'Delayed Justice': Largan, Alchip, Shang Chuan, Winbond, HC SemiTek, 'Aunt Xue'?

I. Market Trends and Technical Structure

Index Performance

• The Taiwan stock market opened high and continued to rise, closing up 1,250 points at 44,611.

• Intraday, the index surged 1,619 points, reaching a high of 44,980, but faced resistance at the 45,000 psychological level.

• The index successfully reclaimed both the monthly and quarterly moving averages, signaling a key bullish reversal.

Trading Volume and Market Momentum

• Trading volume expanded to approximately TWD 1.15 trillion, indicating clear capital inflow.

• Foreign investors bought a net TWD 90.3 billion, becoming a major driver of the short-term rally.

Technical Analysis

• After the previous sharp correction of over 8,800 points, the market has completed an 'accelerated bottoming' process.

• Moving averages have turned into support (10-day MA rising), reducing downside risks in the short term.

• The 45,000–46,000 range remains a resistance zone, likely leading to short-term consolidation.

II. Macroeconomic and Fundamental Outlook

Strong Economic Data

• Taiwan's Q2 GDP grew by 13.72%, reflecting robust economic momentum.

• UBS raised its full-year GDP forecast to 11%, potentially the highest since 1987.

Corporate Earnings Outlook

• Most listed and OTC companies are expected to report record-high Q2 earnings.

• Fundamentals remain solid, indicating the market is not in a bearish structure.

III. Positioning and Capital Structure

Deleveraging Completed

• Margin debt decreased significantly by TWD 137.4 billion, showing market positions have stabilized.

• Overheated capital in AI-related stocks has been effectively cleansed.

Shift in Foreign Investor Sentiment

• Foreign investors have shifted from net sellers to buyers, showing signs of 'wrong-way position correction'.

• Positioning has improved from unstable to favorable, supporting the continuation of the rebound.

IV. Industry Trends and AI Development

AI Investment Concerns Easing

• Strong earnings from Microsoft and Amazon confirm that AI investments are starting to generate returns.

• Market concerns over 'excessive AI capital spending' are gradually subsiding.

AI Industry Still in Early Growth Phase

• Institutional investors widely believe AI infrastructure is still in the early expansion phase.

• Investment focus is shifting from training to inference and enterprise applications.

Beneficiary Industries Expanding

• Core: Foundry, ASIC, Advanced Packaging

• Extended: Networking Equipment, Memory, Power Management

• Peripheral: Thermal Solutions, Servers, PCBs, Optical Communications

V. Sector and Stock Selection

Semiconductors Remain Central

• TSMC (2330-TW), UMC (2303-TW): Core foundry players

• ASE Group (3711-TW): Beneficiary in packaging and testing

• MediaTek (2454-TW), Grace Semiconductor (3443-TW), Alchip (3661-TW): Growth drivers in ASIC

AI Supply Chain Rotation Continues

• Upstream Materials: Copper Clad Laminate, IC Substrates, Quartz Components

• Hardware Equipment: Servers, Rails, Cooling, Power Supplies

• Advanced Technologies: CPO, Optical Communications

VI. Market Outlook

Short-Term (August)

• Expected range: 42,000–46,000 points

• Pattern: Sideways consolidation with stock rotation

• Characteristics: Consolidation to build a base, trading time for space

Medium-Term (September–Q4)

• If negative factors are fully digested, the index may challenge new highs

• Catalysts: U.S. election momentum and year-end speculative season

VII. Investment Strategy Recommendations

Core Strategy

• Trim weak positions, focus on fundamentally strong and trend-growth stocks

• AI remains the dominant theme

Entry/Exit Principles

• At 45K–46K resistance zone: Trim weak stocks on rallies

• On pullbacks: Accumulate strong AI-related stocks

Risk Management

• Strictly follow 'buy low, don’t chase high'

• Control position sizing and capital allocation

• Monitor short-term volatility and market sentiment recovery

Conclusion:

The Taiwan stock market has shown clear signs of bottoming, supported by capital inflows and improved positioning. In the short term, it is entering a consolidation phase. Given that the long-term AI trend remains intact, the outlook remains positive. However, investors must focus on stock selection and timing to capture excess returns amid rotational markets.

Fundamentals have improved significantly

But stock prices were severely oversold

Those who sold out of panic

Will miss out when prices rebound

Simply put: Buy high-quality stocks in deeply corrected industries

Optics → Largan, ASIC → Alchip

Fiberglass → Jianrong, Robotics → Yiden

Memory → Winbond⊕, Passive Components → Yageo

Silicon Photonics → Shang Chuan, HC SemiTek⊕

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Was identified early with strong growth themes

We guided members to position at lows

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Source: Analyst Chen Hsueh-Chin, Luen Yuan Investment Advisory

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Have no improper financial interests. Past performance does not guarantee future profits.

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