Chinese equity markets staged a late-day rebound on Thursday, but the picture was fragmented: the Shanghai Composite finished essentially flat, Shenzhen ended modestly higher and the technology-focused STAR/Science board outperformed, while the Nasdaq-style ChiNext slipped. Trading activity picked up, with daily turnover rising to ¥2.54 trillion and more than 2,800 names in the red, reinforcing a theme of concentrated rallies amid broad weakness.
The decisive move came from stocks tied to AI infrastructure and so-called compute hardware. Suppliers along the chip and server supply chain — including PCB makers, CPO (chip packaging and related materials), liquid-cooled server components and compute-chip suppliers — registered sharp gains. Market leaders such as Shennan Circuits, Han's Laser, Guanghe Technology and Chuanrun saw limit-up moves as investors chased beneficiaries of an anticipated cycle of AI-capex.
Strength was not confined to the compute chain. Power and industrial equipment names performed strongly, with provincial power generator Ganneng posting its second consecutive daily limit-up and Huayin Power also hitting the limit. A cluster of gas-turbine and heavy-equipment suppliers surged, and small-metals plays such as Yunnan Germanium and Zhangyuan Tungsten continued multi-day rallies. Environmental engineering stocks rallied into the close, while media, insurance and property sectors lagged, with cinema operators among the hardest hit.
The market’s pattern — narrow leadership powered by hardware suppliers while the bulk of stocks fall — speaks to an investor preference for tangible, short-term beneficiaries of the AI investment cycle rather than a broad-based risk-on rotation. PCB and packaging firms are seen as near-term winners from rising server builds and upgrades, especially where liquid cooling and advanced 3D packaging are required to support high-density AI racks.
This day’s action sits against a backdrop of increased capital raising and deal activity in the chip packaging and testing space, including a high-profile packaging supplier preparing a STAR Market IPO to fund 3D packaging capacity. That pipeline of funding and capacity expansion helps explain why small, niche suppliers are commanding attention, even as wider macro and sectoral concerns keep many investors on the sidelines.
The market’s bifurcation raises familiar cautions. Narrow rallies led by thinly traded suppliers can be volatile, driven in part by retail flows and momentum trades, and are sensitive to changes in policy, supply-chain timing and global demand for AI servers. For investors and policymakers, the key questions are whether the compute-hardware rally reflects durable corporate capex and supply-chain reinvestment or a cyclical, sentiment-driven upswing likely to fade once near-term catalysts pass.