Preface

In an unexpected turn of events, the Shanghai Composite Index surged beyond the 3800-point mark on August 22, reaching its highest level in a decade. This impressive rally reflects a broader bullish momentum sweeping across both domestic and international markets.  The day’s market movement signifies a crucial phase in the bullish cycle of Chinese equities.

Lazy bag

The Shanghai Composite Index, buoyed by key sectors, reached heights unobserved for ten years.  Key drivers include a surging semiconductor sector and strong brokerage performances.

Main Body

The Chinese stock market experienced a significant upswing as the Shanghai Composite Index surpassed the 3800-point level during an afternoon trading session on August 22. This milestone marks the index's highest point in a decade, driven by notable performances in various sectors.

The Shenzhen Component Index advanced over 1.5%, while the ChiNext Price Index climbed more than 2.5%. The Science and Technology Innovation Board Index (STAR 50) also showed remarkable gains, surging nearly 7% as of the report's release.

Among the standout sectors, brokerage firms saw substantial increases, with most stocks in the segment displaying upward momentum. Cinda Securities hit the limit up, while Everbright Securities surged by over 7%. Additionally, the semiconductor sector demonstrated robust activity in the afternoon. Notably, stocks such as Hygon Information Technology and ACM Shanghai reached there limit up, and Cambricon Technologies saw its stock price soar above 1200 CNY, presenting a more than 15% increase, lifting its market capitalization to over 500 billion CNY. Other semiconductor firms like Xin Yuan Microelectronics and JH President saw significant gains as well.

On the Hong Kong Stock Exchange, the Hang Seng Index rose more than 0.2%, with the Hang Seng Tech Index climbing over 1.6%. Leading contributors to these gains included Hua Hong Semiconductor, soaring more than 12%, along with XPeng Motors and ZTE Corporation each climbing over 10%. Additionally, NIO Inc. and SMIC experienced strong rallies, climbing over 7% and 6% respectively, while China Biopharmaceutical increased by over 5%.

The FTSE China A50 Index also showcased a steep incline, posting a rise of over 0.8% by the report's release.

According to Huaxi Securities, the Chinese A-share market continues to exhibit ample opportunities and prospects. They highlight several contributing factors to this market's vibrancy. Firstly, despite increasing global trade uncertainties, China's robust economic resilience is gaining more international acknowledgment. After the tariff shocks in April, high-risk capital promptly entered the A-shares.

Secondly, the household sector has accumulated significant excess savings, pointing towards abundant potential incremental funds. By mid-2025, household savings are expected to divert approximately 50 trillion CNY upwards from the 2011-2019 trend line, implying massive potential incremental capital for the stock market.

Thirdly, the new bullish market phase has heightened household risk appetites. However, compared to historical averages, both the total market capitalization/A-share market free-float market cap to household savings ratios remain at relatively low levels, suggesting that the 'migration' of household savings is still in its early stages. Should the capital market's dynamism further unfold, a positive feedback loop of 'investment funds entering the market and gradual stock market uptrends' could ensue, fostering this 'savings migration' phenomenon.

Key Insights Table

Aspect	Description
Market Performance	Shanghai Composite Index reached 3800 points, highest in ten years, boosted by multiple sectors.
Sector Contributions	Brokerage and semiconductor sectors were key contributors to the rise, with specific stocks hitting high gains.
International Recognition	China's economic resilience increasingly acknowledged worldwide, attracting higher-risk capital investments.

Last edited at：2025/8/23