A-Share Review | Entrepreneurship Board Index Breaks Through 2400 Point Threshold!
July 29, A-share market ended with a rally, with a daily turnover of RMB 1.8 trillion, up from RMB 609 billion in the previous trading day. The Shanghai Composite Index rose by 0.33%, the Shenzhen Component Index rose by 0.64%, and the Entrepreneurship Board Index rose by 1.86%.
According to SinDa Securities, policy support and funds drive the bull market's main wave. August may see a small-scale fluctuation due to the development of US-China tariff negotiations and the peak period for mid-year reports, but it is expected that this will not significantly change the trend of the bull market.
On the trading floor, innovative drug stocks, CROs, and other pharmaceutical companies continued to soar. Multiple stocks hit their daily limits, including Zongsheng Pharmaceutical, Tianxin Pharmaceutical, and Jiaxing Pharmaceutical. In addition, semiconductor stocks such as Eastchip Holdings rose by 20%, with other stocks following suit.
The outlook for the market is that the structure of the bull market remains strong, with a high concentration of funds in innovative industries. According to East Securities, this trend is expected to continue.
Hot sectors
1. Pharmaceutical sector continues to soar
Innovative drug stocks such as Pacific Pharmaceuticals and other pharmaceutical companies continued to rise, with multiple stocks hitting their daily limits.
Commentary: With multiple catalysts at play, the pharmaceutical sector is expected to continue its strong performance. According to Haitong Securities, 2025 is expected to be a crucial year for the authorization of innovative drugs abroad, as domestic enterprises have been transitioning from copycat drugs to innovative drugs over the past seven years.
2. Semiconductors rise sharply
Semiconductor stocks such as Eastchip Holdings rose by 20%, with other stocks following suit, including Sipei Electronics and Nanxin Microelectronics.
Commentary: According to CITIC Securities, the demand for advanced process technology is increasing rapidly in the AI era. As a result, domestic manufacturers are actively catching up while equipment suppliers, yield rates, and customer expansion remain as bottlenecks that need to be addressed. We recommend focusing on advanced process technology and domestic semiconductor equipment.
3. Algorithmic hardware sector remains strong
PCB, optical modules, and other algorithmic hardware stocks continued to rise, with multiple stocks hitting their daily limits, including Zhongxin Weiye and Tianfu Communication.
Commentary: According to Goldman Sachs, 2025 and 2026 are expected to see the sales of 800G optical modules reach 1990 million and 3350 million units, respectively, up from previous estimates by 10% and 58%. The market scale is also expected to increase by 60% and 52%, showing a strong growth trajectory.
Institutional views
1. SinDa Securities: Main wave of bull market arrives
SinDa Securities believes that policy support and funds drive the main wave of the bull market. With the increasing expectation of mid-year reports, the market may see a small-scale fluctuation in August, but it is expected that this will not significantly change the trend of the bull market.
2. China Merchants Securities: Profits accumulate to strengthen investors' confidence
China Merchants Securities believes that the profits accumulated from the A-share market's three rounds of fluctuations are different in terms of the composition of funds involved. In the first quarter, technology stocks were driven by retail investors and institutional investors. In April, private funds and foreign capital played a leading role. In recent weeks, foreign capital has continued to flow in, indicating that foreign investors may have increased their confidence.
3. East Securities: Industry narrative remains mainstream investment thinking
East Securities believes that the market structure remains strong, with a high concentration of funds in innovative industries. The outlook is that the AI industry will enter a stage driven by algorithms in the second half of the year, with domestic chip and basic infrastructure construction expected to start picking up.