Following the initial two trading days of July, which saw market fluctuations and a degree of rebalancing in style, which sectors and stocks are brokerages favoring this month?
Overall, in terms of sectors, electronics, machinery, and pharmaceuticals are among the industries with the highest weightings in brokerages' July top stock picks. The sectors showing the largest increases in allocation are non-banking financials and pharmaceuticals.
Regarding specific stocks, data from Kaiyuan Securities research reports indicates that after de-duplicating the top picks from 34 brokerages, Zhongji Innolight Co.,Ltd. (SHE: 300308) is the most popular, receiving the highest total number of recommendations across various brokerages' July lists.
Non-Banking Financials Lead Allocation Increase, Marking a Shift to Growth Style
From a sector perspective, a Guosen Securities research report points out that after de-duplicating the pool of brokerage top picks, based on absolute proportions, brokerages' July selections have high allocations in sectors such as electronics, machinery, basic chemicals, power equipment & new energy, and pharmaceuticals.
Statistical results from Kaiyuan Securities' reports also show that electronics is the top-weighted sector in July's brokerage picks, accounting for as much as 19.9%. Power equipment follows closely at 9.3%, with machinery equipment and pharmaceuticals & biotech next at 7.8% and 7.2% respectively.
Regarding changes in sector weightings, data from multiple brokerage reports indicates that non-banking financials is the sector with a relatively noticeable increase in weighting for July's top picks.
Kaiyuan Securities data shows that compared to June of this year, the sectors with the largest increases in July's brokerage picks are non-banking financials, pharmaceuticals & biotech, and electronics, with increases of 3.0%, 2.9%, and 2.6% respectively.
Guosen Securities report data also notes that, in terms of relative changes, brokerages' July top picks show increased allocations in sectors like pharmaceuticals, non-banking finance, and electronics.
On the reduction side, data from both Guosen Securities and Kaiyuan Securities indicates brokerages significantly reduced their allocation to the banking sector in July. Kaiyuan Securities data shows a 3% decrease in the weighting of banks for July's top picks.
"The market capitalization and valuation levels of the July brokerage top picks have risen, which may indicate a shift towards a growth style for July," stated Kaiyuan Securities.
Zhongji Innolight Ranks as Most Popular Pick
At the individual stock level, Kaiyuan Securities data shows that among the stocks recommended by various brokerages for July, Zhongji Innolight Co.,Ltd. (SHE: 300308) ranks first in the total number of recommendations, receiving 11 mentions.
China Jushi Co., Ltd. (SHA: 600176) follows, receiving 9 recommendations. WuXi AppTec Co., Ltd. (SHA: 603259) comes next with 7 recommendations. Contemporary Amperex Technology Co., Limited (SHE: 300750), GF Securities Co., Ltd. (SHE: 000776), and China Securities Co., Ltd. (SHA: 600030) each received 5 recommendations.
Juhua Co., Ltd. (SHA: 600160), Hygon Information Technology Co., Ltd. (SHA: 688041), GigaDevice Semiconductor Inc. (SHA: 603986), and Asymchem Laboratories Tianjin Co., Ltd. (SHE: 002821) each received a total of 4 recommendations.
Suzhou TFC Optical Communication Co., Ltd. (SHE: 300502), Zijin Mining Group Co., Ltd. (SHA: 601899), Weichai Power Co., Ltd. (SHE: 000338), Tongkun Group Co., Ltd. (SHA: 601233), and Piotech Inc. (SHA: 688072) each received 3 recommendations.
Among the newly added stocks for July (relative to the June 2026 list), the distribution of recommendations from various brokerages across listed companies is relatively even.
Statistical data shows that Zhejiang Yonghe Refrigerant Co., Ltd. (SHA: 605020), China Merchants Securities Co., Ltd. (SHA: 600999), Haisco Pharmaceutical Group Co., Ltd. (SHE: 002653), FeiWo Science And Technology Co., Ltd. (SHE: 301232), Dongshan Precision Manufacturing Co., Ltd. (SHE: 002384), Shanghai Energy New Materials Technology Co., Ltd. (SHE: 002812), Wanchen Group Co., Ltd. (SHE: 300972), Shenzhen Capchem Technology Co., Ltd. (SHE: 300037), Ningbo Boway Alloy Material Co., Ltd. (SHA: 605376), Hongrui Technology Co., Ltd. (SHE: 301285), China Aerospace Times Electronics Co., Ltd. (SHE: 002025), China Rare Earth Group Limited (SHE: 000831), TCL Technology Group Corporation (SHE: 000100), Guotai Junan Securities Co., Ltd. (SHA: 601211), and China Tungsten And Hightech Materials Co., Ltd. (SHE: 000657) each received a total of 2 recommendations.
Looking at specific popular sectors, the hottest picks in the electronics sector are Hygon Information Technology Co., Ltd. (SHA: 688041) and GigaDevice Semiconductor Inc. (SHA: 603986), each receiving 4 recommendations.
In the power equipment sector, Contemporary Amperex Technology Co., Limited (SHE: 300750) is the top pick with 5 recommendations. In machinery equipment, it's Uni-Trend Technology (China) Co., Ltd.; in pharmaceuticals & biotech, it's WuXi AppTec Co., Ltd. (SHA: 603259).
For other hot sectors: Zijin Mining Group Co., Ltd. (SHA: 601899) received the most recommendations in nonferrous metals; Zhongji Innolight Co.,Ltd. (SHE: 300308) is hottest in communications; GF Securities Co., Ltd. (SHE: 000776) and China Securities Co., Ltd. (SHA: 600030) lead in non-banking finance; Weichai Power Co., Ltd. (SHE: 000338) is top in automobiles; Juhua Co., Ltd. (SHA: 600160) ranks first in basic chemicals; AVIC Optoelectronics Technology Co., Ltd. is most popular in defense & military industry; China Jushi Co., Ltd. (SHA: 600176) leads in building materials; and Inspur Electronic Information Industry Co., Ltd. is most watched in computers.
Market participants note that within the brokerage top picks pool, if a stock had relatively low prior market attention, its visibility can significantly increase once brokerage analysts recommend it as a top pick. Based on this, one can identify brokerage top picks that previously had relatively low market attention.
"To some extent, the monthly top ten stock lists disclosed by most brokerages at the beginning of each month reflect the consensus expectations of analysts. Simultaneously, brokerage top picks also incorporate the forward-looking nature of fundamental research absorbed by quantitative analysis systems," noted a chief financial engineering analyst at a Shanghai-based brokerage. However, they further pointed out, "As market attention to brokerage top picks increases, for investors to gain more excess returns from these portfolios, further optimization and selection among the brokerage recommendations is still necessary."
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