The medium to long-term positive trend remains unchanged, but short-term caution is warranted due to multiple pressures.

The ChiNext Index continued its upward momentum! On September 25, the ChiNext Index broke through 3,200 points during trading, reaching a high of 3,266 points, marking a new high since early 2022, with momentum heading toward 3,300 points.

At the close, the ChiNext Index stood at 3,235.76 points, up 1.58%, with trading volume of 663.053 billion yuan. The year-to-date gain reached 51.09%, significantly outperforming the CSI 300 (up 16.74% year-to-date) and the Shanghai Composite Index (up 14.96% year-to-date).

Notably, A-shares witnessed a historic moment as Contemporary Amperex Technology Co., Limited (300750.SZ), the top weighted stock in the ChiNext Index, surpassed Kweichow Moutai Co.,Ltd. (600519.SH) in total market capitalization. Year-to-date, CATL has risen over 50%, while Kweichow Moutai has declined 3.7%.

CATL Continues to Hit Record Highs

Since the beginning of the year, ChiNext Index weighted stocks have experienced "stacked" gains, with collective outbreaks across technology and growth sectors including AI applications, AI computing hardware, solid-state batteries, consumer electronics, and innovative pharmaceuticals.

During morning trading on the 25th, solid-state battery concept stocks strengthened again. EVE Energy (300014.SZ) surged nearly 9% at one point, closing up 6.47% with a year-to-date cumulative gain of 76.41%. EVE Energy ranks as the 12th largest weighted stock in the ChiNext Index with a 1.56% weighting.

CATL rose over 5% in early trading, with its stock price reaching a record high of 402.59 yuan. According to Wind data, CATL closed up 3.4% with a total market value of 1.8066 trillion yuan, surpassing Kweichow Moutai's market cap of 1.8020 trillion yuan. As the largest weighted stock in the ChiNext Index with a 17.07% weighting, CATL's 52% year-to-date gain has been a major driving force behind the index's rise.

Research from Guotai Haitong Securities suggests that solid-state batteries, with their advantages in safety and energy density, will become a key development direction for high-performance batteries in the future, offering broad market opportunities in consumer batteries, new energy vehicles, and low-altitude applications. Under policy and industry standard constraints, the solid-state battery industry chain is expected to accelerate development.

Additionally, among ChiNext constituent stocks, Kunlun Tech (300418.SZ) surged 7.4%, and Dangsheng Technology (300073.SZ) rose 5.91%.

Overall, among the 1,388 ChiNext stocks, 132 stocks have doubled year-to-date (10% of total), while 31 stocks have tripled (2% of total). Notable performers include AI PCB leader Shenghong Technology (300476.SZ) up 614.22%, semiconductor materials concept stock United Chemical (301209.SZ) up 490.97%, and thermal management materials specialist Siquan New Materials (301489.SZ) up 462.02%.

The continued strong performance of weighted stocks has provided significant momentum for the index. Since the low of 1,756.64 points on April 7 this year, the ChiNext Index has achieved a maximum gain of 86%, requiring only 248 more points to double. It is also just about 310 points away from the previous peak of 3,576 points reached on July 22, 2021.

Poised to Become Core Stage for Incremental Capital Inflows

The ChiNext Index has now entered its third bull market. The previous bull market roughly spanned from October 18, 2018, to August 4, 2021, during which the index rose from 1,205.03 points to 3,563.13 points, representing a cumulative gain of 195.7%.

The difference between the two ChiNext bull markets lies in changed core factors. During the second bull market, emerging industries such as new energy, innovative pharmaceuticals, 5G, and semiconductors entered high-growth cycles, particularly hard technology sectors like new energy and semiconductors, demonstrating the market's deep recognition of technological innovation and industrial upgrading.

The similarity lies in the continued prominence of the leading effect, with capital concentrating in leading companies with profitability and growth certainty. During the second bull market, large-cap stocks significantly outperformed small and mid-cap stocks on average, reflecting capital's preference for large-cap leading companies with higher market share and stable profitability.

The same trend is now playing out, with weighted stocks leading the index higher. Moreover, behind this rally logic lies an implicit change in retail investors' participation in the stock market ecosystem. Kaiyuan Securities analyst Wei Jixing believes that in this bull market, retail capital entry has shifted to ETF net inflows, potentially driving growth style concentration toward leaders and spreading to large and mid-cap growth stocks.

"As the leader of China's emerging industries, the ChiNext Index has become the anchor and starting point for growth themes across different eras," Wei Jixing noted. He believes the ChiNext's current valuation still offers attractive value proposition, positioning it to become the core stage for incremental capital inflows, and its balanced sector distribution should benefit continuously from retail capital flowing into sector ETFs.

Suzhou Commercial Bank's guest researcher Xue Honglang believes that in this market rally, the ChiNext Index's leading performance primarily benefits from multiple resonances at policy, industry, and capital levels. Policy-wise, continued strengthening of technology innovation support has driven deep integration of artificial intelligence with sectors like new energy and biomedicine, while the ChiNext, as a hub for hard technology companies, directly benefits from policy dividends in its core sectors.

"From a fundamental perspective, high-weighted industries are in high-growth cycles, with demand explosions in sub-sectors and strengthened expectations for leading companies' profit recovery, further consolidating growth momentum. On the capital side, market allocation preferences for growth stocks have significantly improved, with continuous inflows from various types of funds also strengthening the sector's upward trend," he said.

With tremendous momentum in the ChiNext, investor sentiment remains optimistic. Looking ahead, Xue Honglang believes that the prosperity cycles of technology innovation and new energy industry chains, valuation safety margins, and policy dividends remain important supporting factors. The medium to long-term positive trend for the ChiNext remains unchanged, but short-term caution is warranted due to multiple pressures.

"The next month will see a peak in share unlocking, combined with technical adjustment needs triggered by significant cumulative gains in some sectors, potentially leading the market into a consolidation phase. Additionally, the Federal Reserve's interest rate cut pace and marginal changes in domestic monetary policy may also create phased pressure on high-valuation growth stocks. Investors can continue focusing on high-growth sub-sectors and leading companies with strong earnings certainty, seizing structural positioning opportunities amid market volatility while balancing short-term risks with long-term value," he said.