Domestic and foreign capital have increased their positions simultaneously, and "semiconductor equipment" has stood on the industry outlet! Manufacturers have increased production and are optimistic about demand
Recently, the Shanghai and Shenzhen markets have increased the pressure of profit-taking, the Shanghai Index has returned to around 3000 points, the semiconductor adjustment that has rebounded more in the early stage has been larger, and the underlying index of the semiconductor equipment ETF (561980) in the heavy position "equipment" link has been three consecutive yin, and the increase has retraced to -6.63% as of the 27th, but it is still in the forefront of the mainstream semiconductor theme index of A-shares.
In the face of another adjustment of the market, is it worth continuing to pay attention to the upstream equipment sector that benefits from the rebound of the semiconductor industry?
The demand for domestic semiconductor equipment continues to increase
According to the latest data from the General Administration of Customs of China, the total amount of domestic imports of semiconductor front-end equipment from January to February 2024 reached US$4.55 billion, an increase of 84% from US$2.47 billion in the same period last year and a new high in the past five years.
Figure 1: Chinese mainland's semiconductor front-end equipment import value and year-on-year growth rate
Data source: General Administration of Customs, Western Securities R&D Center
Zheshang Securities believes that with the gradual arrival of key imported equipment, the bidding for domestic semiconductor equipment will gradually follow. According to historical data, when the import volume of domestic semiconductor equipment grows rapidly, self-supplied semiconductor equipment will also follow the rapid increase.
Figure 2: China's semiconductor equipment imports and domestic equipment
Data source: Xinmou Research, Western Securities R&D Center, time range: 2020-2024. Among them, the data for 2024 is forecast.
Shenwan Hongyuan believes that under the influence of overseas restrictions, domestic semiconductor equipment is expected to achieve a higher share in the expansion of domestic advanced manufacturing processes, and the overall sales of domestic semiconductor equipment can be expected to increase significantly, and the valuation highlights the cost-effective configuration.
Foreign capital has increased the allocation of high-quality semiconductor equipment
Since the fourth quarter of 2023, foreign investors have increased their allocation to the A-share semiconductor sector. Wind data, as of March 27, the market value of foreign investment in Shenwan's electronic sector reached 170.9 billion yuan, ranking among the top 3 in the 31 Shenwan first-class industries, and the proportion of market value held in the total market value of the electronics sector increased to 2.54%, a new high in one year.
Figure 3: Foreign-owned electronics sector as a percentage of total market capitalization (%)
Data source: Wind, data range: 2023.03.24-2024.03.27
Mutual funds significantly overweight the semiconductor sector
Mutual funds also favor the semiconductor sector.
Figure 5: Mutual funds' holdings and overweights in the semiconductor sector
Source: Wind, Huatai Research, as of 2023.12.31, Note: The constituent stocks of the semiconductor sector are based on the Huatai Industry Classification
It can be seen that foreign capital and public funds are more favored by the semiconductor sector, and they all choose to deploy high-quality core leaders against the trend before the market stabilizes, perhaps with long-term ambitions.
Keeping up with the footsteps of institutions and laying out a "basket" of semiconductor core assets, investors can pay attention to the CSI Semiconductors Index. The index focuses on high-quality leading stocks of semiconductor equipment, while covering core companies in the upstream industry chain such as semiconductor design and materials.
The Semiconductor Equipment ETF (561980) is currently the only ETF tracking the CSI Semiconducting Index, or can continue to track attention. From the perspective of the industrial chain, the upstream semiconductor equipment and materials have a broad space for domestic production, and continue to be highly valued and supported by the national industrial policy.
Risk Warning: Funds are risky and should be cautious when investing. The above views, opinions and ideas are based on the current situation and are subject to change in the future. Past performance of a fund is not indicative of its future performance, and the performance of other funds managed by the fund manager does not constitute a guarantee of the performance of the fund. Investors should carefully read the "Fund Contract", "Prospectus", "Product Key Facts Statement" and other fund legal documents, fully understand the risk-return characteristics of fund products, and make independent decisions on fund investment and choose suitable fund products based on their own risk tolerance, investment period and investment objectives on the basis of understanding the product situation and listening to the suitability opinions of the sales agency. For the above views or information quoted from securities companies and other external institutions, we do not make any substantive guarantee or commitment to the authenticity, completeness and accuracy of such views and information, nor do they constitute investment recommendations.
The performance of the CSI Semiconductor Industry Index in the past five years is 85.59% (2019), 83.00% (2020), 30.00% (2021), -29.65% (2022), and -3.90% (2023) respectively. The CSI Semiconductor Industry Index is compiled and published by China Securities Index Co., Ltd. The Compiler of the Index will take all necessary measures to ensure the accuracy of the Index, but does not guarantee this and will not be liable to any person for any errors in the Index. Past performance of the Index is not indicative of future performance and does not constitute a guarantee of investment income or any investment advice. Indices operate for a relatively short period of time and do not reflect all stages of market development.
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