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On July 15, the three major A-share indices rose and fell differently. The Shanghai Composite Index closed up 0.09%, the Shenzhen Component Index closed down 0.59%, and the ChiNext Index closed down 0.63%; the Beijing Stock Exchange 50 closed down 0.37%.

On that day, the turnover of the Shanghai and Shenzhen stock markets was 602.2 billion yuan, a decrease of 84.8 billion yuan from the previous trading day. The number of stocks that fell was greater than that of those that rose, with 890 stocks rising and 4,367 stocks falling. Among them, there were 47 stocks that rose by the daily limit and 13 stocks that fell by the daily limit.

In terms of sectors, pork, film and television, banking, and online ride-hailing sectors led the gains, while power grid, digital finance and taxation, CRO, and real estate sectors led the losses.

There is no shortage of nonsensical events in the history of A-shares. Sichuan University Zhisheng hit the daily limit on Monday, sparking heated discussions among netizens in the stock bar.

Regarding the stock price limit, Sichuan University Zhisheng's relevant personnel said that the reason for the stock price limit could not be determined and the company's operations were normal. However, it is also true that the company's performance was not good. The company's semi-annual performance forecast showed that the company expected its net profit attributable to the parent company in the first half of the year to be between -23 million and -17 million.

Compared with the hype about Sichuan University Zhisheng, the "real" hot spots in today's market are the four major banks - China Construction Bank, Agricultural Bank of China, Bank of China, and Industrial and Commercial Bank of China, all of which hit record highs.

In the past two years, as a stable defensive investment target, bank stocks have significantly increased their investment attractiveness, especially as a representative of high dividend assets. China Construction Bank A shares rose 23.16% in 2023, and have risen by more than 20% since 2024.

From the perspective of industry analysts, the rise of the banking sector seems to be only halfway through. For example, Huachuang Securities emphasized in its latest research report that the current low interest rate environment provides a double benefit for bank stock investment: it not only ensures the stability of dividends, but also attracts the continuous inflow of medium- and long-term funds. The report pointed out that in order to maintain a dividend rate of more than 4%, the overall valuation of bank stocks is expected to have room for growth of 23% to 54%, which shows that the banking sector, although currently in a valuation trough, has huge upside potential.

But from a trading perspective, low-volatility dividend assets have seen huge gains this year, and analysts always mention "dividend yield". Does this indicate that the dividend track is too crowded and the market style may be getting closer to the critical point of transformation?

A phenomenon worth noting is that on July 13, ABC-Huarong Fund Management Co., Ltd. announced that it would extend the fundraising period of ABC-Huarong Dividend Selected Hybrid Securities Investment Fund. Although ABC-Huarong stated that the purpose of the extension was "to better meet the investment needs of the majority of investors", this phenomenon also shows that the incremental funds in the OTC market may begin to be cautious about whether to continue to intervene in the dividend assets that have already risen sharply.

The views of some brokerage sell-side analysts have also undergone subtle changes. For example, Dongwu Securities pointed out that in the past three years, the dividend style has risen, the growth style has declined, the style differentiation has reached a relatively extreme level, and the volatility has also decreased significantly. The interpretation of this round of dividend style has exceeded the previous two rounds in both time and space dimensions, and the degree of differentiation of the dividend rate of all A shares has reached an extremely low level in history. The subsequent market style is expected to usher in a switch.

However, July and August coincide with the traditional mid-year report period, and the recent mainstream market view is that the third quarter is still a risk-averse period for seeking performance certainty.

As Shenwan Hongyuan pointed out, the market will continue to fluctuate in the third quarter, and the index will rise in the fourth quarter. In terms of style, low-volatility dividends are dominant in the third quarter, and the key industries include electricity, power grid equipment, and banks. We will continue to pay attention to the allocation opportunities of nonferrous metals, coal, and booming consumption.

Shenwan Hongyuan also believes that at this stage, booming technology investment still needs to constantly find new directions. The corresponding technology market has shifted from "car, road and cloud" to smart driving and automotive IT, while the stock price resistance of AI computing power and AI mobile phones has increased. However, Shenwan Hongyuan believes that the growth market will start in the fourth quarter.

Finally, let’s take a quick look at other hot spots in today’s trading.

Last week, the "carrot run" was very popular, and the driverless sector took the lead. The sector's "leader" Tianmai Technology (300807.SZ) won the championship with a weekly increase of 68.91%, and Dazhong Transportation (600611.SH) ranked second with a weekly increase of 51.08%.

Today, the driverless sector remains hot, but short-term funds show signs of retreat. Tianmai Technology's maximum intraday gain was more than 16%, but the gain narrowed to less than 10% in the afternoon. Dazhong Transportation hit the daily limit in the morning, but then crashed, and the closing gain narrowed to 5.95%.

In addition, during the summer vacation, film and television stocks were sought after, with Xingfu Blue Ocean rising by 20cm, Jinyi Film and Television rising by 10cm, and Huanrui Century rising by more than 5%.

In this regard, Guojin Securities pointed out that the box office in July soared. From July 1st to 13th, the domestic box office was 1.601 billion, an increase of 78.7% over the same period in June. With the release of films such as "Silent Killer" and "Catching Dolls", the summer season has become more popular. There are many films scheduled for July and August, including "Catching Dolls" (starring Shen Teng and Ma Li), "Legend", "Despicable Me", "Decryption", "White Snake: Floating Life", "Under the Alien", etc. The summer supply has begun to be released, and the summer season is optimistic about the increase in popularity and the box office performance in July and August. Guojin Securities recommends paying attention to the leading theater chains that directly benefit from the growth of the box office market and targets with strong content scheduling and upward marginal growth.

Investment is risky, independent judgment is important

This article is for reference only and does not constitute a basis for buying or selling. You should bear the risks of entering the market at your own risk.

Cover image source: Daily Economic News, photo by Liu Guomei

Reporter Wang Yandan, Editor Peng Shuiping

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