The Shanghai Composite Index has surpassed the 3,700-point mark, reaching its highest level since December 2021. This marks the ninth consecutive day of gains, reflecting strong investor confidence and positive market sentiment. The surge is primarily fueled by robust performance in key sectors, particularly semiconductors and real estate.
Cambricon Technologies Corp. Ltd., a significant player in AI chip design, saw its shares climb by over 12%, pushing its market capitalization beyond 400 billion yuan. The company reported a 15% year-over-year increase in second-quarter revenue, reaching 184.5 billion yuan, and a 17% rise in net profit to 55.63 billion yuan, both exceeding analyst expectations. Margin financing and securities lending balances increased by 11.718 billion yuan to 2.046 trillion yuan, indicating heightened investor leverage and risk appetite. China International Capital Corporation (CICC) has likened the current market rally to an "enhanced version of 2013," suggesting a sustained bullish trend. Despite a reported 9.8% decline in overall investment in China's semiconductor industry in the first half of 2025, semiconductor equipment spending surged by over 53%, underscoring a strategic focus on building a self-sufficient supply chain, with wafer manufacturing accounting for 51% of investment. The Yangtze River Delta, including Shanghai, remains a central hub for this industrial chain.
The real estate sector is showing early signs of stabilization, with moderated national average price declines and improved sentiment and transactions in tier-1 cities. Government stimulus measures are anticipated to support retail sales growth, with retailers focusing on expansion and efficiency. Investor sentiment is further boosted by a 37% year-on-year increase in individual trading accounts opened in the first seven months of 2025. Foreign investors have also steadily increased their exposure to Chinese equities, with net inflows totaling $2.7 billion in July. Analysts note that valuations in the A-share market remain attractive despite recent strong gains.