Preface

This article examines the sharp divergence in China’s equity market as AI-related names soar while a large group of stocks have suffered prolonged declines. The goal is to present a clear, fact-based summary of recent market moves: the rapid appreciation of stock 688519 (Nanya New Materials), drivers behind the rally in AI and adjacent industrial chains, and the profile of over 110 A-share companies that have experienced continuous multi-year share-price drops. Readers will find concise data on company fundamentals, sector dynamics, pricing pressures in the supply chain, and institutional attention, enabling a balanced understanding of why some names surged and others languished.

Lazy bag

Key takeaways: 688519 briefly surpassed CNY 400/share, producing an intraday rise that equates to more than 20x from its January 2025 low. The AI ecosystem — including fiberglass, glass substrates, and PCB-related firms — led a broad rally. Meanwhile, more than 110 stocks have recorded declines spanning five years or longer, concentrated in property and some large consumer names. Supply-cost pressures (notably copper and fiberglass) and price adjustments in the PCB supply chain amplified winners; these contrasts spotlight market bifurcation and potential rotation opportunities.

Main Body

The Chinese equity market recently displayed pronounced dispersion between high-growth technology and AI-related names on one hand, and numerous legacy or cyclical firms on the other. On June 17, the AI supply chain drove strong intraday momentum across segments such as fiberglass, glass substrates, and printed circuit board (PCB) materials. More than 200 stocks rose over 5% that morning, and several companies hit daily price limits. Among the most notable moves was 688519 (Nanya New Materials), which closed above CNY 400 per share at midday and reached an intraday high near CNY 409, a new historical peak. When compared with the low recorded in January 2025, the stock’s peak performance represents a >20-fold increase.

688519 is a domestic high-tech enterprise focused on the design, research and development, manufacturing and servicing of composite materials such as copper-clad laminates (CCL) and prepregs. The company reported robust operating results in its most recent quarterly disclosure: first-quarter revenue grew by over 92% year-on-year, and attributable net profit rose by more than 610% year-on-year. Such fundamental improvements, combined with a favorable end-market environment tied to electronics and AI-capable hardware, help explain investor enthusiasm.

At the same time, industry cost dynamics played a material role. Major suppliers in the PCB and laminate chain — including leading CCL manufacturers — issued price increases. Elevated copper prices, sustained rises in fiberglass cloth costs, and constrained supply pushed up production costs for FR-4 and related materials. Some suppliers announced price hikes of roughly 15% across FR-4 and PP products, which can both bolster supplier margins and accelerate revenue growth for vertically exposed manufacturers, depending on pass-through speed and demand resilience.

Despite these pockets of strength, the broader market shows persistent weakness among many stocks. Data aggregators identify more than 110 A-share companies whose stock prices have fallen for five consecutive years (counting the current year-to-date performance). Several entertainment and education names have been stressed for much longer: two film-related companies have logged 11 consecutive years of declines. From a cumulative decline perspective, delisted and distressed names show the largest drops, with some declines near 90% or more. Other sizable names have also experienced prolonged losses, with cumulative declines exceeding 80% in several cases.

Interestingly, some of the deeply depressed names still retain large market capitalizations. Four A-share companies listed among the five-year decliners maintain market values above CNY 100 billion: Mindray Medical, Shanxi Xinghuacun Fen Wine, Jinlongyu (a major edible oil business), and Luzhou Laojiao. The five-year deterioration is concentrated in sectors that bore the brunt of China's structural shifts — notably real estate and parts of the large-consumer complex. Real-estate-linked firms such as Vanke A and Greenland Holdings remain on the list of multi-year decliners.

Broker commentary suggests the property cycle may be gradually stabilizing. Some securities firms observed that May real-estate sales declines narrowed, core-city secondhand transactions picked up, and listings fell — signs that supply-demand dynamics may be slowly improving. If demand recovery continues, valuation repair in select property-related and construction chains could follow. However, the timing and extent of recovery are uneven across regions and developers.

In large-consumption staples — notably Baijiu (white spirits) — names such as Shanxi Xinghuacun Fen and Luzhou Laojiao have also traded lower for multiple years. Research houses note the sector moved from a sharper downturn into a phase of moderating decline, with the market now testing whether a bottom is forming ahead of the seasonal peak period. Analysts advise that, while seasonality and product premiumization support long-term prospects, short-term volumes and channel inventories still weigh on near-term financials.

Institutional coverage patterns are instructive for identifying potential reversal candidates. Dozens of firms among the long-decliners still receive multi-firm analyst coverage: roughly 20-plus stocks have ten or more institutional ratings, while another subset has between five and nine. High analyst coverage does not guarantee an imminent rebound, but it can signal persistent attention from funds and brokers that could catalyze interest if sector fundamentals or liquidity conditions improve. Shanxi Xinghuacun Fen, for example, had the highest coverage count among the group, with over thirty institutional ratings.

For investors, the contrasting narratives — explosive growth and valuation expansion for AI and materials leaders versus prolonged erosion in older cyclical and consumer names — underscore the importance of rigorous stock-selection and risk control. Key considerations include: 1) verifying whether revenue and profit acceleration are sustainable and supported by end-market demand, 2) assessing supply-chain cost dynamics and the degree to which price increases can be passed through, 3) tracking channel inventory and seasonality for consumer categories, and 4) watching liquidity and institutional positioning that could amplify moves in either direction. Market rotation is possible, and selective exposure to high-quality names in both the winners and the beaten-down cohort may be appropriate depending on risk tolerance.

In summary, the market’s current state reflects a bifurcated landscape. Names like 688519 benefit from strong secular demand tied to electronics and AI infrastructure and favorable cost pass-through, enabling dramatic price appreciation. Simultaneously, a sizable group of companies continues to endure multi-year share-price declines driven by structural sector challenges, cyclicality, and stretched fundamentals. Careful bottom-up analysis and attention to evolving macro and sector signals are essential for navigating this environment.

Key Insights Table

Note: This article summarizes market developments and public data. It is not investment advice. Investors should conduct their own research and consider their risk profile before making decisions.