Institutional Investors' Weekend Focus

As usual, Sunday evening is devoted to reviewing the weekly price changes and latest valuations across the manufacturing sector. This week, the high-end manufacturing segment suffered a severe setback—except for domestic AI computing chips, most other subsectors posted notable declines. Here’s a breakdown: Top three gainers: SMIC (+16.2%), Cambricon (+3.5%), Foxconn Industrial Internet (+2.4%); Top three decliners: Dajin Heavy Industry (−17.6%), Ganfeng Lithium (−14.8%), DEYE Co., Ltd. (−12.9%). First, the gainers: 1. SMIC: At its shareholders’ meeting at the end of June, SMIC was highlighted as the representative industry leader in China’s semiconductor sector. This week’s sharp rally was accompanied by overwhelmingly positive institutional commentary: Short term: Optimistic Q2 guidance—revenue expected to grow 14–16% year-on-year, gross margin projected at 20–22%; with anticipated price hikes, actual results may exceed expectations. Additionally, Changxin Memory’s upcoming IPO could boost order volumes and valuation premiums for domestic foundries. Medium term: Depreciation expenses are forecast at $5 billion this year and $6 billion next year. If depreciation as a share of revenue peaks this year—and absolute depreciation peaks next year—the resulting “revenue-cost scissors effect” (i.e., revenue growth outpacing cost growth) over the next two to three years should drive rapid profit expansion. Long term: The “Tao Law” is expected to expand total addressable market size. On one hand, high-value steps—including chip folding and circuit folding—may increasingly be handled by foundries; on the other, stacking layers will continue increasing, potentially multiplying wafer demand several-fold. Of course, praise abounds now that the stock has surged—but investors must carefully distinguish substance from hype. After all, if the stock falls, the very same factors cited above can instantly turn bearish. For instance: • Q2 results may merely meet (rather than beat) guidance, with price-increase profits deliberately deferred; • Excessive pre-IPO expectations for Changxin could mean its listing becomes a “sell-the-news” event; • Peaking depreciation may constrain new capital expenditures, indirectly signaling slowing downstream semiconductor demand; • The “Tao Law” remains immature, and overseas technology roadmaps still hold competitive advantages. That’s often how market memes are born: a few WeChat groups circulate and amplify such narratives until they influence stock prices. For long-term investors, however, what matters most is identifying fundamental shifts. For example, while reviewing an in-depth SMIC report over the weekend, I noted a key trend worth highlighting: Domestic semiconductor equipment and materials localization is accelerating rapidly; meanwhile, the China Integrated Circuit Industry Investment Fund continues ramping up capacity investments, and downstream demand for domestically produced AI computing chips remains structurally robust. SMIC’s N+1 and N+2 improved process technologies are progressing steadily and predictably. Investing in SMIC—or Hua Hong Semiconductor—is essentially benchmarking against TSMC. As TSMC represents the global pinnacle of semiconductor process technology, domestic foundry leaders must at least embody China’s most advanced capabilities. 2. Cambricon: This week, domestic AI computing chip stocks—including Cambricon, Hygon, and Muxi—performed strongly. A core catalyst was Inspur Information’s semi-annual earnings preview: Q2 net profit is projected at RMB 2–2.5 billion, versus just RMB 300 million a year earlier—a massive, highly unexpected surge. Such strong results from domestic server manufacturers signal sustained, robust downstream demand—namely, for domestic AI computing chips and large language models. Cambricon briefly surpassed a RMB 1 trillion market cap at the end of June—an eye-catching milestone—earning market acclaim as a stock where “narrative → orders → earnings” is gradually closing the loop.

Dragon & Tiger List Revealed: Institutional Investors and Prominent Retail Traders Bought These Stocks on March 12

1. Desay SV Automotive — Turnover Rate: 1.56%; Volume Ratio: 1.64; Net Buy-Sell Difference: RMB 150 million — Computer Applications 2. MPO Optoelectronic — Turnover Rate: 1.60%; Volume Ratio: 0.10; Net Buy-Sell Difference: RMB 115 million — Communications Equipment 3. iReader Technology — Turnover Rate: 12.07%; Volume Ratio: 1.54; Net Buy-Sell Difference: RMB 108 million — Media & Publishing 4. Vogel Optoelectronics — Turnover Rate: 12.92%; Volume Ratio: 1.85; Net Buy-Sell Difference: RMB 81.27 million — Optical & Optoelectronic Components 5. CITIC Ocean Helicopter — Turnover Rate: 14.24%; Volume Ratio: 1.36; Net Buy-Sell Difference: RMB 71.99 million — Airport & Airline Services 6. HGH Infrared — Turnover Rate: 6.21%; Volume Ratio: 6.88; Net Buy-Sell Difference: RMB 71.51 million — Defense & Aerospace 7. Shengtong Holdings — Turnover Rate: 24.88%; Volume Ratio: 2.25; Net Buy-Sell Difference: RMB 53.93 million — Packaging & Printing 8. Zuo Li Pharmaceutical — Turnover Rate: 14.36%; Volume Ratio: 5.71; Net Buy-Sell Difference: RMB 46.68 million — Traditional Chinese Medicine 9. DEYE Co., Ltd. — Turnover Rate: 11.36%; Volume Ratio: 1.43; Net Buy-Sell Difference: RMB 46.27 million — Power Equipment 10. Langwei Co., Ltd. — Turnover Rate: 47.00%; Volume Ratio: 2.20; Net Buy-Sell Difference: RMB 43.12 million — Communications Equipment 11. Rihai Intelligent — Turnover Rate: 18.21%; Volume Ratio: 1.44; Net Buy-Sell Difference: RMB 36.28 million — Communications Equipment 12. Haikexinyuan — Turnover Rate: 40.58%; Volume Ratio: 7.69; Net Buy-Sell Difference: RMB 30.81 million — Power Equipment

ZWJ Investment Counsel Inc. Purchases 4,917 Shares of Linde PLC

11 hours ago

ZWJ Investment Counsel Inc. initiated a new position by purchasing 4,917 shares of Linde PLC valued at approximately $2.3 million. The industrial gas company recently reported strong quarterly results, exceeding earnings expectations with $4.50 EPS.

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