[Financial Column] Chip sector heats up again, stocks with expected increases in semi-annual reports are popular

Source: Shanghai Securities News

Since July, although the overall market index has continued to fluctuate at a low level, the chip sector has bucked the trend and strengthened, with some individual stocks that have forecast an increase in performance in their semi-annual reports performing particularly well.

The positive semi-annual report forecast has become a key factor driving the strength of individual stocks. In the recent recovery of the chip sector, many stocks with positive semi-annual report forecasts have performed outstandingly, with their share prices rising significantly.

Allwinner Technology's cumulative increase since July has reached 33.37%, ranking second in the concept of chip localization, second only to Zhichun Technology (52.54%) which recently resumed trading.

Allwinner Technology released its earnings forecast on the evening of July 9, predicting that the net profit attributable to shareholders of the listed company in the first half of 2018 would be RMB 73 million to RMB 80 million, a significant year-on-year increase of 4220.04% to 4634.29%. After the release of this earnings forecast, Allwinner Technology's stock price rose by the daily limit from July 10 to 11.

Naiwei Technology has risen 24.42% since July. The company recently revised its semi-annual performance forecast upward, and it is expected to achieve a net profit attributable to shareholders of listed companies of 53.006 million yuan to 60.2253 million yuan in the first half of 2018, a year-on-year increase of 120.01% to 150.00%.

Nawei Technology stated in the announcement that the expected increase in first-half performance was mainly due to the fact that the operating conditions of the MEMS business in June 2018 were much better than expected. The profitability of the MEMS business in the first half of 2018 has exceeded that of the whole year of 2017.

In addition, the share prices of chip stocks such as Changchuan Technology, Nasdaq, and Shengbang Shares have all risen by more than 10% this month. These companies issued announcements during this period, expecting year-on-year growth in performance in the first half of the year or a turnaround.

Since July, the research enthusiasm of institutions on the chip sector has also been rapidly increasing, and many companies have welcomed dozens of institutions to conduct concentrated research. Overall, institutions also tend to choose companies with expected performance increases in the semi-annual report when selecting research companies.

On July 18, Nawei Technology received a large research team from 52 institutions, just two trading days after the company revised its semi-annual performance forecast.

Nawei Technology said in the survey that the performance growth of MEMS business in the first half of this year is due to both revenue growth and net profit margin improvement. On the one hand, the markets in the fields of biomedicine and communications are highly prosperous; on the other hand, the capacity utilization rate of the company's MEMS production line has continued to increase significantly in recent years, and the capacity utilization rate from January to June this year was as high as 98.52%, resulting in a significant increase in net profit margin.

Since the beginning of the month, Jingsheng Electromechanical has received four groups of institutional surveys, involving as many as 44 institutions. The company said in the survey that the 403 million yuan semiconductor silicon wafer procurement project won this time will help the company further expand the industrialization scale of semiconductor equipment and maintain the company's technological advancement and market leadership in semiconductor silicon crystal growth and processing equipment.

In addition, companies such as Nasdaq and Allwinner Technology have received more than 10 research institutions since July.

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