The AI sector has made a strong comeback today, as anticipated in yesterday's discussion that the recent dip was merely a mid-stage pause. The Shanghai Composite Index rose 1.28% to reclaim the 4,000-point level. While the Hong Kong market index dipped 0.37%, AI-related stocks performed strongly.
According to reports, Iran and Israel have temporarily agreed to halt attacks, following the most severe escalation of violence since the April ceasefire took effect. U.S. President Trump stated that negotiations with Iran are ongoing, hinting at potential clear progress within "a day or two," which could lead to a significant drop in U.S. oil prices. Consequently, the oil and gas and related equipment sectors, which were strong yesterday, retreated. Speculating on geopolitical tensions is generally inadvisable due to the inherent unpredictability of daily developments.
The AI theme remains hot. Jensen Huang commented that SK Hynix's plan to double wafer capacity by 2030 is insufficient. Elon Musk noted that the real bottleneck lies in chip manufacturing capacity, stating that Micron's current output falls far short of actual demand. Due to a severe capacity crunch at TSMC, giants like Google and NVIDIA are turning to Intel as an alternative foundry. Google has placed an order with Intel to produce over 3 million TPUs by 2028. This reflects the difficulty in securing additional capacity from TSMC in the US. Intel's stock rose 11% last night, with a further 3% gain after hours.
In Hong Kong, SMIC (00981) and HUA HONG SEMI (01347) gained over 2%. Packaging leader ASMPT (00522) announced it has secured an additional order from a leading global Integrated Device Manufacturer (IDM) for eight Thermo-Compression Bonding (TCB) systems for its Chip-to-Wafer (C2W) applications. Its stock surged over 9% today. Silicon carbide substrate leader Tianyue Advanced (02631) rose over 8%. As mentioned yesterday, TianShu ZhiChip (09903), newly included in the Hong Kong stock connect, will be added to the Hang Seng Tech 100 Index after market close on June 12th, effective June 15th. It continued to attract capital inflows, rising over 13% again today.
Yesterday's discussion highlighted the high景气度 of the PCB sector, driven by upstream material price increases. For instance, PPE resin has become tight. Saudi Arabia's Jubail Industrial City previously supplied about 70% of the global PPE resin. However, as early as the end of March, related plants halted production due to disruptions in shipping through the Strait of Hormuz. Resin is a crucial material for manufacturing printed circuit boards, with PPE resin primarily used for high-end products. Many corresponding A-share stocks hit their daily limit-up today, though there are no direct counterparts in Hong Kong.
The price of electronic cloth has doubled this year. The mainstream 7628 specification electronic cloth has skyrocketed from 3.7 yuan/meter in Q3 2025 to 7.4 yuan/meter in June 2026, a 100% increase, with five rounds of price hikes already implemented. China National Building Material (03323), a leader in the glass fiber sector holding 60.24% of Sinoma Science & Technology and 29.22% of China Jushi, surged over 14% today.
Global MLCC leader Murata has initiated another capacity expansion, starting construction in May 2026 and completing it in December 2027. This marks its second expansion in 2026, following an April announcement of an 80-billion-yen专项 expansion for high-end AI MLCCs. The primary reason for expansion is robust demand, with AI MLCC demand projected at 72.6 billion units in 2026 (+87%) and 136.7 billion units in 2027 (+88%). The pure-play Hong Kong stock Tianli Holdings (00117) soared over 26% today.
The above points indicate that upstream base materials are facing severe supply bottlenecks with a strong momentum for price increases, which will inevitably drive PCB prices higher. Kingboard Holdings (00148), mentioned yesterday, surged over 25% again. GDH Advanced Technology (01989) rose nearly 16%, and Kingboard Laminates Holdings (01888) gained over 12%. Another stock, Shenghong Technology (02476), saw its chairman recently embroiled in a personal scandal. The company responded that the online video and related information have no bearing on the company's production and operations and will not affect daily operations. The incident, which occurred last year, is being dredged up for speculation and indeed has no impact. As a core supplier to NVIDIA, the company plans to launch a new employee持股 plan with a total fund not exceeding 700 million yuan, sourcing shares from the secondary market. Its stock rose over 12% today.
The fiber optic sector also received a stimulus. U.S.-based Corning has signed multi-year orders with Meta and AWS, each worth around $6 billion. Corning is also expected to have signed a similar-sized order with Oracle, though not officially announced. Corning's current order backlog stands at $18 billion. Strong demand from AI data centers is expected to lead to increasing fiber optic shortages in North America. Corning's own capacity can hardly meet domestic demand, with the U.S. domestic supply gap potentially widening to 50%. Having previously signed a long-term agreement with NVIDIA, Corning's capacity is largely locked in, prompting North American clients to engage with Chinese manufacturers for potential long-term cooperation. The price of A1-class fiber, primarily used in data centers, has already recovered from an average of 140 yuan to 170 yuan and is expected to rise again. YOFC (06869) gained over 9%, while optical communication stocks like General Intergroup (01300) and CIG (06166) rose over 4%.
On June 9th, according to the latest shareholding disclosures on HKEX, Lei Jun, founder of Xiaomi and Chairman of the Board of Kingsoft, recently increased his stake in Kingsoft (03888) by 6 million shares. The average transaction price was HK$22.0587 per share, involving approximately HK$132 million. The increase in Mr. Lei's持股比例 is due to Xiaomi's purchase, not personal buying. Xiaomi is firmly optimistic about Kingsoft's long-term development and the strategic synergy between the two companies. Kingsoft (03888) rose over 9%.
Yesterday's sector focus mentioned lithium batteries. Trading in late June will focus on Q2 2026 earnings. Both lithium carbonate prices and production schedules were robust in Q2 2026, and with a low base in the same period last year, the entire industry is likely to see earnings multiply year-on-year with significant sequential growth. Entering the second half of the year, valuation can shift to next year's estimates. If leading companies are valued at 20X next year's earnings, there is still about 40% upside, opening space for the entire sector. Mentioned stocks Tianqi Lithium (09696) and Ganfeng Lithium (01772) suddenly rallied in the afternoon, both gaining around 4%.
Note that the overseas silicon wafer market has entered a second wave of acceleration, with Sumco, GlobalWafers, and Siltronic all breaking previous highs. Key player GCL Technology (03800) rose nearly 6%.
Sector Spotlight
Bloomberg reported today that China is considering a roughly 2 trillion yuan (≈$295 billion), five-year nationwide data center AI computing power construction plan, as part of the "Six Networks" project. The National Development and Reform Commission is leading the blueprint, with state-owned enterprises (like China Mobile, China Telecom) operating the main data centers. The plan requires local suppliers to account for no less than 80% of core technologies like AI chips, effectively excluding NVIDIA and AMD. The ultimate bottleneck for the scaling of domestic computing power lies in the wafer capacity for advanced logic processes, which is the hardest and most irreplaceable constraint in this round of domestic computing power expansion. Other related AI hardware will also benefit.
Beneficiaries: SMIC (00981), HUA HONG SEMI (01347), ASMPT (00522), YOFC (06869), CIG (06166).
Stock in Focus
GON TECHNOLOGY (02768): Steady Growth in Dual Core Businesses, Accelerated Overseas Capacity Expansion
The company reported Q1 2026 operating revenue of 5.377 billion yuan, up 21.86% year-on-year but down 6.57% quarter-on-quarter. Net profit attributable to shareholders was 257 million yuan, soaring 131.08% year-on-year and up 13.45% quarter-on-quarter. Adjusted net profit was 255 million yuan, up 149.38% year-on-year and 12.79% quarter-on-quarter.
Analysis: The company is a leader in polymer改性材料/composite materials in China, with its dual core businesses showing steady, high growth. With international energy prices remaining high and大宗化工品 prices rising significantly—styrene prices have increased about 20% since early March—the performance of its petrochemical division is expected to continue improving. It is self-sufficient in core raw materials, giving it a significant cost advantage over peers.
The company exhibits strong growth potential, with five major project plans involving total planned investments exceeding 3.8 billion yuan. These include an 8,000-ton/year high-purity dianhydride monomer & 10,000-ton/year polyimide聚合 material project, a 500-ton/year PSPI photoresist material project, a 100,000-ton/year C9 mixed aromatics pre-hydrogenation project, a 20,000-ton/year isononyl ester & isononyl acid-based low-temperature lubricating grease project, and a 50,000-ton/year high-purity para-methylstyrene (PVT) green intelligent manufacturing project. The company is poised to evolve into a platform-based technology group.
Healthcare: Controlling shareholder Dongbao Bio. Scale: PS capacity over 1 million tons+, ranking first domestically; modified plastics capacity 1.08 million tons (300k under construction), ranking second nationally.
Four Core Growth Drivers: 1)特种 Engineering Materials: PEEK (polyetheretherketone) will achieve thousand-ton级聚合 capacity. Aviation-grade acrylic glass对标国际 giants, entering the supply chain for国产大飞机 and eVTOL, offering scarcity value. 2) Semiconductor/Display Core Material Localization: Planning to build 8,000 tons of high-purity dianhydride monomer and 500 tons of PSPI photoresist projects, directly targeting polyimide (PI) and photoresist—two areas where China faces海外 supply constraints. 3) Smart Robot Lightweighting Pioneer: Leveraging material advantages, it is self-developing bipedal/quadrupedal robots and joint modules, building a full chain from "material-structure-complete machine," targeting the embodied AI赛道. It is a fusion play of "new materials + AI." 4) Global High-End Capacity Expansion: Utilizing its Hong Kong listing platform, it is promoting the出海 of modified materials and特种 engineering materials while布局 high-value-added fine chemicals like isononyl ester and syndiotactic polystyrene (SPS), continuously raising its profit ceiling.
The order backlog is饱满, totaling approximately 6.9 billion yuan, with production scheduled into 2027. Military carbon fiber (core business, 100% locked in with long-term orders): 4.322 billion yuan; Commercial aerospace (high growth): 3 billion yuan+, scheduled into H2 2026, with clients including LandSpace, Galactic Energy, Long March 6/12, and Kuaizhou. Wind power carbon梁 (main民用 segment): 1.2–1.5 billion yuan in rolling long-term orders, operating at full capacity in 2026.
Capacity Expansion: Dongming styrene/PS capacity释放 in 2026 will further strengthen cost advantages.
Overseas布局: H-share fundraising of 1 billion Hong Kong dollars to build a Thailand base, supporting出海 home appliance/new energy clients.
The company intends to cancel 6.25 million repurchased shares to reduce registered capital, demonstrating management's confidence in long-term value and commitment to shareholder returns.
Comments