Hong Kong, Jan 26, 2026, 08:18 HKT — Premarket
- Mainland chip shares start the week with policy and trade headlines back in focus
- Leverage data reveals margin traders trimmed their exposure in China Resources Microelectronics following a volatile week
- Upcoming milestones to watch are China’s position on importing high-end AI chips and the schedule for the company’s annual report
China Resources Microelectronics Ltd’s Class A shares on the Shanghai exchange (688396.SS) closed Friday up 1.5% at 65 yuan, pushing the stock close to the upper boundary of its recent trading range ahead of Monday’s open.
Timing is crucial here as the chip sector reacts once more to headline risks, beyond just earnings reports. Nvidia CEO Jensen Huang spent the weekend in Shanghai while the U.S. firm awaits Beijing’s decision on whether it can sell its H200 AI chip to customers in China, Reuters reported.
Uncertainty often seeps into A-share semiconductor stocks as traders grapple with what “support domestic champions” actually entails. Stricter import controls could fuel optimism for local substitution, yet a swift rollback can quickly reverse the sentiment.
China Resources Microelectronics operates across the chip supply chain, covering power semiconductors plus wafer manufacturing and packaging and testing. It doesn’t supply AI GPUs, but it’s part of the broader hardware ecosystem that investors frequently trade as a group.
The stock surged 13.0% on Jan. 16, hitting 68.20 yuan, and even climbed to 70.48 yuan during intraday trading. It then dropped 6.0% on Jan. 19, per Investing.com historical data.
Leverage played a role here. Data from Eastmoney Choice revealed that on Jan. 23, the stock saw a net margin-financing repayment of roughly 68.1 million yuan, leaving outstanding margin financing at about 10.77 billion yuan. Securities lending stayed relatively minor. Margin financing, which involves borrowed funds to buy shares, often signals profit-taking or stricter risk controls when it declines.
Valuation leaves almost no margin for a calm quarter. Morningstar data shows shares trading at a triple-digit normalized price-to-earnings ratio, a stretch that can amplify reactions to guidance shifts, margin changes, or any signs of weakening demand in power devices and foundry utilization.
Within the broader competitive landscape, investors often shift between mainland foundry and device stocks whenever policy discussions highlight self-reliance—typically reallocating capital within the same pool instead of injecting new risk.
There’s a clear two-way risk here. Should China open the door wider to high-end foreign AI chips, the push for “domestic substitution” in local semiconductor stocks could lose steam. On the flip side, if Beijing clamps down harder, it might boost homegrown firms—but also cast doubt on end-demand, order timing, and export risks.
Traders focusing on China Resources Microelectronics will be looking out for any early-year trading updates and how leverage stabilizes following recent volatility. The next key date is the company’s 2025 annual report release, set for April 25, per Eastmoney’s stock calendar.
