Core Insights - China Duty Free Group (中国中免) made its first appearance on the Hong Kong Stock Connect active trading list in nearly a month, with a trading volume of 1.698 billion HKD and a net sell of 29 million HKD on November 10 [1] - The total trading volume of active stocks on the Hong Kong Stock Connect reached 30.933 billion HKD, accounting for 29.76% of the day's total trading amount, with a net buying amount of 688 million HKD [1] - Alibaba (阿里巴巴-W) led the trading volume with 5.302 billion HKD, followed by SMIC (中芯国际) and Tencent (腾讯控股) with 4.304 billion HKD and 4.019 billion HKD respectively [1] Trading Activity Summary - The active stocks on November 10 included: - Tencent Holdings (00700): 4.019 billion HKD, net sell of 128 million HKD, 20 appearances in the last month, closing price 649.5 HKD, daily increase of 2.44% [1] - SMIC (00981): 4.304 billion HKD, net sell of 217 million HKD, 20 appearances in the last month, closing price 74.7 HKD, daily decrease of 0.99% [1] - Huahong Semiconductor (01347): 1.306 billion HKD, net sell of 198 million HKD, 20 appearances in the last month, closing price 78.1 HKD, daily decrease of 1.70% [1] - Xiaomi Group (01810): 3.256 billion HKD, net buy of 173 million HKD, 20 appearances in the last month, closing price 42.36 HKD, daily increase of 0.28% [1] - Alibaba (09988): 5.302 billion HKD, net sell of 653 million HKD, 20 appearances in the last month, closing price 163.4 HKD, daily increase of 2.06% [1] - Pop Mart (09992): 3.164 billion HKD, net buy of 519 million HKD, 17 appearances in the last month, closing price 221.4 HKD, daily increase of 8.11% [1] - Meituan (03690): 570 million HKD, net sell of 31 million HKD, 13 appearances in the last month, closing price 103.3 HKD, daily increase of 1.27% [1] - CNOOC (00883): 3.742 billion HKD, net buy of 1.313 billion HKD, 13 appearances in the last month, closing price 22.44 HKD, daily increase of 5.95% [1] - China Mobile (00941): 758 million HKD, net sell of 79 million HKD, 7 appearances in the last month, closing price 87.8 HKD, daily increase of 0.75% [1] - Ganfeng Lithium (01772): 1.142 billion HKD, net sell of 74 million HKD, 4 appearances in the last month, closing price 54.0 HKD, daily increase of 2.47% [1] - Sangfor Technologies (01530): 605 million HKD, net sell of 12 million HKD, 3 appearances in the last month, closing price 29.0 HKD, daily increase of 0.62% [1] - Xpeng Motors (09868): 1.067 billion HKD, net buy of 103 million HKD, 3 appearances in the last month, closing price 92.0 HKD, daily increase of 1.21% [1] - China Duty Free Group (01880): 1.698 billion HKD, net sell of 29 million HKD, 1 appearance in the last month, closing price 81.6 HKD, daily increase of 15.34% [1]

Group 1 - The Hang Seng Index rose by 1.55% on November 10, with total southbound trading amounting to HKD 103.94 billion, including buy transactions of HKD 55.30 billion and sell transactions of HKD 48.64 billion, resulting in a net buy of HKD 6.65 billion [1] - The southbound trading through Stock Connect (Shenzhen) totaled HKD 40.91 billion, with buy transactions of HKD 23.20 billion and sell transactions of HKD 17.70 billion, leading to a net buy of HKD 5.50 billion [1] - The southbound trading through Stock Connect (Shanghai) reached HKD 63.04 billion, with buy transactions of HKD 32.09 billion and sell transactions of HKD 30.94 billion, resulting in a net buy of HKD 1.15 billion [1] Group 2 - Among the actively traded stocks, Alibaba-W had the highest transaction amount at HKD 53.02 billion, followed by SMIC and Tencent Holdings with transaction amounts of HKD 43.04 billion and HKD 40.19 billion, respectively [1] - The stock with the highest net buy was China National Offshore Oil Corporation, with a net buy of HKD 13.13 billion, closing with a price increase of 5.95% [1] - Other notable net buys included Pop Mart with HKD 5.19 billion and Xiaomi Group-W with HKD 1.73 billion [1] Group 3 - Continuous net buying was observed for Xiaomi Group-W and XPeng Motors, with net buying days of 9 and 3 days, respectively, and total net buying amounts of HKD 53.68 billion and HKD 16.80 billion [2] - The stocks with the highest net sell amounts included Alibaba-W and Meituan-W, with net sell amounts of HKD 13.23 billion and HKD 2.45 billion, respectively [2] - The trading data for November 10 shows that China National Offshore Oil Corporation, Pop Mart, and Xiaomi Group-W were among the top stocks in terms of net buy and price increase [2]

Market Overview - On November 10, the Hang Seng Index rose by 1.55%, closing at 26,649.06 points, with a total net inflow of HKD 6.654 billion through the southbound trading channel [1] - The total trading volume for the southbound trading was HKD 103.941 billion, with a net buying amount of HKD 6.654 billion [1] Southbound Trading Details - The Shanghai Stock Exchange's southbound trading had a total transaction amount of HKD 63.035 billion, with a net buying of HKD 1.152 billion [1] - The Shenzhen Stock Exchange's southbound trading recorded a transaction amount of HKD 40.906 billion, with a net buying of HKD 5.502 billion [1] Active Stocks - In the Shanghai Stock Exchange's southbound trading, Alibaba-W had the highest transaction amount of HKD 30.14 billion, followed by SMIC and Tencent Holdings with transaction amounts of HKD 25.38 billion and HKD 23.94 billion, respectively [1] - In terms of net buying, China National Offshore Oil Corporation (CNOOC) led with a net buying amount of HKD 564 million, with its stock price increasing by 5.95% [1] - Alibaba-W recorded the highest net selling amount of HKD 748 million, while its stock price rose by 2.06% [1] Shenzhen Stock Exchange Active Stocks - In the Shenzhen Stock Exchange's southbound trading, Alibaba-W also topped the transaction amount with HKD 22.88 billion, followed by SMIC and CNOOC with transaction amounts of HKD 17.66 billion and HKD 16.28 billion, respectively [2] - CNOOC had the highest net buying amount of HKD 750 million, with its stock price increasing by 5.95% [2] - SMIC recorded the highest net selling amount of HKD 12.6 million, with its stock price declining by 0.99% [2]

Investment Rating - The report suggests a positive outlook for the electronic industry, particularly focusing on structural opportunities in AI computing, AIOT, semiconductor equipment, key components, and rising storage prices [4][5]. Core Insights - The domestic wafer foundry, Huahong Semiconductor, reported a record high revenue of $635 million for Q3 2025, a year-on-year increase of 20.7%, with a capacity utilization rate of 109.5% and a gross margin of 13.5% [4][10]. - Google's upcoming TPU chip, Ironwood, is set to launch soon, boasting over four times the performance of its predecessor, enhancing Google's competitive edge in AI infrastructure [4][10]. - The electronic industry is experiencing a gradual recovery in demand, with unexpected price increases in storage chips, and a strong focus on domestic production capabilities [5][4]. Summary by Sections Industry News - Huahong Semiconductor's Q3 revenue reached $635.2 million, up 20.7% year-on-year, with a gross margin of 13.5% [10]. - Google's Ironwood TPU chip will be released soon, significantly improving performance for AI tasks [10]. - The semiconductor industry is seeing a resurgence in demand, particularly in AI and storage sectors [4][5]. Market Performance - The electronic sector underperformed the market, with the Shenwan Electronics Index down 0.09% compared to a 0.82% increase in the CSI 300 Index [17][19]. - Various sub-sectors showed mixed performance, with semiconductor equipment up 4.80% and consumer electronics down 2.45% [19][23]. Investment Recommendations - The report recommends focusing on companies benefiting from strong domestic and international demand in the AIOT sector, such as Lexin Technology and others [5]. - It also highlights opportunities in AI-driven sectors, semiconductor equipment, and companies poised for recovery in storage prices [5].

Investment Rating - The report assigns a "Buy" rating for the company with a target price of HKD 105, representing a potential upside of 32.16% from the current price of HKD 79.45 [4]. Core Insights - The company's revenue is projected to recover significantly, with a forecasted increase of 40.5% in 2025 and 22.5% in 2026, following a decline in the previous years [3]. - Gross margin is expected to improve, reaching 20.6% by 2027, up from 10.2% in 2023 [3]. - The company is benefiting from a strong demand for its products, particularly in the embedded non-volatile memory and power device segments, with notable growth rates of 20.4% and 3.5% year-on-year, respectively [5]. - The production capacity utilization rate remains high at 109.5%, indicating efficient operations and potential for further revenue growth [5]. - The report anticipates continued positive performance in the semiconductor industry, positioning the company as a key beneficiary of domestic substitution trends [5]. Financial Summary - Total revenue for the fiscal year ending December 31, 2022, was USD 2,286.1 million, with a projected increase to USD 3,459.3 million by 2025 [3]. - Shareholder net profit is expected to rise from USD 80.3 million in 2025 to USD 322.7 million by 2027, reflecting a strong recovery trajectory [3]. - The earnings per share (EPS) is forecasted to increase from USD 0.05 in 2025 to USD 0.18 in 2027 [3]. - The company’s market capitalization is currently HKD 105.49 billion, with a price-to-earnings (P/E) ratio of 218.0 for 2025, which is expected to decrease to 57.0 by 2027 [4][6]. Operational Highlights - The company has optimized its product mix, with all process platforms showing positive revenue growth [5]. - The average selling price (ASP) for wafer foundry services is projected to reach approximately USD 500 by 2027, indicating a robust pricing strategy [5]. - The company is also expanding its production capabilities, with the FAB5 facility expected to contribute an additional USD 600-700 million in revenue once operational [5].

Core Insights - On November 10, 2025, Alibaba-W (09988), SMIC (00981), and Tencent Holdings (00700) were the top three companies by trading volume in the Southbound Stock Connect, with trading amounts of 30.14 billion, 25.38 billion, and 23.94 billion respectively [1][2] - In the Shenzhen-Hong Kong Stock Connect, Alibaba-W (09988), SMIC (00981), and China National Offshore Oil Corporation (00883) also ranked as the top three, with trading amounts of 22.88 billion, 17.66 billion, and 16.28 billion respectively [1][2] Southbound Stock Connect - Top Active Companies - Alibaba-W (09988) had a trading amount of 30.14 billion with a net buy of -7.48 billion [2] - SMIC (00981) recorded a trading amount of 25.38 billion with a net buy of -91.6453 million [2] - Tencent Holdings (00700) had a trading amount of 23.94 billion with a net buy of -4.19 billion [2] - China National Offshore Oil Corporation (00883) achieved a trading amount of 21.14 billion with a net buy of +5.64 billion [2] - Xiaomi Group-W (01810) had a trading amount of 20.62 billion with a net buy of +2.62 billion [2] - Pop Mart (09992) recorded a trading amount of 18.74 billion with a net buy of +834.075 million [2] - Hua Hong Semiconductor (01347) had a trading amount of 13.06 billion with a net buy of -1.98 billion [2] - Ganfeng Lithium (01772) recorded a trading amount of 11.42 billion with a net buy of -743.079 million [2] - China Duty Free Group (01880) had a trading amount of 10.92 billion with a net buy of -1.47 billion [2] - Xpeng Motors-W (09868) achieved a trading amount of 10.67 billion with a net buy of +1.03 billion [2] Shenzhen-Hong Kong Stock Connect - Top Active Companies - Alibaba-W (09988) had a trading amount of 22.88 billion with a net buy of +952.690 million [2] - SMIC (00981) recorded a trading amount of 17.66 billion with a net buy of -1.26 billion [2] - China National Offshore Oil Corporation (00883) achieved a trading amount of 16.28 billion with a net buy of +7.50 billion [2] - Tencent Holdings (00700) had a trading amount of 16.25 billion with a net buy of +2.91 billion [2] - Pop Mart (09992) recorded a trading amount of 12.90 billion with a net buy of +4.35 billion [2] - Xiaomi Group-W (01810) had a trading amount of 11.95 billion with a net buy of -883.856 million [2] - China Mobile (00941) achieved a trading amount of 7.58 billion with a net buy of -789.845 million [2] - China Duty Free Group (01880) recorded a trading amount of 6.07 billion with a net buy of +1.18 billion [2] - 3SBio (01530) had a trading amount of 6.05 billion with a net buy of -11.6094 million [2] - Meituan-W (03690) achieved a trading amount of 5.70 billion with a net buy of -306.287 million [2]

Group 1 - Southbound funds net bought Hong Kong stocks worth 6.654 billion HKD today [1] - The top net purchases included China National Offshore Oil Corporation (CNOOC) at 1.313 billion HKD, Pop Mart at 518 million HKD, Xiaomi Group-W at 173 million HKD, and Xpeng Motors-W at 103 million HKD [1] - The top net sales included Alibaba-W at 653 million HKD, SMIC at 217 million HKD, Hua Hong Semiconductor at 197 million HKD, and Tencent Holdings at 127 million HKD [1] Group 2 - Southbound funds have net bought Xiaomi for 9 consecutive days, totaling 5.36835 billion HKD [1] - Southbound funds have net bought Xpeng Motors for 3 consecutive days, totaling 1.68038 billion HKD [1] - Southbound funds have net sold Alibaba for 3 consecutive days, totaling 1.32284 billion HKD [1]

Summary of Key Points Core Viewpoint - The Hong Kong stock market experienced significant net inflows from northbound capital, with a total net buy of HKD 66.54 billion on November 10, marking a cumulative net inflow of over HKD 5 trillion since the launch of the Stock Connect program [1]. Group 1: Northbound Capital Inflows - The highest net purchases were recorded for CNOOC (00883), Pop Mart (09992), and Xiaomi Group-W (01810) [1]. - The most significant net sales were observed for Alibaba-W (09988), SMIC (00981), and Hua Hong Semiconductor (01347) [1]. Group 2: Individual Stock Performance - Alibaba-W had a net buy of HKD 11.33 billion and a sell of HKD 18.81 billion, resulting in a net outflow of HKD 7.48 billion [2]. - CNOOC received a net buy of HKD 13.13 billion, influenced by OPEC+ production decisions and U.S. sanctions on Russian oil producers [4]. - Pop Mart saw a net buy of HKD 5.18 billion, with positive sales growth projections through 2026 due to strategic adjustments and product management [5]. - Tencent and Alibaba-W faced net outflows of HKD 1.27 billion and HKD 6.53 billion, respectively, as market sentiment remained cautious ahead of Tencent's earnings announcement [7]. Group 3: Market Trends and Insights - The overall market sentiment is mixed, with concerns about demand weakness and supply surplus affecting oil prices, while optimism exists for the Chinese duty-free sector, particularly for China Duty Free Group [6]. - Hua Hong Semiconductor's third-quarter gross margin exceeded expectations, but its valuation is already reflected in the market [7].

Core Viewpoint - 招银国际 reports that 华虹半导体's gross margin significantly exceeded expectations, but its valuation has already been reflected, maintaining a "Hold" rating with a target price adjustment to HKD 68 [1] Financial Performance - 华虹半导体 achieved a record revenue of USD 635 million in Q3 2025, representing a year-on-year growth of 21%, in line with market consensus and company guidance [1] - The gross margin recovered to 13.5%, an increase of 1.4 percentage points year-on-year [1] - The net profit for the period was USD 26 million, which was 5.3% lower than market expectations, but the net profit margin improved from 0.7% and 1.4% in the first and second quarters to 4.1% [1] Future Guidance - The company guided for Q4 revenue between USD 650 million and USD 660 million, with a gross margin ranging from 12% to 14% [1] - 招银国际 maintains its full-year revenue forecast for 华虹半导体 for 2025 and has raised the full-year gross margin estimate from 10.9% to 12%, reflecting a stronger profit margin recovery [1] - Considering the planned new factory acquisition, expected to be completed around August 2026 with an annual revenue contribution of USD 600 million to USD 700 million, the firm has raised its revenue forecast for 2026 to USD 3.2 billion [1]

Core Viewpoint - Zhaoyin International reports that Huahong Semiconductor (01347) has significantly exceeded expectations in gross margin, but its valuation is already reflected, maintaining a "Hold" rating with a target price adjusted to HKD 68 [1] Financial Performance - For Q3 2025, Huahong Semiconductor achieved a record revenue of USD 635 million, a year-on-year increase of 21%, aligning with market consensus and company guidance [1] - Gross margin recovered to 13.5%, up 1.4 percentage points year-on-year [1] - Net profit for the period was USD 26 million, which was 5.3% lower than market expectations, but net profit margin improved from 0.7% and 1.4% in the first and second quarters to 4.1% [1] Future Guidance - The company guides for Q4 revenue between USD 650 million and USD 660 million, with gross margin expected to be between 12% and 14% [1] - Zhaoyin International maintains its full-year revenue forecast for Huahong Semiconductor for 2025 and raises the full-year gross margin estimate from 10.9% to 12%, reflecting stronger profit margin recovery [1] - Considering the planned new factory acquisition, expected to be completed around August 2026 with an annual revenue contribution of USD 600 million to USD 700 million, the firm raises the 2026 revenue forecast to USD 3.2 billion [1]