The broader market declined across the board today, with the Shanghai Composite Index ending its four-day winning streak. The semiconductor sector showed relative strength in the afternoon session. Notably, Cxmt Corporation is scheduled to list on the STAR Market next Monday, which contributed to a cautious sentiment among investors. Total trading volume on the two exchanges reached only 1.9 trillion yuan, hitting a new low for the recent period.
From a sector rotation perspective, the pace of theme switching accelerated. The military and banking sectors were active, with concepts related to military equipment restructuring and ordnance equipment continuing to rise. Several stocks, including Hunan Tianyan and Jianshe Industrial, hit their daily price limits. In the afternoon, the semiconductor equipment sector saw another surge. Tuolunsi rose 20% in 4 days, achieving a "3 boards in 4 days" pattern. Stocks like Zhengfan Technology, Core Micro, Jingce Electronics, Tuojing Technology, and Xin Yuan Wei all gained over 6%. The computing chip concept rebounded with volatility, as Meizhi Technology hit its daily limit, and Aojie Technology surged over 10%. Lanqi Technology, Muxi Co., Ltd., Haiguang Information, and Xinyuan Co., Ltd. also followed the uptrend. In other areas, the advanced packaging concept rebounded during the session, with Guangli Technology hitting a 20% daily limit, while Tongfu Microelectronics, Core Micro, Gaode Infrared, Guangzhi Technology, and Huatian Technology all posted gains.
Market analysts pointed out that some semiconductor companies' shares rose in after-hours U.S. trading, which effectively boosted sentiment in the sector. Additionally, strong semi-annual reports from several A-share semiconductor companies have continued to attract capital. Some institutions suggest that while volatility in the tech sector has recently increased, the logic for an industry upcycle in semiconductors remains intact. They recommend positioning along the capacity expansion theme, with a focus on key segments such as advanced packaging, wafer foundry, semiconductor equipment, and materials.
On the downside, sectors including precious metals, industrial metals, glass and fiberglass, and media led the market's declines. At the individual stock level, 555 stocks advanced, 4,940 declined, and 36 were unchanged. There were 43 stocks hitting the daily upper limit and 25 hitting the daily lower limit.
At the close, both major indices finished lower. The Shanghai Composite fell 1.61% to 3,814.20 points, with turnover of 915.4 billion yuan. The Shenzhen Component Index dropped 2.47% to 13,774.68 points, with turnover of 1,004.1 billion yuan. The ChiNext Index declined 2.65% to 3,480.87 points.
Looking ahead, Industrial Securities stated that the logic for the semiconductor industry cycle remains unchanged, and the domestic memory chip supply chain still has immense potential for development and capital expenditure.
Fund Flow
Today, major funds focused on net buying in sectors like semiconductors, ground ordnance equipment, other electronics II, environmental management, and textile manufacturing. Net capital outflows were seen in communication equipment, electric power, components, securities II, and industrial metals.
Key News Recap
1. Rumored internal brokerage memo warning against speculation in Cxmt Technology's IPO denied by multiple branch offices. A memo, purportedly from a brokerage firm's internal risk control department, circulated in the capital market this morning. It was directed at Cxmt Technology (688825), which is about to list on the STAR Market, and reportedly instructed branches to warn clients with accounts over 500,000 yuan against speculative trading in the new stock. However, multiple brokerage branch office personnel contacted by reporters stated they had not received any such official notice.
2. Japanese and South Korean stock markets closed lower. South Korea's KOSPI fell nearly 6%, while Japan's Nikkei 225 dropped 2.73% to 64,611.15 points. The KOSPI finished down 5.69% at 6,693.16 points. SK Hynix fell 8.33%, and Samsung Electronics dropped 7.59%.
3. Morgan Stanley warns that the AI-driven memory chip rally is approaching a turning point, with memory contract prices expected to peak in the fourth quarter. A new report from Morgan Stanley warns that the semiconductor memory industry boom, fueled by artificial intelligence (AI), is nearing a turning point. It predicts memory contract prices will peak in the fourth quarter, signaling a profound shift in the current industry cycle. The bank noted that the momentum for upward earnings revisions for memory manufacturers is weakening significantly, with the net earnings upgrade ratio declining from a peak of 92% to 77%.
4. XPeng's humanoid robot has entered small-batch trial production, with the mass production line in its final stages of joint debugging. According to reports on the afternoon of July 24, XPeng's humanoid robot has officially begun small-batch trial production at its Guangzhou factory. The mass production line is currently in its final stage of joint debugging, marking the final countdown to mass production.
Market Outlook
1. Industrial Securities: The logic for the semiconductor industry cycle remains unchanged, and the domestic memory chip supply chain still has immense potential for development and capital expenditure. The firm pointed out that, driven by explosive demand from AI and the need for domestic substitution or technological catch-up, the domestic memory chip supply chain, led by YMTC and Cxmt, still has enormous room for development and capital spending. This, in turn, will create significant opportunities and growth for upstream semiconductor equipment and materials.
2. Chasing Securities: The broader market has stabilized somewhat, and the short-term market structure may see another style rebalancing. Chasing Securities believes that Thursday's market saw a low-volume rotational rebound, with a broad rally in previously underperforming sectors. The market has stabilized this week, with index-level trading volume shrinking and consolidating. Recent, relatively quiet low-position thematic sectors have rotated and rebounded. On the session, sectors like new energy, non-ferrous metals, and chemicals led the gains, while the tech sector lagged. Overall, the index's two consecutive days of shrinking consolidation to some extent reflects limited selling pressure at current levels. As long as the market environment doesn't change significantly, a short-term bottom is essentially formed. Once trading volumes expand, the market still has room for an upward rebound. Furthermore, during this week's rebound, various thematic sectors have rotated. In the short term, the market structure may see another style rebalancing. In the medium term, driven by factors such as the completion of semi-annual report disclosures by the end of August and the U.S. midterm elections in early November, the period from late August to late October may present a favorable window for renewed bullish positioning in the A-share market, at which point risk appetite and positions can be increased.
3. Central China Securities: The marginal impact of overseas volatility on the A-share market will gradually diminish. Central China Securities analyzed that, considering A-share tech stocks have already followed the sharp overseas declines, and that A-shares' own leverage pressure is significantly lower than the Korean market, the marginal impact of future overseas volatility on A-shares will gradually diminish. They advise focusing on macroeconomic data, changes in overseas liquidity, and policy developments.
4. China Galaxy Securities: Recommends focusing on directions such as semiconductor equipment and materials. The global semiconductor sector has seen a continuous pullback since July, with no major fundamental headwinds. The decline is primarily attributed to factors like fund deleveraging, profit-taking in the memory sector, and valuation corrections for some stocks. The sector has now largely de-risked from its current position. They recommend focusing on themes related to capacity expansion, including advanced packaging, wafer foundry, semiconductor equipment and materials, as well as domestic computing power.
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