A review of the July 2026 market shows the A-share landscape experienced significant volatility with a pronounced style rotation. As the mid-year report disclosure window opened, the market's driving logic shifted from speculative themes to earnings realization, leading to a notable uptick in mutual fund research activity compared to the prior month.
Data from Mutual Fund Ranking Network reveals that as of July 31, 2026, 152 fund houses participated in A-share research during July, covering 400 stocks across 94 Shenwan secondary industries. The total number of research visits hit 3,280, marking a 16.39% increase from June. Looking ahead, fund institutions anticipate a potential rebound from oversold levels in August, suggesting that the current period may offer a high-value entry point for tech sector allocations.
Mid-Year Report Window Fuels Research Activity; Semiconductor and Telecom Stocks with Strong Earnings Draw Interest
From a sector perspective, semiconductors garnered the most attention. Fund institutions conducted research on 31 stocks within this industry, totaling 433 visits 鈥?far exceeding other sectors. The communication equipment sector followed, with 8 stocks covered across 312 research visits. Other sectors like optical components, electronic components, general machinery, medical devices, consumer electronics, and automation equipment received 162, 155, 148, 127, 121, and 115 visits respectively, covering 8, 13, 21, 12, 13, and 10 stocks.
On an individual stock basis, 106 companies were visited at least 10 times. Specifically, standout names in the communication equipment sector, Zhongji Innolight and Eoptolink Technology, were the most researched stocks in July, with 158 and 118 visits respectively. Zhongji Innolight attracted 89 fund institutions for research, including 14 top-tier firms with over 100 billion yuan in assets under management, such as E Fund Management, China Asset Management, and China Southern Asset Management. Eoptolink Technology drew a concentrated 118 fund institutions for research.
In the semiconductor sector, Yuanjie Technology (Yuanjie Semiconductor), MONTAGE TECH, and Liandong Technology (Liandong Tech) were visited 106, 63, and 46 times, respectively. Yuanjie Technology and MONTAGE TECH attracted attention due to significant earnings increases. Yuanjie Technology expects a net profit attributable to the parent of 600 million to 650 million yuan in the first half of 2026, a year-on-year surge of 1196.91% to 1304.98%. During its research visits, the company attributed the substantial revenue growth to increased data center business revenue. As the data center segment's share of total revenue rises, the company's overall gross margin is improving.
MONTAGE TECH anticipates a net profit attributable to the parent of 1.9 billion to 2.1 billion yuan in the first half of 2026, a year-on-year increase of 63.9% to 81.2%. The company stated that the robust operating performance was primarily driven by the AI industry trend and strong industry demand. On one hand, with the increasing penetration of DDR5 and its subsequent iterations, shipments of its DDR5 RCD chips have risen significantly, with the proportion of third and fourth-generation RCD chip shipments further increasing. On the other hand, revenue from new interconnect chip products like MRCD/MDB, PCIe Retimer, CKD, and CXL MXC chips has climbed sharply. Notably, MONTAGE TECH's stock price fell over 30% in July, prompting the company to announce a share buyback plan, which was first executed on July 29.
The merger and acquisition progress of Liandong Tech (Liandong Technology) was a key focus during fund research. The company stated that by acquiring NorthStar, it can localize key technologies and related products for memory testing equipment in China, effectively filling a technical gap in this field. This move addresses shortcomings in industry application experience, further completes the industrial chain, and enhances the company's ability to provide comprehensive solutions. Additionally, the target company has a mature R&D and manufacturing base in the Philippines, which can serve as a platform for the company's overseas production and assembly, effectively meeting its needs for expanding overseas production capacity.
July IPO Subscription Yields 56.3 Billion Yuan in Paper Gains for Funds; Some Returns Exceed 400%
While closely monitoring A-share listed companies, fund institutions also actively participated in IPO subscriptions. In July, five new stocks were listed on the Shanghai and Shenzhen stock exchanges, including two "giants": China Resources New Energy and ChangXin Memory Technologies (CXMT).
Data from Mutual Fund Ranking Network shows that, as of July 31, 2026, 114 fund institutions participated in the offline placement of all five new stocks listed in July, with total allocated funds amounting to 13.915 billion yuan. Based on the closing price change on the first day of listing, the total paper gain from IPO subscriptions was 56.342 billion yuan, representing a paper profit margin of 404.9%. Notably, E Fund Management, China Southern Asset Management, and ICBC Credit Suisse Asset Management were particularly active in IPO subscriptions, participating in the offline placement of all five new stocks, with each receiving allocated amounts exceeding 1 billion yuan.
Domestic memory giant ChangXin Memory Technologies (CXMT) was the most favored. In terms of allocated funds, CXMT ranked first, with 100 fund institutions participating in its offline placement, receiving a total of 10.829 billion yuan. China Resources New Energy followed, with 78 fund institutions participating in its offline placement, receiving a total of 2.348 billion yuan. Fund institutions reaped significant returns based on the first-day trading performance of the new stocks. Calculated by the closing price change on the first day of listing, the paper profit margin for funds participating in the Toruns (Toruns Technology) offline placement reached a staggering 858.85%. This was followed by CXMT, with a paper profit margin of 465.82%, and Tenomab Biotech (Tainuo Mabio), with a margin of 211.89%.
Oversold Rebound May Be the Dominant Market Theme Going Forward
Despite the A-share tech sector experiencing a deep correction overall in July, the latest fund research direction indicates that institutions remain bullish on the growth prospects of the tech sector. Looking ahead, is the tech rally still worth anticipating?
Wang Li, Senior Macro Strategy Researcher at Great Wall Fund, believes that based on the timing framework, an oversold rebound may be the dominant market theme going forward. The negative feedback loop of market funds has largely been cleared, and overseas tech stocks are gradually stabilizing. The current period presents a high-value point for tech allocations, suggesting the market is poised for a rebound and structural expansion. Specifically, the market bottom is gradually emerging, potentially entering the "sweet spot." On July 19, China Reform Holdings Corporation and China Chengtong Holdings Group again announced large-scale counter-cyclical share purchases, providing support at the bottom. The July Politburo meeting clearly stated the need to "deepen the comprehensive reform of capital market investment and financing to enhance its resilience and confidence," further emphasizing the construction of the capital market system and its ability to withstand shocks. Combined with the recent convening of intensive seminars by the securities regulator to guide market expectations, reforms on the investment side remain a key focus of capital market reform, bolstering market confidence.
"Structurally, we are optimistic about a tech stock rebound, and the manufacturing and financial sectors may also have opportunities. The current market outlook is broadening, but from a fundamental pricing perspective, the market has not fully priced in the outlook for some non-tech sectors. The market style is expected to become more balanced, with room for repair in the manufacturing and financial sectors," Wang Li further stated. He suggested focusing on the following three directions: First, emerging technology. The global AI industry inflection point has not yet arrived, but domestic AI, under systematic innovation in "hardware + models," has outstanding advantages in input-output efficiency. The pace of capital expenditure and downstream application iteration is expected to accelerate. Focus can be on electronics, communications, and media. Second, advantageous manufacturing. Chinese companies with industrial competitive advantages are going global, and under geopolitical shocks, they are expected to accelerate market share expansion. Focus can be on innovative drugs and machinery. Third, finance and new infrastructure. After the clearing of micro-level trading structures, financial stocks possess the power to stabilize the market. Focus can be on non-bank financials and banks. The physical workload of new infrastructure is expected to accelerate in the second half of the year, hedging against external uncertainties. Focus can be on the power grid, building materials, and construction.
"This bull market driven by the tech industry cycle is unlikely to be declared over by this short-term correction, and investors do not need to be overly pessimistic," noted Yang Delong, Chief Economist at First Seafront Fund. He pointed out that in the next round of tech sector repair, fundamentals differentiation may become the core theme. "However, a large number of start-up tech companies have yet to achieve stable profitability, rendering the P/E ratio meaningless. Investors need to assess a company's investment value by synthesizing multi-dimensional financial data. For example, at the profitability level, focus on gross margin, net margin, and return on equity; at the liability level, examine the company's debt-to-asset ratio; at the operational level, refer to asset turnover efficiency; and cash flow is a core observation item. It is crucial to verify the scale of a company's net operating cash flow, prioritizing companies whose operating cash flow consistently exceeds net profit." Yang Delong further stated that screening companies using a multi-dimensional financial data approach can optimize investment decisions and reduce the risk of picking the wrong stocks.
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