Market Performance - The A-share market experienced a significant upward trend, with the Shanghai Composite Index surpassing 3800 points for the first time since August 20, 2015 [1] - As of 14:12, the Shanghai Composite Index rose by 1.13% to 3813.69 points, the Shenzhen Component Index increased by 1.78% to 12131.98 points, and the ChiNext Index climbed by 3.05% to 2674.59 points [1] - The market's trading volume exceeded 20 trillion yuan for the eighth consecutive trading day, with an increase of over 80 billion yuan compared to the previous day [1] Sector Performance - Semiconductor, chip, brokerage, and computing hardware sectors led the market gains [1] - The Kweichow Moutai stock saw a trading volume exceeding 21 billion yuan, making it the highest in the A-share market [1] Notable Stocks - A total of 10 stocks had trading volumes exceeding 10 billion yuan, including Dongfang Wealth, ZTE, SMIC, Northern Rare Earth, Cambricon Technologies, Haiguang Information, Zhaoyi Innovation, New H3C, Inspur Information, and Zhongke Shuguang [1] - Cambricon Technologies saw a surge of over 18%, with its total market capitalization exceeding 500 billion yuan, reaching a new historical high [3] - Haiguang Information hit the daily limit, while other stocks like Deepin Technology and SMIC also experienced significant gains [3]

Market Overview - A-shares experienced a strong upward trend on August 22, with technology stocks driving the ChiNext 50 index up over 5%, reaching a nearly three-and-a-half-year high [1] - The Shanghai Composite Index approached 3800 points, with a half-day trading volume of 1.51 trillion, down 56.9 billion from the previous trading day [1] - By midday, the Shanghai Composite Index rose by 0.67%, the Shenzhen Component Index increased by 1.32%, and the ChiNext Index climbed by 2.56% [1] Key Developments - DeepSeek launched its latest large language model, DeepSeek-V3.1, which enhances global AI market competition through a mixed reasoning architecture and improved agent capabilities [1] - The model utilizes UE8M0 FP8 Scale parameter precision, designed for the upcoming generation of domestic chips [1] Sector Performance Computing Power Chip Sector - The computing power chip sector saw significant gains, with stocks like Cambrian Technology surpassing 1100 yuan, and several others hitting their daily limit [3] - The release of DeepSeek-V3.1 is expected to accelerate the pace at which major model manufacturers introduce stronger products to the market by Q2 2025 [3] Rare Earth Sector - The rare earth and small metal sectors showed strength, with stocks like Zhangyuan Tungsten hitting their daily limit [4] - Rare earth prices have risen significantly, averaging over 100,000 yuan per ton since August, driven by domestic order growth and supply chain concerns due to trade conflicts [4] Digital Currency Sector - The digital currency sector remained active, with stocks like Yuyin Co. achieving four consecutive trading limits [5] - The upcoming China International Service Trade Fair will feature a digital RMB experience area, indicating a focus on digital currency [5] Institutional Insights - GF Securities suggests maintaining a bullish market stance with a focus on growth technology and industries with improving economic conditions [6] - According to Zhao Shang Securities, the current market style is characterized by a focus on technology growth and small-cap stocks, which is expected to continue [8] - Dongfang Securities warns of potential adjustment pressure near the 3800-point mark, emphasizing the need for investors to recognize market characteristics and avoid missing out on opportunities [9]

Group 1 - The Shanghai Composite Index has shown strong performance, surpassing 3674.4 points, marking a new high since October 8, 2024, with the computer sector remaining active [1] - The Cloud Computing ETF (517390) rose by 1.55%, with leading stocks including New Yisheng, Alibaba-W, Taiji Co., Kingsoft Cloud, and Tencent Holdings showing significant gains [1] - As of August 12, the Cloud Computing ETF (517390) had a latest circulation scale of 269 million yuan, ranking first among similar products in the Shanghai market [1] Group 2 - Huawei officially launched its AI inference innovation technology UCM on August 12, which integrates various caching acceleration algorithms to enhance inference performance and reduce costs [2] - Huawei plans to open-source UCM by September 2025, contributing it to mainstream inference engine communities and sharing it with storage manufacturers and ecosystem partners [2] - The "East Data West Computing" initiative is expected to provide clear direction for the large-scale and intensive development of data centers, combining low-cost resources in the west with high market demand in the east [2] Group 3 - China is firmly establishing a "secure and controllable" computing foundation, with promising development prospects for domestic computing chips and their supply chains, represented by Huawei's Ascend [3]

Core Viewpoint - Jinglin Asset Management Hong Kong Company disclosed its US stock holdings as of the end of Q2 2025, showing a total market value of $2.874 billion, a decrease of approximately 11% from the previous quarter's $3.228 billion [1][2]. Holdings Summary - The company held 28 securities in the US market, with the top 10 holdings accounting for 88.19% of the total portfolio value, indicating an increase in concentration compared to the previous quarter [2][3]. - Meta Platforms remains the largest holding, with a market value of $731.70 million, representing 25.46% of the total portfolio [3][4]. - New purchases included Nvidia, Atour, and Huazhu Group, while the company sold out of Apple and several pharmaceutical giants [6][7]. Trading Activity - In Q2, Jinglin made 3 new purchases, added to 7 existing positions, sold out of 6 stocks, and reduced holdings in 13 stocks [2][5]. - Significant increases in holdings were noted for Nvidia (new position), Manbang Group, and Qifu Technology, while reductions were seen in NetEase, Pinduoduo, and TSMC [4][5][7]. Investment Strategy - The company is focusing on Chinese assets, particularly in emerging industries, and aims to identify companies with strong business models and robust free cash flow [1][8]. - Jinglin Asset Management expressed that the valuation recovery of Chinese assets may be at a midpoint, emphasizing the need for skillful identification of new investment opportunities [8].

Core Viewpoint - The recent surge in the AI-themed ETFs, particularly the Kexin Composite Index ETF managed by Harvest, was driven by a small transaction that caused a significant price increase, raising concerns about the impact of low trading volumes on market stability [1][4][6]. Group 1: ETF Performance - The Kexin Composite Index ETF managed by Harvest closed at 1.342 CNY per share, marking a 20.04% increase due to a single transaction of 134 CNY that triggered a trading halt [4][8]. - On July 25, multiple AI-related ETFs saw significant gains, with most rising over 4%, indicating a broader market interest in AI stocks [1][3]. Group 2: Market Dynamics - The small scale of the Kexin Composite Index ETF, with a total size of only 101 million CNY, contributed to its susceptibility to price fluctuations from minimal trading activity [5][6]. - Analysts noted that the price spike did not attract follow-up buying from other investors, suggesting that the market may stabilize in the following trading sessions [2][8]. Group 3: AI Sector Trends - The AI sector experienced a notable rebound on July 25, with significant gains in stocks like Cambrian and Aojie Technology, highlighting investor interest in AI-related companies [9]. - The World Artificial Intelligence Conference (WAIC), which commenced on July 26, was identified as a key catalyst for the recent uptick in AI stock prices, showcasing over 3,000 cutting-edge technology exhibits [10]. Group 4: Institutional Insights - Institutional investors have increased their holdings in the components of the AI industry, with a reported 3.73% market value share as of the end of Q2, reflecting a growing confidence in the sector's potential [11]. - Analysts predict that the demand for AI-related infrastructure, such as servers and data centers, will see explosive growth, positively impacting the financial performance of related companies in the coming quarters [11][12].

Core Viewpoint - The article emphasizes the need for increased support from the capital market for the computing chip industry, highlighting its strategic importance in global technology competition and the necessity for domestic innovation [1][2][3]. Group 1: Industry Insights - The event hosted by the Shenzhen Stock Exchange focused on the computing chip sector, with participation from over 30 companies across various segments of the industry [1]. - The theme "Oriental Dawn" symbolizes the commitment of domestic computing chip companies to independent innovation amidst challenges [1]. - Experts discussed the exponential growth in global intelligent computing demand due to the large-scale application of AI models, stressing the importance of foundational research and infrastructure development [2]. Group 2: Strategic Recommendations - There is a consensus that the computing chip industry in China is at a critical juncture, transitioning from "usable" to "highly usable" and from "following" to "leading" in technology [2]. - Recommendations include strengthening foundational innovation, enhancing talent development, and promoting a comprehensive approach to global competition in the AI industry [2]. - The capital market is seen as a crucial engine for accelerating the cultivation of new productive forces in the computing chip sector, with calls for improved institutional adaptability and support for direct financing and mergers [2][3]. Group 3: Regulatory Support - The Shenzhen Stock Exchange plans to enhance support for the computing chip industry by developing a comprehensive service system from "IP" to "IPO" and beyond [3]. - The exchange aims to facilitate collaboration and innovation among industry players through platforms like "Chuangxianghui" [3].

Summary of Key Points from Conference Call Industry and Company Involved - The discussion primarily revolves around the **U.S. Treasury and the implications of the U.S. debt crisis**. It also touches on the **impact of the Trump tax cuts** and the **potential of domestic computing power companies** in the context of globalization and economic uncertainty. Core Insights and Arguments - The **U.S. Treasury has not issued new debt**, leading to a **$2 trillion fiscal gap** that relies on the TGA account and unconventional measures. The Treasury Secretary warns that funds will be exhausted by August, necessitating a resolution before mid-July to avoid a repeat of the 2019 debt ceiling crisis [1][3] - The **Trump tax cuts** are compared to Reagan's supply-side reforms, with the assertion that their stimulative effect is weaker than direct fiscal spending. If the 2025 tax cuts lack fiscal support, it could lead to an economic downturn and potentially trigger a global financial crisis [1][4] - Three paths to alleviate the U.S. fiscal crisis are identified: **over-issuing U.S. debt, increasing tariffs, and debt default**. Each of these paths would exacerbate the debt crisis by increasing supply, reducing dollar trade volume, and lowering credit ratings, respectively [1][5] - In the current environment of increasing uncertainty, there is a recommendation to embrace **anti-fragile safe assets**, including **immediate net assets** (like gold and similar assets) and **future cash flows** from domestic computing power companies that have a certainty premium [1][6] Other Important but Possibly Overlooked Content - The **rise of de-globalization** is increasing environmental uncertainty, leading capital to seek certainty. Anti-fragile safe assets, such as gold and domestic computing power companies, are seen as more attractive due to their principal certainty and future cash flow premiums [1][7] - The focus on **AI domestic patents** is emphasized, as de-globalization makes computing chips non-tradable, thereby securing market share for domestic computing power companies and providing future cash flow certainty [2][6]

Investment Rating - The report maintains an "Add" investment rating for the company [2] Core Views - The company's profitability continues to improve, with a significant acceleration in the pace of domestic computing chip localization [1][6] - The company’s revenue and net profit are expected to grow substantially over the next few years, with projected revenues of 12.9 billion, 16.95 billion, and 22.1 billion yuan for 2025, 2026, and 2027 respectively [1][6] - The report highlights the positive impact of U.S. export restrictions on high-end chips, which is expected to benefit domestic computing chip companies [6] Financial Data and Valuation - Total revenue for 2023 is projected at 6.012 billion yuan, with a year-on-year growth of 17% [1] - Operating profit is expected to reach 4.008 billion yuan in 2025, reflecting a 44% year-on-year increase [1] - The net profit attributable to the parent company is forecasted to be 2.934 billion yuan in 2025, with a growth rate of 52% [1] - The company’s PE ratio is projected to decrease from 282.9 in 2023 to 66.3 in 2027, indicating improving valuation metrics [1][12] Stock Performance - The stock has shown a 87% increase over the past 12 months, outperforming the benchmark index [4] Key Financial Metrics - The company’s gross margin is expected to stabilize around 63% in the coming years, while the net margin is projected to improve to 24.4% by 2027 [12] - Return on equity (ROE) is anticipated to rise from 7.1% in 2023 to 19.3% in 2027, indicating enhanced profitability [12]