On Wednesday, June 4th, Chinese A-shares advanced with the three major indices closing higher. The rare earth permanent magnet and consumer sectors showed notable activity.
In the A-share market, the Shanghai Composite Index rose 0.42%, the Shenzhen Component Index gained 0.87%, and the ChiNext Index increased 1.11%. Market breadth was positive with nearly 4,000 stocks rising in the Shanghai, Shenzhen, and Beijing exchanges. Trading volume exceeded 1.17 trillion yuan for the day. Leading gainers included the optical module (CPO), rare earth permanent magnet, and consumer sectors, while aviation and logistics were among the decliners. The consumer sector strengthened collectively, led by gold and jewelry, beauty care, and food and beverage segments. Over ten stocks, including Lefen Jewelry and Xima Food, hit the daily limit-up. The optical module (CPO) sector rebounded strongly, with stocks like Sunseeker and Deke rising over 10%. In Hong Kong, the Hang Seng Index closed up 0.6% and the Hang Seng Tech Index gained 0.57%. Pharmaceutical stocks led the gains, with Health-Tech and Dingdang Health surging approximately 42% and 32%, respectively. Most large-cap tech stocks advanced, including Meituan, Alibaba, JD.com, Tencent, and NetEase. Beverage stocks also rose, with brands like Chabaidao and Nayuki posting gains. Notably, Mixue Group, Pop Mart, and Lao Pu Gold all reached new highs, with Pop Mart surging over 5% year-to-date and Mixue Group gaining over 200%. In the bond market, treasury futures recovered in the afternoon. The 30-year contract fell 0.10%, while the 10-year, 5-year, and 2-year contracts rose 0.09%, 0.07%, and 0.04%, respectively. Domestic commodity futures were nearly all higher. Coking coal and European container shipping futures led with gains over 7% and 6%, respectively. Coke and other commodities also advanced, while rapeseed oil and caustic soda were among the few decliners.Regarding the rebound in coking coal futures, Guotai Junan Futures believes that the short-term recovery is driven by certain positive market expectations, primarily influenced by rumors of an export resource tax on Mongolian coal. Although the news remains unconfirmed, short-term market sentiment has noticeably shifted.
On the macroeconomic front, a June 4th front-page article in China Securities Journal highlighted that as the mid-year point approaches, market attention to liquidity is increasing. Due to factors such as month-end and cross-quarter effects, liquidity supply-demand imbalances tend to be more pronounced during mid-year. If necessary, the People’s Bank of China may further implement measures like reserve requirement ratio cuts to release long-term liquidity, ensuring ample liquidity through mid-year and the second half of the year. Additionally, the PBOC’s treasury bond buying and selling operations are expected to resume at an appropriate time. In A-shares, the CPO and rare earth permanent magnet sectors surged. The CPO sector led gains, with Taichenguang and Dekeli rising over 10%, followed by Liante Technology, Xinyisheng, and Zhongji Xuchuang. On the news front, Baidu previously mentioned that Nvidia’s stock rose approximately 3% to $141.22 on Tuesday, with its market cap reaching $3.45 trillion, surpassing Microsoft’s $3.44 trillion to reclaim the title of the world’s most valuable company since January. Nvidia’s forward P/E ratio is about 29x, well below its historical average, and its PEG ratio is lower than other Magnificent Seven members, indicating undervaluation. Guosen Securities noted that global internet cloud providers continue to increase AI investments, with tariffs being a short-term disruption. The global AI industry’ remains high, emphasizing ongoing focus on computing infrastructure and optical components. The A-share rare earth permanent magnet sector also advanced, with Keheng Co. hitting a 20% limit-up, Guang Sheng Nonferrous Metals sealing a limit-up, and Zhongke Magnetic Industry, Dadixiong, and Shenghe Resources among the top gainers. A Morgan Stanley report stated that each humanoid robot requires about 0.9 kg of rare earth metals, comparable to electric vehicles, including 28 rotary and linear actuators for joints and 12 hand actuators. The humanoid robot revolution could generate $800 billion in demand for key rare earth minerals. Hong Kong healthcare stocks erupted, with the Hang Seng Biotechnology Index closing up over 1%. The innovative drug sector soared, with Junshitai Pharma surging 40%, Xinda Biotech and Zailing Pharma rising over 10%, and Junshi Biosciences, Kaitai Pharma, and Tigermed following suit. A-shares innovative drug stocks also performed well, with Shengnuo Biotech, Shouyao Holdings, Xinlita, Haoyuan Pharma, and Tigermed all gaining over 6%. According to Shanghai Securities News, domestic innovative drug companies are making strides overseas, highlighted by high-value licensing deals, listings like Hengrui Pharma on HKEx for ‘A+H’ dual listings, and over 70 original research presentations at the 2025 ASCO annual meeting, showcasing their global competitiveness.Following the record-breaking exclusive global development rights agreement between 3SBio and Pfizer, valued at over $6 billion, setting a new milestone for domestic innovative drug out-licensing, another achievement was announced on May 30th. CSPC Pharmaceutical Group revealed that several products, including its EGFR-ADC (Epidermal Growth Factor Receptor Antibody-Drug Conjugate), are expected to secure three potential business development collaborations, with a total potential transaction value approaching $5 billion.
According to a recent research report from Huafu Securities, from the perspective of drug development cycles, most innovative drugs developed domestically and expanding globally are currently in clinical stages in the United States. They have not yet reached the phases of registrational clinical data readouts, regulatory submissions for market approval, or large-scale commercialization. The future process of ’10-50-100′ will mark the true validation and realization phase for China’s innovative drug sector. Tianfeng Securities noted that looking ahead to 2025, the overall market shows a trend of increasing risk appetite, with innovative drugs being the optimal sub-sector reflecting this trend. The innovative drug segment possesses strong industrial logic, supported by policy encouragement, improved corporate operations, and international expansion, among other factors. Risk Warning and Disclaimer: Market risks exist, and investments should be made cautiously. This article does not constitute personal investment advice and does not consider individual users’ specific investment objectives, financial situations, or needs. Users should assess whether any opinions, views, or conclusions herein align with their particular circumstances. Investments made based on this content are at the investor’s own risk.
