Group 1 - The core viewpoint of the news highlights a significant rise in Hong Kong's stock market, particularly in technology stocks, following the announcement of the "Genesis Plan" by the U.S. government to leverage artificial intelligence for scientific research [1] - The Hang Seng Index and Hang Seng Tech Index opened strongly, with notable gains in companies like Bilibili, Xiaomi, and ZTE, indicating a positive market sentiment towards tech stocks [1] - The Nasdaq Golden Dragon Index, which tracks Chinese tech stocks, rose by 2.82%, with major players like Baidu and Alibaba experiencing substantial increases in their stock prices [1] Group 2 - There is a strong expectation for interest rate cuts by the Federal Reserve, with a probability of 82.9% for a 25 basis point cut in December, which could influence market dynamics positively [2] - Historical data shows that the Hang Seng Index and Hang Seng Tech Index have experienced significant declines recently, with average maximum drawdowns of approximately 17% and 21% respectively during past market corrections [2][3] - The current valuation of the Hong Kong Stock Connect Technology ETF is at a price-to-earnings ratio of 23.55, which is at a historically low level, suggesting potential for recovery [3] Group 3 - The Hong Kong Stock Connect Technology Index has shown greater elasticity compared to similar indices, with a remarkable increase of 170% from February to September 2024, outperforming other indices [4]

Core Viewpoint - The report from Zhongyuan Securities indicates that a series of AI industry catalytic events will occur in 2026, strengthening the leading position of top optical module manufacturers due to their technological, customer, and scale advantages. The current valuation of the communication industry index is below the ten-year average, and the industry maintains a "stronger than the market" investment rating based on performance growth expectations and valuation levels [1][2]. Summary by Sections Review of 2025 - In early 2025, the DeepSeek large model boosted market sentiment, and the three major operators completed the deployment of DeepSeek computing power private networks, enhancing their cloud service capabilities. Domestic cloud manufacturers provided positive capital expenditure guidance, leading to an increase in industry valuations. However, from February to April, the industry index experienced significant fluctuations due to concerns over U.S. tariff policies and future demand for optical modules. By mid-April, the easing of tariff policies and validation of AI computing power demand led to a gradual recovery in the industry index and valuations. In late July, North American cloud manufacturers raised their capital expenditure guidance, further catalyzing the industry. Since September, leading manufacturers faced short-term performance fatigue due to product iterations and customer structure adjustments, raising concerns about unclear downstream business models [2]. Outlook for 2026 - A series of AI industry catalytic events are expected, including the mass production of NVIDIA's next-generation Rubin GPU, the release of Google's new large model Gemini, and clear capital expenditure guidance from cloud manufacturers. AI smartphones equipped with large models are anticipated to become personalized smart assistants, potentially driving the next wave of smartphone upgrades. The development of key 6G technologies by telecom operators is expected to accelerate revenue growth from AI computing power. The report is optimistic about the high industry prosperity and strong growth potential of optical modules, optical devices, optical chips, and the increasing penetration of AI smartphones, as well as the stable operations of quality dividend assets in telecom operators [3][4]. Capital Expenditure Outlook for Leading Cloud Manufacturers - The demand for 800G is increasing, and the industry is transitioning from 800G to 1.6T technology. Leading optical module manufacturers are expected to further highlight their advantages due to technological leadership, stable customer relationships, and scalable delivery capabilities. The development of AI is driving the construction of large data centers, benefiting optical device manufacturers. The long R&D and expansion cycles for optical chips create high barriers in technology, talent, customer validation, and capital, leading to a persistent supply-demand gap for certain optical chips. The increasing demand for domestic controllable solutions is expected to translate into performance for domestic computing power. Recommended companies to watch include: NewEase, Huagong Technology, Guangxun Technology, Yuanjie Technology, Shijia Photon, and Taicheng Light [4]. AI Smartphones and Market Trends - Generative AI smartphones are set to provide users with new interactive experiences, multimodal content generation capabilities, personalized services, and innovative application ecosystems. The continuous improvement of edge AI computing power and large model capabilities is expected to further increase the market penetration of AI smartphones. Innovations and upgrades in AI smartphones are likely to lead to higher average selling prices and improved profit margins. The growth in edge AI shipments will drive sustained growth in core product lines of consumer electronics components [5]. Telecom Operators' Performance - The three major telecom operators are considered quality dividend assets with high dividend yield potential, offering cash dividends twice a year. The quality of traditional business revenue is improving, and a decrease in capital expenditure is expected to lower future depreciation and amortization costs, maintaining stable operations. Additionally, telecom operators are likely to leverage their advantages in data centers, big data, and network infrastructure to reconstruct business models with the help of AI. Investment recommendations include focusing on the optical module, optical device, and optical chip sectors, as well as AI smartphone and telecom operator sectors [6].

Group 1 - UBS's long position in ZTE Corporation's H-shares decreased from 8.05% to 7.81% as of November 18, 2025 [1]

Group 1 - UBS's long position in ZTE Corporation - H shares decreased from 8.05% to 7.81% as of November 18, 2025 [1]

Core Insights - The Terahertz concept sector has seen a rise of 4.47%, ranking fourth among concept sectors in terms of growth [1] - Key stocks within this sector include LeiKe Defense, Tianhai Defense, Tianhe Defense, and Haige Communication, with LeiKe Defense hitting the daily limit up [1][2] Market Performance - The Terahertz sector had a net inflow of 488 million yuan from main funds, with 8 stocks receiving net inflows and 5 stocks exceeding 50 million yuan in net inflow [2] - LeiKe Defense led the net inflow with 341 million yuan, followed by ZTE Corporation, Haige Communication, and Tianhe Defense with net inflows of 223 million yuan, 108 million yuan, and 68 million yuan respectively [2][3] Stock Performance - LeiKe Defense recorded a daily increase of 10.02% with a turnover rate of 9.45% and a net inflow ratio of 44.60% [3] - Other notable performers include ZTE Corporation with a 1.52% increase and a net inflow ratio of 7.07%, and Haige Communication with a 5.74% increase and a net inflow ratio of 6.95% [3][4]

Investment Rating - The report maintains a "Buy" rating for several key companies in the telecommunications and AI computing chain, including ZTE Corporation, NewEase, Ruijie Networks, Zhongji Xuchuang, China Telecom, Haige Communication, China Mobile, and Shanghai Hantong [9][41]. Core Insights - The report highlights the ongoing concerns regarding the sustainability of the AI "bubble" and the effectiveness of Scaling Law, while expressing optimism about the performance of Gemini 3 and Banana Pro, which have exceeded initial expectations [2][3]. - The AI computing chain is expected to continue its upward trend, with a focus on Google's core components such as optical modules and liquid cooling systems [2][3]. - The report emphasizes the generational leap in capabilities of Gemini 3, which has achieved significant benchmarks in reasoning and multimodal tasks, thereby shortening the time from investment to revenue [20][14]. Summary by Sections Market Overview - The telecommunications index fell by 2.51% last week, while the Shanghai Composite Index and Shenzhen Component Index dropped by 3.90% and 5.13%, respectively [2][13]. - Concerns about the overseas AI "bubble" are prevalent, particularly regarding the effectiveness of Scaling Law and the sustainability of ROI [2][3]. Key Companies and Dynamics - The report recommends several companies within the AI computing chain, including: - ZTE Corporation (Buy, target price: 64.34) [41] - NewEase (Buy, target price: 476.71) [41] - Ruijie Networks (Buy, target price: 102.51) [41] - Zhongji Xuchuang (Buy, target price: 626.68) [41] - China Telecom (Buy, target price: 9.11) [41] - Haige Communication (Buy, target price: 13.70) [41] - China Mobile (Buy, target price: 126.20) [41] - Shanghai Hantong (Buy, target price: 28.28) [41] - China Unicom (Hold, target price: 7.56) [41] AI Computing Chain Insights - The report notes that the performance of Gemini 3 and Nano Banana Pro has significantly advanced the capabilities in reasoning and multimodal tasks, indicating a strong integration into the AI ecosystem [20][14]. - The demand for AI computing resources is expected to grow, driven by the increasing need for reasoning capabilities and the expansion of cloud token scales [20][14]. Financial Performance - ZTE Corporation reported a revenue of 100.52 billion yuan for the first nine months of 2025, a year-on-year increase of 12%, but a net profit decline of 33% [42]. - NewEase's revenue for the first three quarters of 2025 reached 16.5 billion yuan, a year-on-year increase of 222%, with a net profit increase of 284% [44]. - Ruijie Networks reported a revenue of 10.68 billion yuan for the first nine months of 2025, a year-on-year increase of 28%, with a net profit increase of 65% [46].

Core Insights - The report maintains a "stronger than market" investment rating for the communication industry, highlighting its growth potential and favorable valuation levels [1][5][12] - The communication industry index has shown significant performance, ranking second among 30 major industry indices with a 60.87% increase as of November 20, 2025 [12][14] - The report emphasizes the optimistic outlook for AI-related developments, particularly in AI computing and cloud services, which are expected to drive industry growth [4][5][45] Market Review and Industry Performance - In the first three quarters of 2025, the communication industry achieved a total revenue of CNY 19,753.67 billion, representing a year-on-year growth of 2.30%, while net profit reached CNY 1,886.40 billion, up 6.95% [18] - The overall gross margin for the communication industry was 28.45%, with a net margin of 10.19% for the first three quarters of 2025, indicating stable profitability [19] - The telecommunications operators segment reported a revenue of CNY 14,819.21 billion, growing by 0.57%, and a net profit of CNY 1,548.98 billion, increasing by 4.30% [35] Segment Performance - The optical communication segment (including optical modules, devices, and chips) saw a revenue of CNY 795.38 billion, a year-on-year increase of 56.14%, with net profit soaring by 116.86% [41] - The telecommunications equipment segment recorded a revenue of CNY 1,390.0 billion, growing by 11.2%, while the consumer electronics components segment also grew by 11.1% [21] - The cable segment achieved a revenue of CNY 464.54 billion, reflecting a growth of 6.99%, driven by increasing demand across multiple applications [46] Investment Recommendations - The report suggests focusing on companies within the optical module/device/chip sector, such as NewEase, Huagong Technology, and Guangxun Technology, due to their strong growth prospects [5][41] - For AI mobile phones, companies like Xunwei Communication and ZTE are highlighted as key players to watch [5][41] - The telecommunications operators, including China Mobile, China Telecom, and China Unicom, are recommended for their stable operations and high dividend yields [5][41]

Group 1 - The Ministry of Industry and Information Technology (MIIT) has announced the establishment of a standardization technical committee for humanoid robots, with a public notice for the committee member list [1][2] - The public notice period is from November 25, 2025, to December 24, 2025 [2] - Notable members include Wang Xingxing from Yushu Technology as Vice Chairman and Peng Zhihui from Zhiyuan Innovation as another Vice Chairman [2][4] Group 2 - Wang Xingxing, born in 1990, is a graduate of Zhejiang University of Technology and has experience working at DJI before founding Yushu Technology, which focuses on high-performance humanoid robots and robotic arms [2][4] - Yushu Technology gained significant attention after showcasing its humanoid robot during the 2023 CCTV Spring Festival Gala [2] - Peng Zhihui, born in 1993, is a co-founder and CTO of Zhiyuan Innovation, previously recognized as a "Huawei genius" [4] Group 3 - The committee includes various members from prominent organizations such as Chery Automobile, Huawei Technologies, ZTE Corporation, and Xiaopeng Motors [2][8] - The committee's structure features a Chairman, multiple Vice Chairmen, and members from various research institutions and universities, indicating a collaborative approach to humanoid robot standardization [8][9]

Core Insights - ZTE Corporation's stock price increased by 2.08% on November 24, reaching 38.86 CNY per share, with a trading volume of 2.195 billion CNY and a market capitalization of 185.888 billion CNY [1] - The company has experienced a year-to-date stock price decline of 2.32%, with a 24.28% drop over the past 20 trading days [1] - For the period from January to September 2025, ZTE reported a revenue of 100.52 billion CNY, reflecting a year-on-year growth of 11.63%, while the net profit attributable to shareholders decreased by 32.69% to 5.322 billion CNY [2] Financial Performance - ZTE has cumulatively distributed 17.137 billion CNY in dividends since its A-share listing, with 8.114 billion CNY distributed over the past three years [3] - As of September 30, 2025, the top ten circulating shareholders of ZTE have seen a reduction in holdings, with the Hong Kong Central Clearing Limited holding 76.8764 million shares, down by 11.3435 million shares from the previous period [3] Market Activity - The net inflow of main funds into ZTE was 178 million CNY, with significant buying activity from large orders, accounting for 24.15% of total trading volume [1] - ZTE has appeared on the "Dragon and Tiger List" three times this year, with the most recent instance on October 17, where it recorded a net buy of -554 million CNY [1]

Group 1 - ZTE has resumed operations after the lifting of restrictions, with all 5G field tests initiated with the three major domestic operators and international tests fully restored, accumulating over 500 million yuan in orders from domestic operators [1] - The Ministry of Industry and Information Technology reported a 14.6% year-on-year increase in fixed asset investment in the electronic information manufacturing industry from January to May, with semiconductor discrete device manufacturing seeing a notable growth of 33.1% [1][5] - The investment growth in the electronic information manufacturing sector has been driven by emerging applications such as automotive electronics, artificial intelligence, and 5G, with communication system equipment and integrated circuit manufacturing also showing strong investment momentum [5][6] Group 2 - The overall investment growth in the electronic information manufacturing industry has declined compared to last year, with a drop from 21% in early 2018 to 14.2% by April, although there was a slight recovery in May [2][4] - The significant increase in investment in the first half of 2017 was attributed to the approval of many large-scale projects, including infrastructure developments, which directly boosted the electronic information manufacturing sector [4] - The decline in investment growth in 2018 is seen as a normal process as the industry transitions towards high-quality development, with traditional manufacturing investment cooling while new information technology sectors are still in their infancy [4][6]