HK Stock Market Move | Chip stocks continue recent upward trend. Three major funds join hands with Shanghai state-owned assets to strengthen AI industry. Domestic semiconductor substitution remains a long-term trend.

Chip stocks continued their recent rise, as of the time of writing, Semiconductor Manufacturing International Corporation (00981) rose by 3.68% to 40.85 Hong Kong dollars; HG SEMI (06908) rose by 3.13% to 0.66 Hong Kong dollars; SOLOMON SYSTECH (02878) rose by 3.09% to 0.5 Hong Kong dollars; SHANGHAI FUDAN (01385) rose by 0.54% to 15 Hong Kong dollars. On the news front, on January 17th, the National Artificial Intelligence Industry Investment Fund Partnership Enterprise (Limited Partnership) was established with a capital contribution of 60.06 billion yuan. The enterprise was jointly funded by State Integrated Circuit Industry Investment Fund Phase III Co., Ltd. and Guozhi Investment (Shanghai) Private Equity Fund Management Co., Ltd. Huaxin Securities believes that computing power chips and storage chips will become key nodes in the industry chain. In addition to continued investment in semiconductor equipment and materials, the National Big Fund Phase III may also focus on HBM chips as a key investment direction. Furthermore, according to media reports, newly inaugurated U.S. President Trump signed an executive order on the 20th of January, repealing nearly 80 policies of the Biden administration. Tianfeng had previously pointed out the changes in U.S. semiconductor policy towards China before and after the change of Presidents. The bank believes that external geopolitical restrictions on China's semiconductor industry will accelerate the development of the local industry chain. Domestic substitution will be a long-term trend, with a more urgent need for domestic substitution in the fields of artificial intelligence/advanced processes. There are great opportunities for the development of the local industry chain, and the bank recommends paying attention to investment opportunities in related areas.