In this bull market rally, indices have continuously reached new highs. This Friday, the Shanghai Composite Index successfully broke through 3,800 points, reaching a peak of 3,825.76 points. Among individual stocks, nearly a thousand companies hit annual highs. Industry experts believe that the three strongest performing themes in this bull market so far are AI, innovative drugs, and fintech, which are also expected to be the sectors producing the most ten-fold bull stocks in the future.

Over One Thousand Companies Hit Annual Highs

The Shanghai Composite Index reached a ten-year high, with individual stock performance playing a crucial role. According to Wind data statistics, 1,036 companies hit annual highs this week, while 112 companies reached all-time highs.

Looking at year-to-date gains, 371 companies have doubled in price, with Shanwei New Materials surging 1,166.42%.

In 17 trading days with 13 "20CM" limit-ups, the year's top momentum stock was born. Shanwei New Materials' stock price "took off," triggered by Zhiyuan Robotics' plan to acquire controlling interest in the company. After robots performed yangge dance at the Spring Festival Gala, humanoid robots became one of this year's hottest trends. Zhiyuan Robotics successfully secured a 78 million yuan order from China Mobile this year. Although regulatory intervention temporarily halted the stock's meteoric rise, it had already achieved over ten-fold gains year-to-date.

Innovative drug company Shutaihen gained over six-fold this year, with its stock price hitting new annual highs on August 19th. In late July, the company announced receiving a Phase I/II clinical study summary report for BDB-001 injection (ANCA-associated vasculitis indication, AAV), showing significant clinical advantages in achieving steroid reduction. More noteworthy for the market is Shutaihen's domestic Class 1 new drug STSP-0601. On June 3rd, Shutaihen announced that its subsidiary Jiangsu Beijietai Biotechnology Co., Ltd. received an "Acceptance Notice" from the National Medical Products Administration for the domestic production drug registration and marketing authorization application of "STSP-0601 for Injection." This product has broad market prospects. According to Caitong Securities' forecast, the global market size for inhibitor hemophilia is approximately 27.7 billion yuan, and this drug's domestic sales peak could potentially exceed 2 billion yuan. Additionally, in May this year, the company announced that the Phase Ib/II clinical trial of STSA-1002 injection for acute respiratory distress syndrome (ARDS) had completed enrollment, database cleaning, blinded data review, and unblinding, receiving preliminary statistical analysis results of topline data. Against the backdrop of consecutive drug breakthroughs, Shutaihen's stock price soared.

Foreign Capital Inflows Support A-Share Rally

Market analyst Pengzu stated that foreign capital is one of the biggest contributors to this A-share rally. On August 17th, according to the latest disclosed 13F filings, hedge fund manager Michael Burry, the prototype from the Hollywood movie "The Big Short," adopted a "short-to-long" strategy on Chinese concept stocks in the second quarter, buying call options on Alibaba and JD.com.

According to Goldman Sachs' latest data, hedge funds have been aggressively buying Chinese stocks since August at the fastest pace since late June 2025. Goldman Sachs' Prime Brokerage report shows these purchases are mainly driven by long positions, meaning investors are genuinely bullish on the market and actively buying; short covering accounts for only about 10% of the activity. The ratio of long to short buying is approximately 1.9 to 1.

Goldman Sachs analysts noted that among total hedge fund capital inflows, the Chinese market is now their largest net buying target. Specifically, hedge funds' allocation to Chinese stocks is now overweight by 4.9 percentage points relative to global benchmarks (such as the MSCI World Index). This means that despite already substantial purchases, they continue to increase exposure compared to other global markets. Data shows hedge funds' current total position levels are at five-year lows, leaving room for further purchases. This buying pattern signals strong foreign confidence in the Chinese stock market.

AI, Innovative Drugs, and Fintech Will Birth More Ten-Fold Bull Stocks

Pengzu stated that the three strongest performing themes in this bull market so far are AI, innovative drugs, and fintech, which will also be the sectors producing the most ten-fold bull stocks.

"In the AI sector, from PCB to CPO, and related supporting liquid cooling and power supply core leading companies, all captured opportunities at inflection points, which we shared in our programs. The biggest gains in a bull market come from selecting the right leading companies and holding them firmly. Although AI concepts have risen significantly, current valuations remain cheap and are still in the main uptrend," Pengzu said.

This week, Pengzu provided detailed analysis of investment opportunities in AI subsectors including switches and edge computing. He believes that Google's new OCS optical switch story has just begun industrialization. OCS optical switches eliminate the need for optical-electrical conversion, effectively reducing round-trip conversion delays and energy consumption, saving power, money, and time overall. Coherent reported receiving Google's OCS optical switch orders, which could become an important revenue growth driver for the company over the next three years. Currently, the traditional data center switch market exceeds 150 billion yuan with continuously growing demand. OCS could potentially capture over 50% market share in the future, representing enormous market potential. For AI edge computing, major companies domestically and internationally continue to focus on AI glasses. Meta, as an industry pioneer, is expected to launch major wearable device releases, which could drive sustained growth in smart glasses demand alongside new product launches.

For the innovative drug sector, Pengzu believes it's in a once-in-a-decade bull market with the rally far from over. Each sector pullback presents boarding opportunities, and core leading companies will continue reaching new highs. Key focus areas include companies with BD orders and oligopolies listed on A-shares, H-shares, and US markets simultaneously, followed by companies with blockbuster products and earnings reversals.

Fintech is also a main course, with securities firms yet to surge significantly and insurance still building momentum.

(Individual stocks mentioned are for illustrative analysis only and do not constitute buy/sell recommendations.)