Southern Asset Management's Liu Wenliang said China's equity market appears to
be in the late stage of bottoming. Major sectors' pullbacks from highs are near
historical single-cycle extremes and core-company valuations have largely been
digested, with policy support and fresh inflows expected to reinforce one
another. Disruptions are fading: the first overseas CSP major's results did not
falsify the industry's recovery trend, and a domestic memory leader is scheduled
to list next week, which should narrow fund diversion. Liu expects technology to
be decisive in Q3 and anticipates funds refocusing on tech led by memory names.
Industry signals: Q3 server DRAM contract prices remain in an uptrend, HBM
supply is tight, and price rises are likely to spread from memory makers to
equipment, components and materials. Capex signals are supportive — TSMC has
raised annual CAPEX, ASML has twice upgraded guidance this year, and SEMI
forecasts 23% YoY growth in global equipment sales in 2026. Domestic memory
firms are raising large funding for capacity expansion; local equipment and
component suppliers are benefiting from upgraded orders and longer overseas lead
times that accelerate substitution and price upside. Liu said market
participants should dynamically track domestic and offshore model-level
progress; if continuous learning and a data–model flywheel materialize,
commercialization upside could reopen.
