Group 1 - Morgan Stanley upgraded SMIC's rating, raising the target price from HKD 40 to HKD 80, anticipating an expansion in leading edge capacity and resolution of equipment bottlenecks [2] - Chinese mobile announced plans to deploy 100,000 local GPU networks by 2028, leading to an updated revenue forecast for China's AI GPU market, projected to reach RMB 113 billion in 2026 and RMB 180 billion in 2027, with a compound annual growth rate of 62% [2] - The report indicates that while NVIDIA's market share in China is nearly zero, there are still opportunities for local suppliers to fill the gap, particularly in AI high-performance computing and other semiconductor demands [2] Group 2 - The bottleneck in the semiconductor market is not expected to be TSMC's capacity but rather specific memory or server rack components, with TSMC reporting stronger-than-expected AI demand [3] - AI cluster sizes are moving towards over 100,000 GPUs, driving new standards in Ethernet design and liquid cooling for AI racks [3] - The semiconductor supply chain is projected to expand significantly by 2026, with a focus on CPO and NAND module manufacturers [4] Group 3 - Global CoWoS consumption is expected to reach 1,154k wafers in 2026, with NVIDIA holding a 59% market share, and HBM consumption projected at 2.6 billion GB [5] - AI capital expenditures remain strong, with cloud capex expected to reach USD 582 billion in 2026, reflecting a 31% annual growth [5] - AI GPU and ASIC rental prices have seen slight declines, but demand for AI inference in China remains robust, indicating a positive outlook for the AI supply chain [5]

Core Viewpoint - UBS has upgraded the rating of Chinese stocks to "attractive" and technology stocks to "most attractive," citing them as the most confident investment targets globally [1][2]. Group 1: Technology Sector Insights - Chinese technology stocks are seen as the most confident investment targets globally, supported by two main factors: clear AI commercialization trends and strong growth prospects from leading tech companies, along with significant progress in domestic chip production [2][3]. - Major Chinese tech companies are expected to increase capital expenditures by 55% by 2025 to meet the surging demand for AI, with AI user penetration in China showing significant growth, reaching 645 million users as of August, a year-on-year increase of over 60% [3][4]. Group 2: Market Dynamics - The technology sector is entering a multi-year growth cycle driven by technological breakthroughs, strong policy support, and domestic production, with projected earnings growth of 37% by 2026, making it the fastest-growing stock sector globally [4][5]. - Historical analysis indicates that Chinese bull markets are typically driven by liquidity and valuation expansion, with the current market trend following a similar pattern, suggesting a more sustainable and robust upward movement [5][6]. Group 3: Liquidity and Investment Trends - Domestic investors have net bought $50 billion in Hong Kong stocks through the Stock Connect this year, the highest level since the mechanism's launch, indicating strong liquidity in the market [6][7]. - Local institutional investors are likely to shift funds from bonds to stocks due to declining yields on 10-year government bonds, which could support continued market growth [6][7]. Group 4: Policy Support - The macroeconomic environment remains stable, with expectations for targeted policy support rather than large-scale fiscal stimulus, focusing on technology and advanced manufacturing sectors [8][9]. - Upcoming policies are expected to prioritize innovation and high-quality growth, with specific measures aimed at supporting AI commercialization and chip production, reflecting the government's commitment to these sectors [8][9].

Core Insights - On October 21, Shandong Molong made its first appearance on the Hong Kong Stock Connect active trading list in the past month, with a trading volume of 1.147 billion HKD and a net buying amount of 48 million HKD, closing up 8.39% [1] Trading Activity Summary - The total trading volume of active stocks on the Hong Kong Stock Connect reached 44.268 billion HKD, accounting for 35.00% of the day's total trading amount, with a net buying amount of 868 million HKD [1] - Alibaba-W led the trading volume with 10.33 billion HKD, followed by SMIC and Pop Mart with trading amounts of 7.805 billion HKD and 5.897 billion HKD, respectively [1] Stock Performance Overview - The most frequently listed stocks in the past month include Alibaba-W and Huahong Semiconductor, each appearing 16 times, indicating strong interest from Hong Kong Stock Connect investors [1] - Shandong Molong's trading activity on October 21 marked its first listing in the past month, with a notable increase in its stock price [1]

Market Overview - On October 21, the Hang Seng Index rose by 0.65%, with total southbound trading amounting to HKD 126.49 billion, including buy transactions of HKD 63.83 billion and sell transactions of HKD 62.66 billion, resulting in a net buying amount of HKD 1.17 billion [1] Southbound Trading Details - The southbound trading through Stock Connect (Shenzhen) had a cumulative trading amount of HKD 45.84 billion, with buy transactions of HKD 22.25 billion and sell transactions of HKD 23.60 billion, leading to a net selling amount of HKD 1.35 billion [1] - Conversely, the Stock Connect (Shanghai) recorded a cumulative trading amount of HKD 80.65 billion, with buy transactions of HKD 41.59 billion and sell transactions of HKD 39.06 billion, resulting in a net buying amount of HKD 2.52 billion [1] Active Stocks - Among the actively traded stocks, Alibaba-W had the highest trading amount at HKD 103.30 billion, followed by SMIC with HKD 78.05 billion and Pop Mart with HKD 58.97 billion [1] - In terms of net buying, Pop Mart led with a net buying amount of HKD 11.21 billion despite a closing price drop of 8.08%, followed by Xiaomi Group-W with HKD 4.81 billion and Hua Hong Semiconductor with HKD 4.41 billion [1] - The stock with the highest net selling was the Tracker Fund of Hong Kong, with a net selling amount of HKD 11.02 billion, while Alibaba-W and Innovent Biologics experienced net selling amounts of HKD 4.30 billion and HKD 0.78 billion, respectively [1] Detailed Stock Performance - The following table summarizes the trading performance of selected stocks on October 21: - Pop Mart: Total trading amount of HKD 589.69 million, net buying of HKD 112.07 million, with a price drop of 8.08% [3] - Xiaomi Group-W: Total trading amount of HKD 357.59 million, net buying of HKD 48.11 million, with a price drop of 1.44% [3] - Hua Hong Semiconductor: Total trading amount of HKD 366.72 million, net buying of HKD 44.13 million, with a price drop of 0.26% [3] - Tencent Holdings: Total trading amount of HKD 461.03 million, net selling of HKD 3.19 million, with a price increase of 0.48% [3] - Alibaba-W: Total trading amount of HKD 1,033.04 million, net selling of HKD 42.98 million, with a price increase of 1.98% [3] - Tracker Fund of Hong Kong: Total trading amount of HKD 111.86 million, net selling of HKD 110.23 million, with a price increase of 0.68% [3]

Core Points - The Hang Seng Index rose by 0.65% to close at 26,027.55 points on October 21, with a net inflow of HKD 1.171 billion from southbound funds through the Stock Connect [1] - The total trading volume for the Stock Connect on the same day was HKD 126.489 billion, with a net buy of HKD 1.171 billion [1] - In the Shanghai Stock Connect, the trading volume was HKD 80.647 billion with a net buy of HKD 2.524 billion, while the Shenzhen Stock Connect had a trading volume of HKD 45.843 billion with a net sell of HKD 1.353 billion [1] Trading Activity - The most actively traded stock in the Shanghai Stock Connect was Alibaba-W, with a trading volume of HKD 6.587 billion, followed by SMIC and Pop Mart, with trading volumes of HKD 4.678 billion and HKD 4.097 billion, respectively [1] - In terms of net buying, Pop Mart led with a net inflow of HKD 0.683 billion, despite its stock price dropping by 8.08% [1] - Alibaba-W had the highest net sell amount of HKD 0.133 billion, while its stock price increased by 1.98% [1] Shenzhen Stock Connect Activity - In the Shenzhen Stock Connect, Alibaba-W also topped the trading volume with HKD 3.743 billion, followed by SMIC and Pop Mart with HKD 3.127 billion and HKD 1.800 billion, respectively [2] - Pop Mart again had the highest net buy amount of HKD 0.438 billion, despite a closing price drop of 8.08% [2] - The stock with the largest net sell was the Tracker Fund of Hong Kong, with a net sell of HKD 1.102 billion, while its stock price rose by 0.68% [2]

Group 1 - On October 21, 2025, Alibaba-W (09988), SMIC (00981), and Pop Mart (09992) ranked as the top three companies by trading volume in the Southbound Stock Connect, with transaction amounts of 6.587 billion, 4.678 billion, and 4.097 billion respectively [1] - In the Southbound Stock Connect for the Shenzhen-Hong Kong Stock Connect, Alibaba-W (09988), SMIC (00981), and Pop Mart (09992) also held the top three positions, with transaction amounts of 3.743 billion, 3.127 billion, and 1.800 billion respectively [1] Group 2 - In the Southbound Stock Connect, the top active trading companies included Alibaba-W (09988) with a transaction amount of 6.587 billion and a net buy of -0.133 billion, SMIC (00981) with 4.678 billion and a net buy of -51.9952 million, and Pop Mart (09992) with 4.097 billion and a net buy of +683 million [2] - For the Shenzhen-Hong Kong Stock Connect, the top active trading companies were Alibaba-W (09988) with a transaction amount of 3.743 billion and a net buy of -0.296 billion, SMIC (00981) with 3.127 billion and a net buy of +180 million, and Pop Mart (09992) with 1.800 billion and a net buy of +438 million [2]

Group 1 - Southbound funds recorded a net purchase of Hong Kong stocks amounting to 1.171 billion HKD today [1] - Notable net purchases include Pop Mart at 1.121 billion HKD, Xiaomi Group-W at 481 million HKD, and Hua Hong Semiconductor at 441 million HKD [1] - Southbound funds have sold Alibaba-W for three consecutive days, totaling a net sell of 4.329 billion HKD [1] Group 2 - Southbound funds ended an eight-day net selling streak for SMIC, with a net purchase of 128 million HKD [1] - The net selling of the Tracker Fund of Hong Kong reached 1.102 billion HKD [1] - Cumulatively, southbound funds have sold Alibaba for a total of 4.33685 billion HKD over the last three days [1]

Core Insights - The Hong Kong stock market saw a net inflow of 11.71 billion HKD from northbound trading on October 21, with a net buy of 25.24 billion HKD from the Shanghai Stock Connect and a net sell of 13.53 billion HKD from the Shenzhen Stock Connect [1] Group 1: Stock Performance - The most bought stocks included Pop Mart (09992), Xiaomi Group-W (01810), and Hua Hong Semiconductor (01347) [1] - The most sold stocks included the Tracker Fund of Hong Kong (02800), Alibaba Group-W (09988), and Innovent Biologics (01801) [1] Group 2: Individual Stock Details - Pop Mart (09992) received a net buy of 11.2 billion HKD, with projected revenue growth of 245%-250% year-on-year for Q3 2025 [4] - Xiaomi Group-W (01810) had a net buy of 4.81 billion HKD, with the company repurchasing 10.7 million shares at prices between 45.9 and 46.76 HKD [5] - Hua Hong Semiconductor (01347) saw a net buy of 4.29 billion HKD, supported by positive sentiment around the semiconductor sector driven by AI [5] - China Mobile (00941) received a net buy of 1.77 billion HKD, reporting Q3 service revenue of 216.2 billion HKD, a 0.8% year-on-year increase [5] - China Life (02628) had a net buy of 517.7 million HKD, with expected net profit growth of 50% to 70% year-on-year for the first three quarters [6] Group 3: Market Sentiment - The Tracker Fund of Hong Kong (02800) experienced a net sell of 11.02 billion HKD, attributed to increased market volatility and high valuations of global risk assets [6] - Tencent (00700), Innovent Biologics (01801), and Alibaba Group-W (09988) faced net sells of 318.7 million, 776.4 million, and 4.29 billion HKD respectively [7]

Core Insights - The report highlights the significant growth of the Shangyin Digital Economy A fund, with a net asset value of 0.21 billion yuan as of September 30, 2025, representing a 69.34% increase from the previous quarter [3][5] - The fund achieved a remarkable 56.67% return in Q3 2025, outperforming the average of 1.62% for similar funds and the CSI 300 index's 25.43% increase [5] - The fund's investment strategy focuses on the semiconductor industry, particularly in domestic computing chips and AI edge chips, capitalizing on the accelerating demand driven by AI advancements [5][10] Fund Performance - As of October 20, 2025, the fund's unit net value reached 1.5092 yuan, with a daily increase of 0.87% and a total return of 50.92% since its inception on August 6, 2024 [1][8] - Over the past three months, the fund has seen a growth of 37.71%, and over six months, a cumulative increase of 51.03% [1] Investment Strategy - The fund employs a "dual mainline configuration + dynamic risk control" strategy, focusing on structural opportunities in the semiconductor sector [5] - The first mainline targets domestic computing chips, with a focus on companies that have clear technological barriers and positive customer validation [5] - The second mainline centers on AI edge chips, anticipating the market growth of smart glasses, panoramic cameras, and service robots from 2025 to 2027 [5] Top Holdings - The fund's top ten holdings are entirely concentrated in the semiconductor sector, including companies like SMIC, Hua Hong Semiconductor, and Cambrian [6][7] - The total market value of the top ten holdings amounts to approximately 207 million yuan [7] Management Team - The fund is managed by Zhao Zhiyue and Hui Jun, with Zhao having managed the fund since its inception and achieving a total return of 50.92% [8] - Hui Jun joined the management team on May 19, 2025, with a total return of 48.02% [8] Future Outlook - The fund managers express optimism about the semiconductor industry's prospects, particularly in computing and edge chips, driven by ongoing AI advancements and domestic substitution processes [10]

Core Viewpoint - The Hang Seng Technology Index continues to strengthen, rising over 3%, while the Hang Seng Index increases nearly 2% [1] Company Performance - Bilibili's stock has surged nearly 10% [1] - Semiconductor Manufacturing International Corporation (SMIC) has seen its stock rise over 5% [1]