A-Shares Midday Review | Entrepreneurship Board Index Rises 0.92% Pharmaceutical Stocks Explode Again, Semiconductor Sector Strong
July 29th, A-share early market trend diverged, entrepreneurship board index performed strongly, with over 3800 stocks floating green, closing at midday, Shanghai Composite Index fell 0.08%, Shenzhen Component Index fell 0.04%, and Entrepreneurship Board Index rose 0.92%.
According to Dazheng Securities, policy-driven and fund-driven, the bull market is likely to continue. The August market may experience minor fluctuations due to developments in US-China tariff negotiations and the concentrated release of August reports, but it's expected that the trend will not change.
The hot spot rapidly rotated, with innovative pharmaceuticals, CRO, etc. again exploding; semiconductor sector strong, with optical lithography, advanced packaging, storage chips, etc. collectively boosting, Dongxin Semiconductor Co., Ltd. rose 20% to halt; module, PCB, etc. continue to be active, leading shares such as Zhongti Xuexi and Shengjing Group reached new highs again; three-child concept-related stocks, such as Yangguang Dairy, rose to halt.
Declining sectors include insurance, securities, and large financial institutions, with precious metals, education, and animal husbandry sectors experiencing the largest declines.
Focal individual stocks: Shengjing Group rose over 15%, cumulative gains exceeding 1060% over the past 15 trading days, also becoming the first A-share stock to reach 10-fold returns this year. Prior to this, the company announced that Zhiyuan Robotics would establish a holding platform through the company and core team investment, using contract transfer and tender offers to obtain control.
Looking ahead, East Securities believes that the market is still in a structural bull trend, with no signs of slowing down.
Hot sectors
1. Semiconductor sector strong
The semiconductor sector is strong, with optical lithography, advanced packaging, and storage chips collectively boosting, Dongxin Semiconductor Co., Ltd. rose 20% to halt, followed by other stocks such as Saiwe Electronic, Nanxin Microelectronics, and Fudan Microelectronics.
Point: According to CITIC Securities' research report, the demand for advanced process nodes in AI era is expected to increase significantly, with US sanctions forcing domestic manufacturers to accelerate their pursuit of advanced process technology. There are still some bottlenecks in equipment supply, yield rate improvement, and customer expansion, requiring urgent breakthroughs. Recommendations focus on advanced process node outsourcing and domestic semiconductor equipment.
2. Algorithmic hardware stocks active
PCB, optical modules, etc. continue to be active, with Zhongti Xuexi reaching new highs again, followed by other stocks such as Xinwei Technology, Tianfu Communication, Deke Electronics, and Taicheng Optoelectronics.
Point: Goldman Sachs predicts that 800G optical module sales will reach 1990 million units in 2025 and 3350 million units in 2026, a 10% and 58% increase from previous forecasts respectively; market size is expected to reach $127.3 billion and $193.7 billion in 2025 and 2026, up 60% and 52% year-on-year.
3. Dairy industry sector strong
The dairy industry sector is strong, with Yangguang Dairy and Nobon shares rising to halt, followed by other stocks such as Beinmei, Aibai Room, Knight Dairy, West China Pasture, Taihu Snow, and Children's King.
Point: According to the announcement of the Ministry of Education, the government will implement a child-raising subsidy policy starting from January 1, 2025, with subsidies issued annually to families raising children under the age of three. The current basic standard is $3600 per child per year, and subsidies will be provided until children reach the age of three.
Institutional views
1. Dazheng Securities: Mainstream bull wave begins
Dazheng Securities believes that policy-driven and fund-driven, the mainstream bull wave has begun. With more policy expectations in the second half of the year, the market is gradually becoming detached from earnings sensitivity, and the structural profit-taking effect has almost reached one year. In the future, residents' funds are likely to increase steadily, and the market is expected to enter the main stream.
Point: The market may experience minor fluctuations in August due to developments in US-China tariff negotiations and the concentrated release of reports, but it's expected that the trend will not change.
2. China Merchants Securities: Profit-taking effect accumulates strong funding confidence
China Merchants Securities believes that this year's A-share three rounds of market trends have different structural characteristics: in the first quarter, technology stocks led the way; in April, private equity funds and overseas investors reversed their positions; and in recent weeks, overseas ETFs have seen a surge in net inflows, indicating that foreign capital may be returning. Looking ahead, with a weak US dollar environment and domestic policy support, it's expected that the market will enter the "algorithm-driven" stage in the second half of the year, driving domestic chip and infrastructure construction.
3. East Securities: Industry narrative still dominant
East Securities believes that the market is still in a structural bull trend, with no signs of slowing down. Overall, the market has shown a multi-headed leading trend, with profit-taking effects accumulating in hot sectors such as technology, and traditional cyclical industries also facing bottom-line rebounds. The industry narrative remains dominant, short-term focusing on sectors such as color, communication, innovative pharmaceuticals, military equipment, and games.