[Red envelope] Old tech—optical modules: standing guard at high levels is really suffering; New space—big relay: computing power reaching the sky is truly impressive—July 12 in-depth recap

Daily Re-Cap: The old main trend collapses at high levels—who will take over the new main trend? [Taoguba]

July 12, 2026 | Market Core Logic Breakdown

Key Takeaway: The signal conveyed on July 10 was extremely clear—high-level tech stock group trading has officially broken apart. Funds have massively rotated out of crowded sectors such as semiconductors and optical modules, while the commercial aerospace sector saw 90+ limit-up moves in a single day. Aerospace equipment recorded net inflows of RMB 2.98B, becoming a new capital “reservoir.” But the real expectation gap isn’t about “rocket recovery” itself—it lies in how the new scenario of a space data center redefines the industrial space of commercial aerospace. Goldman Sachs has raised its forecast for LEO satellite deployments in 2031 from 42k to 305k (+634%). The core driving force has shifted from satellite communications to orbital compute power. This is a valuation reconstruction from the one-trillion scale to the ten-trillion scale.

1. Core Market Signal: Extreme Polarization—Ice and Fire in the Same Market

Index Level

The Shanghai Composite fell below 4,000 points (-1%). The Shenzhen Component dropped 2.29%, the ChiNext Index fell 4.37%, and the STAR 50 plunged 5.53%. On the surface, it looks like “selling with volume.” In reality, it’s a chip-cleansing process from high-level tech weights.

Stock Level

More than 3,700 stocks rose, with 94 hitting the daily limit. Indices were weak while individual stocks were strong—this is a typical structure of “group trading breakdown + small/mid-cap activity.” It’s not systemic risk; it’s a style rotation.

Capital Flow Level

Total trading across both markets was RMB 3.41 trillion, up RMB 478.4 billion from the prior day’s volume. This week, main fund net outflows totaled RMB 59 billion. The electronics sector was sold off, losing RMB 23.4 billion. Gigadevice (兆易创新) saw a trading value of RMB 59.4 billion in a single day with a 15.19% intraday swing. In sharp contrast, the aerospace equipment sector recorded net inflows of RMB 42k (No. 1 across the industry). The Yongying Satellite ETF had net subscriptions of RMB 305k in a single day, setting an in-year record.
Core qualitative assessment: This isn’t a bear market selloff—it’s a handover of the main trend inside a bull market. The old main trend (semiconductors/optical modules) reached maximum overcrowding and is inevitably being cleared. The new main trend (commercial aerospace/innovative drugs) is absorbing the rotated-out liquidity.

2. S-Class Event Review: Three Big Things That Can Change Industrial Logic

First: Long March 1.8B achieves global first successful net-based recovery

This isn’t “China’s first.” It’s “the world’s first.” China becomes the second country globally after SpaceX to master heavy-lift reusable rocket technology at scale. The net-based recovery uses China’s original “aerodynamic rudder + net-based soft recovery” scheme, creating a technical route differentiation versus SpaceX’s vertical recovery. Launch costs are reduced by more than 40%, directly unlocking the capacity bottleneck for “ten thousand rockets and millions of satellites.”

Second: Goldman Sachs raises LEO satellite deployment forecast by 634%

From 42k units to 305k. The key variable isn’t satellite internet communications, but space data centers. In parallel, Musk’s “Starbrain” orbital data center plan (million-satellite scale) directly responds to how AI compute power is squeezing Earth’s energy, land, and water resources. This means the industrial space of commercial aerospace has been redefined.

Third: SK hynix CEO warns that 2027 storage will be the tightest supply

“2027 will become the most supply-constrained year in industry history, and shortages will continue beyond 2030.” HBM4 prices are expected to double in 2027. Storage chips are shifting from “a follow-the-market commodity” to “an AI-demand strategic resource,” and pricing power is undergoing a fundamental transfer.

3. The Biggest Expectation Gap: The market sees rockets, but not compute power going to space

The market’s current understanding of commercial aerospace still stays at “event-driven thematic trades.” However, three structural variables have not been fully priced in yet:

Variable One: Space data centers—an added market from zero to the ten-trillion scale

AI compute demand explodes → Earth’s energy/land bottlenecks become prominent → orbital data centers become the optimal solution → LEO satellite demand shifts from communications to compute power → the satellite manufacturing/launch/operations industrial chain expands comprehensively. Domestically, “Cheng Guang” (辰光) first satellite (“Cheng Guang” first launch on July 24) is already a space compute trial satellite. China Aerospace Science and Technology’s satellite company (中科星图) will release its space-aerial information cloud service on July 16. The industrial chain extends from “satellite internet communications” to “space-based compute,” requiring a valuation system rebuild.

Variable Two: Expansion across the entire industry chain—not just rockets, but satellites, ground, and applications

3D-printed aerospace components (the surge in orders for Polymaker/铂力特 and Huashu Keji/华曙高科 rocket engine thrust chambers), satellite laser communications (Heli Star/氦星光联 signing with Optics Valley), liquid oxygen and methane fuel (Jufeng Energy/九丰能源 specialty fuel gas—特燃特气), and thermal insulation materials (Academician He Xiaodong/赫晓东 says it has already entered the world’s top tier). From rocket → satellite → ground → applications—these four links have all entered their realization period.

Variable Three: A dense catalyst calendar that cannot be falsified

July 16: SpaceX Starship 13th test flight + China Star Map’s space-aerial information conference → July 23: Hengxin satellite launch → July 24: “Cheng Guang” first satellite launch → early August: Zhuque 3 terrestrial recovery verification. High-frequency event catalysts ensure the sector’s heat can be sustained, and each catalyst is a substantive validation of technical/commercial progress.

4. Three-Dimensional Judgment: Sentiment, Fundamentals, and Capital Flow

Sentiment: Extreme polarization, switching between high and low

High-level tech stocks (Gigadevice’s 15.19% amplitude; Jizong Xuchuang/中际旭创 being sold off—RMB 4.6 billion) and innovative drugs/commercial aerospace (43 aerospace stocks hit limit-up; CRO sector +4.43%) form an ice-and-fire split. “Brother Feng’s contrarian” trending, and Tu Wenbin’s criticism of quant trading screens nonstop, increasing retail investors’ anxiety. Sentiment is at a critical point of “breaking old to establish new.” Risk appetite is still there, but chips are loosening significantly.

Fundamentals: In the interim report window, hard-tech performance is the strongest

Storage (Shannon Chip/香农芯创 +2118%), non-ferrous metals (Xianglu Tungsten/翔鹭钨业 +2348%), and brokerages (CITIC/中信 +70%) have broadly turned positive. But differentiation is equally extreme: “old-guard stocks” collectively blow up—Vanke expected loss of RMB 34.1k to 15 billion; Muyuan expected loss of RMB 5.7 billion to 6.7 billion; Seres expected loss of RMB 1.5 billion to 1.8 billion. Hard tech + resource cycle earnings are strongest, while consumption, real estate, and new energy vehicles face pressure. On the policy side, new-quality productive forces are being continuously strengthened: the State Council executive meeting set the tone for a Digital China + compute-power network, the energy conservation and carbon reduction action plan, and the TCM “14th Five-Year” to “15th Five-Year” planning.

Capital Flow: Huge trading volume sustains activity, but structural rotation is violent

Across both markets, trading values have surpassed RMB 2.5 trillion for 55 consecutive trading days, and liquidity is abundant. Northbound funds’ market value at end of Q2 hit a new high at RMB 3.13 trillion. Hard tech (CATL, Jizong Xuchuang, and Northern Huachuang/北方华创) takes the top three. But the key variable is Changxin Technology’s (长鑫科技) subscription on July 16 (fundraising: RMB 29.5 billion). This will create a temporary liquidity “rainbow siphon” effect on the market. Since funds need to position for the IPO subscription, capital must withdraw from high-level old tech stocks.

5. Independent View: Why Commercial Aerospace Is the Best Solution Right Now

Among four candidate sectors (commercial aerospace, storage chips, innovative drugs, brokerages), commercial aerospace has three layers of non-substitutability:

First: The only sector that can simultaneously capture “industry turning point + policy tone + capital resonance”

Storage chips have the hardest fundamentals, but the trading overcrowding has already hit the extreme. Leveraged funds are deleveraging at high levels, and in the short term they need time to let chips settle. Innovative drug policy catalysts are clear and the valuation has a margin of safety, but the pace of industry breakout is slower—more suitable as defensive positioning than a main offensive direction. Brokerages follow a slow-repair logic and do not have breakthrough explosive power.

Second: Its chip structure is the cleanest

Unlike storage chips (Jizong Xuchuang/兆易创新 being sold—RMB 13.49 billion) and optical modules (Jizong Xuchuang/中际旭创 being sold—RMB 4.6 billion), commercial aerospace previously did not experience large-scale institutional group positioning. On July 10, the satellite ETF saw net subscriptions of RMB 2.1 billion, indicating incremental funds are building positions rather than merely taking over. The trading-badge data shows that in the buy positions of aerospace stocks, institutional participation ratios are increasing.

Third: It resonates positively with the broad market, not as a hedge

Commercial aerospace belongs to the tech-growth direction, closely aligned with the market’s current AI main trend. Unlike geopolitical-hedging sectors such as oil shipping/gold (which depend on ongoing conflict evolution for sustainability), commercial aerospace has an independent industrial growth logic. Even if geopolitical risks ease, the upward trend of the sector will not reverse.

One-sentence summary:

Global first net-based recovery + ten-trillion new scenario from space data centers + dense catalyst calendar + clean chips + triple resonance of policy/technology/capital = commercial aerospace is the strongest main trend for July.

6. Key Next-Week Milestones and Risk Warnings

Key catalysts
July 13 (Monday): Changxin Technology begins preliminary inquiries, continuing to disturb the semiconductor sector. July 14: The State Council Information Office releases China’s import/export data for the first half, lifting macro volatility. July 16: Changxin Technology subscription + SpaceX Starship test flight + China Star Map conference—triple catalysts overlap. Core risk: the escalation of the Iran-U.S. Middle East conflict leads to a sudden drop in global risk appetite. Changxin Technology’s IPO creates a temporary liquidity siphon effect. After the commercial aerospace sector rapidly rises, profit-taking causes some retracement; high-level volatility in the STAR 50 spreads across the entire market.

Trading strategy: Focus on front-row leaders in commercial aerospace (satellite manufacturing, core rocket components, aerospace 3D printing, and other subsegments). Use ETFs (Yongying Satellite ETF/Easyda/E-Fund) as a core holding to reduce individual-stock “black swan” risks. After chips are sufficiently released in storage chips and other sectors, watch for the second buy point. Treat innovative drugs as defensive positioning and observe post-policy implementation commercialization expansion data.

A re-cap is not a prediction—it’s to build a probabilistic edge for trading. The above views are compiled and analyzed based on publicly available information and do not constitute investment advice.