Pre-Market Highlights

U.S. stocks showed a mixed performance on Tuesday, with semiconductor stocks facing a second consecutive day of selling pressure, while Apple's market capitalization briefly surpassed $5 trillion. Funds continued to rotate out of AI-related chip stocks and into traditional sectors like healthcare and finance. The semiconductor index fell 4.5%, with Micron Technology dropping 8% and SanDisk plunging over 14%. JPMorgan attributed the weakness in semiconductors to three factors: weak earnings reactions, concerns over circular financing, and anxiety about potential capital expenditure cuts by cloud service providers. After the bell, Seagate reported quarterly revenue that exceeded expectations, surging nearly 50% year-over-year, causing its stock to rise over 10% in after-hours trading. Early Wednesday, South Korea's KOSPI index gained 3%, with SK Hynix rising 4% and Samsung Electronics adding nearly 6%.

Up to 8 Billion Yuan in Buybacks; "Yi-Zhong-Tian" Companies Voice Optimism

Amid significant volatility in the optical communication sector, leading companies in the supply chain are releasing positive signals. Zhongji Innolight Co., Ltd. announced a proposal to repurchase between 4 billion and 8 billion yuan worth of its shares, intended for equity incentives or employee stock ownership plans. Eoptolink Technology Inc., Ltd. previously stated that order deliveries in the second half of the year remain in a rapid growth phase, with industry prosperity continuing at a high level. TFC Optical Communication Co., Ltd. also said in a media interview that its current order backlog is very strong.

ChangXin Memory Technologies (CXMT) to Be Added to MSCI China All Shares Index

MSCI announced on July 28th that CXMT will be included in the MSCI China All Shares Index, effective August 10th. The MSCI China Index is nested within the MSCI Global Standard Index series, meaning inclusion in the MSCI China Index typically leads to tracking and allocation by more passive funds. Analysts suggest that CXMT's subsequent inclusion in indices like the STAR 50 and STAR Composite Index is a certainty, with the only variable being the timing.

Ministry of Commerce Responds to US Section 301 Investigation

Regarding the recent US Section 301 investigation into production capacity, the Ministry of Commerce stated at a press conference on July 28th that this is a typical act of unilateralism that severely undermines the international economic order. The ministry argued that the US cannot narrowly define production capacity exceeding domestic demand as "overcapacity" and label it as such. China urges the US to correct its erroneous approach and return to the correct path of resolving issues through dialogue and consultation.

Investment Calendar

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Investment Wisdom

"The success of investment is built on existing knowledge and experience." - Roy Neuberger

Institutional Views

1. China Merchants Securities: Externally, the deleveraging process in the South Korean stock market is still ongoing, while domestically, a policy bottom has appeared for A-shares.

2. Founder Securities: Active defense remains the core strategy. Focus on high-dividend yields, the manufacturing sector, and technology growth opportunities.

3. Orient Securities: The Shanghai Composite Index is more likely to oscillate and consolidate around 3800 points. The end of the bottoming process will depend on a pick-up in trading volume.

Positive and Negative Outlook

China's Robotics Supply Chain Sees Order Surge

Companies producing frameless motors report that orders on hand have exceeded 1 million units.

Great Wall Securities firmly believes in the investment opportunities within the robotics sector. Considering value, technology pathways, and incremental links, it recommends grasping the current industrial trend and seeking companies with production capacity, orders, and the ability to secure contracts.

Cyberspace Administration Partners with 5 Major AI Model Companies

An action to enhance the IPv6 capabilities of large AI models has been launched.

Huachuang Securities continues to be optimistic about the development of the AI industry. The performance improvement pace of domestic models has exceeded expectations, potentially shedding the label of being "low-cost" and competing for high-value scenarios through superior intelligence-to-price ratios. The firm suggests monitoring the iteration pace of domestic models.

AI-Produced TV Series Trends Online

AI is beginning to spread from computing power to applications.

Huaxin Securities predicts that 2026 will be the "Golden Year" for AI applications. As technology matures, many large models already possess strong tool-calling and multi-modal understanding capabilities. Continued policy support and market demand resonance, from B-end cost reduction and efficiency improvement to C-end popularization, are driving factors.

Announcement Summary

Positive Announcements

1. Kingsoft Office: Expects net profit for the first half of the year to be between 2.316 billion and 2.719 billion yuan, a year-over-year increase of 209.98% to 263.89%.

2. BOE Technology Group Co., Ltd.: The controlling shareholder, Beijing Electronic Control, plans to increase its stake in the company's A-shares by 500 million to 1 billion yuan.

3. China State Construction Engineering Corp.: Signed a contract for the North Kabd Sewage Treatment Plant and supporting project in Kuwait, with a contract value of approximately 22.4 billion yuan.

Negative Announcements

1. Jin Hai Tong: Shareholder Xunuo Investment reduced its holdings by 1.2792 million shares from July 24th to July 27th.

2. Hainan Huatie: Fined 3 million yuan for failing to disclose significant progress in a computing power service agreement in a timely manner.

3. Hongbaoli Group: The share reduction plan of the largest shareholder and actual controller has expired, with a total reduction of 1.36% of the shares.

Overnight Markets

U.S. stock indexes closed mixed on Tuesday. The Dow Jones Industrial Average rose 1.03%, while the Nasdaq Composite fell 0.22%. The optical communication and memory storage sectors saw significant declines, with SanDisk dropping over 14%, Corning falling over 12%, and SK Hynix sliding over 8%. The Nasdaq Golden Dragon China Index gained 1.08%, with JD.com rising over 2% and Li Auto adding over 4%.