Eliza Wong
On August 29th, China’s A-share market opened with mixed signals as the three major indices showed divergent movements in early trading. By the time of reporting, all three indices had turned positive, with the ChiNext Index rising over 1%. The market landscape revealed active sectors including fiberglass, insurance, real estate development, precious metals, and composite current collector concepts, while automotive services, semiconductors, whole vehicle manufacturing, and AI chip concepts showed weakness.
Market Opening Trends and Sector Performance
The morning session revealed distinct sector rotations as investors repositioned their portfolios based on emerging opportunities and risk assessments. Glass fiber companies led the gains alongside insurance and property development stocks, indicating renewed confidence in these traditional sectors.
Chip Stocks Face Early Adjustment Pressure
Chip stocks experienced significant pressure at market open, with Cambricon Technologies (寒武纪) dropping over 7% at one point. Several other semiconductor companies followed suit, including Sanechips Technology, NAURA Technology Group, and Forehope Electronic, all declining more than 6%. The semiconductor sector’s weakness contrasted sharply with the broader market’s positive performance.
Regulatory Warnings and Company Responses
The chip sector’s volatility prompted immediate regulatory attention and company responses. Cambricon Technologies issued a risk warning announcement on the evening of August 28th, noting that their stock price had increased by 133.86% compared to July 28th, 2025 closing price. The company explicitly stated that this appreciation exceeded most peer companies’ performance and significantly outpaced relevant indices including the STAR Market Composite, STAR 50, and Shanghai Composite Index.
Exchange Intervention and Trading Halts
In a related development, Dongxin Microelectronics announced on August 28th that due to multiple instances of abnormal and severely abnormal stock price fluctuations since July 29th, the company would suspend trading for verification to protect investor interests. The stock halted trading on August 29th with an expected suspension not exceeding three trading days.
Solid-State Battery Concept Stocks Rally
While chip stocks struggled, solid-state battery concepts showed remarkable strength. Hangke Technology hit the 20% limit-up, while Jiebang Technology reached new intraday highs. Several other companies in the sector gained over 10%, including Lead Intelligent Equipment, Zhongyi Technology, and Bettery New Material.
Strong Earnings Drive Battery Sector Optimism
The solid-state battery rally received fundamental support from strong financial results. Lead Intelligent Equipment’s 2025 semi-annual report showed approximately 740 million yuan in net profit attributable to shareholders, representing a 61.19% year-over-year increase. Particularly impressive was the second-quarter performance, with single-quarter net profit growing 456.29% year-over-year.
Tianpu Co Ltd’s Remarkable Six Consecutive Limit-Ups
The most dramatic market story centered on Tianpu Co Ltd (605255), which achieved six consecutive trading limit-ups, accumulating a 77.14% gain over six sessions. This extraordinary performance caught the attention of both investors and regulators, prompting exchange intervention.
The Acquisition Announcement That Sparked the Rally
The surge began after Tianpu’s August 21st announcement that Zhonghao Xinying (Hangzhou) Technology Co., Ltd. would act as the leading acquirer through a combination of “equity transfer + capital increase to controlling shareholder + comprehensive offer” to obtain actual control of Tianpu Co Ltd. Market anticipation around this control change triggered the buying frenzy that led to six consecutive limit-ups.
Exchange Regulatory Response and Scrutiny
The Shanghai Stock Exchange issued two regulatory letters in response to Tianpu’s dramatic price movements. The first regulatory work letter, delivered on August 22nd when Tianpu resumed trading, focused on the control transfer plan’s acquisition funding sources and internal information control matters. The second regulatory letter arrived on August 28th, indicating continued exchange scrutiny of the situation.
Financial Performance Contrasts With Market Enthusiasm
Despite the market enthusiasm, Tianpu’s fundamental performance showed challenges. The company’s August 28th released 2025 semi-annual report revealed approximately 151 million yuan in operating revenue, representing a 3.44% year-over-year decrease. Meanwhile, net profit attributable to shareholders reached about 11.298 million yuan, declining 16.08% compared to the same period last year.
Broader Market Movements and Sector Analysis
Beyond the individual stock dramas, broader market movements revealed interesting sector rotations and investment themes. The Hong Kong market showed positive momentum with the Hang Seng Index and Hang Seng Tech Index both in positive territory. Large financial institutions stabilized and strengthened, with New China Insurance and Guotai Junan International both rising over 6%.
Technology Internet Stocks Rebound
Technology internet stocks generally rebounded in Hong Kong trading, with Trip.com Group rising over 5% and Li Auto gaining nearly 3%. This recovery suggested some investor confidence returning to the technology sector despite the chip stock weaknesses on the mainland exchanges.
Additional Sector Performances and Market Drivers
Several other sectors showed notable movements. Liquor stocks continued their upward trajectory, with Jinhuiju hitting the limit-up at one point. Several other liquor companies including Shedaojiu, Laobaiganjiu, Jiuguijiu, Gujinggongjiu, and Huangtaijiuye followed with gains. Building materials sector also advanced, with China Jushi hitting the limit-up and several other companies in the sector posting solid gains.
Investment Implications and Risk Considerations
The contrasting performances across sectors and individual stocks highlight the importance of fundamental analysis alongside market sentiment understanding. While certain stocks like Tianpu Co Ltd experienced dramatic appreciation, the underlying financials and regulatory responses suggest investors should exercise caution.
Balancing Opportunity and Risk in Volatile Conditions
Market conditions present both significant opportunities and substantial risks. The solid-state battery sector’s strong fundamental performance combined with technological breakthroughs suggests genuine investment potential. However, stocks experiencing rapid appreciation without corresponding fundamental improvements, particularly those attracting regulatory scrutiny, warrant careful risk assessment. Investors should consider both the growth stories and the financial realities when making investment decisions. Diversification across sectors and careful position sizing remain crucial strategies in navigating current market conditions. Monitoring regulatory developments and company responses to exchange inquiries provides important insights into potential future price movements and risk factors.
