Source: Brokerage China Author: Qu Hongyan Recently, China Yangtze Power hit a historical high and once again showed the slow bull stock trend of "tripling in ten years". The slow bull market has left behind many passers-by and brought good returns to the steadfast investors. It is "rare for those who triple in one year to be like carp jumping over the dragon gate, while those who double in three years are few and far between." On the other end of the investment world, however, violent collapses are also deafening, with many financial products suspected of "Ponzi schemes" ceasing payments, leaving investors with no hope of recovering their investments. Both positive and negative cases illustrate the importance of forming a suitable mentality towards money in one's lifetime; otherwise, sooner or later, you will divorce yourself from your money. "I call this the money mind, a person's IQ can reach 120, 140, or even higher levels, and perhaps some people's minds are good at doing one thing, while others are good at doing another. They can do things that most ordinary people can't do. But I know some very smart people who make very foolish decisions because they lack the money mind." Buffett once said so. The so-called money mind refers to believing in common sense, believing in compound interest, being cautious and rational, thinking independently, prioritizing security over return, not dealing with people with questionable character, not easily guaranteeing for others, not believing in windfall profits, and not trying to cross legal norms for extra benefits. In today's world of ubiquitous information, everyone's wealth may become the "prey" of those with ulterior motives. Only with the money mind, can one form good behavior habits and shield oneself from separating from one's wealth. Do not entrust your wealth easily. Wealth is easy to lose but hard to accumulate, and trust is a vital reason leading to the rapid loss of wealth. "Do not allow anyone else to manage your business unless you can watch their every move closely and understand their behavior; or you have strong reasons to believe in their character and ability. For investors, this criterion determines when you can let someone else make investment decisions for you." Graham's criterion written eighty years ago is so clear. Almost all the investors who lost their wealth in the financial products have violated the above two criteria. They did not have the ability to closely supervise the whereabouts of their funds, nor did they have sufficient reasons to believe in the character of the product issuers. They easily invested their own wealth solely based on others' glib tongue and a piece of commitment paper. They did not act as gatekeepers of their own wealth and ended up with nothing left even if the government punished the wrongdoers. "An ounce of prevention is worth a pound of cure." This is a phrase Munger often says. Destiny must be in one's own hands, and investors with a suitable money mind will try their best to find suspicious points in their investments to protect the safety of their principal. For example, whether the manager is trustworthy, whether the underlying assets are profitable, whether oneself can timely monitor the risks in the investment process, and whether the sales staff is obtaining large commissions. As long as any unreliable signs are found, these investors firmly will not invest their money. Do not desire to get rich quick. As in the capital market and anywhere else, making money is not easy, and desiring to get rich quick will lead to quick loss of wealth. In the capital market, the desire to get rich quickly often leads to investors over-allocating specific stocks, industries, or assets at the worst time. For example, buying high-risk stocks that can gain huge returns once an adventure succeeds, but the chance of success is very small, also known as "whispering stocks" by legendary fund manager Peter Lynch. "They often tell investors a story with explosive effects. These 'whispering stocks' have a hypnotic effect on people, and it is easy for you to believe that the story the company tells has an emotional appeal that can easily confuse you." This is like hearing a very tempting "sizzling" sound, making you salivate, but you did not notice that there is no steak on the grill. In the eyes of investors who lack the money mind, stable yield provided by blue chips such as China Yangtze Power cannot meet their demands. However, historical experience clearly shows that buying stocks lacking in safety solely based on imagined high yields is unwise. The long-term average investment return of general stocks is 9%-10%, which is also the average investment return of stock indexes in history, a benchmark to measure one's investment performance and the benchmark to measure fund investment performance.

Author: Wang Lulu.

On July 1, the latest disclosed data showed that South Korea's semiconductor exports in June this year reached 13.4 billion US dollars (approximately RMB 97.3 billion), a significant year-on-year increase of 50.9%, which is the largest export number on record. Analysts believe that this data is undoubtedly a bullish news for the global semiconductor industry chain, indicating that the semiconductor recovery momentum is still going strong and exceeding market expectations.

Another signal of the chip's better-than-expected recovery comes from the industry-leading company. South Korea's SK Group announced that its semiconductor subsidiary SK Hynix plans to invest 103 trillion won (about 540 billion yuan) by 2028, highlighting the group's bet on the semiconductor industry. In addition to SK Hynix, global storage chip giant - $Micron Technology (MU.US)$Samsung and others are also actively expanding production.

Institutional analysts believe that under high demand for AI chips, the shortage of high-bandwidth memory (HBM) chips will continue for a long time. In addition to overseas three major storage giants benefiting from the "quantity and price rise" demand and increasing capital expenditures, domestic enterprises with cost and industry chain advantages will also accelerate their involvement in more HBM production processes.

Good news for chips

South Korea, known as the global economic "canary," has brought good news.

Preliminary data from the Korea Customs Service on July 1 showed that due to the record-breaking performance of semiconductor exports, South Korea's exports in June this year increased by 5.1% year-on-year to US$57.07 billion, while imports during the same period fell by 7.5% to US$49.07 billion.

Data showed that South Korea's trade surplus reached US$7.999 billion (approximately RMB 58.1 billion) in June, the largest surplus since September 2020, exceeding the market's expected surplus of US$5.7 billion.

In terms of destinations, exports to the United States increased by 14.7% to reach US$11 billion, the highest in the same month in history. Exports to China also increased by 1.8% year-on-year to reach US$10.7 billion, maintaining growth for four consecutive months.

This is mainly due to the increase in demand for chips. The latest data shows that South Korea's semiconductor exports in June reached US$13.4 billion (approximately RMB 97.3 billion), a significant year-on-year increase of 50.9%, which is the largest export number on record, and the eighth consecutive month of year-on-year growth.

Analysts believe that this data is undoubtedly a bullish news for the global semiconductor industry chain, indicating that the semiconductor recovery momentum is still going strong and exceeding market expectations.

$NVIDIA (NVDA.US)$And other American chip giants are increasing orders, which is bullish news for Korean chip giants such as Samsung Electronics and SK Hynix.

Jeong Yong-taek, an economist at IBK Securities, stated that in the second half of the year, South Korea's overseas shipment volume will continue to expand because the global prosperity around artificial intelligence will continue to support demand for South Korean chips, especially as companies like Nvidia and Apple roll out new products.

South Korean manufacturing continues to expand. On July 1, S&P Global announced that the final value of South Korean manufacturing PMI in June was 52, higher than 51.6 in the previous month, and at the highest level since April 2022.

As is well known, South Korean exports, as an important indicator of the global economy, are forward-looking and even known as the "canary" of the global economy. The positive export data from South Korea may be a major bullish signal for the global economy.

Joe Hayes, the chief economist of S&P Global Market Intelligence, said that global industrial activity and trade are rebounding. As the supply chain integrates key intermediate products such as batteries and semiconductors, South Korean manufacturing output and orders are regarded as leaders in exports.

It is pointed out that the continuous weakness of the Korean won exchange rate is also one of the reasons supporting the strong export performance of South Korea. Since this year, the US dollar to Korean won exchange rate has shown an overall upward trend and recently reached a high of 1,378.93 Korean won.

Another signal of the unexpectedly strong recovery of the chip comes from the latest action of the industry's leading enterprises.

Investing 540 billion recklessly

On June 30 local time, South Korean giant SK Group announced that its semiconductor subsidiary SK Hynix Inc. plans to invest KRW 103 trillion (approximately RMB 540 billion) by 2028, highlighting the group's bet on the semiconductor industry.

The company believes that the semiconductor industry is crucial to its future development.

In its latest statement, SK Group stated that KRW 82 trillion would be used to invest in HBM. SK Hynix's HBM chips, optimized for use with Nvidia's AI accelerator, are part of the bet on AI. As part of this, SK Telecom and SK Broadband will invest KRW 3.4 trillion in data center business.

According to the statement, SK Group lost KRW 10 trillion last year and is expected to achieve pre-tax profit of KRW 22 trillion this year. The goal is to increase pre-tax profit to KRW 40 trillion by 2026.

It is worth noting that SK Hynix has announced a series of investment plans this year, including spending $3.87 billion to build advanced packaging plants and AI product research centers in Indiana, USA, and building a new storage chip facility in South Korea for $14.6 billion, as well as continuing other domestic investments, including in the Yongin semiconductor cluster.

In addition to SK Hynix, global memory chip giants, Micron Technology and Samsung are also expanding production in a big way.

Currently, Micron Technology is building an HBM production line in the United States and is considering producing HBM in Malaysia for the first time and building a new DRAM factory in Japan, with the goal of increasing the company's HBM market share by more than two-fold to around 20% by 2025.

Samsung also expects its HBM production capacity to increase 2.9 times from last year's level. In terms of technological iteration, SK Hynix and Samsung are said to have completed verification of 16-layer "hybrid bonding" HBM memory technology, which will be used for mass production of HBM4 in the future.

It is reported that HBM accounts for the highest proportion of AI chips, with Nvidia's H100 costing nearly $3,000, of which HBM costs about $2,000, far exceeding the manufacturing and packaging stages. Nvidia announced that it will shorten its AI chip update cycle from two years to one year. This means that suppliers need to speed up production expansion. Currently, the 2025 HBM production capacity of storage manufacturers has been fully booked, and order visibility extends to the first quarter of 2026.

Everbright Securities analysis shows that as demand for AI chips continues to grow, the shortage of HBM production will continue for a long time. In addition to the three overseas storage giants benefiting from the demand's "price-volume-rising" trend and increasing capital expenditures, domestic companies with cost and industry chain advantages will also accelerate their involvement in more HBM production activities. It is recommended to pay attention to the benefit of domestic companies with strong supply capacity in key sectors such as packaging and testing, equipment, and materials.

Editor / Feynman