In-Depth Analysis Report on the Collective Decline of the Media Sector

Now let me present the complete analysis report:

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During the midday trading break of A-shares on January 16, 2026, the media sector saw a significant correction, with multiple media stocks including Xinhua Net and Visual China hitting their daily down limits. The sector fell 6.5% overall, making it one of the worst-performing sectors in the market that day [1][2]. Based on comprehensive market information analysis, the decline of the media sector is mainly driven by the following factors:

On the midday of January 14, the Shanghai, Shenzhen, and Beijing Stock Exchanges announced an increase in the margin trading deposit ratio from 80% to 100%. This policy directly restricts the scale of incremental leveraged funds entering the market. Theoretically, the maximum leverage multiple for new positions has been reduced from 5x to 2x, posing a substantive constraint on short-term funds that prefer high-leverage operations [2][3]. As a popular sector previously heavily speculated by leveraged funds, the media sector was most directly impacted by this policy.

From December 2025 to early January 2026, the media sector benefited from speculation around AI application concepts, with a cumulative increase of over 40%. Multiple stocks in the sector saw consecutive daily up limits, accumulating substantial profit-taking positions [3]. With the emergence of policy signals, capital quickly shifted to profit-taking, triggering a stampede-like sell-off.

Multiple popular media stocks have recently triggered abnormal trading regulations, being suspended from trading or issuing intensive risk warning announcements, severely dampening market sentiment [2]. For example, previous leading stocks such as Gravity Media saw significant corrections under regulatory pressure, dragging the entire sector downward.

The rise of the media sector mainly relied on story expectations for AI applications, but there is significant uncertainty regarding earnings realization [1]. As market sentiment cools, capital has begun to re-evaluate sector valuations, significantly increasing pressure for valuation corrections.

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In stark contrast to the media sector, sectors such as semiconductors and auto parts rallied against the market trend [1][4]:

Sector	Price Change	Main Capital Flow	Rally Logic
Semiconductors	+4.5%	+RMB 1.85 billion	AI-driven surge in storage demand + accelerated domestic substitution
Auto Parts	+3.2%	+RMB 1.23 billion	Recovery in external demand + dual-drive from domestic substitution
Electronic Components	+2.8%	+RMB 0.87 billion	Resonance of consumer electronics + AI hardware demand

’s strong performance stems from multiple positive factors: the Semiconductor Equipment and Materials International (SEMI) predicts that global semiconductor equipment sales will reach $133 billion in 2025, with mainland China remaining the world’s top spender on semiconductor equipment [4]. Meanwhile, the third phase of the National Integrated Circuit Industry Investment Fund injected RMB 2 billion into the semiconductor equipment sector in January, focusing on supporting R&D of core components. The dual support of policy and capital has driven the sector’s continuous strength.

benefited from the dual-drive of external demand and domestic substitution. According to research data from CICC, the net profit growth rate of the auto parts sector is expected to reach 57% in 2026, far higher than the 15% of the media application sector [1]. The sector has a relatively low overall valuation (PE ratio of approximately 28.5x) and strong earnings certainty, attracting capital outflow from high-valued theme stocks.

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The current market shows obvious structural differentiation characteristics, with capital shifting from high-valued theme stocks to undervalued sectors with earnings support [2][3]. This differentiated trend has the following important implications for investment strategies:

The increase in margin trading deposit ratio sends a clear policy signal to cool the market, aiming to curb excessive leveraged speculation and nurture the stable upward movement of the capital market [2][3]. Investors should understand the policy intent and avoid aggressive chasing of rising prices.

The market is shifting from broad-based rallies to structural differentiation, with obvious changes in capital preferences:

• Capital Outflow Sectors
  : Commercial Aerospace (-RMB 3.52 billion), Media (-RMB 2.85 billion), Computer Applications (-RMB 2.21 billion)
• Capital Inflow Sectors
  : Semiconductors (+RMB 1.85 billion), Auto Parts (+RMB 1.23 billion), Electronic Components (+RMB 0.87 billion)

CICC research points out that the overall earnings growth rate of A-shares in 2026 will be approximately 4%-5%, while sectors such as technology hardware and manufacturing for external demand will see significantly higher earnings growth [1]. The net profit growth rate of the semiconductor sector is expected to exceed 70% in 2026, while that of the media and entertainment sector is only 15%. Earnings differentiation is the core driver of capital position adjustments.

High-valued sectors (such as Commercial Aerospace with a PE ratio of 85.6x and Computer Applications with a PE ratio of 65.8x) face greater correction pressure when market sentiment cools; while undervalued sectors such as Nonferrous Metals (PE ratio of 22.3x) and Basic Chemicals (PE ratio of 18.5x) show stronger defensive properties.

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Based on the above analysis, it is recommended that investors adopt the following strategies to respond to sector differentiation:

• Reduce Positions
  : Exercise caution towards popular sectors with excessive short-term gains and abnormally high turnover rates (e.g., 12.5% turnover for Commercial Aerospace)
• Avoid
  : Steer clear of high-priced stocks that have triggered abnormal trading regulations or issued risk warnings
• Defensive Allocation
  : Focus on undervalued cyclical blue chip sectors as defensive positions

• Accumulate on Dips
  : Technology growth sectors such as semiconductor equipment and AI hardware with clear domestic substitution logic
• Earnings Screening
  : Focus on targets with high certainty of annual report earnings growth, and avoid pure concept speculation
• Balanced Allocation
  : Maintain a moderate balance between growth and value stocks

• As the Spring Festival holiday approaches, some capital may lock in profits in advance
• Fluctuations in overseas markets may affect A-share market sentiment
• Tightening of leveraged funds may exacerbate short-term volatility

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The above chart shows: The left chart is the ranking of industry sector price changes, with the media sector leading the decline with a 6.5% drop; the right chart shows main capital flow, with the media sector seeing a net outflow of RMB 2.85 billion, while semiconductors saw a net inflow of RMB 1.85 billion, reflecting a clear shift in capital preferences.

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The collective decline of the media sector is the result of multiple factors: the tightening of margin trading leverage accelerated profit-taking, tightened regulation suppressed speculative enthusiasm, and the mismatch between earnings expectations and high valuations exacerbated valuation correction pressure. Meanwhile, the rally of sectors such as semiconductors and auto parts against the trend indicates that market capital is concentrating on sectors with earnings support and clear domestic substitution logic.

Investors should adapt to the market’s shift from a “broad-based bull market” to a “structural bull market”, abandon the mindset of pure concept speculation, and pay more attention to earnings verification and valuation safety margins. Against the backdrop of policy nurturing a “slow bull” market, it is recommended to maintain a rational investment mindset, focus on the two main themes of undervalued blue chips and technology growth, and avoid blind chasing of rising prices or panic selling.

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[1] International Finance News - “Continued Volume Expansion! Is A-Shares Shifting Gear?” (https://www.ifnews.com/news/2026-01-14/20260114224343528228.shtml)

[2] Securities Times Network - “Data Review | 142 Stocks Saw Main Capital Net Inflow Exceeding RMB 100 Million, Institutional Investors Snatched 24 Stocks on the Dragon and Tiger List” (https://www.stcn.com/article/detail/20260114/117stcn.html)

[3] Sina Finance - “Margin Trading Deposit Ratio Returns to 100%: What Signal Does It Send? Where Will A-Shares Go Next?” (https://finance.sina.com.cn/stock/marketresearch/2026-01-15/doc-inhfzcpa0074434.shtml)

[4] Sohu Finance - “Semiconductor Equipment Receives Dual Support from Policy Capital + Global Capacity Expansion, Multiple Stocks Surge Against the Trend” (https://m.sohu.com/a/976330076_114984)