Investment Rating - Industry Rating: Overweight [1] - Previous Rating: Overweight [1] - Rating Change: Maintained [1] Core Insights - DeepSeek represents the transition of domestic AI technology from catching up to leading, indicating a potential revaluation of Chinese tech assets [1] - The selected "Big 7" Hong Kong tech stocks include Alibaba, Tencent, Xiaomi, Meituan, SMIC, BYD, and Horizon Robotics, based on industry influence and technological innovation capabilities [1] Summary by Company Alibaba - Alibaba is one of China's largest tech companies, with a business scope covering e-commerce, cloud computing, local services, and international digital commerce [12] - The core competitiveness lies in the "data-technology-scenario" closed loop, with significant advantages in AI model training due to massive consumer behavior data [12][13] - Collaboration with Apple to develop localized AI features for the Chinese version of the iPhone may lead to a revaluation of Alibaba's cloud and AI business [13] Tencent - Tencent is a leading player in China's internet ecosystem, with a strong "social + content" super-ecosystem that forms a solid barrier to entry [2][14] - Future growth is expected to be driven by innovations powered by AI technology, with applications in enterprise services and consumer-facing products [15] Xiaomi - Xiaomi is a leading consumer electronics and smart manufacturing company, focusing on smartphones, smart hardware, and IoT platforms [3][17] - The company has connected 822.2 million IoT devices, showing a 25.6% year-on-year growth, and aims to deepen its "human-vehicle-home" ecosystem strategy [17][18] - The automotive sector is expected to become a second growth curve, with AI integration enhancing user experience and creating new revenue streams [18] Meituan - Meituan is a super platform in China's local service sector, focusing on the digitalization of various scenarios including food delivery and travel [4][19] - The company's competitive edge lies in its super app ecosystem and instant delivery system, which creates a high-frequency traffic entry point [19][20] - Future growth will benefit from structural upgrades in the local service market and technological innovation [20] SMIC - SMIC is a leader in China's integrated circuit manufacturing, focusing on both mature and advanced process chip production [5][22] - The company has a strong manufacturing capability and localized supply chain, which positions it well to meet the growing semiconductor demand [22][23] - Future growth is expected to be driven by the continuous demand for semiconductors and technological upgrades [23] BYD - BYD is a global leader in the new energy vehicle sector, with a projected sales volume of over 4.27 million vehicles in 2024 [6][24] - The company has significant advantages in technology, cost, innovation, and distribution channels, which solidify its leadership position [24][25] - The "smart driving equality" strategy is expected to deepen BYD's leadership in the automotive industry [25] Horizon Robotics - Horizon Robotics is a leading supplier of advanced driver-assistance systems (ADAS) and high-level autonomous driving solutions [7][27] - The company has a competitive advantage through software-hardware collaboration, high efficiency, and an open ecosystem for customized development [27][28] - Future prospects include a strong entry into the high-performance computing market with its J6P chip, marking a significant leap in capabilities [29]

Core Viewpoint - The article discusses BYD's "Smart Driving Equality" strategy and its potential impact on the new energy vehicle industry, suggesting that it may lead to a revaluation of the sector and highlighting the companies that could benefit from this shift [5][10]. Group 1: Impact of "Smart Driving Equality" - BYD's "Smart Driving Equality" is expected to accelerate consumer education on smart driving, making it a core factor in vehicle purchasing decisions, marking a shift from electrification to smart technology in the automotive industry by 2025 [6][10]. - The article anticipates that traditional fuel vehicle manufacturers will face accelerated elimination due to BYD's advantages in smart driving technology and government policies [7][10]. - BYD is positioned as a leader in this transition, likely to see significant increases in sales and market share by 2025, while competitors like Geely may face risks of declining market share due to slower adoption of smart driving technologies [8][10]. Group 2: Valuation and Market Position - The article raises questions about whether BYD's current stock price has fully accounted for the impacts of the "Smart Driving Equality" strategy, given that its stock has surged by 56% from its lowest point this year [18][19]. - Factors influencing BYD's valuation include competition from other manufacturers in the 10-20 million yuan price range and the potential for new electric vehicle platforms to enhance market share [19][22]. - The article suggests that BYD's stock may still have upward potential based on optimistic projections for sales and profitability, particularly if it can maintain its technological lead and manage costs effectively [31][32]. Group 3: Supply Chain and Technological Advancements - The article highlights the importance of the supply chain in supporting BYD's smart driving initiatives, particularly in the areas of hardware and software integration, which could lead to cost reductions and improved margins [14][25]. - It discusses the potential for new battery technologies and platforms to significantly enhance the performance and appeal of BYD's electric vehicles, contributing to sales growth [24][26]. - The article emphasizes the need for BYD to continue advancing its smart driving technology to maintain its competitive edge and achieve a successful transition to a software-driven valuation model [34][35].