Core Viewpoint - On October 13, Kingsoft Software made its first appearance on the Hong Kong Stock Connect active trading list in a month, with a trading volume of 19.32 billion HKD and a net buy of 2.86 billion HKD, closing up 13.82% [2][3]. Group 1: Trading Activity - The total trading volume of active stocks on the Hong Kong Stock Connect on October 13 was 1080.35 billion HKD, accounting for 47.59% of the day's total trading amount [2]. - Alibaba-W had the highest trading volume at 322.98 billion HKD, followed by SMIC and Xiaomi Group-W with trading volumes of 177.21 billion HKD and 153.23 billion HKD, respectively [2]. - The most frequently listed stocks in the past month were Alibaba-W and Tencent Holdings, each appearing 15 times, indicating strong interest from Hong Kong Stock Connect funds [2]. Group 2: Individual Stock Performance - Kingsoft Software's trading volume was 19.32 billion HKD, with a net buy of 2.86 billion HKD, marking its first appearance on the active list in a month [2][3]. - The stock closed at 36.56 HKD, reflecting a daily increase of 13.82% [3]. - Other notable stocks included Tencent Holdings with a trading volume of 136.00 billion HKD and a net sell of 24.45 billion HKD, and SMIC with a trading volume of 177.21 billion HKD and a net sell of 5.24 billion HKD [2].

Core Points - The Hang Seng Index fell by 1.52% on October 13, closing at 25,889.48 points, while southbound funds through the Stock Connect recorded a net inflow of HKD 19.804 billion [1] - The total trading volume for the Stock Connect on October 13 was HKD 227.017 billion, with a net buy of HKD 19.804 billion [1] - Active stocks in the Shanghai Stock Connect included Alibaba-W, which had the highest trading volume at HKD 22.610 billion, followed by SMIC and Xiaomi Group with HKD 12.670 billion and HKD 9.133 billion respectively [1] - The top net buy stock was the Tracker Fund of Hong Kong, with a net inflow of HKD 5.208 billion, despite its closing price dropping by 1.56% [1] - Tencent Holdings had the highest net sell amount at HKD 3.308 billion, with a closing price decrease of 1.92% [1] Trading Activity Summary - In the Shenzhen Stock Connect, Alibaba-W led with a trading volume of HKD 9.688 billion, followed by Xiaomi Group and SMIC at HKD 6.189 billion and HKD 5.050 billion respectively [2] - The Tracker Fund of Hong Kong recorded a net buy of HKD 2.075 billion, while the highest net sell was for Innovent Biologics at HKD 0.515 billion, with a closing price drop of 4.20% [2] - The trading data for the top active stocks included significant fluctuations in net buy and sell amounts, indicating varied investor sentiment [2]

Group 1 - The Hang Seng Index fell by 1.52% on October 13, with a total southbound trading volume of HKD 227.017 billion, including HKD 123.411 billion in buying and HKD 103.606 billion in selling, resulting in a net buying amount of HKD 19.804 billion [1] - The southbound trading through Stock Connect (Shenzhen) had a total trading volume of HKD 78.738 billion, with net buying of HKD 12.206 billion, while the trading through Stock Connect (Shanghai) had a total volume of HKD 148.279 billion and net buying of HKD 7.598 billion [1] - Alibaba-W had the highest trading volume among southbound stocks, totaling HKD 32.298 billion, followed by SMIC and Xiaomi Group-W with HKD 17.721 billion and HKD 15.323 billion respectively [1] Group 2 - Among the active stocks, the top net buying stock was the Tracker Fund of Hong Kong with a net buying amount of HKD 7.282 billion, despite a closing price drop of 1.56% [2] - Xiaomi Group-W and ZTE Corporation had the longest consecutive net buying days, with 6 and 3 days respectively, and the highest net buying amounts of HKD 4.709 billion and HKD 1.673 billion [2] - The stocks with the highest net selling amounts included Tencent Holdings with HKD 2.445 billion, Alibaba-W with HKD 1.624 billion, and SMIC with HKD 0.524 billion [2]

Group 1 - The article highlights that 30 stocks experienced a net inflow of over 2 billion yuan, with Baotou Steel leading at a net inflow of 2.436 billion yuan [1] - China Software follows in second place with a net inflow of 1.451 billion yuan [1] - Other notable stocks with significant net inflows include Northern Rare Earth, Huayou Cobalt, and SMIC [1] Group 2 - On the other hand, BYD saw the highest net outflow of funds, totaling 1.176 billion yuan [1] - Sirius and Dongfang Wealth ranked second and third in net outflows, with 922 million yuan and 892 million yuan respectively [1]

Investment Rating - The report assigns an "Accumulate" rating to the company, SMIC (688981.SH), with a target price of 146.45 CNY and a target market value of 1,171.597 billion CNY for 2025, based on a 7.6 times PB valuation [5][19]. Core Insights - SMIC is positioned as the leading wafer foundry in mainland China, with advanced process technology that is domestically leading. The company has a production capacity covering 350-7nm process nodes and has made breakthroughs equivalent to 5nm technology [5][19]. - The semiconductor market is expected to recover, driven by AI and a resurgence in consumer electronics demand, with global semiconductor market size projected to grow from 679 billion USD in 2025 to 1,061 billion USD by 2030, reflecting a 5-year CAGR of 9% [2][13]. - The company is focusing on expanding its advanced process capacity, particularly in the 7/5/3nm nodes, which are expected to significantly increase its market share and revenue potential [2][19]. Financial Projections - Revenue projections for SMIC from 2025 to 2027 are estimated at 699.24 billion CNY, 798.12 billion CNY, and 925.16 billion CNY, respectively. Corresponding net profits are projected at 59.67 billion CNY, 66.92 billion CNY, and 81.85 billion CNY [4][19]. - The company’s revenue growth rates are expected to be 21% in 2025, 14% in 2026, and 15.9% in 2027, indicating a strong recovery trajectory following a downturn in 2023 [4][19]. Market Position and Competitive Advantage - SMIC is the largest wafer foundry in mainland China, with a global market share projected to increase from 5.3% in 2023 to 6% in 2024, moving up to the third position globally [5][19]. - The company has a significant capacity for mature processes, with over 90% of its production currently in this category, but it also has substantial room for expansion in advanced processes [36][19]. Industry Trends - The semiconductor industry is entering a new growth cycle driven by AI and technological innovation, with a notable increase in demand for advanced integrated circuits [2][13]. - The global market for 7nm and below processes is expected to be nearly double that of mature processes, highlighting the importance of advanced technology in future growth [2][19]. Operational Efficiency - SMIC has been increasing its capital expenditures significantly, from 140.22 billion CNY in 2019 to 539.13 billion CNY, which is expected to enhance its production capabilities and operational efficiency [15][42]. - The EBITDA margin has shown a stable upward trend, indicating improved core profitability despite fluctuations in gross and net margins due to rising depreciation costs [43][42].

Core Insights - On October 13, 2025, Alibaba-W (09988), SMIC (00981), and Xiaomi Group-W (01810) were the top three stocks by trading volume in the Southbound trading of the Stock Connect, with trading amounts of 22.61 billion, 12.67 billion, and 9.13 billion respectively [1] - In the Southbound trading of the Shenzhen-Hong Kong Stock Connect, Alibaba-W (09988), Xiaomi Group-W (01810), and SMIC (00981) also ranked as the top three, with trading amounts of 9.69 billion, 6.19 billion, and 5.05 billion respectively [1] Shanghai-Hong Kong Stock Connect Top Active Companies - Alibaba-W (09988) had a trading amount of 22.61 billion with a net buy of -2.18 billion [1] - SMIC (00981) recorded a trading amount of 12.67 billion with a net buy of -1.81 billion [1] - Xiaomi Group-W (01810) had a trading amount of 9.13 billion with a net buy of +0.13 billion [1] - Tencent Holdings (00700) had a trading amount of 9.13 billion with a net buy of -3.31 billion [1] - The Yingfu Fund (02800) saw a trading amount of 5.42 billion with a net buy of +5.21 billion [1] - Hua Hong Semiconductor (01347) had a trading amount of 5.17 billion with a net buy of +0.79 billion [1] - Other notable companies included Hang Seng China Enterprises (02828), ZTE Corporation (00763), Meituan-W (03690), and Kingsoft Corporation (03888) with varying trading amounts and net buys [1] Shenzhen-Hong Kong Stock Connect Top Active Companies - Alibaba-W (09988) had a trading amount of 9.69 billion with a net buy of +0.55 billion [1] - Xiaomi Group-W (01810) recorded a trading amount of 6.19 billion with a net buy of +0.76 billion [1] - SMIC (00981) had a trading amount of 5.05 billion with a net buy of +1.29 billion [1] - Tencent Holdings (00700) had a trading amount of 4.47 billion with a net buy of +0.86 billion [1] - Hua Hong Semiconductor (01347) saw a trading amount of 3.04 billion with a net buy of +0.56 billion [1] - Other companies such as Yingfu Fund (02800), Meituan-W (03690), ZTE Corporation (00763), WuXi Biologics (02269), and Innovent Biologics (01801) also participated with varying trading amounts and net buys [1]

Group 1 - Southbound funds net bought Hong Kong stocks worth 19.804 billion HKD today [1] - The top net purchases included: - Tracker Fund of Hong Kong: 7.282 billion HKD - Hang Seng China Enterprises: 2.135 billion HKD - Hua Hong Semiconductor: 1.348 billion HKD - Xiaomi Group-W: 0.888 billion HKD - Meituan-W: 0.806 billion HKD - ZTE Corporation: 0.724 billion HKD - Kingsoft Corporation: 0.286 billion HKD [1] - The top net sales included: - Tencent Holdings: 2.445 billion HKD - Alibaba Group-W: 1.624 billion HKD - SMIC: 0.523 billion HKD - Innovent Biologics: 0.515 billion HKD - WuXi Biologics: 0.267 billion HKD [1] Group 2 - Southbound funds have net bought Xiaomi for six consecutive days, totaling 4.70897 billion HKD [1] - Southbound funds have net bought ZTE Corporation for three consecutive days, totaling 1.67286 billion HKD [1] - Southbound funds have net sold SMIC for three consecutive days, totaling 5.62891 billion HKD [1] - Southbound funds have net sold Alibaba for three consecutive days, totaling 4.18416 billion HKD [1] - Southbound funds have net sold Tencent for three consecutive days, totaling 3.85962 billion HKD [1]

Core Insights - The Hong Kong stock market saw a net inflow of 198.04 billion HKD from northbound trading on October 13, with 75.98 billion HKD from the Shanghai Stock Connect and 122.06 billion HKD from the Shenzhen Stock Connect [1] Group 1: Stock Performance - The most bought stocks included the Tracker Fund of Hong Kong (02800), Hang Seng China Enterprises (02828), and Hua Hong Semiconductor (01347) [1] - The most sold stocks were Tencent (00700), Alibaba-W (09988), and SMIC (00981) [1] - Alibaba-W had a buy amount of 102.16 billion HKD and a sell amount of 123.94 billion HKD, resulting in a net outflow of 21.78 billion HKD [2] - SMIC had a buy amount of 54.30 billion HKD and a sell amount of 72.40 billion HKD, leading to a net outflow of 18.10 billion HKD [2] - Tencent had a buy amount of 29.11 billion HKD and a sell amount of 62.19 billion HKD, resulting in a net outflow of 33.08 billion HKD [2] Group 2: Market Trends - The market is experiencing a decline in investor risk appetite due to escalating US-China trade tensions, which has led to a valuation correction in Hong Kong stocks [4] - Despite the current market challenges, there are expectations for stabilization in investor sentiment due to domestic growth-supporting policies and long-term measures to stabilize the stock market [4] - The semiconductor sector is showing divergence, with Hua Hong Semiconductor receiving a net inflow of 13.47 billion HKD, while SMIC faced a net outflow of 5.23 billion HKD [5] Group 3: Company-Specific News - Xiaomi Group-W (01810) saw a net inflow of 8.88 billion HKD despite a nearly 9% drop in its stock price due to safety concerns following a fire incident involving one of its vehicles [5] - Kingsoft (03888) received a net inflow of 2.86 billion HKD amid discussions on export controls related to rare earth materials [5] - Northbound trading sold off tech stocks, with Alibaba-W and Tencent facing significant net outflows of 24.45 billion HKD and 16.23 billion HKD, respectively [6]

Core Insights - The report highlights significant target price increases for several companies, with notable gains in the semiconductor, personal care, and consumer electronics sectors [1] Group 1: Target Price Increases - Companies with the highest target price increases include: - SMIC (中芯国际) with a target price increase of 86.01% - Weigao Medical (稳健医疗) with a target price increase of 41.99% - Tonglian Precision (统联精密) with a target price increase of 38.96% [1] Group 2: Broker Recommendations - A total of 128 listed companies received broker recommendations from October 6 to October 12, with the following companies receiving three recommendations each: - Shanghai Pudong Development Bank (浦发银行) - BYD (比亚迪) - Silis (赛力斯) [3][4] Group 3: Rating Upgrades - Three companies had their ratings upgraded during the same period: - Ninebot (九号公司) from "Hold" to "Buy" by Everbright Securities - Jiangfeng Electronics (江丰电子) from "Hold" to "Buy" by Northeast Securities - Xizi Clean Energy (西子洁能) from "Recommended" to "Strongly Recommended" by Founder Securities [4][5] Group 4: First-Time Coverage - A total of 36 first-time coverage ratings were issued, with notable mentions including: - Weili (维尔利) receiving a "Buy" rating from Changjiang Securities - Dongzhu Ecology (东珠生态) receiving a "Buy" rating from Guosheng Securities - Runjian Shares (润建股份) receiving an "Increase" rating from Zhongyou Securities - Northern Rare Earth (北方稀土) receiving an "Increase" rating from Industrial Securities - Tonglian Precision (统联精密) receiving an "Increase" rating from Guotai Junan Securities [6][7]

Core Viewpoint - The semiconductor sector, particularly the SMIC concept stocks, has shown significant upward movement, with a notable increase in trading volume and net inflow of funds, indicating strong investor interest and potential growth in this industry [1][2][3]. Group 1: Market Performance - As of October 13, the SMIC concept stocks rose by 3.03%, ranking fifth among concept sectors, with 51 stocks increasing in value [1]. - Key performers included New Lai Ying Material, which hit a 20% limit up, and other stocks like Yuyuan New Materials and Zhichun Technology also reached their daily limits [1]. - Conversely, stocks like Juhua Co., Shenghui Integrated, and Demingli experienced declines of 4.66%, 4.41%, and 3.54% respectively [1]. Group 2: Fund Flow Analysis - The SMIC concept sector saw a net inflow of 789 million yuan, with 31 stocks receiving net inflows, and 11 stocks exceeding 100 million yuan in net inflow [2]. - SMIC itself led the inflow with 704 million yuan, followed by Yuyuan New Materials and Duoflu with inflows of 519 million yuan and 420 million yuan respectively [2]. - The top three stocks by net inflow ratio were Zhichun Technology, Antai Technology, and Yuyuan New Materials, with ratios of 27.43%, 26.50%, and 18.50% respectively [3]. Group 3: Stock Performance Metrics - SMIC's stock increased by 6.66% with a turnover rate of 7.02%, while Yuyuan New Materials and Duoflu saw increases of 10.00% and 9.98% respectively [3][4]. - Other notable performers included Antai Technology and Zhichun Technology, which rose by 9.99% and 10.00% respectively, with significant net inflows [4]. - Stocks like Juhua Co. and Shenghui Integrated faced the largest declines, with drops of 4.66% and 4.41% respectively, reflecting a negative sentiment in certain segments of the market [5][7].