Market Overview - Global markets showed mixed performance, with the Hang Seng Index declining by 0.98% while the Shanghai Composite Index increased by 0.83% [1][3] - Southbound capital inflow reached a record high of HKD 35.876 billion, indicating strong interest in Hong Kong stocks [3] Sector Performance - The Hong Kong stock market experienced a pullback, particularly in consumer discretionary, essential consumer goods, and real estate sectors, while materials, healthcare, and industrial sectors saw gains [3] - The Hang Seng Financial Index fell by 1.25%, and the Hang Seng Real Estate Index dropped by 1.83% [2] Company Insights - NetEase Cloud Music reported a 6% decline in total revenue to RMB 3.83 billion for 1H25, but adjusted operating profit increased by 35% to RMB 905 million, driven by improved commercialization and cost control [4] - Weibo's 2Q25 revenue grew by 2% to USD 444.8 million, exceeding expectations, but the outlook for 2H25 remains uncertain due to challenges in the advertising business [5] - China Hongqiao's net profit for 1H25 was RMB 12.3 billion, a 35% increase, and the company announced a new share buyback plan to enhance market confidence [5] - China Lilang's sales for 1H25 increased by 8% to RMB 1.73 billion, but net profit fell by 14% to RMB 181 million, attributed to rising operational costs [9] Investment Ratings - NetEase Cloud Music maintained a "Buy" rating with a target price of HKD 330, reflecting an upward revision based on operational efficiency improvements [4] - Weibo also holds a "Buy" rating with a target price of USD 14.5, despite a slight downward adjustment in revenue forecasts [5] - China Hongqiao is rated "Buy" with a target price raised to HKD 27, supported by strong profit growth and a favorable industry outlook [5] - China Lilang's target price was lowered to HKD 4.42, but it retains a "Buy" rating due to attractive dividend yields [8]

Retail Performance - In July, U.S. retail and food service sales increased by 0.5% month-on-month, slightly below the market expectation of 0.6%[5] - The average monthly growth rate of retail sales rose from 0% in January-May to 0.7% in June-July, indicating a recovery in consumer demand[2] - Automotive sales rebounded, with a month-on-month growth rate increasing from 1.4% in June to 1.6% in July after a cumulative decline of 4.6% in the first five months of 2023[5] Industrial Output - Industrial production fell by 0.1% month-on-month in July, primarily due to declines in mining and utilities, which dropped to -0.4% and -0.2% respectively[5] - Manufacturing output remained flat at 0% month-on-month, with significant increases in medical equipment (2.6%) and semiconductors (2.9%), while apparel and automotive sectors saw declines[5] Economic Outlook - Federal Reserve Chair Jerome Powell's upcoming speech at Jackson Hole is expected to defend the independence of the central bank and reduce market expectations for significant interest rate cuts[2] - With inflation expected to rebound and unemployment rates remaining low, the Federal Reserve is anticipated to keep interest rates unchanged in September, followed by rate cuts in October and December[2]

Group 1: Market Overview - Global markets showed mixed performance, with the Hang Seng Index closing at 25,519, down 0.37% for the day but up 27.22% year-to-date [1] - European markets continued to rise for the third consecutive day, with the UK stock market reaching a historical high [3] - US markets exhibited mixed results, with financials, healthcare, and consumer discretionary sectors leading gains, while industrials and materials lagged [3] Group 2: Company Analysis - JD.com - JD.com reported Q2 2025 revenue of 356.7 billion RMB, a 22.4% year-on-year increase, exceeding market expectations by 6% [4] - Non-GAAP net profit fell 49% year-on-year to 7.4 billion RMB due to increased investment in the food delivery business, but was 38% higher than market expectations [4] - The management emphasized strong early synergies between the e-commerce and food delivery businesses, with active user growth exceeding 40% year-on-year [4] Group 3: Company Analysis - NetEase - NetEase's Q2 2025 revenue grew 9% year-on-year to 27.9 billion RMB, slightly below market expectations [4] - Non-GAAP net profit increased by 22% to 9.5 billion RMB, aligning with market expectations [4] - The company anticipates resilient growth in gaming revenue for the second half of 2025, driven by strong performance in evergreen games [4] Group 4: Company Analysis - Geely Automobile - Geely's Q2 2025 revenue met expectations, with a gross margin improvement of 1.3 percentage points to 17.1%, exceeding market forecasts [5][6] - The company plans to launch five new electric vehicle models in the second half of the year, targeting competitive pricing in underrepresented market segments [6] - Adjusted profit forecasts for 2025 have been slightly increased to 17.7 billion RMB, reflecting improved synergy from brand integration [6] Group 5: Company Analysis - Jizhi Technology - Jizhi Technology is positioned as a new star in the global warehouse automation market, with over 800 end customers across 40 countries [7] - The company is expected to achieve a compound annual growth rate of 34% in revenue from 2024 to 2027, with meaningful profitability anticipated starting in 2026 [7] - As the first AMR company listed in Hong Kong, Jizhi Technology holds a unique market position [7] Group 6: Investment Ratings - Geely Automobile is rated "Buy" with a target price of 25 HKD, reflecting a 27% upside potential [8] - JD.com is rated "Buy" with a target price of 49.4 USD, indicating a strong outlook despite short-term profit pressures [4][8] - NetEase is rated "Buy" with a target price of 160.0 USD, supported by positive gaming revenue forecasts [4][8]

Investment Rating - The report initiates coverage on Geekplus (2590 HK) with a "Buy" rating and a target price of HKD 26.7, representing a potential upside of 42.3% from the current price of HKD 18.76 [1][3]. Core Insights - Geekplus is positioned as a rising star in the global AMR (Autonomous Mobile Robot) market for warehouse automation, with a unique presence in the Hong Kong market. The company has over 800 end customers across 40 countries, with an expected overseas revenue contribution of 72% in 2024 [1]. - The AMR solutions market is projected to grow significantly, with the market size expected to increase from RMB 39 billion in 2024 to RMB 162 billion by 2029, driven by an increase in AMR penetration from 8% to 20% of total warehouse automation solutions revenue [7]. - Geekplus holds a 9% market share in warehouse fulfillment revenue, ranking first globally, attributed to its modular design solutions that integrate easily into existing customer systems, minimizing operational disruptions [7]. - The report highlights the cost-saving and efficiency improvements experienced by Geekplus customers, exemplified by YesAsia, which saved approximately USD 10 million in costs and improved order accuracy to 99.99% after implementing Geekplus AMR solutions [7]. Financial Summary - The forecasted revenue for Geekplus is expected to grow from RMB 2,143 million in FY23A to RMB 5,788 million by FY27E, reflecting a compound annual growth rate (CAGR) of 34% from 2024 to 2027 [2][8]. - Adjusted net profit is projected to turn positive starting in FY26E, with estimates of RMB 112 million in FY25E and RMB 673.5 million in FY27E [2][8]. - The company is expected to achieve a gross margin improvement from 17.7% in FY22A to 39.0% by FY27E, indicating enhanced profitability [9].

Report Industry Investment Rating - Not provided in the given content Core Viewpoints - After the release of US CPI data, Asia IG opened firmly, and the market almost fully priced in a 25bps rate cut in Sep'25 and a high chance of another 25bps cut in Oct'25 [1] - CMBI expects USD/RMB may drop again in 4Q25 when US inflation might decline and China might launch additional fiscal stimulus; USD/RMB to reach 7.10 at end - 2025 [2] - Maintain buy on INDYIJ 8.75 05/07/29, considering its sufficient liquidity, disciplined capex, and strong technicals in the Indonesia oil & gas and mining sectors [13] - The PBOC will maintain easing liquidity condition, which is positive for Chinese stocks and commodities, and might cut RRR by 50bps and LPRs by 10bps in 4Q25 [17] Summary by Relevant Catalogs Trading Desk Comments - Asia IG opened firmly after US CPI data release. Newly issued WYNMAC 6.75 moved 0.7pt higher, and some bonds like MGMCHIs, MTRC perps, etc., had price changes. Chinese properties ROADKG 28 - 30s dropped 2.3 - 3.3pts [1] - SHIKON tightened 5bps in the morning, HK banks T2s tightened 3bps, Korea space was unchanged to 2bps tighter, and some floaters and perps had price movements [2] - There is demand from China - based investors for Japanese insurance hybrids and Yankee AT1s, and bonds in SEA and LGFV also had price changes [3] Marco News Recap - On Wednesday, S&P (+0.32%), Dow (+1.04%), and Nasdaq (+0.14%) were higher, and UST yield was lower with 2/5/10/30 yield at 3.67%/3.77%/4.24%/4.83% [6] Desk Analyst Comments - INDYIJ's 1H25 profit eroded due to lower ASP and softened market demand. Revenue declined 20.0% yoy to USD957mn, with coal ASP and sales volume decreasing. Operating profit and adj. EBITDA dropped 49.4% and 28.1% respectively [7] - Indika has been diversifying into non - coal businesses, but coal operations still drive performance. It incurred negative FCF in 1H25, and total debt/LTM EBITDA and net debt/LTM EBITDA weakened [9][10][11] - Indika has proactive liability management and smooth access to funding channels. The company is considered a candidate for early redemptions, and INDYIJ 8.75 05/07/29 is recommended as a good carry play [12][13] China Economy - Social financing extended recovery due to robust government bond issuance, but private - sector Renminbi loans slowed. The PBOC will maintain easing liquidity to stimulate credit demand [17] - The central bank might cut RRR by 50bps and LPRs by 10bps in 4Q25. US$/RMB may rise in Aug - Sep and drop in 4Q25, reaching 7.10 at end - 2025 [17] - Outstanding social financing edged up to 9% in July, SF flow expanded by 50.5% but fell short of expectation. Government and corporate bond issuances were strong, while RMB loans to the real economy dropped [18] - New RMB loans remained subdued, with growth of outstanding RMB loans edging down to 6.9% in July. Credit demand in household and corporate sectors was weak, and bill financing increased [19] Offshore Asia New Issues - New issues include Chengdu Sino French Ecological (USD100mn, 3yr, 6.8%) and Henan Water Conservancy Investment (USD500mn, 3yr, 4.3%) [22] - There is no offshore Asia new issues pipeline today [23] News and Market Color - There were 94 credit bonds issued onshore yesterday with an amount of RMB70bn, and 930 credit bonds issued month - to - date with a 9.5% yoy increase [24] - Various companies had news such as Adani solar arm sued, Adani Ports accepting tendered bonds, Azure Power seeking debt, etc. [24]

Group 1: Market Overview - Global markets showed positive performance, with the Hang Seng Index rising by 2.58% and the Nasdaq increasing by 0.14% year-to-date [1][3] - The Hong Kong stock market experienced significant gains, particularly in healthcare, information technology, and consumer discretionary sectors, while utilities, telecommunications, and energy sectors lagged [3] - A net outflow of HKD 8.277 billion was observed from southbound funds, indicating a cautious sentiment among investors [3] Group 2: Economic Insights - The U.S. economy is experiencing a rebound in core inflation, with expectations for a potential interest rate cut being pushed to later dates [4] - China's economic indicators show a continued recovery, with M1 and M2 growth rates reaching recent highs, although household housing demand remains weak [4] - The Chinese central bank is expected to maintain a loose monetary policy, potentially lowering the reserve requirement ratio (RRR) and the loan prime rate (LPR) in the future [4][5] Group 3: Company Analysis - Tencent - Tencent reported a strong Q2 2025 performance, with total revenue and non-IFRS operating profit increasing by 15% and 18% year-on-year, respectively [5] - The gaming and marketing segments showed robust growth, with year-on-year increases of 22% and 20%, contributing to a 3.6 percentage point rise in gross margin [5] - The target price for Tencent has been raised to HKD 705.0, reflecting confidence in its growth strategy and AI development opportunities [5] Group 4: Company Analysis - Hongteng Precision - Hongteng Precision's Q2 2025 results met expectations, with revenue and net profit growing by 9% and 13% year-on-year, respectively [6] - The company is accelerating its business transformation, with AI cloud and automotive segments accounting for 36% of revenue in Q2, up from 24% in 2024 [6][7] - The target price for Hongteng Precision is set at HKD 4.96, based on a rolling 16 times 2026 expected P/E ratio, indicating an attractive valuation [7] Group 5: Company Analysis - 361 Degrees - 361 Degrees maintains its sales growth guidance of 10%-15% for FY25, supported by strong demand for basketball products and e-commerce growth [8][9] - However, there are concerns regarding store opening risks and declining same-store sales, which could impact future orders [8] - The target price for 361 Degrees has been adjusted to HKD 7.09, reflecting a valuation based on 11 times FY25 expected P/E [8]

Inflation Trends - The U.S. July CPI growth rate slightly decreased to 0.20% month-on-month from 0.29% in June, primarily due to falling energy prices, while the year-on-year CPI growth remained at 2.7%[6] - Core CPI month-on-month growth increased from 0.23% in June to 0.32% in July, exceeding market expectations of 0.29%, with year-on-year growth rising from 2.9% to 3.1%[6] Market Expectations - Following the CPI data release, market expectations for a rate cut in September rose from 86% to 94%, with an anticipated total cut of 60 basis points for the year[1] - The Federal Reserve is expected to maintain interest rates in September, with potential cuts in October and December[1] Core Inflation Components - Core goods prices remained stable month-on-month, while core service prices saw a significant rebound, with core services month-on-month growth rising from 0.21% to 0.48%[6] - Rent, which accounts for nearly 35% of the CPI, saw a month-on-month increase of 0.27%, returning to pre-pandemic levels[6] Employment and Economic Outlook - Non-farm employment growth has recently declined, influenced by both demand slowdown and reduced immigrant labor supply, while the unemployment rate remains low historically[1] - The inflation rate is expected to rebound in August and September, with projections indicating a year-on-year CPI growth of 2.9% to 3%[6]

Market Overview - Global markets showed mixed performance, with the Hang Seng Index closing at 24,970, up 0.25% for the day and 24.48% year-to-date [1] - The US markets saw gains, with the Dow Jones up 1.10% and the S&P 500 up 1.13%, reflecting positive sentiment driven by moderate inflation data [3] Hong Kong Stock Performance - The Hang Seng Financial Index rose 0.52% and is up 28.47% year-to-date, while the Hang Seng Utilities Index fell 0.30% but is still up 5.00% for the year [2] - Southbound capital saw a net inflow of HKD 9.45 billion, indicating strong interest in Hong Kong stocks [3] Economic Policies and Impacts - The Chinese government announced targeted interest subsidies for personal consumption loans, potentially leading to an increase in loan growth by CNY 1 trillion [3] - The Hong Kong Monetary Authority intervened by buying HKD 7.065 billion to defend the currency peg, with total purchases since June reaching HKD 116.6 billion [3] Company Analysis: Kingdee International - Kingdee reported a 1H25 revenue of CNY 3.19 billion, a year-on-year increase of 11.2%, aligning with expectations [4] - The company aims for AI-related revenue to constitute over 30% of total revenue by 2030, with AI contracts exceeding CNY 150 million in 1H25 [4] Company Analysis: Tencent Music - Tencent Music's 2Q25 revenue grew 18% to CNY 8.44 billion, with Non-IFRS net profit increasing 37% to CNY 2.57 billion, surpassing market expectations [5] - The company is expected to continue its growth trajectory, with projected revenue and profit increases of 17% and 28% respectively for 3Q25 [5] Focus Stocks - Geely Automobile (175 HK) has a target price of HKD 24.00, representing a 24% upside potential [6] - Luckin Coffee (LKNCY US) has a target price of USD 44.95, indicating a 19% upside potential [6] - Tencent (700 HK) is rated "Buy" with a target price of HKD 660.00, reflecting an 18% upside potential [6]

Core Insights - The report highlights a mixed performance in global markets, with the Hang Seng Index showing a year-to-date increase of 24.16% while the S&P 500 and NASDAQ have increased by 8.36% and 10.74% respectively [1][3] - The report notes a significant inflow of capital into China, contrasting with a net outflow from emerging market ETFs, indicating a potential shift in investor sentiment [3] - The semiconductor sector is highlighted with companies like Huahong Semiconductor and Qiutai Technology showing strong earnings growth, driven by increased demand and improved margins [4][5] Market Performance - The Hang Seng Index closed at 24,907, up 0.19% for the day and up 24.16% year-to-date [1] - The Shanghai Composite Index rose by 0.34% to close at 3,648, with a year-to-date increase of 8.82% [1] - The US markets saw declines, with the Dow Jones down 0.45% and the S&P 500 down 0.25% [1] Sector Analysis - The telecommunications, real estate, and healthcare sectors led gains in the Hong Kong market, while materials, energy, and information technology sectors faced declines [3] - In the A-share market, power equipment, communication, and computer sectors showed strong performance, while banking and oil sectors declined [3] Company Insights - Huahong Semiconductor reported Q2 2025 revenue of $566 million, an 18.3% year-on-year increase, with a gross margin of 10.9%, exceeding expectations [4] - Sany International expects a net profit growth of 25-35% for the first half of 2025, driven by strong demand for large port equipment and steady domestic demand [4] - Qutai Technology's revenue for the first half of 2025 grew by 15%, with a net profit increase of 168%, driven by strong performance in non-mobile camera modules [5][6] Investment Ratings - Huahong Semiconductor has been downgraded to a "Hold" rating with a target price of 48 HKD due to its current stock price being deemed reasonable [4] - Sany International maintains a "Buy" rating with a target price of 8.7 HKD, reflecting a positive growth outlook [4] - Qutai Technology is rated "Buy" with a target price of 14.5 HKD, supported by strong growth in non-mobile business segments [5][6]

Macro Economic Overview - China's CPI in July remained flat year-on-year, while PPI showed a narrowing decline month-on-month, indicating ongoing deflationary pressures [4] - The report anticipates that PPI will continue to be subdued in Q3 due to trade tensions and weak final demand, but a potential recovery in Q4 is expected due to ongoing policy support [4] Industry Insights - The Chinese construction machinery industry showed strong performance in July, with excavator sales increasing by 32% year-on-year for exports and 17% for domestic sales, indicating a positive outlook driven by replacement cycles and emerging markets [4] - The report maintains a positive view on companies such as Sany Heavy Industry, Hengli Hydraulic, and Zoomlion [4] Company Analysis: Hutchison China MediTech - Hutchison China MediTech's H1 performance fell short of expectations, with a 15% year-on-year decline in oncology revenue to $144 million, attributed to competitive pressures in the Chinese market [5] - The company has revised its full-year oncology revenue guidance down from $350-450 million to $270-350 million due to ongoing challenges [5][6] - Despite challenges, management remains optimistic about H2 2025, citing new product approvals and a sales team restructuring as potential growth drivers [5][6] Financial Position - Hutchison China MediTech reported a strong cash position of $1.37 billion as of H1 2025, providing flexibility for future strategic opportunities [6] - The company achieved a net profit of $455 million, primarily due to a $416 million gain from the sale of a stake in Shanghai Hutchison [6] Product Development and Pipeline - The report highlights the potential of Savolitinib as a second global commercialized product, with positive trial results for MET+ NSCLC patients [7] - The company plans to submit a New Drug Application (NDA) for Savolitinib in gastric cancer by the end of the year and has ongoing trials for other indications [7][8] Innovation and Future Prospects - Hutchison China MediTech is focusing on its Antibody-Drug Conjugate (ATTC) platform as a core innovation direction, with plans to initiate clinical trials for its first candidate in late 2025 [8] - The company sees potential for external licensing opportunities with its ATTC platform [8]