Shenzhen Techwinsemi Technology Co. Ltd.

China’s artificial intelligence companies are poised to deliver robust earnings, but elevated expectations after a months-long rally are raising the bar for tech stocks to climb further. A number of companies along the chip supply chain have flagged profit surges easily topping 1,000% in their preliminary reports, yet stock moves have been mixed, suggesting investors have already priced in exponential earnings growth. The CSI 300 Information Technology Index, which tracks semiconductor and electronic component makers listed on the mainland, has retreated recently after gaining 80% in the June quarter, and its valuation has risen to 36 times one-year forward earnings from 28 times in April. Shares of Shannon Semiconductor Technology Co. dropped by the daily limit of 20% after it flagged earnings growth of more than 2,000%, while Shenzhen Techwinsemi Technology Co. slumped by the daily limit of 10% following a forecast of as much as 5,600% in net income growth for the first half. Memory chipmaker Shenzhen Longsys Electronics Co. flagged a profit increase topping 62,200%, and although its shares rose 10% on the day, they have since erased all gains.

China's A-share market underwent volatile adjustments today, with the Shanghai Composite Index falling 1.85 percent and losing the 3,900-point level. However, the traditional Chinese medicine sector surged against the market, with Pien Tze Huang and ZBD Pharma hitting their daily limit up in the afternoon. The pharmaceutical and biological industry saw a net inflow of over 5 billion yuan in main funds, and the TCM sector index rose more than 3 percent at one point during the session, marking seven consecutive positive daily candlesticks. Harbin Pharmaceutical Group locked in its fifth straight daily limit up, while Hainan Haiyao achieved its second consecutive daily limit up. Chip stocks, on the other hand, suffered a broad sell-off, with the semiconductor sector index plunging more than 5 percent. Companies such as JCET and Demingli hit limit down in batches. Global chip stocks also faced heavy selling, with South Korea's SK Hynix tumbling 11.53 percent and Japan's Kioxia plummeting 15.03 percent. On the news front, the State Council approved the 15th Five-Year Plan for the Revitalization and Development of Traditional Chinese Medicine, and the 2026 edition of the National Essential Medicines List added 48 new proprietary Chinese medicines.

Storage leader Demingli opened limit down on July 15, trading at 662.40 yuan, with turnover exceeding 1.4 billion yuan and a latest market cap of 150.26 billion yuan. The evening before, the company announced it expects net profit attributable to shareholders of the listed company for the first half of 2026 to be between 5.7 billion and 6.5 billion yuan, swinging from a loss to a profit year-on-year. The company said accelerating AI application deployment is driving storage demand growth, industry prosperity is high, storage product prices are rising, and the company is leveraging cooperation with mainstream wafer manufacturers to secure supply, significantly improving profitability. In addition, the company launched its self-developed enterprise SSD controller chip, multiple QLC embedded storage products have entered mass production, and the product mix continues to be optimized.