Group 1 - The core viewpoint of the article highlights the emergence of "performance stocks" in the A-share market as over 1500 companies have released their half-year performance forecasts, with more than 460 companies expecting profit increases [1] - The companies with the highest expected net profits are China Shenhua (estimated at 23.6-25.6 billion), Zijin Mining (estimated at 23.2 billion), and Guotai Haitong (estimated at 15.283-15.957 billion) [1] - Notable stocks in the PCB and CPO sectors, such as Shengyi Technology and NewEase, have seen significant price increases due to strong performance, with Shengyi Technology expecting a net profit increase of 432.01% [1] Group 2 - In the dual innovation board (Science and Technology Innovation Board and Growth Enterprise Market), companies are not required to disclose half-year performance forecasts, which may present greater "arbitrage" opportunities for high-growth stocks that have not yet reported [3] - Among the stocks in the dual innovation board, 10 companies have reported a year-on-year net profit growth exceeding 10 times, with Changxin Bochuang leading at over 3226 times [3] - The average stock price increase for the 12 identified high-growth stocks is nearly 72%, significantly outperforming major indices, with Shijia Photon leading with a year-to-date increase of over 187% [3][4] Group 3 - Analysts suggest that stocks with high growth in the first quarter and institutional attention may see further price appreciation if they release positive signals in their subsequent half-year reports [4] - The case of NewEase, which saw its stock price soar after releasing a positive half-year performance forecast, exemplifies the potential for significant returns in this segment [4]

Group 1 - Shanghai Xiangchu Asset Management recently conducted research on a listed company, Shijia Photon, focusing on its acquisition of Fuke Qima, a leading domestic MT connector supplier [1] - Fuke Qima achieved a revenue of 82.578 million yuan and a net profit of 30.6865 million yuan in Q1 2025, with its products being recognized by well-known market clients [1] - The acquisition is expected to enhance Shijia Photon's core competitiveness by obtaining MT connector production capabilities, reducing overall product costs [1] Group 2 - Fuke Qima has a high capacity utilization rate and has developed a flexible expansion plan to adjust production based on market demand [1] - The valuation and pricing of the acquisition have not yet been determined and will be disclosed in the restructuring report [1]

Group 1 - Several A-share listed companies, including Shijia Photon, Oriental Bio, and Maiwei Bio, have disclosed their latest top ten shareholders due to buyback activities, revealing adjustments by well-known fund managers [1][2] - Notable fund managers such as Jin Zicai, Wan Minyuan, and Jin Xiaofei have made significant adjustments in their holdings, with Jin Zicai's funds entering the top ten shareholders of Shijia Photon after a 130% increase in its stock price in the first half of the year [2] - Foreign institutions like Barclays, UBS, and JPMorgan have increased their stakes in several A-share companies, indicating growing foreign interest in the market [3] Group 2 - The A-share market is experiencing structural opportunities amid internal and external factors, with a potential upward trend in the short term [4] - The overall investment attractiveness of the Chinese capital market is improving, with an increase in stock buybacks and dividend distributions, which are highly valued by foreign investors [4][5] - Economic indicators show signs of recovery in consumption, investment, and exports, with expectations for a more accommodative monetary policy in the coming quarters [5]

Investment Rating - The report maintains a "Positive" investment rating for the communication industry [10]. Core Insights - The communication sector saw a 1.99% increase in the 28th week of 2025, ranking 14th among major industries in the Yangtze River region. Year-to-date, the sector has risen by 10.00%, placing it 13th [2][4]. - OpenAI plans to launch an AI browser and open-source a new model, while xAI has released Grok 4 and is initiating a new round of financing to accelerate AI data center construction. The acquisition of Fokexima by Shijia Photon aims to enhance the MPO supply chain [2][5][6][7]. - The current valuation of the communication sector is at a historical low, indicating a high cost-performance ratio for investment [2]. Summary by Sections Market Performance - In the 28th week of 2025, the communication sector increased by 1.99%, with a year-to-date rise of 10.00%. The top three gainers among companies with a market cap over 8 billion yuan were Hengbao Co. (+21.1%), Changxin Bochuang (+19.8%), and Shijia Photon (+14.8%). The top three decliners were Runze Technology (-4.1%), Canqin Technology (-3.4%), and Guomai Technology (-3.4%) [4]. AI and Computing Developments - OpenAI is set to release a browser integrated with a generative AI assistant, which could challenge Chrome's market dominance. Additionally, OpenAI will soon unveil an open-source language model, marking its first release since 2019 without Microsoft's involvement [5]. - xAI's Grok 4, touted as the "world's strongest AI," has surpassed doctoral-level performance in standardized tests. The company is preparing for a new financing round valued between 170 billion to 200 billion USD, with participation from Saudi Aramco's PIF fund [6]. Strategic Acquisitions - Shijia Photon plans to acquire 82.4% of Fokexima, a leading supplier of MT connectors, to strengthen its MPO product line. Fokexima's production capacity has exceeded 10 million units per month, and its revenue for 2024 is projected at 270 million yuan, reflecting a 225% year-on-year increase [7]. Investment Recommendations - The report recommends focusing on key players in various segments: - Telecom operators: China Mobile, China Telecom, China Unicom - Optical modules: Zhongji Xuchuang, Xinyi Sheng, Tianfu Communication, Shijia Photon - Domestic computing: Fenghuo Communication, Huafeng Technology, Yingweike, Runze Technology, Guanghuan New Network, Aofei Data, Guangxun Technology, ZTE, Unisplendour - AI applications: Heertai, Tuobang Technology, Yiyuan Communication, Meige Intelligent, Guanghetong, Boshijie, Aojie Technology - Satellite applications: Haige Communication, Huace Navigation [8].

Core Viewpoint - The A-share market showed mixed performance on July 15, with the Shanghai Composite Index declining while the ChiNext Index rose, driven by a significant surge in the communication sector, which saw gains exceeding 4% [1][3][6]. A-share Market Summary - The Shanghai Composite Index fell by 0.93% to 3486.88, with a trading volume of 430.58 billion [4]. - The Shenzhen Component Index decreased by 0.26%, closing at 10657.22, with a trading volume of 650.18 billion [6]. - The ChiNext Index increased by 0.64%, reflecting a peak gain of over 2% earlier in the session [3]. Communication Sector Performance - The communication sector outperformed other sectors, with a peak increase of over 4% during the session [6]. - Notable stocks included: - New Yisheng, which hit a 20% limit up - Zhongji Xuchuang and Shijia Guangzi, both rising over 11% [6][9]. ETF Performance - Several ETFs related to communication and artificial intelligence saw significant gains, with increases exceeding 5% for funds such as: - Fu Guo Zhong Zheng Communication Equipment Theme ETF - Hua Xia ChiNext Artificial Intelligence ETF [11]. Market Sentiment and External Factors - Positive sentiment was bolstered by news from NVIDIA's CEO regarding the approval of H20 chip exports to China and the launch of the RTX Pro GPU, which is designed for AI and digital twin applications [11]. - The overall market sentiment was mixed, with sectors like electronics and home appliances performing well, while real estate and coal sectors faced declines [12]. Hong Kong Market Summary - The Hong Kong market experienced slight gains, with the Hang Seng Index rising over 1% before fluctuating [14]. - Key stocks in the Hang Seng Index included: - Techtronic Industries and Nongfu Spring, which saw notable gains, while Xinyi Glass and Xinyi Solar faced declines [15]. Notable Stock Movements - In the Hong Kong market, stocks like MediWound and Zhongshi Min'an saw significant price increases, with MediWound's stock rising over 40% following a placement agreement announcement [16][17]. - The European shipping futures market also saw a surge, with prices increasing by over 10% amid geopolitical tensions [19].

Core Viewpoint - The A-share market showed mixed performance with the ChiNext index rising by 0.64% while the Shanghai Composite Index and Shenzhen Component Index fell by 0.93% and 0.26% respectively, indicating a slight weakness in the overall market sentiment [1] Market Performance - As of midday, the Shanghai Composite Index decreased by 0.93%, the Shenzhen Component Index fell by 0.26%, and the ChiNext index increased by 0.64% [1] - The total trading volume in the Shanghai and Shenzhen markets reached 1.08 trillion yuan, an increase of 108.5 billion yuan compared to the previous trading day [1] Sector Highlights - The main focus of the market was on computing power concepts, with most stocks in the two markets showing negative performance [1] - The CPO concept stocks rose against the trend, with New Yi Sheng hitting the daily limit and reaching a historical high, while Dongtianwei, Zhongji Xuchuang, and Shijia Guangzi all increased by over 10% [1] - The coal mining sector experienced low fluctuations in the morning, with Dayou Energy and Shanxi Black Cat both dropping by over 7% [1] - The electricity sector continued to weaken, with Huayin Power hitting the daily limit down [1] - The real estate sector saw a pullback, with Greenland Holdings also hitting the daily limit down [1]

Core Viewpoint - The CPO sector in the A-share market experienced a significant rally, with several companies achieving substantial gains, particularly New Yisheng, which hit the daily limit up of 20% [1]. Group 1: Market Performance - New Yisheng (300502) surged by 20%, with a total market capitalization of 156.1 billion and a year-to-date increase of 91.04% [2]. - Shijia Photon (688313) rose by 14.67%, with a market cap of 22.6 billion and a year-to-date increase of 200.43% [2]. - Zhongji Xuchuang (300308) increased by 14.40%, with a market cap of 190.4 billion and a year-to-date increase of 39.33% [2]. - Tianfu Communication (300394) saw a rise of 12.75%, with a market cap of 74.5 billion and a year-to-date increase of 47.67% [2]. - Other notable performers included Taicheng Light (300570) up 7.45%, and Lian Te Technology (301205) up 7.43% [1][2]. Group 2: Company Earnings - New Yisheng is expected to report a net profit of 3.7 billion to 4.2 billion for the first half of the year, representing a year-on-year growth of 327.68% to 385.47%, with the second quarter net profit projected at 2.1 billion to 2.6 billion, a year-on-year increase of 289% to 380% [2]. - Cambridge Technology anticipates a net profit of 120 million to 128 million for the first half, reflecting a year-on-year growth of 50.12% to 60.12%, with the second quarter net profit expected to be 90 million to 98 million, a year-on-year increase of 67% to 81%, significantly exceeding market expectations [2].

Market Performance - The Shanghai Composite Index, Shenzhen Component Index, and Hang Seng Index all rose collectively, with the ChiNext Index increasing by over 2% [1] - The ChiNext Artificial Intelligence ETF (Guotai, 159388) led the market with a rise of over 5% [1] Sector Highlights - CPO concept stocks surged, driven by the strong mid-year report forecast from component stock Xinyiseng, which saw a rise of over 10% to reach a historical high [1] - Other stocks in the sector, including Shengyi Technology, Tianfu Communication, Zhongji Xuchuang, Cambridge Technology, Shengyi Electronics, Shijia Photon, Changxin Bochuang, and Liante Technology, also experienced gains [1] Policy and Industry Developments - The Ministry of Industry and Information Technology announced the "International AI Open Source Cooperation Initiative" at the World Artificial Intelligence Conference, aiming to strengthen China's voice in the AI field [2] - The ministry's "2025 Work Points for the Integration of Information Technology and Industrialization" emphasizes enhancing intelligent levels and implementing "AI + Manufacturing" actions [2] Investment Opportunities - Nvidia's market capitalization reached $4.022 trillion, positively impacting A-share sectors related to optical modules and computing chips [3] - Meta's announcement of a 5GW AI data center further intensified global competition in computing power, creating cross-market effects [3] - Guoyuan Securities noted that while CPO technology's current industry scale is small, its performance advantages are significant, indicating a broad long-term penetration space [3] - The ChiNext Artificial Intelligence ETF (Guotai, 159388) tracks an index of 50 listed companies in the AI field, covering hardware, software, and computing power core segments, benefiting from the global demand for AI computing power [3][4]

Summary of the Conference Call for Shijia Photonics Industry Overview - The AI computing power demand remains optimistic, with high-frequency data showing explosive growth year-on-year and month-on-month, indicating a broad application of AI in the B-end market. The upcoming release of large models like GPT-5 is expected to catalyze the industry and enhance valuations, benefiting related stock trading strategies [2][3] - The optical module industry is experiencing significant growth opportunities, with an upward revision in the demand for 800G optical modules and a confirmed ramp-up in 1.6T optical modules. Shijia Photonics is expected to benefit from the increased production of 800G and 1.6T products and the rising penetration rate of CPU applications [2][5] Company Highlights - Shijia Photonics has acquired Fokexima, enhancing its technical strength and market competitiveness. Fokexima specializes in MPO components and holds nearly 60 patents, reporting revenue of 82.57 million yuan and a net profit of 30.68 million yuan in Q1 2025 [2][6] - Fokexima has been certified by several leading clients, including optical module manufacturers and structured cabling companies, with its 800G and 1.6T single-mode low-loss connectors already in mass production for high-speed data transmission applications [2][7][8] - The acquisition of Fokexima is expected to significantly enhance Shijia Photonics' technical capabilities and market position, particularly in the MPO component sector [6][30] Product Development and Market Trends - The optical module industry is witnessing notable trends, with a strong demand for 800G and 1.6T products. Shijia Photonics has a comprehensive layout in both passive and active products, benefiting from the ramp-up of its 800G and 1.6T products and the accelerated penetration of CPU applications [5][29] - The AWG (Arrayed Waveguide Grating) products of Shijia Photonics are competitive, with strong performance in loss metrics and leading capacity and customer response. The demand for AWG products continues to grow, covering major domestic optical modem manufacturers [4][23] - The company is also focusing on new product categories such as CW light sources and EML optical chips, which are expected to open up larger growth opportunities [5][30] Financial Performance and Future Outlook - The acquisition of Fokexima is anticipated to improve Shijia Photonics' capacity utilization and gross margin, although the specific impact is yet to be quantified. The company is adjusting its product structure to enhance the gross margin of MPO products [13][30] - The potential output value of the Thai factory, which is currently in the equipment debugging and employee training phase, is expected to be significant, although actual production value needs further enhancement [19] - The company’s MPO products are primarily multi-mode until 2024, after which there will be a gradual shift towards single-mode products, which are expected to improve gross margins [14][30] Competitive Landscape - The barriers to entry in the connector industry, particularly for MPO connectors, are primarily based on technological advancement. Fokexima has achieved mass production of products with 2 to 48 fiber holes, leading the domestic market in technology [11][12] - The company is also exploring the application of wavelength division multiplexing technology in DR optical module products, which is expected to reduce costs and meet increasing demand [24] Conclusion - Shijia Photonics is well-positioned for future growth, particularly in the AWG product line, which is expected to replace traditional filter methods. The company has achieved significant sales in MPO connectors, with a growth rate of approximately 400% in Q1 2025 compared to the previous year [29][30] - The active optical chip market is projected to reach around 15-16 billion yuan in 2025, with Shijia Photonics playing a crucial role in this growth [30]

Group 1 - The A-share CPO concept stocks experienced a surge at the beginning of trading, with New Yisheng's stock price hitting the daily limit and reaching a new high [1] - Other companies such as Zhongji Xuchuang, Shijia Guangzi, Tianfu Communication, Pengding Holdings, and Dongtian Micro also saw their stock prices rise in response [1]