China IT Industry Weekly Report: Policy Dividends and AI Investment Converge, Focusing on Hardware and Platform Ecosystems

Bottom Line

This week (June 15–21, 2026), China's IT industry exhibited a dual-driver pattern of "dense policy catalysts + hardware leading the rally." The coordinated development policy for the platform economy jointly issued by seven ministries, combined with the structural rally in the AI hardware market, provides clear signals for investors to increase allocations. It is recommended that investors maintain an overweight position in AI computing power and equipment sectors while closely focusing on valuation recovery opportunities in software and SaaS sectors driven by the implementation of platform economy policies.

Key Developments

1. Seven Ministries Jointly Issue the Platform Economy Coordinated Development Action Plan (2026–2028) — On June 18, China's Ministry of Industry and Information Technology and six other ministries jointly released the "Action Plan for Promoting Integrated Development of Large, Medium, and Small Enterprises," aiming to enhance the overall development level of the platform economy and foster collaboration among enterprises of all sizes. Portfolio implication: This policy represents a top-down structural positive, directly benefiting platform leaders and software enterprises serving them. Attention should be paid to policy-supported "Specialized and New" small and medium-sized IT service providers, whose valuation elasticity may exceed the industry average.

2. AI Hardware Market Continues to Surge, A-Share Indices Hit New Highs — From June 15 to 18, AI hardware concept stocks, represented by CPO, PCB, and memory chips, led a significant rally in the A-share market, with the ChiNext Index continuously setting new highs. On June 15 alone, the ChiNext Index rose by 5.30%, and on June 18, it gained over 2% to reach a new historical high. Portfolio implication: Market enthusiasm for AI infrastructure investment has shifted from expectations to the earnings realization phase. Given that tech giants like ByteDance (News 15) have significantly raised capital expenditure, the upward momentum in the hardware sector remains strong. Investors should focus on core suppliers related to PCIe, optical modules (CPO), and high-end PCBs.

3. National Bureau of Statistics Data Shows Sustained High Growth in Information Transmission, Software, and IT Services — According to data released by the National Bureau of Statistics on June 16, the production index for this industry grew by 11.3% year-on-year in May 2026, indicating continued rapid expansion. Portfolio implication: Macro data confirms industry prosperity, providing a safety cushion for the sector. In terms of allocation, investors may appropriately tilt toward software and service enterprises related to AI applications, AI+communications (News 12), and AI+e-commerce (News 13) implementations to capture investment opportunities at their earnings inflection points.

4. Two Major AI Model Companies, Kimi and DeepSeek, Secure Massive Financing — Kimi (June 19) has raised over $1.2 billion cumulatively, with its valuation doubling to over $10 billion; DeepSeek (June 17) completed its first external financing of over RMB 50 billion (approximately $6.82 billion), both setting records for AI industry financing in China. Portfolio implication: High financing amounts and valuation jumps in the primary market have significantly boosted confidence in the AI application and large model tracks in the secondary market. This validates the narrative logic of "AI as a core asset," guiding capital flows from pure hardware speculation toward AI application layers with commercial potential.

5. AI+Software Special Initiative and Integrated Circuit Breakthroughs Advance Simultaneously — The Ministry of Industry and Information Technology is accelerating the "AI+Software" special initiative (News 6), focusing on new formats like intelligent programming; meanwhile, the Hubei Jiangcheng Laboratory has achieved a breakthrough in three-dimensional multi-layer capacitor technology (News 3), positively impacting the development of high-end chips. Portfolio implication: These two developments represent the direction of self-reliance and control in software and hardware, respectively. From an investment logic perspective, priority should be given to semiconductor equipment companies benefiting from "domestic substitution" with technological barriers, while also focusing on leading enterprises implementing new business models like "Model as a Service" to capture structural excess returns.

Sector Pulse

Risk Watch

• AI Hardware Overheating Risk — The A-share AI hardware sector (CPO, PCB, etc.) saw significant gains from June 15 to 18, with short-term trading congestion notably increasing, and some stocks experienced "surge followed by pullback" (News 19). If leading companies' earnings fall short of expectations or market risk appetite cools, high-valuation stocks may face correction pressure. Probability: Medium. Impact: High.

• Platform Economy Policy Implementation Falling Short of Expectations — Although the seven ministries jointly issued the action plan, the specific execution details and incentive measures have not been fully disclosed. If subsequent policy progress is slow or less forceful than market expectations, related software and internet stocks may face price corrections due to "expectation gaps." Probability: Medium. Impact: Medium.

• Excessive Capital Expenditure by Giants Squeezing Profits — ByteDance plans AI investments exceeding RMB 200 billion in 2026 (News 15), and large-scale financing by DeepSeek, while beneficial to equipment suppliers, may imply pressure on profit margins for leading companies, with profitability potentially falling short of the market's currently extremely optimistic expectations. Probability: Low. Impact: Medium.

Outlook

Key events and indicators to monitor next week:

• The pace of release of specific implementation rules and subsequent supporting measures for the seven ministries' platform economy policy.
• Trading volume and sector divergence within A-share AI hardware concepts (CPO, PCB) during the week of June 22.
• Profit growth rate for the computer, communication, and other electronic equipment manufacturing industry in the National Bureau of Statistics' May data on industrial enterprise profits above designated size.

Positioning consideration: Against the backdrop of short-term euphoria (ChiNext Index hitting new highs), it is recommended to maintain an overweight position in AI computing hardware (CPO, PCB, memory) and semiconductor equipment, but with controlled positions to avoid chasing highs; meanwhile, tactically build positions in SaaS and AI application stocks benefiting from platform economy policies to balance portfolio risk.