A-shares surge back into the limelight.

In the early trading session today, small-cap growth stocks continued to rebound significantly, with the ChiNext index gapping up and rising by more than 3% on increased volume, and the STAR 50 index also rose by more than 2% with increased volume during the session. Over 4,800 individual stocks in the two markets rose, with a half-day turnover reaching 523.5 billion yuan.

On the market, the vast majority of industry sectors increased, with consumer electronics, chips, non-bank finance, and real estate sectors leading the gains, while a few sectors such as banking, telecommunications operations, and transportation facilities experienced minor adjustments.

Non-bank finance gains strength

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Following the adjustment in bank stocks, non-bank finance took over the upward momentum. In the morning, the insurance sector index opened high and rose sharply, at one point surging by nearly 4% on increased volume, setting a new high in 10 months, with half-day transactions exceeding the full-day transactions of the previous day. All stocks within the sector turned red, with Tianmao Group reaching a vertical limit-up in just about 8 minutes, and New China Life Insurance and China Pacific Insurance leading the gains.

Hong Kong-listed insurance stocks also followed suit with significant increases. New China Life Insurance gapped up and rose sharply, surging by more than 10% during the session, marking the 6th consecutive day of gains, with the share price reaching a new high in over three months; China Pacific Insurance, China Life, and Ping An Insurance were among the leaders in gains.

Last night, New China Life Insurance announced its semi-annual report, achieving a total operating income of 55.591 billion yuan in the first half of 2024, a year-on-year increase of 13.6%, and a net profit of 11.083 billion yuan, a year-on-year increase of 11.1%. The company plans to distribute 0.54 yuan (including tax) per share for the mid-term, totaling about 1.69 billion yuan.

The semi-annual report shows that New China Life Insurance's net investment income, total investment income, and comprehensive investment income all achieved growth, with the comprehensive investment income reaching 42.6 billion yuan, a year-on-year increase of 51.8%. The annualized total investment return rate was 4.8%, and the annualized comprehensive investment return rate was 6.5%, marking the best level in nearly three years.

With this, all five major listed insurance companies in A-shares have disclosed their semi-annual reports for 2024. Overall, the five insurance companies achieved a total net profit of 171.799 billion yuan in the first half of the year, a year-on-year increase of 12.55%.

Haitong Securities believes that in the future, as the domestic economy recovers and long-term interest rates stabilize or rise, the pressure on the yield of new fixed-income investments for insurance companies will be somewhat alleviated. At the same time, the continuous implementation of real estate-related favorable policies is also conducive to easing concerns about the quality of investment assets for insurance companies.Securities stocks also saw a significant volume increase in the morning, with the sector index soaring by more than 3%, and half-day transactions exceeding the full-day volume of the previous day. All individual stocks turned red, with China Galaxy and Huaxin Shares hitting the daily limit up, while Tianfeng Securities and CICC were among the top gainers.

Donghai Securities believes that against the backdrop of strict supervision and management in the early period, the specific details of future high-quality development will become the main driving force for the long-term development of the capital market. The effectiveness and direction of building first-class investment banks remain unchanged. It is recommended to grasp the three logical main lines of mergers and acquisitions, high "wealth content rate," and ROE improvement, and to pay attention to the configuration opportunities of large securities companies with strong capital strength and stable business operations.

Interconnected finance and financial technology also surged by more than 4% in the morning, with Tianli Technology and Zhaori Technology hitting the 20% daily limit up, and Softstone Dynamics and Sanlian Hongpu either hitting the daily limit up or rising by more than 10%.

China's chip industry is experiencing rapid growth.

The chip concept saw a broad surge in the morning, with the photolithography machine direction leading the charge, and the sector index volume surged by more than 5%, marking the largest single-day increase in over three months. Companies like Intech, Guolin Technology, and Shuangle Shares hit the 20% daily limit up, while more than 10 stocks including Blue Ocean Equipment and Fujian Technology either hit the daily limit up or rose by more than 10%.

Memory chips, MCU chips, automotive chips, and semiconductor sectors saw significant increases of over 4%, with a batch of stocks like Liyuan Information, Oriental Zhongke, and Hao Shang Hao hitting the daily limit up.

In the global AI boom, an undeniable potential obstacle is the lack of computing power. As the battle for large models intensifies, large model companies that want to launch models and AI applications more quickly must purchase a large number of related chips. As a result, large model companies have not yet made money, while chip companies are reaping substantial profits.

According to statistics from the Semiconductor Industry Association (SIA), the global chip market size in the second quarter of 2024 was $150 billion, a year-on-year increase of 18.3%, and a 6.5% increase from the $141 billion in the first quarter.

Gartner estimates that the demand for memory chips will show strong growth in 2024, with revenue expected to surge by 66.3%. Among them, Flash Memory revenue is expected to surge by 49.6%, and DRAM revenue is expected to surge by 88%.

Under the continuous promotion of policies, China's chip industry is developing rapidly. Data on domestic integrated circuit (chip) production released by the National Bureau of Statistics for July 2024 shows that a total of 37.54 billion chips were produced in July, a year-on-year increase of 26.9%.From January to July, a total of 244.45 billion chips were produced, with a year-on-year increase of 29.3%. Based on a calculation of 210 days over 7 months, this is equivalent to producing 1.16 billion chips per day, setting a historical record.

Tianfeng Securities pointed out that the semiconductor industry enters its traditional peak season in the second half of the year. With the launch of new consumer electronics, it is expected that AI smartphones and AI personal computers will be the main highlights of this year's new devices. Additionally, the breakthroughs in the development of domestic servers will continue to drive the recovery of semiconductor demand, highlighting the growth potential of China's semiconductor companies.