Zhitong Hong Kong Stock Exchange Unravels | Big capital enters the market, technology breaks out across the Middle East, or suspends the collective strength of gold

[Anatomy Dashboard]

Looking back at what was said yesterday: “The World Cup is over, and the disgraced stock market cannot go up”. Today, A-shares have achieved a V-shaped rebound, and technology stocks have exploded across the board. The same is true in South Korea. Samsung Electronics rose 6%, the Korea Composite Index increased to 4%, the Nikkei 225 Index rose more than 2%, and Kioxia rose more than 10%. Hong Kong stocks, on the other hand, declined slightly and closed down 0.04% due to low “inclusiveness” volume.

Yesterday, I mentioned that the Securities Regulatory Commission held a symposium. Investors expressed their demands and suggestions: strengthen first-level market regulation, attract long-term capital entry, standardize quantitative transactions and AI applications, urge listed companies to increase profits, and increase penalties for securities violations; supervision will clearly control market risks, strengthen supervision, standardize institutional operations, enhance the authenticity of listed companies' information, improve investor protection mechanisms, and maintain a fair and just market environment so that investors can share the dividends of market development. The point is to standardize quantification; don't always smash the market. At the same time, it is necessary to have large capital to enter the market to prevent big risks from occurring.

Beginning yesterday, news broke that the sales department has begun to stabilize. Most of the two finance customers have taken the initiative to reduce their leverage, and some of the most aggressive financing customers have already cut their leverage. The average maintenance guarantee ratio in the entire market has dropped from 296.44% on June 30 to 261.6% on July 17 (last Friday). It dropped 11 percentage points last Friday alone. It should have dropped even more in the past two days. The level of technological congestion has basically returned to before the market started.

The tech stock bubble has indeed reached its extreme. If it doesn't happen, the entire market confidence will be destroyed. Therefore, the Securities Regulatory Commission will hold a symposium to boost confidence, and major insurance companies will also state that they will provide funds to support the stock market. But it's not enough to just shout slogans; the key is to get real money to enter the market. In the past two days, quite a few people have actually entered the market, but the key issue is that technology must be combined before it can be done, because this sector has focused on the most capital and the injuries are the most serious.

As a result, today's targeted action has been taken: the largest fund tracking the Science Innovation 50 Index, the Huaxia Science and Technology Innovation 50 ETF, attracted a record inflow of 13.8 billion yuan (2 billion US dollars) of capital, directly triggering a major rebound in technology. The leading variety is Huahong Hongli (01347). The fundamentals are also catalytic. According to reports, TSMC may raise the price of mature process chips in early 2027. This will be the first price adjustment action for non-advanced manufacturing processes in more than three years. It also means that the boom in demand for AI-driven semiconductors is spreading from fields such as GPUs and high-performance computing to mature processes such as power management chips and power devices. As mentioned earlier, TSMC's current production capacity is skewed towards advanced manufacturing processes, and the share of mature manufacturing processes has naturally been relinquished. Huahong just took on this extra dividend. Today, it surged nearly 18%. SMIC (00981) of advanced manufacturing processes rose more than 8%, and other crystal integration (02249) and Shanghai Fudan (01385) all increased 8%.

The US is also stepping up its AI layout. Bessent made a high-profile claim that America's share of computing power will jump from the current 50%-60% to 80%, and characterizes the dominance of computing power as a “must not lose” national strategic game. Looking at this trend, the AI game will not stop at a standstill, and domestic production-related processes are bound to accelerate. Apart from the sharp rise in semiconductors mentioned yesterday, the other two GigaYi Innovation (03986) also surged more than 15% and Lanqi Technology (06809) surged more than 17%. Other fermented ones include Wallace Technology (06082), Tianshu Zhixin (09903), and Nanxin (02676), which all have increased by more than 11%; Dingtai Hi-Tech (01377), Jiantao Group (00148), and Dazu CNC (02676) with PCBs 03200) Both rose more than 8%.

Smart Spectrum (02513): A 1GW domestic AI computing power data center has been built, and all domestic AI chips have been used. Meanwhile, Zhipu also officially completed the acquisition of the domestic AI heterogeneous computing power software company Zhongke Jiahe (xCoreSigma) today. The latter originated from the compilation laboratory of the Institute of Computing of the Chinese Academy of Sciences. It has long been deeply involved in heterogeneous computing power software stacks and compilation optimization, and is regarded by the industry as one of the top AI infrastructure teams in China. People familiar with the matter said that these two actions each completed the two key capabilities of computing power supply and computing power release. Today it surged nearly 37%. This nationally produced AI chip is also an important highlight. The strong domestic model directly brought about an increase in tokens. Xunce (03317) undoubtedly benefited the most. Today, it has once again risen by nearly 17%. The chairman of OpenAI asserted that token billing will end within a year, and in the future, the industry will say goodbye to “calculating tokens” and fully move towards a new business model of “paying according to business results.” Seen from this perspective, Maifushi (02556) is the most in line with the requirements, rising 3% today.

There may be an easing in the Middle East. Qatar, Oman, and Egypt jointly mediated and proposed a 10-day calm cease-fire, but the two sides have not reached a consensus. A number of senior US officials revealed that President Trump is expected to decide whether to expand military action against Iran and resume full-scale combat operations within the next few days. For the time being, since there have been casualties in the US, there are a lot of concerns, and the Red Sea will also have to be blocked if things go wrong. Depending on this situation, a short cease-fire is possible. Spot gold rebounded in early trading today. The price once fell below $4,000 and then rebounded above $4,030. Regarding the rise in gold, the latest statement is to hedge against currency depreciation. The next key depends on whether the relevant gold ETFs can continue to have capital inflows. Today, China Gold International (02099), Zijin Gold International (02259), and Zhaojin Mining (01818) all rose more than 10%.

The types of increase in holdings and repurchases also performed well. Huaqin Technology (03296) announced that, based on confidence in the company's stable future development and recognition of the company's long-term investment value, Mr. Qiu Wensheng, the chairman, general manager and executive director of the company, plans to increase his direct holdings in H shares within six months from July 21, 2026 (including that date), for a total increase of 10 million yuan. An increase of more than 12%; Jiaxin International (03858) announced last night that it plans to implement a share repurchase plan for the second half of 2026, and plans to use up to HK$200 million for the share repurchase plan, which will also increase by more than 12%; Lingyi Intelligent Manufacturing (01688) recently announced that it plans to double the maximum amount of repurchase capital from 400 million yuan to 800 million yuan. Today's increase is over 4%.

[Section Focus]

July 21 - The US Department of Energy released a draft study warning that data center expansion, domestic manufacturing growth, and large-scale electrification are pushing the national grid to its limits. The huge demand for electricity brought about by artificial intelligence (AI) and industrial development is intertwined with extreme weather due to climate change, testing the carrying capacity of the US power grid. Department of Energy officials said that demand for electricity in the US is growing at the fastest rate in decades. PJM, the largest power grid operator in the US, also said that demand for data centers is driving up power supply costs. Meanwhile, demand for electricity in Texas is approaching historic highs, and parts of the Midwest have issued emergency grid warnings.

The production capacity of power equipment in North America is seriously insufficient, the delivery cycle is lengthening, and demand for overseas imports has increased dramatically. It mainly benefits domestic power equipment varieties: Dongfang Electric (01072), Weichai Power (02338), Harbin Electric (01133), and SGT (06656).

[Individual Stock Mining]

Lanqi Technology (06809): DDR5 RCD chip shipments have increased significantly, and the unit price of new products has risen steadily

Recently, the chairman of the company proposed an A-share repurchase plan of 300 million to 600 million yuan. In the first quarter of 2026, the company achieved revenue of 1,461 billion yuan, an increase of 19.5% over the previous year, and realized net profit of 847 million yuan, an increase of 61.3% over the previous year. The company plans to distribute a cash dividend of 3.90 yuan (tax included) for every 10 shares in 2025.

Comment: The company's profitability is stable. The first half of the year benefited from AI industry trends, and industry demand was strong. In the world, there are only three DDR5 memory interface chips for energy production servers, Renesas Electronics, and Rambus, with CR3 > 93%; Lanqi Technology accounts for 36.8% of the global market, ranking first. The company's core business benefits from the growing demand for AI servers and the continued penetration of DDR5 platforms. 2026Q1, the company's DDR5 RCD chip shipments have increased significantly, and the proportion of third-generation and fourth-generation RCD chip shipments has further increased. The company's 2025 annual report revealed that the power consumption of DDR5 fifth-generation RCD chips decreased by 35%-40% compared to first-generation products at the same rate, reflecting the company's technology accumulation in the field of high-performance, low-power memory interface chips. As the memory bandwidth, capacity and energy efficiency requirements of AI servers continue to increase, the company's DDR5 related products are expected to continue to benefit. The company is expanding from memory interface chips to high-speed interconnect chips.

2026Q1, the company's interconnect chip product line revenue was 1,417 billion yuan, +24.4% year over year; of these, the total revenue of the four categories of MRCD/MDB, PCIe Retimer, CKD and CXL MXC was 269 million yuan, +93.8% year over year, accounting for 19.0% of interconnect chip revenue. Demand for high-speed data transmission in AI computing power systems is increasing, driving demand for products such as PCIe Retimer and CXL. At the same time, the company continues to expand the PCIe high-speed interconnect chip product layout. At the end of 2026Q1, the company's total assets were RMB 21.681 billion, up 57.70% from the end of the previous year; equity attributable to parent owners was RMB 20.846 billion, an increase of 61.30% over the end of the previous year, mainly due to the issuance of H shares to receive funds raised.

In terms of cash flow, net cash flow from operating activities in 2026Q1 was 627 million yuan, +232.88% year over year. Cash flow improved significantly. The order boom is high, the company's DDR5 basic chip orders are high, and downstream memory module manufacturers generally lock in production capacity 3 to 6 months ahead of schedule; MRCD/MDB (AI chip) shipments have increased markedly for two consecutive quarters, and domestic computing power customer sample transfer orders have continued to increase; PCIe Retimer domestic orders have grown steadily, and overseas customers continue to verify; CXL products are in the small-batch testing stage.

Recently, Tencent Cloud officially announced large-scale deployment of localized computing power, speeding up the construction of domestic intelligent computing clusters, directly boosting long-term demand for high-speed interconnect chips. The company's demand for Q3 2026 is expected to remain strong, and order visibility remains high; rising overseas storage cycles are compounded by domestic AI capital expenditure, and capacity utilization remains high. The company's mid-term dividend and repurchase plans have significantly boosted investor confidence.