Is there a transition to a new cycle in the Micro LED boom and bust? (Review as of 2026.03.05)

Data Review: [Taogu Ba]
Today, the Shanghai Composite Index +0.64%, the ChiNext Index +1.66%, the STAR Market 50 Index +1.72%. Total market turnover was 23,900-23,657 billion yuan. Advancing stocks: 4,079; declining stocks: 1,306. Overall market volume decreased by 243 billion compared to yesterday.

Market sentiment: Slightly broad-based rise with weak recovery
Number of limit-up stocks: 68 (yesterday: 44)
Number of stocks with 20-cent limit-up: 13 (yesterday: 7)
Number of consecutive limit-up stocks: 7 (yesterday: 6)
Number of limit-down stocks: 2 (yesterday: 11)
Today’s board-breaking rate: 29.8% (yesterday: 30.1%)
Success rate of first limit-up board upgrade: 18.9% (yesterday: 0%)

Today’s major stocks with large volume
Tongyuan Petroleum -14, Oil & Gas
Before 9:45 AM, whether major stocks can quickly recover is an auxiliary signal for sector recovery.

Today’s unexpected high-volume bidding stocks
Hua Gong Technology

Overall sector consolidation overview:
2-board: Wangli Security (Home Consumption), Zhuolang Intelligent (Smart Economy), Tongguang Cable (AI Power), Smart Control (Smart Economy), Hanlan Cable (AI Power), Jicheng Electronics (AI Power), Shunnao Co. (AI Power)

I. Sentiment Cycle and Key Point Analysis:

• Increase in limit-up stocks within the median range.
• Consecutive board stocks remain at low levels.
• Board-breaking rate stable.
• Significant decrease in limit-down stocks at low levels.
• Today’s total limit-up transaction amount/market total ratio: 0.31 (medium-low range).
  Compared to yesterday, notable changes include a sharp decrease in limit-down stocks and a large increase in first-board success rate, indicating strong intra-day profit-making effects and reduced loss effects. Funds continue to switch between high and low, testing the market. Currently, the market is in a chaotic trial-and-error phase.

Sentiment temperature: Moderate to weak, around 40

Tomorrow’s ultra-short-term market sentiment anchor stocks:
Yunnan Energy Holdings, Jufei Optoelectronics
Before 9:45 AM, these stocks’ positive/negative feedback and extreme sentiment anchoring will signal market bullish or bearish sentiment.

Recent strong sectors, top-performing sectors of the day, and intra-day recognizable stocks:

II. Capital Flow Analysis:

Loss Effect -
No obvious loss effect across sectors. Some localized in agriculture, oil & gas, chemicals, representing risk-averse defensive themes with weakening divergence.
Position & Structure: No clear loss effect; some are at mid-to-low levels, represented by Qiule Seed Industry, Lanyan Holdings, etc.

Profit Effect -
Concentrated in LED, AI Power, and tech sub-sectors, representing sector sentiment rotation, recovery, and new theme trial-and-error.
Position & Structure: Some are trend-based and at low levels, represented by China Western Electric, Dongfang Electric, Jufei Optoelectronics.

Capital flow summary:
Some funds focus on trend sectors (fiber optics, AI Power) with a churning structure; others switch to new themes like LED for new cycle testing; additional funds rotate among various tech branches for recovery. Overall, new themes and trend sectors are competing for liquidity, with no clear winner yet.

III. Sector Analysis:
Sectors or concepts showing continued healthy trend structures today include: AIDC / Fiber Optics / Optical Communications / Tungsten Metals / Power Grid / Transformers / Micro LED
These sectors or concepts represent recent profit effects and high recent fund involvement, suitable for ultra-short-term stock selection.

Micro LED -
In the first phase of trial-and-error.
Led by Jufei Optoelectronics and Huacan Optoelectronics, followed by others.

Core Micro LED chips: Zhaochi Co., Jufei Optoelectronics, Sanan Optoelectronics, Huacan Optoelectronics. Light source shifts from lasers to Micro LED chips.
Core Micro LED lenses: Jufei Optoelectronics, Lante Optical, Medike. Due to light divergence, specialized lenses are needed for focusing.

Path of LED concept today:

During bidding, Huacan Optoelectronics and Zhaochi Co. had no orders at the end of bidding, with tens of billions of orders, high opening prices for Leyman Optoelectronics, Jufei Optoelectronics, Sanan Optoelectronics, and others. As a new theme, bidding confidence remains decent, further observation needed on fund absorption.

Post-open, Guoxing Optoelectronics, Sanan Optoelectronics, Leyman Optoelectronics quickly hit the board; Huacan Optoelectronics and Zhaochi Co. oscillated and strengthened, leading to a breakout. The sector experienced a major surge, with early confidence in new themes.
The main driver: news that “Optical Interconnect Replacement: Micro LED CPO reduces power consumption to 5% of copper cables.” According to TrendForce, traditional copper cables face transmission density and energy challenges, while Micro LED CPO offers lower energy consumption per transmission, potentially replacing optical interconnects.

In simple terms, high-speed interconnects in data centers like AI server cabinets currently use copper cables, limited by transmission distance and losses. Laser modules transmit over longer distances with low loss but consume more power at higher speeds, causing heat issues. Micro LED optical transmission offers a new solution.

This wave of Micro LED concept is a technological revolution, with potential industry chain growth from chips, optics, to fiber connectors after application. It has imagination space but is not yet mass-produced for commercial use. The market’s upward breakout is limited, so currently viewed as a small-cycle theme, watch and see.

Tomorrow’s key signals to monitor sector strength:

1. Whether Huacan Optoelectronics and Zhaochi Co. have large single orders, especially Zhaochi’s orders >1.4 billion at bidding end.
2. Whether at least 4 stocks have single large orders during bidding.
3. Whether Jufei Optoelectronics continues to rise strongly and challenge the trend line.
4. Whether Sanan Optoelectronics continues oscillating and upgrading.
   If these signals are met, continue the bullish trend; if not, expect divergence.

Geopolitical situation (Oil, Gas, Ports) -
In the first phase of trend cycle.
Led by China Merchants Nanhai and COSCO Energy, followed by others.

Path today:
During bidding, intercontinental oil & gas opened flat, with low opening prices for China National Petroleum, CNOOC, COSCO Energy, China Merchants Shipping. Post-open, intercontinental oil & gas oscillated and strengthened; Shandong Molong quickly hit the limit, most capacity stocks oscillated below. Midday, as intercontinental oil & gas strengthened, leading stocks like COSCO Energy, Tongyuan Petroleum, China Merchants Shipping rallied, overall sector strengthened.

The recovery in oil sector mainly reflects quantitative amplitude behavior, possibly a short-term geopolitical risk play. Overall, the view remains that such recoveries are rebounds, with a high probability of repeated sell-offs, a phase of fluctuation and withdrawal.

Metals (Small metals, Rare Earths) -
In the first phase of trend cycle.
Led by Jiangtung Equipment and Zhangyuan Tungsten, followed by others.

Path today:
During bidding, Zhangyuan Tungsten, Xiamen Tungsten, Xianglu Tungsten opened high, then oscillated downward with little resistance, mainly deep water oscillations.

Tungsten metal sector index broke down; core trend stocks are near breakdown. In the overall market recovery, even if not continuing the attack, a serious negative feedback is unlikely. The structure of underperformance is below expectations; rare earths are more resilient than tungsten. Therefore, reduce expectations for tungsten trend continuation, monitor cautiously.

AI Power (Gas turbines, Power grids, Transformers) -
In the second phase of trend cycle.
Led by China Western Electric, followed by Sany Electric, Baowen Electric.
Next phase led by China Western Electric, Dongfang Electric, Baowen Electric, TBEA.

Path today:
During bidding, Shunnao Co. hit the limit, with capacity stocks like Dongfang Electric, China Western Electric, TBEA opening slightly higher. Post-open, Hanlan Cable, Jicheng Electronics, Shama Power, Tongguang Cable hit the limit; trend stocks like Dongfang Electric, China Western Electric, TBEA strengthened collectively.
After some suppression due to new LED theme, some oscillated and fell back, but overall, the trend remains upward.
Signals like Shama Power, Dalian Electric Porcelain, Guiguan Electric, and oscillations in TBEA and Baowen Electric indicate the main trend is still upward. The previous large-scale breakdowns in AI Power suggest the current wave is trend-driven. The ongoing demand increase for power after industry upgrades, and the US power shortage, support continued upward expectations. Focus on sector index and core stocks like TBEA, China Western Electric.

Artificial Intelligence (Computing Power, Chips) -
In the 13th stage of trend cycle.
Led by Haili Co., Chunzhong Tech, followed by others.

Path today:
During bidding, Haili Co. and Chunzhong Tech led, with Zhangjiang Hi-Tech following.
In the second stage, led by Haili Co. and Dongxin Co.
In the third stage, led by Chunzhong Tech, Huasheng Tiancheng, Yingweike.
Subsequent stages show alternating leadership among various stocks, with no clear core leader currently.

Huawei Ascend trend core: Huasheng Tiancheng, Huafeng Tech, Taijia Co., Shenling Environment, Yi Hua Co. — structure broken, entering deep consolidation or signaling end.
Transformers trend core: Yigaoer, Jinpan Tech, Wangbian Electric, Sifang Co., Siyuan Electric, China Western Electric, TBEA — re-approaching trend line, maintaining upward trend expectation for mid-long term.
Gas turbines trend core: Liande Co., Wanze Co., Yingliu Co., Boying Welding, Weichai Power, Dongfang Electric — same as above.
Second-generation electronics trend core: Guojie Composites, Honghe Tech, China Geostone — in correction, uncertain short-term.
Q-Board trend core: Filihua, Ping An Electric, Zhongcai Tech, Dongcai Tech — correction phase, uncertain short-term.
Copper foil trend core: Copper Crown Copper Foil, Longyang Electronics, Fude Tech — correction phase, uncertain short-term.
PCB drilling trend core: Dingtai High-Tech, Zhongwuzhongxin, Dazhuo CNC — correction, uncertain short-term.
PCB manufacturing trend core: Huidian Co., Shennan Circuit, Shenghong Tech, Shengyi Tech — profit-taking, correction, uncertain short-term.
Fiber optics trend core: Changfei Fiber, Hengtong Optoelectronics, Tongdeng Interconnect, Hangdian Co., Zhongtian Tech — currently the best in computing power branches, maintaining oscillation upward trend, anchored by trend lines.
OCS trend core: Tengjing Tech, Dekeli, Guangku Tech — deep correction, uncertain short-term.
CPO/Optical Communication trend core: Huatian Tech, Tanfeng Communication, Jepu Tech, Mingyang Circuit — some broken structures, monitor individual stock trend structures.
Storage chips trend core: GigaDevice, Jiangbolong, Shannon Chip, Demingli, Buwei Storage — correction phase, uncertain short-term.
Domestic semiconductor front-end trend: Beifang Huachuang, Jiangfeng Electronics, Fuchuang Precision, Dinglong Co., Chipsource Micro, Green Da, Jingce Electronics — related to wafer manufacturing, uncertain short-term.
Domestic semiconductor back-end trend: Changchuan Tech, Changdian Tech, Tongfu Micro, Jingzhida, Jinhai Tong, Xidian Co., Helin Micro, Polymer Materials — related to packaging/testing, uncertain short-term.

Today’s tech sector path:
Bidding yesterday saw early recovery in AI Power, fiber optics, tungsten, Ascend, with signals of movement. AI Power capacity stocks like TBEA, China Western Electric, optical capacity stocks like Hua Gong Tech, Tanfeng, Hengtong, non-ferrous like Zhangyuan Tungsten, Xiamen Tungsten, Ascend, Huasheng Tiancheng, Tuowei Info all opened high.

The tech sector during bidding is the most confusing; these trend sectors continue bullish signals, while new themes like LED show strong momentum, indicating liquidity rotation and conflict. Focus on the large funds’ attitude via capacity stocks.

Post-open, except for AI Power capacity stocks continuing to attack, most open high but trend downward. Coupled with new theme breakout, be cautious about chasing high; participate on the right side based on liquidity.

Intra-day, chips, semiconductors, and domestic computing power show partial rotation, confirming the early-stage sector rotation and recovery.

Summary: Despite overall tech sector rebound driven by US stocks’ strong rise or market-wide recovery expectations, it’s a short-term rebound, not a reversal of funds’ bullish outlook. Recently, only AI Power and fiber optics/optical communications show healthy trend structures; other branches need index reversal for resonance.

IV. Index and Market Outlook:

As shown, today’s main index opened high, oscillated, then fell back into a doji pattern. Key points: index diverges from sentiment yellow-white line and market continues to shrink volume, indicating sentiment leads the rebound, while the index lags and diverges. No additional funds entered, so the upward movement is driven by limited liquidity. Overall, the index’s upward continuation is unlikely.

Since the upward expectation is reduced, the index is expected to enter a range-bound oscillation, with a possible second bottom. Watch for volume near the 2 trillion yuan limit.

Pre-market outlook for tomorrow:
Based on the above, today’s market is a weak rebound after the bottom. The rebound sentiment may last two days. With no expectation of continued index rise, tomorrow’s market will likely be a rotation and oscillation.
From sector perspective, watch whether AI Power, which has been strong for two days, consolidates or weakens, and whether liquidity shifts to new themes like LED or flows back into fiber optics/optical communications. If these themes underperform or news-driven rotation dominates, wait for the next divergence point to re-enter.

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