Trust companies are accelerating their strategic pivot away from traditional real estate and infrastructure investments towards the hard technology sector.
Recently, Changzhi Hanhai (Shanghai) Private Equity Investment Fund Partnership, which focuses on equity investments in integrated circuits and hard technology, was officially registered and established with a total fund size of 3.91 billion yuan. As one of the initiators, Dongguan Trust became the second-largest investor with a 29.41% stake. Since the beginning of this year, several trust companies including Zhongxin Trust and Guomin Trust have also contributed capital as Limited Partners (LPs) to establish equity investment funds, with the funds primarily targeting strategic emerging industries such as hard technology and biomedicine.
Industry Perspectives
1. Trust equity investments, particularly in private equity, face challenges in meeting investor demand for short-to-medium-term returns due to their long investment cycles and uncertain returns. Taking integrated circuits as an example, investments in this sector are notoriously known for their long cycles and high uncertainty. The incubation period for hard technology projects typically ranges from 7 to 9 years, or even longer.
2. A deeper issue lies in capability alignment. The core competencies of traditional trust companies are built on risk assessment and management systems for fixed-income assets. In contrast, investments in hard tech fields like integrated circuits heavily rely on specialized technical judgment and industry expertise. While trust companies can easily provide capital as LPs, developing the ability to genuinely participate in post-investment management and understand the underlying assets is difficult to achieve in the short term. This explains why many trust companies prefer to follow industry leaders rather than taking a dominant role themselves.
3. Entering the hard tech arena represents a carefully considered transformation experiment for trust companies. The integration of capital and industry is never an overnight process. Amidst the accelerating industry differentiation, trust institutions should avoid "campaign-style" transformations. Instead, they should select specific sub-sectors to deeply cultivate based on their own resource endowments, reshape their profit models, and transition from earning interest spreads to generating management and service fees.
New Guidelines for Public Fund Thematic Investment Style Take Effect
On June 12, the Asset Management Association of China (AMAC) released the "Guidelines for the Management of Thematic Investment Styles of Publicly Offered Securities Investment Funds," which will be implemented starting December 1. These guidelines aim to further standardize the management of thematic investment styles for public funds and protect the legitimate rights and interests of investors. Existing thematic investment funds that do not comply with the relevant provisions of the guidelines will be granted a 12-month transition period for rectification.
Key Provisions
1. The scope of the guidelines is clearly defined as public funds where over 80% of non-cash assets are allocated to specific investment directions. Index funds and public REITs are excluded. Basic requirements are proposed for the establishment of thematic investment funds, including ensuring the fund's name matches its actual investments, clearly defining the investment style in an identifiable or quantifiable manner, establishing a style library, and specifying the frequency of updates to the style library.
2. Unlike the draft for comments, the final guidelines mention exemption scopes for establishing style libraries. The criteria for inclusion in a thematic fund's style library are simplified into two categories: those based on industry investment directions and those based on thematic investment directions, each with its own implementation method. The guidelines clarify processes for submitting and adjusting style libraries, strengthening managers' oversight of investment styles. This includes establishing internal management mechanisms to prevent funds from overly concentrating investments in a single sub-sector or area within the chosen investment direction.
3. The guidelines reinforce the supervisory responsibilities of fund custodians. They require custodians to strengthen their review of relevant content in fund contracts, continuously monitor the investment proportion of thematic funds in securities of the specific direction, and report situations such as fund managers failing to submit style libraries on time to the relevant regulatory bureau and the association.
CITIC Securities: Bullish on Semiconductor Industry Trends, Monitoring Price Increases for Components
The global semiconductor upcycle continues to be confirmed, with a positive outlook on the industry trend and attention on rising component prices. SEMI has revised its full-year expectations upward, and SK Hynix plans to triple its capacity by 2034, further solidifying the global semiconductor recovery cycle. Global semiconductor equipment shipments reached $36.55 billion in Q1, a year-on-year increase of 14%, setting a new historical quarterly record. Following the announcement of SK Hynix's five-year plan to double capacity earlier this month, SK Group Chairman Chey Tae-won recently revealed in an interview that if all construction plans proceed as expected, Hynix's capacity will triple by 2034 compared to current levels. The components segment is expected to show the greatest elasticity in this market cycle. The global semiconductor equipment supply chain is experiencing a historically rare, comprehensive wave of price increases across all components. Pricing power within the semiconductor industry chain is structurally shifting from chip end-users towards the equipment and components segments.
CITIC Securities: Focus on Other Silicon Wafer Companies Leading in 12-Inch Lightly Doped Wafer Shipments
Silicon wafer price increases materialized as expected in Q2 2026, with further hikes anticipated domestically and internationally in the second half of the year. Regarding industry trends, the tight supply of heavily doped silicon wafers and lightly doped wafers from overseas suppliers is relatively clear. Domestic lightly doped wafers are also expected to benefit from spillover orders from overseas. The industry may enter a state of global supply shortage over the next two years. CITIC Securities primarily recommends silicon wafer companies with a relatively high proportion of heavily doped wafer products and suggests paying attention to other silicon wafer companies that are leading in shipments of 12-inch lightly doped wafers.
Huatai Securities: Photovoltaic Module Industry Inflection Point May Gradually Emerge; Battery/Module and Paste Leaders Expected to See Profit Improvement First
On June 11, the Ministry of Industry and Information Technology's Department of Science and Technology released the "Photovoltaic Product Grading and Classification - Part 1: Photovoltaic Modules (Draft for Approval)." Compared to the previous national standard draft for comments, the approval draft significantly raises the efficiency threshold for modules. Huatai Securities expects that after the public comment period (June 13 - July 12), the subsequent approval, release, and implementation processes will be advanced. This is likely to first impact the market through centralized procurement of components by central and state-owned enterprises. Huatai Securities views this move as potentially accelerating capacity consolidation, benefiting high-efficiency cell/module technologies like BC, HJT, and TOPCon 3.0. Second and third-tier enterprises with outdated technology or funding constraints are expected to be gradually phased out. Based on efficiency calculations for mainstream products/champion products, Huatai Securities estimates the scale of product phase-out at 327.6 GW / 153.6 GW, representing 33% / 15% of the market.