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Pei Lirui/Watchmaking

Securities Times reporter Pei Lirui

The cycle has bottomed out, performance has exploded, stock prices have skyrocketed... Recently, the semiconductor sector has become a beautiful landscape in the stock market.

The recently released second quarter fund report shows that many well-known fund managers overweighted the semiconductor sector in the second quarter. Nine semiconductor stocks including Montage Technology, Changdian Technology, and GigaDevice all received more than 10 million shares of increased holdings from funds. Many fund managers believe that the semiconductor industry is at the bottom of the inventory cycle and are optimistic about AI-driven computing power semiconductors and macroeconomic-driven consumer electronics semiconductors.

For example, the Caitong Integrated Circuit Industry Fund managed by Jin Zicai increased its stock holdings in the second quarter and made a large-scale adjustment, significantly increasing its holdings of two semiconductor stocks, Jacques Technology and GigaDevice, making them the sixth and seventh largest holdings of the fund respectively. In addition, it also held a large position in Shanghai Electric Co., Ltd., which is the third largest holding.

Jin Zicai said in the second quarter report that he overweighted the semiconductor sector in the second quarter, mainly because he believed that the semiconductor cycle was getting closer to bottoming out and reversing. At present, advanced manufacturing and advanced packaging have taken the lead in rising sharply, but related companies are not listed in the A-share market. If the AI ​​industry develops towards the end and application side, he believes that it is very likely to drive the semiconductor industry to reverse upward, and he will pay close attention to investment opportunities in related industries in the future.

For another example, the Xingquan Social Value Fund managed by Xie Zhiyu has 6 semiconductor stocks among the top 10 holdings, including memory interface chip leader Lanqi Technology, camera module supplier Gowin Electronics, and audio and video chip company Jingchen Holdings. In addition, San'an Optoelectronics, Crystal Optech, and Hua Hong Semiconductor are also heavily held. Among them, Crystal Optech and Hua Hong Semiconductor were both newly added to the fund's top 10 holdings in the second quarter.

Xie Zhiyu said that Nvidia's AI server business continued to develop rapidly in the second quarter, and domestic related server, optical module and other sector indexes continued to improve. The expected implementation of Apple's AI will drive the domestic electronics industry chain. The fund maintained a relatively high position during the reporting period, exploring related industry chains such as pan-AI applications, semiconductors, new energy vehicles, and home appliances, and conducting long-term tracking and layout of companies with core competitiveness. In the future, it will continue to look for excellent companies with good investment cost-effectiveness.

In addition, Galaxy Innovation and Growth, managed by Zheng Weishan, has 9 semiconductor stocks among its top 10 holdings, among which the top three are Changdian Technology, Shengbang Electronics, and North Huachuang; GF Advanced Manufacturing, managed by Sun Di, has heavy holdings in Shanghai Electric Co., Ltd., Tongfu Microelectronics, and Changdian Technology; Wanjia Technology Innovation, managed by Huang Xingliang, has heavy holdings in China Micro Semiconductor, Zhanrui Micro, GalaxyCore, and Cambrian.

Zheng Weishan stated in the second quarter report of Galaxy Innovation Growth that the inventory cycle of this round of the semiconductor industry has basically been fully interpreted. Except for mobile phones and PCs, which may have quarterly replenishment opportunities, other smart Internet of Things (AIOT), home appliances, and cars may be in a state of slow digestion and slow transition. In general, the industry has bottomed out and may be in the initial stage of an upward cycle.

Overall, in the second quarter of this year, the entire semiconductor sector received increased holdings from public funds.

Wind data shows that as of the end of the second quarter of 2024, public funds have held a total of 121 semiconductor stocks, of which 70 stocks have been increased by funds in the second quarter. Nine semiconductor stocks including Lanqi Technology, Changdian Technology, GigaDevice, Cambrian, and Yak Technology have all received increased holdings of more than 10 million shares from funds.

Among them, Lanqi Technology is the semiconductor stock with the largest number of increased holdings by funds in the second quarter. More than 150 funds, including Xingquan Trend Investment managed by Dong Li, GF Multi-Factor managed by Tang Xiaobin and Yang Dong, and Xingquan Heyi managed by Xie Zhiyu, increased their holdings in the stock in the second quarter, with a net increase of 66.455 million shares in total.

It is worth mentioning that the latest 2024 semi-annual report disclosed by Lanqi Technology shows a significant increase in performance, with net profits of 583 million to 623 million yuan in the first half of the year, an increase of 612.73% to 661.59% over the same period last year. The company believes that this is due to the recovery of demand for the company's memory interface and module supporting chips, and on the other hand, it is due to the large-scale shipment of some of the company's new AI "capacity" chip products, which has contributed new growth points to the company's performance. In the secondary market, the company's stock price has bottomed out and rebounded since April 10, and has risen by more than 40% so far.

Similar to Lanqi Technology, most of the semiconductor stocks that were pre-empted by funds have shown encouraging performance in the recently disclosed 2024 semi-annual report performance forecasts.

Storage chip company GigaDevice received an increase of 44.1 million shares from funds in the second quarter. Galaxy Innovation Growth managed by Zheng Weishan and Soochow Mobile Internet managed by Liu Yuanhai both increased their holdings in the stock. GigaDevice's performance forecast shows that after experiencing sluggish market demand and gradual inventory reduction in 2023, demand in the consumer and network communication markets will pick up in the first half of 2024, driving the company's storage chip product sales and revenue growth. The company expects to achieve a net profit of approximately 518 million yuan in the first half of the year, a year-on-year increase of 54.18%.

The performance forecast of semiconductor materials company Yak Technology shows that the company is expected to achieve a net profit of about 512 million to 580 million yuan in the first half of 2024, a record high since 2019, an increase of 50% to 70% over the same period last year. In the second quarter, the stock was increased by products under the management of many star fund managers, such as E Fund Emerging Growth, Invesco Great Wall Industrial Trend, and Caitong Value Momentum, with a total increase of about 14.85 million shares.

Overall, as of the end of the second quarter, among the 121 semiconductor stocks heavily held by public funds, North Huachuang had the largest number of heavily held funds, with 527 funds holding them; the stock with the largest total market value was SMIC, with funds holding a total of 24.075 billion yuan.

According to Huafu Securities' research report, as of the end of the second quarter of 2024, the total market value of public funds' electronic industry holdings accounted for 14.1%, ranking first among all Shenwan first-level industries, with a month-on-month growth rate of 24.4%, also ranking first. Among them, semiconductor sector holdings accounted for 46% of the total electronic sector holdings, accounting for half of the market.