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In the morning trading of August 9, the Shanghai Composite Index rose by 0.12%, the ChiNext Index fell by 0.12%, and the two markets had a total turnover of 365.2 billion in half a day. On the market, real estate services, engineering consulting services, real estate development, and flexible screens led the gains, while vitamins, longevity drugs, CRO, Alzheimer's, and education sectors led the declines. As of the morning close, more than 2,400 stocks rose in the two markets, 24 stocks hit the daily limit, and 4 stocks hit the daily limit of 20%.

1. Funding: The central bank conducted a 7-day reverse repurchase operation of 12.9 billion yuan today, with an operating interest rate of 1.7%. The central parity rate of the RMB against the US dollar was 7.1449, up 11 points.

2. News：In July 2024, the national consumer price index rose by 0.5% year-on-year. The price of consumer goods rose by 0.5%, and the price of services rose by 0.6%. On average from January to July, the national consumer price index rose by 0.2% over the same period last year. In July, among food, the price of livestock meat rose by 4.9%, affecting the CPI by about 0.14 percentage points, of which the price of pork rose by 20.4%, affecting the CPI by about 0.24 percentage points; the price of fresh fruit fell by 4.2%, affecting the CPI by about 0.09 percentage points. In July 2024, the national ex-factory prices of industrial producers fell by 0.8% year-on-year and 0.2% month-on-month, the same as the previous month; the purchase prices of industrial producers fell by 0.1% year-on-year and month-on-month. On average from January to July, the ex-factory prices of industrial producers fell by 2.0% over the same period last year, and the purchase prices of industrial producers fell by 2.2%.

3. Tang Wenhong, Assistant Minister of Commerce, said at a press conference held by the State Council Information Office on the 9th that developing service consumption and improving the quality of supply are the key. We will do a good job in opening up, promote the relaxation of market access for the service industry, improve the level of openness of cross-border service trade, and provide more high-quality and differentiated supply. When it comes to differentiation, all regions should give full play to their respective advantages and provide more differentiated service supply. We should do a good job in quality, continuously improve the service consumption experience, leverage market resources and social forces, and encourage the development of a diversified and multi-level service consumption system; we should do a good job in innovation, deepen the market segmentation, promote cross-border integration, multi-format integration, and multi-scenario integration, empower traditional service consumption through innovation, and better play the role of service consumption in "benefiting the people" and "enriching the people".

4. Sector: As chip exports have achieved year-on-year growth for nine consecutive months, good news came from the two leading wafer manufacturers. SMIC's second-quarter revenue exceeded the company's previous expectations, and Huahong's capacity utilization rate further increased compared with the previous quarter, approaching full production. The performance of the two leading companies exceeded expectations, driving the rebound of the semiconductor chip sector today. The Hang Seng Technology Index rose 2.93%, with the automotive, retail, and semiconductor sectors leading the gains, and SMIC rose more than 6%.

On May 9, SMIC released its first quarter report for 2024. In Q1 2024, it achieved operating income of 12.594 billion yuan, a year-on-year increase of 23.36% and a month-on-month increase of 3.63%. It achieved a net profit attributable to shareholders of 509 million yuan, and its performance far exceeded market expectations. The company continues to promote the construction of 12-inch production capacity, and it is expected that the capital expenditure for the whole year of 2024 will be approximately US$7.5 billion. In the medium and long term, the global semiconductor industry is both cyclical and growth-oriented, and the short-term imbalance between supply and demand will not affect the medium and long-term improvement of the industry. With the increase in demand for intelligent terminal equipment, the market scale continues to increase, and each link of the industrial chain is gradually recovering, and the capacity utilization rate is expected to gradually recover.

China Micro Semiconductor (688380) increases its investment in industrial control and automotive electronics, and new products continue to increase in volume

The company has increased its layout in the fields of industrial control and automotive electronics, and new products continue to be released in large quantities. The company's automotive-grade MCU BAT32A series products have been further expanded. The ultra-cost-effective product BAT32A233 for body control and automotive DC brushless motor applications has been tested in many Tier1s, and the market response has been good. It is expected to be supplied in batches in the third quarter; the first domestic product that meets AEC-Q100 Grade 0, BAT32A337, is being certified by the third-party organization SGS, and will be mainly used for automotive thermal management applications. The company's automotive-grade products are in mass production with 3 wafers and more than 10 product part numbers. Recently, the company has two series of multiple chips that have passed the AEC-Q100 Grade 1 certification; the company's automotive-grade chips have currently formed serialized and platform-based development advantages in the body domain, connection domain, and assisted driving domain. The company is actively deploying high-end domain control MCU chips, semi-full-bridge drivers, and pre-driver chips, and is moving towards a fully domestic solution for automotive chips. ——Great Wall Securities

Allwinner Technology (300458): A local leader in wireless audio SoCs, with diversified product lines demonstrating its advantages in the market

The company is a leading chip design manufacturer in China, focusing on products such as smart application processor SoC, smart power management chips, wireless interconnection chips and voice signal chips. The downstream applications of the products cover multiple tracks such as AIoT smart hardware, automotive electronics, smart industry and smart decoding display, and it provides stable supply to well-known customers such as Xiaomi, Baidu, Alibaba, Tencent, iFlytek, Midea, and Stone Technology. The company has carried out in-depth cooperation in the entire industry chain, and promoted the platform layout of products with "SoC+" and "smart big video" as the main lines. The company has joined hands with Alibaba Pingtou Ge to develop the RISC-V ecosystem. Its products can quickly adapt to various operating systems, meet the differentiated needs of AIoT segmented scenarios, and enable performance to take off. ——Huafu Securities

Biwei Storage (688525): Storage prices are expected to continue to rise, and advanced packaging and testing business is expected to have a bright future

On June 18, BIVI Memory released its 2024 semi-annual performance forecast, with operating income of 3.1 billion to 3.7 billion yuan in the first half of 2024 and net profit attributable to the parent company's owners of 280 million to 330 million yuan, a year-on-year increase of 194.44% to 211.31%. With the continuous rise in storage prices, the company has turned losses into profits since entering 2024. In the future, with the use of self-developed chips and the growth of packaging and testing business, profitability is expected to be enhanced to a certain extent. According to TrendForce, storage prices are expected to rise by 8% to 26% in the second half of the year. Based on the company's 24H1 performance, we judge that the company's downstream demand is expected to grow further in the second half of the year, and the unit price of products is also expected to continue to rise, thereby achieving a simultaneous increase in volume and price at the operating level. The company continues to increase its R&D investment in advanced packaging and testing equipment and other fields. We expect that the company's advanced packaging and testing business is expected to develop rapidly and will become the second growth curve of the company's future business. - West China Securities

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