A-share Evening Highlights | Are essays coming back? US stocks see a collective surge in optical communication.

Evening Highlights of Major News 1. Another Short Essay? U.S. Stocks in the Optical Communication Sector Surge Importance: On August 4, a short essay regarding the FCC's ban on optical modules went viral, as the U.S. showcased logic for domestic alternatives. Following the announcement, Corning's stock jumped 8% in pre-market trading, Coherent soared 14%, and Lumentum rose by 11%. Market discussions feature both bullish and bearish perspectives. Bulls argue that the core function of optical modules is to convert optical signals and do not handle business data storage, making the FCC's security rationale unfounded according to sources. Moreover, U.S. optical module manufacturers cannot replace China's production capacity, especially in high-end optical modules. Currently, domestic leaders significantly surpass their overseas counterparts in aspects such as technological prowess, product development, cost control, and production layout, making it impossible to bridge the gap in the short term. Bears contend that sanctions are unrelated to the company's origin; otherwise, Huawei could simply establish an overseas factory to evade them. Additionally, supply chain risks should have been priced in long ago, with the likes of Zhongji Innolight, Eoptolink Technology Inc., and WuXi AppTec previously named by the U.S., with only WuXi AppTec experiencing a sharp decline, showing that optical modules were unaffected. WuXi AppTec's stock fell to single-digit PE ratios during its peak controversies, and despite substantial growth in performance, it has only reached a 10+ PE now. Thus, asserting risks regarding the security of optical modules and the establishment of factories in Thailand proves to be pointless. 2. Expanding Medium- and Long-term Liquidity, Central Bank to Conduct 500 Billion Yuan Reverse Repo Importance: On August 4, the People's Bank of China announced a tender for a fixed amount and rate 500 billion yuan reverse repo to maintain sufficient liquidity in the banking system. This will occur on August 5, 2026, with a maturity period of three months (92 days), expiring on November 5, 2026 (extended in case of holidays). Wang Qing, Chief Macro Analyst at Dongfang Jincheng, noted that macro policies in the second half of the year will shift towards stable growth, including accelerating government bond issuance and promoting the effectiveness of 800 billion yuan of new policy financial instruments. Meanwhile, the likelihood of a rate cut in the short term remains low. 3. Mandatory National Standard for "Intelligent Connected Vehicles: Safety Requirements for Autonomous Driving Systems" Officially Released Importance: On July 30, 2026, the mandatory national standard for "Intelligent Connected Vehicles: Safety Requirements for Autonomous Driving Systems" (GB 447212026), organized and filed by the Ministry of Industry and Information Technology, was approved and published by the State Administration for Market Regulation and the National Standardization Administration. It is set to be officially implemented on July 1, 2027. Guotai Haitong believes that technology iterations and commercialization in the smart driving sector are advancing in sync, accelerating commercialization and focusing on relevant hardware and services such as drive-by-wire chassis, intelligent driving domain control, sensors, testing, and leading OEMs and algorithm companies in intelligent technology. 4. STO Express Co., Ltd. Under Investigation, Public Company Expected to Report Profit Exceeding 950 Million Yuan in First Half Importance: This year, multiple companies operating express services under the "STO Express Co., Ltd." trademark have repeatedly faced production safety accidents, and many safety hazards have been uncovered during inspections. STO Express Co., Ltd. has been found lacking in safety production management related to associated enterprises and has failed to implement unified safety assurance management as required. Consequently, the National Postal Administration has lawfully launched an investigation into STO Express Co., Ltd. Earlier announcements show that the listed company expects a net profit attributable to the parent company in the first half of the year to be between 950 million yuan and 1.06 billion yuan, representing a year-on-year growth of 109.59% to 133.85%. 5. China Successfully Launches 23 Low Earth Orbit Satellite Internet Satellites Importance: According to Xinhua News Agency, at 16:52 on August 4, 2026, China successfully launched 23 low Earth orbit satellites for internet services using the Long March 8 carrier rocket at the Hainan Commercial Space Launch Center. The satellites entered their planned orbits smoothly, marking a successful mission. This task validated several key technologies, optimized the rocket launch site operations, significantly enhancing overall measurement and launch efficiency; for the first time, it achieved a "Direct Express" function, saving several months of orbit-raising time for the satellites. 6. Major News in U.S.-Iran Negotiations Causes International Oil Prices to Plummet Importance: U.S. Treasury Secretary Scott Pelley indicated in an interview that the U.S. and Iran may reach an agreement as soon as Tuesday or Wednesday to reopen the Strait of Hormuz, ensuring the freedom of navigation for merchant ships. Following this news, international oil prices fell, with WTI crude oil futures down by as much as 4%. 7. New Margin Trading Accounts Opened in July: 139,400, Down 22.12% Month-on-Month Importance: Recently, China Securities Data Limited revealed that 139,400 new margin trading accounts were opened in July, a year-over-year increase of 12.78% but down 22.12% month-on-month. By the end of July, the total number of margin financing and securities lending accounts across the market reached 16.5844 million. 8. Shanghai Stock Exchange: A-Share New Accounts in July Reach 2.6554 Million, Up 35% Year-on-Year and Down 7.3% Month-on-Month Importance: Data from the Shanghai Stock Exchange indicates that 2.6554 million new A-share accounts were opened in July 2026, a decrease of 7.30% compared to the previous month but an increase of 35.23% compared to 1.9636 million accounts in July 2025. The cumulative number of new accounts opened in 2026 reached 22.8168 million, representing a year-on-year growth of 56.69%. Opportunity Preview Based on a review of market-focused investment opportunities, the selected sectors include chips and semiconductors. 1. CoWoS Packaging Capacity is Strained; TSMC to Further Expand Outsourcing Capacity NVIDIA's GPU orders have pushed TSMC's packaging lines to their limits, forcing TSMC to outsource the CoWoS (Chip on Wafer) packaging capacity, which is critical for AI chip manufacturing, to testing and packaging vendors such as ASE. CoWoS is TSMC's 2.5D packaging technology used for AI chips, placing the AI processor at the center, with HBM surrounding it via an intermediary layer. Sinolink is optimistic about the high demand for CoWoS-L packaging and semiconductor materials. The explosive demand for AI computing power has led to noticeable "AI crowding out" within the testing and packaging industry, with the five major domestic testing and packaging firms projected to have an average revenue growth rate of 21% by 2025, with more significant improvements in net profit. Guotai Haitong points out that while chip performance enhancements have historically followed Moore's Law, the increasing marginal costs associated with advanced chip fabrication processes mean that advanced packaging is becoming an essential avenue for improving chip performance in the future. In addition, the following sectors also warrant attention: 2. Copper | Copper prices have broken through the $14,000 barrier, as U.S. imports tighten global supply. 3. Artificial Intelligence | The Korean National Artificial Intelligence Computing Center, led by Samsung SDS, has officially commenced operations. Positive and Negative Announcements from Listed Companies On the positive side, attention should be paid to Fengzhushou signing a massive 4.608 billion yuan power order, among other announcements; on the negative side, be aware of Anhui Conch Cement's shareholders reducing their stakes in the company. Positive Announcements 1. Fengzhushou: Signed a 4.608 billion yuan power order, laying out plans for power leasing and token operations in new formats. 2. Zhejiang Meili High Technology: Plans to raise no more than 585 million yuan through private placement for projects including intelligent suspension systems. 3. Dajin Heavy Industry: Signed a shipbuilding contract worth about 1 billion yuan with a Norwegian shipowner. 4. Willfar Information Technology: Won a total of 80.9602 million yuan in projects during July. Negative Announcements 1. Shenyang Cuihua Gold and Silver Jewelry: Major shareholder Guo Yingjie, acting in concert with parties holding over 5% of shares, has been placed under investigation by the CSRC for suspected violations of information disclosure regulations. 2. Shenzhen Zhongjin Lingnan Nonfemet: A caving accident occurred at the Fankou lead-zinc mine, resulting in one fatality; production has been halted. 3. Anhui Conch Cement: Controlling parties holding over 5% of shares have reduced their stake by 0.1766%. 4. TSI Group Co., Ltd.: Shareholders plan to collectively reduce their holdings by no more than 3%. This article is reproduced from "Tencent Self-selected Stocks", edited by Xu Wenqiang.