- On April 21, China's three major A-share indices displayed a mixed yet resilient slight upward trend. The Shenzhen Component Index (SZCOMP) edged up by 0.1%, continuing its trajectory of reaching a new high in more than four years; the Shanghai Composite Index (SHCOMP) and ChiNext Index (CHINEXTP) also recorded gains of 0.07% and 0.31%, respectively.
- The trading enthusiasm of the two markets cooled down temporarily, with the total market transaction amounting to 2.43 trillion yuan, a decrease of about 179.9 billion yuan from the previous trading day. Moreover, market breadth was weak, with over 3,400 stocks closing lower, reflecting a divergence between rising indices and widespread individual stock declines.
- The market exhibited a significant performance and prosperity-driven structure. The electronic chemicals and traditional energy sectors strengthened considerably due to fundamental improvements and external macro support, while the communication services, software development, and brokerage sectors faced valuation adjustment pressures due to weaker-than-expected first-quarter results.
Index Divergence and Fund Confrontation in a Shrinking Market
Amid a drop in total market transactions to 2.43 trillion yuan, the A-share market displayed a highly structured confrontation characteristic. The Shenzhen Component Index (SZCOMP) managed to withstand the pressure of lower volumes to reach a new high, largely due to the late-session gains in some high-weight technology and new energy stocks. However, the decline of over 3,400 stocks reflected a concentration of liquidity in assets with performance certainty, putting smaller-cap stocks under pressure. This scissor gap phenomenon of rising indices and falling individual stocks indicates that during a slowdown in the entry of incremental funds, the switching of existing funds between high and low sectors is the core force driving market fluctuations. From the trading behavior perspective, slight rises in a shrinking state often suggest market disagreement near key resistance levels, with both long and short sides waiting for clearer macro data or policy guidance.
Prosperity Verification of the Electronic Chemicals Sector
The electronic chemicals sector became one of the core themes pursued by funds that day, with Fangbang Co., Ltd. (688020.SH) and Huate Gas (688268.SH) both hitting the 20% limit of gains. This sector's strength is not only supported by the long-term logic of domestic substitution but also instantly catalyzed by micro-level financial report data. Take Fangbang Co., Ltd. as an example: its latest 2025 annual report shows total operating income reaching 358 million yuan, a year-on-year increase of 3.79%, and a significant increase in net cash inflow from operating activities by 47.589 million yuan compared to the same period last year. Although net profit attributable to the parent company remains in negative territory, the narrowing loss and significant improvement in cash flow led the market to price in positive marginal repairs to its underlying fundamentals. The recovery of demand for semiconductor materials and special gases is being gradually verified on the balance sheet side.
Resonance Logic of Traditional and Clean Energy
The energy sector demonstrated strong defensive and cyclical dual attributes that day. In the coal mining and processing sector, the Qinhuangdao Port Q5500 power coal closing price rose to 761 yuan/ton, with a simultaneous increase year-on-year and month-on-month, confirming the underlying value of coal as an alternative energy amid the oil supply squeeze overflow effect. Simultaneously, the power sector also experienced a boom, with many stocks hitting the ceiling. A report by the global energy think tank Ember pointed out that by 2025, the global solar power generation will surge by 30%, and renewable energy will for the first time surpass coal in the global power structure. This macro picture of maintaining supply security in traditional fossil energy while increasing clean energy installations runs parallel, with domestic industrial electricity consumption increasing by 5.2% year-on-year, providing a solid revenue growth base for the broader energy sector.
Earnings Shock Pressure at the End of Earnings Season
In stark contrast to the heat of the pro-cyclical and materials sectors, some subfields within big finance and TMT sectors faced valuation pressure. The communication services, software development, and brokerage sectors were among the biggest decliners, with the core reason being that quarterly reports did not meet market expectations. Guosheng Securities' first-quarter net profit attributable to the parent company plummeted by 97.91% year-on-year, affected by fluctuations in the market value of its financial assets; Haite Data's first-quarter net loss approached the full-year level of the previous year; Zhongjiabochuang triggered the shareholder meeting review mechanism due to unpaid losses reaching one-third of the capital stock. At the end of the earnings season, the market's tolerance for companies' profitability sharply fell, and any financial characteristics of revenue non-increase or cash flow deterioration would meet short-term liquidity selling pressure, forcing a painful valuation reshaping for the related stocks.
