The market faced significant headwinds as the heavyweight ChangXin Technology is set to list on the Shanghai Stock Exchange's STAR Market on July 27. Today, A-share turnover fell below 2 trillion yuan, hitting a new low in over three months, reflecting a very sluggish market. US stocks also suffered overnight, leaving Hong Kong stocks unable to withstand the pressure, dropping 0.98% today. The current market is blocked on multiple fronts. The tech sector sees major US giants struggling, while domestically, the market faces the capital absorption pressure from ChangXin's listing. On other fronts, "Trump-related" stocks have rebounded significantly from their lows, with much of their potential already priced in. However, ChangXin's listing has provided some stimulus to related memory concept stocks, such as Gigadevice (03986), which managed a slight gain. Montage Technology (06809), a memory interface chip company, benefited from a share buyback plan: it announced plans to repurchase A-share shares for 300 million to 600 million yuan of its own funds, with a maximum repurchase price of 332.9 yuan, significantly higher than the current stock price range of around 230 yuan. The company's fundamentals are also strong, with a net profit of 1.9 to 2.1 billion yuan in the first half of 2026, a substantial year-on-year increase of 63.9% to 81.2%, and a record high single-quarter profit in the second quarter. The shipment proportion of high-end, high-margin third and fourth-generation DDR5 chips continues to increase, driving the overall gross margin close to 70%. The stock rose over 6% today. The large model leader Z.AI (02513) rose over 5% today, boosted by a positive call from JPMorgan.
Looking around, bank stocks seem to be the safest option, especially Hong Kong bank stocks. A key advantage is that Hong Kong banks are linked to the US dollar via the linked exchange rate system. Hong Kong dollar time deposits yield only around 3%, while mainland deposit rates are under 1.5%. Additionally, benefits from 11 offshore RMB policy advantages, cross-border wealth management, and increased fee income from a thriving Hong Kong stock market have driven shares of Dah Sing Banking Group (02356), Bank of East Asia (00023), and BOC Hong Kong (02388) all up over 5%.
The external environment remains grim, with trouble erupting in various places. Trump stated that he is considering launching a large-scale military operation against Iran again and will make a decision soon. According to media reports, Yemen's Houthi forces claimed on the morning of July 23 to have attacked two Saudi oil tankers in the Red Sea. Separately, Ukraine reportedly accurately hit three Russian oil tankers in the Black Sea. The escalating tensions in the two strategic waterways of the Black Sea and the Red Sea are continuously impacting global grain trade, further fueling concerns about the supply of wheat exports. The most active wheat futures in Chicago rose again on Friday, gaining up to 0.8% during the session. In the previous trading session, wheat futures surged 4.1%, approaching a three-year high. The agricultural spot index rose to its highest level since July 2023 on Wednesday, indicating that the costs of agricultural products like grains and oils are continuously climbing. This suggests that food prices for items like bread, cooking oil, meat, and dairy products may face further upward pressure, raising the risk of food inflation. Related agricultural stocks performed well today, with China Modern Dairy (01117) rising over 3%. However, the stronger performer was Andre Juice (02218), a global leading concentrated fruit juice processing company that, along with SDIC Zhonglu, forms a duopoly in the industry. The company has recently been continuously acquiring industry peers to expand its capacity advantage. The latest catalyst was its cross-border acquisition of a PCB copper-clad laminate company (Ningbo Yongqiang Technology), entering the high-growth chip industry chain. Recently, two major PCB manufacturers simultaneously announced large-scale expansion plans. Avary Holding (002938.SZ) plans to invest 10 billion yuan to build a Shenzhen Smart Manufacturing Base, focusing on AI high-end IC substrates and flexible circuit boards. Shennan Circuits (603459.SH) plans to invest a total of 5.7 billion yuan in mSAP high-end PCB projects and HDI production line upgrades. With the PCB industry's prosperity improving, Andre Juice (02218) has room for imagination, surging over 17% today.
Another stock, Auntea Jenny (02589), has completed initial validation of its overseas expansion. As of the end of 2025, it had opened 45 stores in the US, South Korea, and other locations. By early 2026, it further expanded into the UK, Australia, and Indonesia, potentially opening up medium to long-term growth space. A significant catalyst was the conversion of 35.256 million domestic unlisted shares into H-shares, which began trading on July 23, marking the full implementation of H-share full circulation. Typically, this situation attracts funds to push the stock price higher, and it rose nearly 8% today.
After oil prices were pushed up by the Iran conflict, demand for electric vehicles among European consumers is accelerating, providing a major boost for Chinese automakers to accelerate their entry into the European market. On July 23, data from the European Automobile Manufacturers' Association (ACEA) showed that new car sales in the EU, EFTA, and the UK rose 13% year-on-year in June, reaching 1.41 million vehicles. Chinese automakers' sales in Europe in June exceeded those of Japanese automakers by about 13,000 vehicles, widening the gap from the approximately 8,000-vehicle lead in May 2025. The market share of Chinese brands in the European new plug-in hybrid electric vehicle (PHEV) market exceeded one-third in June. In terms of sales volume, Leapmotor (09863) delivered 356,487 vehicles cumulatively in the first half of 2026, a significant year-on-year increase of 60.8%, leading domestic new energy vehicle startups by a wide margin. It was the only new energy brand to surpass 300,000 units in sales in the first half of the year. The company's Chairman and CEO, Zhu Jiangming, stated that any one of their four product lines could justify a 50 billion yuan valuation. The C-series and B-series main models, combined with overseas exports, are forming a stable incremental driver. The stock rose nearly 5% today. Similarly, Geely Auto (00175) acquired a 34% stake in Ford's Spain operations for 221 million euros, with Ford retaining 66%. The entity will not be consolidated and will be accounted for under the equity method. The target is the Valencia Almussafes plant, and a joint venture is planned to be established in 2027, planning to produce five models, with the first model being the Geely EX2 (known as the Geely Xingyuan in China). This is a classic win-win situation. Geely gains a production base within the EU, allowing it to circumvent EU tariffs on imported Chinese EVs, and enabling Geely Auto to directly enter the European market. Ford, in turn, revitalizes idle capacity and leverages Geely's electrification technology. In the first half of this year, Geely Auto's overseas sales reached 474,000 vehicles, a year-on-year increase of 158%, making it one of the fastest-growing Chinese auto companies in overseas markets. The stock rose nearly 3% today.
Other movers included pharmaceutical stocks driven by news. On July 23, Beigene (06160) announced it would invest an additional $300 million to expand its flagship manufacturing base and clinical R&D center in the Princeton West Innovation Park in Hopewell, New Jersey, USA. This expansion will add small molecule drug production capabilities, improving the company's global manufacturing and supply chain system. The stock rose nearly 3%. CSPC Pharmaceutical Group (01093) previously announced that the Phase II clinical trial for its developed SYS6026 injection, used to treat HPV16 or 18-related high-grade cervical squamous intraepithelial lesions, has officially been initiated in China. Southbound capital has been net buying CSPC Pharmaceutical for two consecutive days, with cumulative net purchases exceeding HK$2.3 billion over the past 30 trading days. Multiple mainland public funds increased their positions in CSPC Pharmaceutical during the second quarter. The stock rose over 2% today. Lens Technology (06613) announced that its wholly-owned subsidiary, Lens International (Hong Kong) Limited, recently signed a memorandum of cooperation with Intel Corporation, focusing on TGV (Through Glass Via) advanced packaging. The signing of this memorandum helps the company establish a long-term, stable, and mutually trusting strategic partnership with Intel. The stock rose over 2% today.
Key Sector Focus
Data from BaiChuan YingFu shows that on July 23, the average price of VC (Vinylene Carbonate) stood at 200,000 yuan per ton, a single-day increase of 20,000 yuan per ton, or 11.11%. The price has accumulated an increase of over 21% in the past week, surpassing the high of 175,000 yuan per ton set in December last year, and has once again broken above the 200,000 yuan per ton mark after more than four years. According to data from the ICC Xinluo database, global electrolyte production is expected to exceed 300,000 tons in July, leading to a supply gap for VC. By November, electrolyte production is expected to reach 360,000 tons, with monthly VC demand exceeding 11,000 tons, further widening the VC gap. Key Hong Kong stocks in this sector: Dongyue Group (00189), Lee & Man Chemical (00746).
Stock Analysis
SMIC (00981): Wafer foundry price hikes continue to catalyze the sector, with high demand driving capacity expansion. TSMC plans to raise foundry prices for both advanced and mature process chips in 2027, with increases of up to 10%. The company's 40.6 billion yuan private placement has been formally completed, making SMIC North a wholly-owned subsidiary. In the first quarter of 2026, operating revenue reached 17.617 billion yuan, up 8.07% year-on-year and 0.7% quarter-on-quarter. Net profit attributable to the parent company was 1.361 billion yuan, up 0.36% year-on-year. Analysis: TSMC will fully increase prices for advanced process foundry services, having already communicated with customers regarding 7nm and more advanced processes. Global wafer foundry revenue is expected to grow by over 20% this year. SMIC is the only domestic company capable of mass-producing advanced process nodes, with stable mass production of 14nm FinFET (yield rate of approximately 92.7%) and a monthly capacity of about 92,000 wafers. It is a global leader in mature processes, covering 28/40/55/90nm nodes with yield rates of 95%–98%. AI is driving prosperity in the chip industry chain, and SMIC has ample capacity through its 3 8-inch and 7 12-inch fabs. The company's monthly capacity increased from 1.0588 million wafers (in 8-inch equivalent) in Q4 2025 to 1.0783 million wafers in Q1 2026. The capacity utilization rate was 93.1% in Q1, compared to 95.7% in the previous quarter and 89.6% in the same period last year. Capital expenditure was 10.8 billion yuan. Hot processes (14/28nm) require capacity booking 3 months in advance. To meet local manufacturing demand, SMIC is steadily advancing its expansion plans, improving capacity utilization. It added about 50,000 wafers per month of 12-inch capacity in 2025 and expects to add another 40,000 wafers per month of 12-inch capacity in 2026. Full-year capital expenditure reached $8.1 billion, with the 2026 plan roughly flat compared to 2025. With a capacity utilization rate of 95.7%, up 10.2 percentage points year-on-year and roughly flat quarter-on-quarter, the company maintains a high utilization rate while capacity grows, indicating robust downstream demand. On the demand side, low-end demand in the consumer electronics market, primarily for phones and computers, is weak. The company is actively adjusting its mature process technology platforms. Leveraging its technical reserves and leading advantages in specialized areas like BCD, analog, memory, MCU, and mid-to-high-end display drivers, it can maintain a favorable position during this industry cycle. The explosion of AI chips is leading to supply shortages for power management, driver, and transmission chips, with capacity utilization above 95%, continuous price increases, and improving gross margins. The company's capacity expansion is proceeding orderly, with a strong order backlog and a widening supply-demand gap. Order visibility covers the entirety of 2026, with some long-term orders extending to 2027. Long-term agreements signed with customers lock in future demand, providing the company with steady growth momentum.
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