In the early trading session today, the A-share market opened low and fluctuated, with major stock indices reaching new lows since the adjustment. The Shanghai Composite Index barely held above 3,200 points, and the Shenzhen Component Index once fell below the 10,000-point mark during the session. There is a trend of shrinking trading volume in both markets.
On the market, real estate, photolithography machines, brain engineering, and water utilities sectors led the gains, while communication equipment, diversified finance, hundred-yuan stocks, and high-speed copper cable connections sectors led the declines.
Continuously Positive News Boosts Real Estate Strength
Real estate stocks showed overall strength in the morning, with the sector index opening high and rising, increasing by more than 4% in volume, with half-day transactions approaching the full-day transactions of the previous day. Everbright Jiabao quickly hit the upper limit after the opening, marking the 4th consecutive day of hitting the limit, with its stock price reaching a new high in over a year. Sunshine Shares, Financial Street, and Caixin Development also strongly hit the upper limit.
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Related sectors such as rental rights, property management, building materials, and new urban areas also saw significant increases, with Western Construction, Sifang New Materials, Chongqing Construction Engineering, and Chengdu Road and Bridge all hitting the upper limit in large quantities.
In the Hong Kong market, real estate stocks also rose sharply against the trend, with the Hang Seng Mainland Real Estate Index once surging by more than 6% during the session, and the Hang Seng Real Estate Property Management Index also rising by more than 5%. Sanxun Group's highest increase exceeded 40%, while Rongxin China, Taihe Holdings, and Longguang Group all increased by more than 20% during the session.
In terms of news, the State Council Information Office will hold a press conference at 10 a.m. tomorrow (October 17), where Minister Ni Hong of the Ministry of Housing and Urban-Rural Development, along with heads of the Ministry of Finance, Ministry of Natural Resources, People's Bank of China, and the State Financial Regulatory Administration, will introduce the situation related to promoting the stable and healthy development of the real estate market.
In addition, the Tianjin Municipal People's Government website announced this morning that the "Notice of the General Office of the Tianjin Municipal People's Government on the Further Optimization of Real Estate Policies to Better Meet the Reasonable Housing Needs of Residents" was issued by the Tianjin Municipal Housing and Urban-Rural Development Commission and six other departments. The notice proposes to cancel restrictive housing measures, implement national financial support policies, accelerate the construction of a new model for real estate development, better meet the rigid and diverse improvement housing needs of residents, and promote the stable and healthy development of the real estate market.
Since the end of September, following the super positive news, according to incomplete statistics from Wind data, more than 10 provinces including Sichuan, Guangdong, Hubei, and Yunnan have issued provincial-level policy documents to promote the healthy development of the real estate market. More than 50 cities including Wuhan, Nanchang, Hefei, and Guangyuan have also issued optimization policies for the real estate market in their cities.
Real estate sales have also been booming recently, with the long-lost "daylight disc" frequently appearing, and many places including Shenzhen and Nanjing have reported news of selling out on the day of the opening.According to monitoring data from Shenzhen Central Research Center, as of last week, the number of new home subscriptions in October has reached 4,418 units, equivalent to the online signing volume of the previous two months. Historically, the last time Shenzhen's single-month new residential transactions exceeded 4,000 units was in November 2021, with a monthly transaction volume of 5,644 units. Therefore, it is highly likely that the number of new home transactions in Shenzhen in October this year will set a new high in nearly three years.
Dongxing Securities stated that the central government's policy goals for the real estate market are shifting from maintaining stability to promoting stability, and it has clearly shown its willingness to maintain the steady recovery of the real estate market. Subsequent policies will be more active and sustained. Currently, the real estate sector is welcoming more active and sustained policy stimulation on both the supply and demand sides, and it is recommended to continue to focus on investment opportunities in the real estate sector.
The domestication rate of photolithography machines continues to increase
The photolithography machine concept surged in volume in the early morning, with the sector index rising nearly 4% at the start of the trading day. Jingrui Electric Materials' stock price soared 20% shortly after opening, with trading volume increasing by nearly 300% compared to the previous day's total, while Yida Shares and Guofeng New Materials either hit the daily limit or rose by more than 10%.
Last night, photolithography machine giant ASML reported a bombshell, with orders for the third quarter of this year amounting to only 2.6 billion euros, far below the market expectation of 5.4 billion euros, with a drop in order volume of more than 50%. In addition, ASML also revised down its sales guidance for the fiscal year 2025, expecting total net sales to be between 30 billion euros and 35 billion euros, while the market generally predicts 35.8 billion euros.
ASML also mentioned the importance of the Chinese market, expecting revenue from the Chinese market to account for about 20% of total revenue next year. ASML's semi-annual report for 2024 shows that in the first half of the year, sales revenue from equipment to China accounted for 49% of the company's photolithography machine sales revenue, a year-on-year increase of 142%.
ASML's significant decline in orders does not represent a contraction of the global market; in fact, the global semiconductor industry is currently thriving. According to SEMI forecasts, the global semiconductor equipment industry market size for 2024-2025 is expected to be between 98.3 billion US dollars and 112.8 billion US dollars, with a year-on-year growth of 3%-15%.
ASML's decline indirectly confirms that China's domestic photolithography machine has made substantial progress. Recently, the Ministry of Industry and Information Technology released the "Guidance Catalog for the Promotion and Application of the First Set of Major Technical Equipment (2024 Edition)" under the electronic special equipment catalog, disclosing an argon fluoride photolithography machine, which belongs to the DUV photolithography machine and has attracted widespread market attention.
According to data from Chipè°‹Research, the scale of China's semiconductor equipment market reached 34.2 billion US dollars in 2023, with domestic equipment at 4 billion US dollars, accounting for 11.7%; it is expected to reach 37.5 billion US dollars in 2024, with domestic equipment at 5.1 billion US dollars, and the proportion is expected to increase to 13.6%.
Tianfeng Securities believes that although the sales scale of domestic equipment continues to grow rapidly (an estimated year-on-year increase of 27.5% in 2024), the proportion is still less than 15% in terms of the amount. It is expected that future breakthroughs in the research and development of core process equipment will further increase the domestic upgrade ratio. In terms of structure, attention can be paid to the demand increase of advanced process equipment driven by AI, and from the perspective of recovery, attention can be paid to the order growth of back-end packaging and testing equipment benefiting from the quarter-by-quarter improvement in the prosperity of packaging and testing factories.