Firmly optimistic about the future of chip stocks

Recently, the market has emerged from a fragmented market, with the new energy sector continuing to decline, and state-owned enterprise leading stocks and ChatGPT concept stocks performing strongly. In this context, the institution is firmly optimistic about investment opportunities in the hard technology field represented by semiconductor chips. From the perspective of the reporting of new fund products, major fund companies such as E Fund, Hua'an, and China Europe have all reported theme funds related to semiconductor chips.

Judging from the market situation since March, the most prominent performer is SMIC International. As of March 23, this leading wafer foundry stock has risen as high as 24.51% since March. The recent performance of Jingfang Technology, Electronics chips, and Shanghai Beiling, which belong to the same semiconductor field, has also been strong.

According to You Guoliang, a fund manager at Great Wall Jiujia, the recent strong performance of the semiconductor sector is due to both the expected reversal of the macroeconomic environment and the expected reversal of the industry cycle. From the perspective of the cycle law of the semiconductor industry, the industry fundamentals are expected to bottom out and rebound in the second half of this year. Judging from past market interpretations, stock prices typically start one quarter ahead of the industry cycle.

"The continued strength of downstream sectors in the chip industry such as the digital economy and artificial intelligence has also boosted market sentiment to some extent," added You Guoliang.

Wang Dating, an analyst at China Post Securities, believes that the new wave of AI triggered by ChatGPT has hit, and the demand for computing power has increased significantly, which will greatly stimulate the demand for chips. With the increased layout of domestic technology companies such as Baidu, Alibaba, Tencent, and iFLYTEK, domestic AI chips will face development opportunities with limited overseas high computing power chips, and the market space for related companies is huge.

A growth style fund manager in South China stated that over the past two years, the global semiconductor industry has been in a downward cycle, with the performance of related companies under pressure and the valuation level continuously declining. Compared to the market highs of the previous two years, the stock prices of many companies have dropped by more than half, and valuations have returned to a reasonable range. Once stimulated by potentially good news, stock prices will rebound quickly.

According to the trend of fund companies, the website of the Securities Regulatory Commission shows that in the past few months, multiple fund companies have reported multiple products related to hard technology industries such as chip semiconductors.

For example, on January 18th, E Fund declared the China Securities Chip Industry Traded Open Index Fund; On March 6th, Hua'an Fund declared an ETF for the Hua'an CES semiconductor chip industry; On March 7th, the China Europe Fund declared the China Europe Semiconductor Chip Theme Equity Sponsored Fund.

In addition to the above-mentioned chip semiconductor industry theme funds, some large fund companies have also reported technology theme funds. Among them, Yinhua Fund and Nanfang Fund have applied for relevant funds linked to the China Securities Guoxin Central Enterprise Technology Leading Index, while Wanjia Fund, Shanghai Investment Morgan and Huatai Asset Management have applied for theme funds related to Hang Seng Technology.

According to an analysis by a private equity fund manager in Shanghai, the recent rebound in the chip sector is due to expectations of potential industrial policy increases, as well as positive information such as increased demand for domestic chips. However, from the perspective of short-term market gaming, increased buyer funds are also an important driving factor. "In the short term, the stock price is determined by marginal forces. Due to the large enough adjustment range and long enough adjustment time in the previous period, the selling force is already very small. When the vast majority of people do not want to sell, even a small buyer's force can drive the stock price up."

According to the analysis of the fund managers mentioned above, from the perspective of the future performance of the chip sector, due to the industry's reversal expectations and subsequent expectations of new funds entering the market, if the performance of listed companies can support the industry's development prospects, the market is expected to evolve in depth.

From-Shanghai Securities News