190 billion over yesterday – algorithmic trading amplified both surges and drops. Provincial investment funds aggressively rotated into utilities while departing consumer staples.
SiFang Materials’ Rollercoaster
Construction supplier SiFang Materials completed a stunning “Earth-to-Sky” turnaround: opening limit-up, crashing to near 10% loss, then rebounding to secure its fifth consecutive daily ceiling. Sentiment flipped amid rumors of Zhejiang Cement acquisition talks – forcing short sellers to urgently cover positions.
Banking Sector Retreat
Major lenders ICBC and China Construction Bank retreated after brief midday rallies despite improving NPL ratios. Experts cite foreign capital flight toward Indian banks ahead of BRICS meetings, though Shanghai Pudong Development Bank defied trends with 1.8% gains.
Strategizing Next Moves
The power demand surge presents tactical opportunities, but requires careful navigation amid overheated valuations and policy interventions.
- – Energy Hedge Plays: Accumulate shares in transmission companies like China Southern Grid subsidiaries for diversification.
- – China-Chip Exposure: Target second-tier semiconductor designers like Chipone Technology with cheaper valuations.
- – Profit Defense: Set stop-loss orders at 8% under buy-price for volatile names like Pop Mart.
Monitor National Energy Administration announcements next Thursday regarding plant capacity expansions. Simultaneously, Southeast Asian tourism recovery could benefit Lao Feng Xiang Gold’s overseas outlets later this quarter – consider accumulating below HK$950 with strong upside potential. For real-time shifts in China’s power markets and consumer discretionary pressures, subscribe to Phoenix Finance alerts.