June saw heightened volatility in the A-share market with a clear divergence in sector performance, where technology and growth stocks generally outperformed. As of June 30th, the Shanghai Composite Index gained 0.63% for the month, the Shenzhen Component Index rose by 4.05%, the ChiNext Index increased by 7.55%, and the STAR 50 Index surged 26.07%. Following a brief earnings lull, July marks the start of the mid-year reporting season, where listed companies face their interim 'exams', making it crucial for investors to closely monitor corporate earnings. Additionally, risks related to share reductions, lockup expiries, delistings, and overextended stocks require attention.
This article focuses on outlining key individual stock risks for July to help investors stay informed and avoid potential pitfalls. (Note: The lists provided are based on objective data screening and do not constitute investment recommendations; they are for reference only. Data source: WIND, as of June 30, 2026.)
Risk Category One: Pullback in Overextended Stocks
Since the second quarter, market divergence has persisted, with semiconductor industry chains—particularly memory chips and materials/equipment—experiencing significant rallies, while small/micro-cap stocks and consumer sectors have faced continuous declines, intensifying the concentration of gains. However, within the hard tech rally, some stocks are driven by speculative themes. Without fundamental earnings support, these stocks are likely to face substantial pressure once market sentiment cools.
As June draws to a close, the curtain has risen on the 2026 interim earnings pre-announcement season for A-shares. Wind data shows that as of June 28th, 19 A-share listed companies have pre-announced their first-half performance, with mixed results. The following companies have seen cumulative gains exceeding 80% in June. As the interim reporting season approaches, investors should scrutinize company fundamentals and be wary of pullback risks from elevated levels.
(Data table implied here for companies with >80% gains)
Data source: Wind; data as of June 30, 2026. The above content and listed stocks are compiled from public information and are not recommendations or specific investment advice; they are for reference only.
Risk Category Two: Lockup Expiry Risk
Wind data indicates that nearly one hundred listed companies will face lockup share expiries in July. Among them, Yitang Co., Ltd., Weike Precision, and Langwei Co., Ltd. have relatively high proportions of shares becoming tradable, accounting for 713%, 300%, and 242% of the pre-expiry circulating A-shares, respectively.
In terms of impact, while stock prices ultimately revert to value in the long run, the effect of lockup expiries tends to diminish over time. However, such events often exert short-term pressure on share prices, as locked-up shareholders may choose to sell upon expiry, affecting the supply-demand balance. Generally, a larger proportion of expiring shares and a greater number of involved shareholders can lead to a more pronounced impact on the stock price.
The following are companies with lockup expiries in July where the expiring shares constitute over 30% of the pre-expiry circulating A-shares. Investors should note the associated risks.
(Data table implied here for companies with >30% expiry ratio)
Data source: Wind; data as of June 30, 2026. The above content and listed stocks are compiled from public information and are not recommendations or specific investment advice; they are for reference only.
Risk Category Three: Share Reduction Risk
Wind data shows that since June, significant shareholders of listed companies have announced over 400 related share reduction plans. In terms of the proposed reduction ratio, companies ranking high include Dingjie Digital Intelligence, Yandong Micro, and Jinmo Technology, with the maximum intended reduction amount exceeding 3% of their total share capital.
According to supply-demand dynamics, when major or significant shareholders of a company reduce their holdings, a substantial short-term increase in stock supply can disrupt the existing equilibrium if market absorption capacity is limited, potentially putting downward pressure on the share price.
Since June, the following companies have shareholders intending to reduce holdings where the maximum intended reduction exceeds 3% of total share capital. Investors should be aware of the related risks.
(Data table implied here for companies with >3% reduction plans)
Data source: Wind; data as of June 30, 2026. The above content and listed stocks are compiled from public information and are not recommendations or specific investment advice; they are for reference only.
Risk Category Four: Delisting Risk
Since 2026, the trend of 'delisting as required' in the A-share market has become evident. Currently, 9 companies have been formally delisted, with another 7 entering the delisting consolidation period, bringing the total number of companies delisted or set for delisting this year to over 21. The new "National Nine Articles" policy emphasizes stricter delisting standards and supervision, along with expanding diversified exit channels, making it essential for investors to closely monitor relevant companies for delisting risks.
According to relevant standards, trading below 1 yuan for 20 consecutive trading days triggers par-value delisting. For main board companies, maintaining a total market capitalization below 5 billion yuan for 20 consecutive trading days triggers market-cap delisting. Both are trading-related forced delistions triggered directly by market data, leading to immediate termination of listing without a suspension period or rectification buffer.
Statistics show that as of the close on June 30th, there are 70 A-share companies with a market capitalization below 10 billion yuan. Among main board companies, *ST Qingyue and *ST Yuandao are below or approaching the 5-billion-yuan red line. *ST Lingnan, *ST Qingyue, and ST Longyuan have share prices below the 1-yuan par value.
Additionally, Rongsheng Development, *ST Jinke, ST Xiwang, *ST Zhongyan, ST Easy Buy, Guangtian Group, Chongqing Iron & Steel, *ST Huaxing, *ST Ruimao, and ST Longda currently have share prices below 1.2 yuan. If their prices continue to weaken, they also face potential risks.
Comments