Preface

Investment analysis reports from Jinqilin empower your stock market strategies with reliable, professional, and timely data, helping you capitalize on potential thematic opportunities. Today's market focus is on the Rising Bank Stocks, where significant gains are followed by impressive moves in the rare earth and pharmaceutical sectors.

Lazy bag

A-morning on July 10 marked a notable increase in banking stocks, with rare earth and pharma shares also rising prominently amid market fluctuations.

Main Body

On the morning of July 10, the A-share market exhibited slight volatility. By midday, the Shanghai Composite Index rose by 0.36%, the Shenzhen Component Index by 0.02%, while the ChiNext Index fell by 0.3%. The total market transacted value reached 934.47 billion yuan, slightly less than the previous day. Out of the stocks available, 3114 declined, and 2037 rose.

Notably, the rare earth sector erupted with strong performances, and the financial sector actively contributed to the market strength, with other segments like silicone, photovoltaic, and innovative drugs experiencing upticks. Conversely, sectors such as automotive, media, and defense faced downturns.

The Hong Kong stock market also followed this fluctuating pattern. By noon, the Hang Seng Index increased by 0.09%, the Hang Seng China Enterprises Index by 0.3%, while the Hang Seng Tech Index dropped by 0.44%. Among the Hang Seng constituents, Sunny Optical Technology led with an impressive gain of over 6%.

Focusing on the rare earth domain, shares soared with Northern Rare Earth reaching a limit-up before noon, closing at 27.01 yuan with a market cap of 97.6 billion yuan. The morning's transaction volume was a staggering 7.356 billion yuan, topping the A-share market for the day.

In a significant announcement, Northern Rare Earth projected a substantial increase in its semi-annual net profit attributed to shareholders, anticipating a growth range of 1882.54% to 2014.71% compared to the previous year's statutory disclosure data. It also noted a 17.34% rise in market value in the first half of the year, leading in the rare earth permanent magnet sector, with its stock newly included in the CSI A50 Index—a testament to its rising capital market prominence and investment allure.

Alongside Northern Rare Earth, other rare earth-related stocks like China Rare Earth, Zhongke Magnetic, JL Mag Rare-Earth, Baogang Group, and Ningbo Yunsheng showed remarkable price increases.

On the financial forefront, notable growth was observed in bank stocks by the morning, providing substantial support to the overall market. With a more than 5% increase, Minsheng Bank led the bank stocks group, followed by record highs from major banks like Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, alongside Huaxia Bank, Zhengzhou Bank, and Ping An Bank.

In the Hong Kong market, the banking sector ascended synchronously, highlighting Zhengzhou Bank with a rise of over 6% and significant gains from Shengjing Bank, Zhongyuan Bank, and Minsheng Bank.

Dai Zhifeng, head of Zhongtai Securities Research Institute and banking analyst, commented on the weak cyclical attribute of banking stocks in both their fundamental and investment appeal. According to him, the dependable yields of bank stocks hold attractiveness as risk-free rates decline. Following "reciprocal tariffs," optimism remains for the banks' robust performance and sustainability.

The pharmaceutical sector exhibited localized surges, energized particularly in innovative drugs, with stocks such as Qianyuan Pharmaceuticals hitting a 20cm limit-up, alongside impressive performances from Yuheng Pharmaceutical, Lianhuan Pharmaceutical, Kangchen Pharmaceutical, Sely Medical, and Haisco.

Donghai Securities research emphasizes that with the rollout of commercial insurance lists, enhanced payment avenues, and a proliferation of innovative drugs on the market, the innovative drug sector is poised for major growth phases. As major BD transactions flourish and products attain overseas launches, with international competitiveness and renown climbing, the scope and opportunity in overseas markets are anticipated to expand continually. Investors are advised to monitor opportunities within the innovative drug chain, device equipment, traditional Chinese medicine, chain pharmacies, and medical services subsectors.

Key Insights Table