On July 7th, the three major A-share indices opened lower and continued their decline throughout the morning, with all three dropping over 1% at one point during the session. By the midday close, the Shanghai Composite Index had fallen 1.04%, losing the 4000-point level, the Shenzhen Component Index was down 1.02%, and the ChiNext Index declined 0.78%. The number of declining stocks far outnumbered gainers, with over 4,700 stocks in the red across the two markets. The combined half-day turnover was 1.63 trillion yuan, a decrease of 575.7 billion yuan from the previous trading day.
On the market front, the computing power chip concept saw volatile gains, with Muxi Co., Ltd. surging over 15%. WanTong Development, VeriSilicon Microelectronics, Hygon Information Technology, Cambricon Technologies Corporation Limited (ASX: 688256), Moore Threads, and Loongson Technology followed with gains. The organic silicon concept remained active, with Morning New Material hitting a straight limit-up, while Dongyue Silicon, Guibao Science & Technology, Hoshine Silicon Industry, and Runhe Materials also rose. The gaming sector experienced volatile upward movement, with Star Entertainment jumping over 13%, and Youzu Interactive, Kunlun Tech, Giant Interactive Group, and Kaiying Network following suit.
On the downside, gold stocks led the market decline. The pharmaceutical sector underwent adjustments, with sub-sectors like cell immunotherapy, innovative drugs, influenza, and weight-loss drugs collectively weakening. The oil and gas industry chain also trended lower. Computing power hardware concepts such as PCBs and optical modules declined, with Hangzhou Cable Co.,Ltd. hitting the lower limit. The computing power leasing concept fell sharply, with Litong Electronics also hitting the lower limit. The humanoid robot concept saw initial gains followed by a retreat.
Sector Performance Overview
1. Computing Power Chip Concept Sees Volatile Gains
The computing power chip concept experienced volatile gains during the morning session. Muxi Co., Ltd. surged over 15%, with WanTong Development, VeriSilicon Microelectronics, Hygon Information Technology, Cambricon Technologies Corporation Limited (ASX: 688256), Moore Threads, and Loongson Technology following the upward trend.
Commentary: On the news front, Intel has adjusted prices for its CPUs. This price increase primarily targets certain consumer-grade Core Ultra processors and Xeon server processors. Among them, the overall price increase for high-end Xeon server products ranges from 7% to 12%.
2. Organic Silicon Concept Remains Active
The organic silicon concept continued to show activity. Morning New Material hit a straight limit-up, while Dongyue Silicon, Guibao Science & Technology, Hoshine Silicon Industry, and Runhe Materials also rose.
Commentary: On the news front, Dongyue Silicon disclosed its semi-annual performance forecast, expecting to achieve a net profit attributable to shareholders of 424 million to 444 million yuan for the first half of 2026, representing a year-on-year increase of 904.88% to 952.28% compared to 42.18 million yuan in the same period last year. Adjusted net profit is expected to be between 465 million and 485 million yuan, a year-on-year increase of 933.72% to 978.18%.
3. Gaming Sector Experiences Volatile Gains
The gaming sector saw volatile gains. Star Entertainment jumped over 13%, with Youzu Interactive, Kunlun Tech, Giant Interactive Group, and Kaiying Network following the upward movement.
Commentary: On the news front, the National Press and Publication Administration released approval information for domestic and imported online games in June 2026. A total of 171 online games obtained licenses in June, an increase from 158 in the previous month.
Institutional Perspectives
Yingda Securities: Market Lacks Clear New Theme, Remains in a Chaotic Fluctuation Phase
Yingda Securities believes the market will gradually enter the semi-annual earnings verification period in July. As the intensive disclosure period for mid-year performance forecasts begins in mid-July, the pricing logic for A-shares may shift from "liquidity-driven" to "earnings-driven." The previous significant gains in the technology sector have partially overdrawn optimistic expectations for the future. After the semi-annual report window opens, there is considerable uncertainty about whether high growth rates can be realized as expected, which suggests that the period of high volatility for high-valuation tech sectors may have just begun. Although there are signs of funds shifting towards lower-valued traditional sectors, the strength and sustainability of this shift are questionable. The market currently lacks a clear new leading theme and is overall in a phase of chaotic fluctuation.
Caixin Securities: Market Expected to Experience High Volatility in Short Term, Low-Valuation Sectors Have Potential for Valuation Repair
Caixin Securities believes that, overall, the market is currently in a phase of style rebalancing. Low-valuation sectors possess momentum for valuation repair, but market sentiment and investor confidence still largely depend on the performance of the science and technology innovation direction. As the hard tech sector has shown a muted reaction to positive news recently while being more sensitive to negative news, short-term market fluctuations may increase, which is not conducive to sentiment recovery. This leads to faster sector rotation and weaker sustainability in the market. Therefore, in the short term, it is advisable to observe more and act less, managing portfolio exposure reasonably. Investors should wait to increase participation until observing positive signals from the market, such as a timely stabilization and recovery in the tech sector or the broader market showing strong volume-driven gains. From a medium-term perspective, July is a transitional phase for the market, which is expected to experience relatively high volatility, suggesting a balanced allocation strategy as the primary approach.
Guojin Securities: Lithium Battery Peak Season Approaches in July, Favor Sectors with Superior Competitive Landscape
A Guojin Securities research report points out that the entire lithium battery industry chain is currently entering a window for a cyclical bottom reversal. As the peak demand season for power and energy storage approaches within the year, the sector is expected to usher in a main upward trend driven by both volume and price resonance, allowing upstream, midstream, and downstream segments of the industry chain to fully share in the industry's upward benefits. Using the competitive landscape of sub-sectors as the core judgment criterion, the report focuses on leading companies with stable profitability and market share in their respective fields, as well as high-quality second-tier companies achieving technological breakthroughs. The core selection involves eight high-quality sub-sectors: lithium mining, power batteries, structural components, separators, copper foil, lithium iron phosphate cathodes, large-scale energy storage, and vehicle exports. Specifically, the upstream, midstream, and downstream segments of the lithium battery industry chain all show a pattern where leading players are strengthening and new technologies are breaking through.
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