After a sharp market decline, perspectives on the outlook ahead

In other words, capital moves ahead of real demand, and demand moves ahead of capacity ramp-up—thus inevitably creating a time lag: the 【inflection point in capital expenditure】 + 【slowing demand growth】 + 【concentrated realization of capacity deployed during peak prosperity】. This leads to a sudden plunge in corporate profitability, and even forces companies into cutthroat, price-driven competition. Such cyclical fluctuations have been a recurring norm since humanity entered the industrial age—repeating themselves for centuries—and constitute the essence of countless economic crises (the most classic example being the Great Depression of 1929). They will not vanish simply because technology advances or demand grows. The steam engine dramatically boosted human productivity—but how many mechanical workshops went bankrupt in the process? The railway boom caused cargo transportation demand to surge exponentially—yet how many railway investors lost their entire fortunes? Steel, oil, electricity… Was any of these sectors not revolutionary for human development? Was long-term demand not steadily rising? And yet, how many capitalists or investors in these industries achieved lasting success? Note that waves of corporate bankruptcies do not occur only during industry downturns. Even in booming eras, players are constantly eliminated. The reason remains the same: Asynchronous oscillations among the capital cycle, the capacity cycle, and the demand cycle mean that even brief mismatches can eliminate numerous participants. AI hardware follows the same logic. Demand surges first, preceding capacity expansion—causing product prices to rise and corporate profits to soar. To capture greater market share, firms accelerate production expansion; once new capacity comes online, however, if demand fails to sustain its prior high growth rate, overcapacity emerges, triggering vicious, low-margin competition—and a sharp profit correction. As for the current situation, AI hardware capacity is certainly *not* yet oversupplied. My earlier expectation was that the memory supply-demand inflection point would arrive in 2027, and for optical modules in 2028. But again—the stock price inflection point ≠ the fundamental inflection point. Stock prices reflect expectations—they lead reality and anticipate developments in advance. How far in advance they do so is inherently unpredictable. Generally speaking, the more crowded the trade, the earlier the anticipation manifests. Therefore, to catch the stock price inflection point, you cannot adopt an analyst’s perspective focused solely on fundamentals. Instead, you must adopt a trader’s mindset—to detect signals both within and beyond the trading screen. The trigger for this round of overcapacity-expectation panic was precisely the expansion plans announced by memory and fiber-optic manufacturers—amplified by highly concentrated capital and leverage—culminating in this sharp market decline. Memory and optical modules thus became the leading drivers of this tech-sector selloff. The chart patterns and underlying expectation logic align perfectly. Whether this panic reflects prudent foresight—or groundless anxiety— we analyze it from both supply and demand angles. On the supply side, massive capacity expansion is unquestionable. Otherwise, why would major manufacturers hold enormous cash reserves idle? The earlier they expand, the sooner they lock in profits. Yet—as noted earlier—a key precondition for industry-wide overcapacity is "market-driven competition." This does not apply to sectors characterized by administrative or natural monopolies (e.g., coal). Where monopoly exists, output, capacity, and pricing can be controlled to some extent—smoothing out cyclical volatility and sustaining supernormal profits. (Though such firms also risk intervention by regulatory authorities or antitrust enforcement.)

Kemite Gas (002549.SZ): The 'Song of Ice and Fire' Behind Its Stock Surge

National Expansion: Starting in 2006, the company established subsidiaries in Anqing, Huizhou, and other locations, adding 230,000 tons/year of liquid carbon dioxide capacity and expanding into industrial gas categories including hydrogen and combustible gases. Shareholding Reform: Completed shareholding reform in 2007; listed on the SME Board of the Shenzhen Stock Exchange in February 2011, raising RMB 510 million to accelerate capacity expansion and business diversification. Capital Operations: Following its IPO, the company executed multiple bonus share issuances and capital reserve conversions (e.g., a 5-for-10 bonus issue in October 2011), increasing registered capital from RMB 80 million to RMB 567 million by 2015. 3. Diversification and Transformation Phase (2012–2018): Entry into High-End Gases Product Line Expansion: Added liquid oxygen, liquid nitrogen, liquefied petroleum gas (LPG), and other products; in 2018, established Yueyang Kemite Electronic Specialty Gases Co., Ltd., formally entering the electronic specialty gases sector. Technological Breakthroughs: After 2018, through independent R&D and joint ventures, the company mastered high-purity purification technologies for electronic specialty gases—breaking the monopoly previously held by international giants such as Germany’s Linde and France’s Air Liquide. Market Exploration: Targeted semiconductor manufacturing, medical applications (e.g., excimer laser gases), and new energy sectors—gradually achieving import substitution. 4. High-End Breakthrough Phase (2019–2024): Rise of Electronic Specialty Gases and Internationalization Explosion in Electronic Specialty Gases: The Yueyang electronic specialty gases project commenced operations in 2020; in 2021, revenue from electronic specialty gases surged 698% year-on-year, with gross margins reaching 84.67%. International Certification Milestone: In 2023, a subsidiary passed certification by Cymer, a subsidiary of ASML, becoming a qualified supplier of photolithography gases—an international recognition of its technical capabilities. Capital Reinforcement: In 2022, the company raised RMB 1 billion via a private placement, funding the Yizhang Specialty Gases Project and the Fujian High-Purity Hydrogen Peroxide Project—strengthening its positioning in electronic specialty gases and new energy. III. Financial Reality: Widening Losses—Where Did the Money Go? Q1 Earnings Shock Dragging Down Full-Year Results: Nearly RMB 76 million loss: Although Q1 2024 revenue rose modestly by 2.56%, net profit plunged to a loss of RMB 75.59 million—a staggering 747% YoY increase in losses! The primary cause was the termination of the equity incentive plan, resulting in RMB 87.4 million in one-time expenses booked to cost of sales. Even excluding this factor, underlying operational pressures remain evident. According to the company’s 2024 annual earnings forecast, full-year attributable net profit is expected to range between a loss of RMB 43.8 million and RMB 54 million—not only due to the terminated equity incentive plan but also impacted by falling raw material prices for rare gases. IV. Shareholder Actions: Simultaneous Share Reductions and Calls for “Rational Investment” Major Shareholder Quietly Exiting: From late 2024 through Q1 2025, Hunan Caixin—the company’s controlling shareholder—reduced holdings by 2.35 million shares (0.338% of total shares). Corporate Warnings vs. Market Frenzy: Amid abnormal stock price movements, the company repeatedly issued risk disclosures emphasizing "cyclical industry fluctuations" and "declining product prices." Yet market sentiment remained feverish—almost enacting the script: "The more you clarify, the more we buy." V. Industry Hardship: Struggling Amid a Cyclical Downturn Plummeting Rare-Gas Prices: The company’s core products—including carbon dioxide and industrial gases—are significantly affected by volatility in raw material prices.

Air Products and Chemicals Shares Drop 8.7%, Analysts Predict Reversal

Sep 22, 2026

Air Products and Chemicals Inc. stock fell 8.7% over four weeks, reaching oversold levels with an RSI of 29.02. Analysts forecast a trend reversal supported by increased earnings estimates and a Zacks Rank #2 Buy rating.

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