2025‑12‑31 Market Overview
The Chinese equity market closed on 31 December 2025 with modest gains in the main indices: the Shanghai Composite Index finished 0.09 % higher at 3 968.84 points, while the Shenzhen Composite Index declined 0.58 % to 13 525.02 points. The CSI 300 index ended the day down 0.58 %.
During the trading session the market was dominated by a surge in AI‑application and commercial aerospace stocks. 2400 shares closed at a gain and 2700 shares declined, with 63 stocks hitting the daily limit up and 13 reaching the limit down. The AI‑application sector recorded 70.79 % of the limit‑up stocks, with Blue Star and Lio Share among the most heavily traded.
Sector‑Specific Movements
Communication Services
In the communication services sector, which includes Leo Group Co. Ltd., the net capital flow was negative. According to the securities‑reporting data, communication services lost 1 % of its trading volume and experienced a 1 % decline in share price. The sector’s performance lagged behind the AI‑application and commercial aerospace groups that benefited from policy support and investor enthusiasm.
AI‑Application and Commercial Aerospace
The AI‑application theme saw several names reach the daily limit, such as Blue Star (27.46 billion yuan of net inflows) and Lio Share (23.00 billion yuan). The commercial aerospace theme continued its upward trajectory with multiple shares, including North Star Communications and Benghuai, achieving consecutive limit‑ups.
Implications for Leo Group Co. Ltd.
Leo Group Co. Ltd., a communication‑services company listed on the Shenzhen Stock Exchange, is primarily engaged in digital marketing services, including digital creative, media, traffic, television, social media, and e‑commerce solutions. The company also manufactures civil pumps, industrial pumps, and gardening products. With a market capitalization of 36.62 billion CNY and a 52‑week high of 6.85 CNY, Leo’s valuation (P/E of 78.22) indicates a premium relative to the broader market.
The sectoral drift away from communication services toward AI‑application and aerospace suggests that Leo may face increased valuation pressure unless it can capture momentum from emerging technologies. Potential avenues include:
- Digital Marketing for AI‑Application Clients – Leveraging its expertise in digital creative and media to serve the fast‑growing AI‑application segment.
- E‑commerce Solutions for Aerospace‑Related Supply Chains – Applying e‑commerce platforms to streamline procurement for aerospace manufacturers.
- Expansion of Pump and Gardening Product Lines – Diversifying revenue streams beyond digital services into industrial and consumer markets.
Market Outlook
The closing of 2025 marked a record annual gain for the Shanghai Composite (18.41 %) and a 49.57 % increase for the ChiNext index, underscoring heightened investor confidence in high‑growth sectors. The Chinese government’s recent policy announcements, including the “Two‑Year‑Plan” for AI and infrastructure development, are likely to sustain momentum in AI‑application and commercial aerospace, while the communication services sector may need to adapt to remain competitive.
Key Takeaway: Leo Group Co. Ltd. operates in a sector that is currently outperformed by AI‑application and commercial aerospace stocks. To maintain relevance, the company should explore strategic initiatives that align with the prevailing technological trends, particularly in digital marketing for AI and e‑commerce solutions for high‑growth industrial segments.
