GMT EIGHT - OPPORTUNITIES IN CHINA

BOC International: The conditions for the hard technology sector in A-shares to transition from an oversold recovery to a trending market are accelerating in maturity.

Overall, the strong earnings reports from major cloud companies in this round have further solidified the logical chain from AI orders to capital expenditures and finally to revenue conversion. The narrative of AI infrastructure is accelerating its maturation from a rebound theme trading back to the mainline of rising capital expenditures.

Chen Guo: The non-bank financial sector is currently significantly undervalued.

The PB-ROE framework, along with the previously mentioned profit revision-stock price divergence framework, jointly confirms the current significant undervaluation of the non-bank financial sector.

Where is the way out? Central banks in multiple countries are trapped in a cycle of "firefighting - leveraging - and firefighting again."

Huw Pill, chief economist of the Bank of England, warned that the rescue mechanisms launched by central banks to prevent market collapse are unintentionally subsidizing government borrowing, driving up systemic leverage, and potentially disrupting the transmission of monetary policy. The amount of U.S. Treasury bonds held by hedge funds has ballooned from $600 billion a decade ago to $2.4 trillion. Currently, there is no recognized solution to this cycle of "firefighting-leverage-firefighting."

NEW VISION CO (02632) issued a profit warning, expecting a mid-term loss attributable to the parent company of approximately 404 million to 424 million yuan, an increase of 60.9% to 68.8% year-on-year.

Zhejiang Holdings (02632) announced that it expects the group to report a pre-tax loss of approximately RMB 402 million to RMB 422 million for the six months ending June 30, 2026 (the reporting period), an increase of 65.9% to 74.2% compared to the same period in 2025; and a loss attributable to owners of the parent company of approximately RMB 404 million to RMB 424 million under international accounting standards, an increase of 60.9% to 68.8% compared to the same period in 2025.

Guojin Strategy: The market rebound may gradually enter a plateau phase, and the elasticity of physical assets will also become apparent.

After the drive force on the denominator side weakens, AI assets and non-AI related physical assets gradually enter a plateau phase.

SENSETIME-W (00020) issued a profit warning, expecting a mid-term profit of approximately 500 million to 700 million yuan, turning from loss to profit year-on-year.

SenseTime-W (00020) announced that (a) the Group expects to achieve a profit of approximately RMB 500 million to RMB 700 million for the six-month period ending June 30, 2026 (the first half of 2026), compared to a loss of approximately RMB 1.48927 billion for the six-month period ending June 30, 2025 (the first half of 2025).

How much longer can storage prices rise?

In the mainstream DRAM and NAND markets, contract prices for products are still on the rise. However, the spot market for some consumer-grade storage is stabilizing, and in some cases, has slightly declined due to inventory buildup. The trends for high-end storage and consumer-grade storage are beginning to diverge.

BASECARE-B (02170) expects mid-term revenue of approximately 126 million to 131 million yuan, an increase of about 24.0% to 29.0% year-on-year.

Beikang Medical-B (02170) announced that (i) revenue growth: for the six months ending June 30, 2026, it is expected to generate revenue of approximately RMB 126 million to RMB 131 million, representing a year-on-year increase of approximately 24.0% to 29.0% compared to RMB 101 million for the six months ending June 30, 2025.

ZIJIN GOLD INTL (02259) will distribute a mid-term dividend of HKD 1.5 per share on September 24.

Zijin Mining International (02259) announced that the company will distribute an interim dividend of HKD 1.5 per share for the six months ending June 30, 2026, on September 24, 2026.

ZIJIN GOLD INTL (02259) announced its interim results, with a net profit attributable to shareholders of $1.451 billion, a year-on-year increase of 178.83%.

Zijin Mining International (02259) announced its interim results for the six months ended June 30, 2026, reporting revenue of $3.987 billion, an increase of 99.67% year-on-year; profit attributable to equity holders of the parent was $1.451 billion, up 178.83% year-on-year; earnings per share were $0.54; and a proposed interim dividend of HK$1.50 per share.

SINOPEC SEG (02386) will distribute an interim dividend of 0.127 yuan per share on October 30.

Sinopec Engineering (02386) announced that it will distribute an interim dividend of RMB 0.127 per share for the six months ending June 30, 2026, on October 30, 2026.

GenScript BIO (01548) released its mid-term results, with a shareholder loss of $129 million, narrowing by 29.25% year-on-year.

King's Ray Bio-Tech (01548) announced its interim results for the six months ending June 30, 2026, reporting revenue of $404 million, a year-on-year increase of 27.35%; the loss attributable to equity holders amounted to $129 million, a decrease of 29.25% year-on-year; loss per share was 5.92 cents.

CITIC SEC: The market is awaiting the emergence of a new narrative for AI futures, and investors need to return to reasonable expected returns.

Market opportunities may increasingly manifest as valuation corrections supported by performance-backed varieties. The subsequent process of market volatility reduction is also a process of optimizing chip structure and repricing quality assets, laying a solid foundation for the continuation of the medium to long-term market trend.

CAPITAL REALM (00204) had a net asset value per share of approximately HKD 1.630 at the end of July.

Capital (00204) announced that as of July 31, 2026, the unaudited consolidated net asset value per share of Capital is approximately HKD 1.630.

160 HEALTH (02656) announced a profit warning, expecting a mid-term net profit of approximately 1 million to 3 million yuan, turning a profit compared to the same period last year.

Health 160 (02656) announced that the Group expects to achieve a net profit ranging from approximately RMB 1 million to RMB 3 million for the six months ending June 30, 2026, compared to a loss of RMB 19.6 million for the six months ended June 30, 2025 (same period last year).

SINOPEC SEG (02386) announced its interim results, with a profit attributable to shareholders of 1.137 billion yuan, a year-on-year decrease of 18%.

Sinopec Engineering (02386) announced its interim results for the six months ending June 30, 2026, reporting revenue of RMB 35.624 billion, a year-on-year increase of 12.7%. The profit attributable to equity holders of the company was RMB 1.137 billion, a year-on-year decrease of 18%. The basic earnings per share were RMB 0.26. The company intends to declare an interim dividend of RMB 0.127 per share.

CANSINOBIO (06185): The new drug application for Td5cp for adolescents and adults has been accepted.

CanSino Biologics (06185) announced that its new drug application (NDA) for the acellular pertussis combined vaccine (5-component) for use in individuals aged 6 and above (Td5cp for adolescents and adults) has recently received an Acceptance Notice from the National Medical Products Administration of the People's Republic of China.

In one week, there were two investments, with the first days floating profit exceeding 460 million! Changjiang Storage's investment fund has made four moves in 2026.

Changcun Industrial Investment Fund has a cumulative investment cost of 270 million yuan, with the latest share value of 1.21 billion yuan, resulting in a current book return multiple of 4.48 times. Changcun Hongtu Fund has a cumulative investment cost of 232 million yuan, with the latest share value totaling approximately 1.574 billion yuan, leading to a current book return multiple of 6.78 times.

Bullish confidence on Wall Street soars: S&P 500 earnings growth hits a 30-year high.

In the second quarter, the S&P 500 saw a year-on-year earnings growth of 31%, the strongest growth rate since tracking began in 1992, excluding recession recovery periods, far exceeding the expected 23%. AI-driven profit margins surged from 14% to nearly 16%, and valuations reset from 26 times down to below 22 times. Earnings expansion has spread to mid and small-cap stocks as well as markets in Europe and Asia-Pacific.

Why has the core product behind faced commercialization obstacles in the US, and how did the stock price of ACOTEC-B (06669) plunge before reversing?

On August 12, after market hours, Sunruida Medical-B (06669) disclosed its earnings warning announcement for the first half of the 2026 fiscal year. The company stated in the announcement that it expects a net loss of not more than RMB 80.9 million for the six months ending June 30, 2026, compared to a net profit of approximately RMB 88.6 million for the same period last year, reflecting a year-on-year transition from profit to loss.

Yushujing Technology (688836.SH) IPO Heat and the Noise: The Dark Pool Trading Rumors Are Groundless, and the Risks Behind Should Not Be Underestimated.

Regarding the recent situation of Yushu Technology involving "dark trading," reporters have verified this with several investment institutions, private equity firms, and wealth management departments of brokerage firms. All parties reported that "they have not heard about it, and it basically does not exist."

Three senior professionals joined the independent director lineup, and FU SHOU YUAN (01448) has a clearer path to resumption.

The resume of the new independent director adds weight to this appointment.

In the first seven months, state-owned enterprises in Hunan exported 800 million yuan worth of rail transit equipment, a year-on-year increase of 58.7%.

In the first seven months, Hunan state-owned enterprises exported 800 million yuan worth of rail transit equipment, an increase of 58.7%, accounting for 82.9%.

NVIDIA Corporation (NVDA.US) plans to invest $3 billion to enter the SB Energy market: from selling chips to securing the "power-park-computing" chain with OpenAI.

Analysts point out that Nvidia may be able to intervene early in a crucial aspect that determines whether GPU orders can be fulfilled by investing in the data center developers serving OpenAI.

Super El Nio is about to strike. JP Morgan warns: a global food crisis may erupt next year.

J.P. Morgan recently warned that the next round of the global food crisis may be brewing and could erupt next year.

Control of the Strait: "Each has its own say": Trump declares to "take" Hormuz, while Iran states it has reached an agreement with Oman on a passage plan.

Iran has announced that it has reached an agreement with Oman on a new shipping route in the Strait of Hormuz, but the foreign minister made it clear that this is a separate matter from the reopening of the strait, which will depend on whether the United States can meet the conditions.

Hong Hao: China's AI market has entered the second phase, and high-quality companies are performing better.

On August 13, renowned economist Hong Hao shared his insights on the future AI market during an interview.

Guosen Xun Yugen: What new narratives have emerged as this round of the bull market enters its third stage?

The bull market that began on September 24, 2024, has entered its third phase. A new round of increases following market adjustments often brings about new narratives.

Hong Kong Property: Over 20 million Hong Kong dollars in second-hand residential transactions recorded 1,314 deals in the first seven months of Hong Kong, setting a new high for the same period in five years.

In the segment of over 20 million Hong Kong dollars, 1,314 second-hand residential properties were registered, marking an increase of approximately 81% compared to 726 registrations during the same period last year. The year-on-year increase significantly outperformed the market, reaching a five-year high for the same period.

CITIC SEC: It is expected that in the second half of the year, opportunities in the home appliance industry will come more from industrial trends and the enterprises' own adjustment capabilities. We are optimistic about three main lines.

In the first half of 2026, the demand for my country's home appliance industry fluctuated overall. Domestic sales were affected by high baselines and weather, while external sales experienced increased differentiation due to external disturbances such as costs and exchange rates. It is expected that the performance of leading companies will remain resilient in Q2 and the first half of the year.

Optimal "AI Bubble Trading": Going Long on Both "Pride" and "Prejudice"

The optimal investment strategy in the current AI bubble environment is to simultaneously go long on "arrogance" (leading AI technology companies) and "bias" (overlooked distressed assets) to capture the dual-sided returns during the final peak stage of nominal GDP bubble.

CITIC SEC: Can the pressure from the midterm elections still trigger a "TACO"?

The process of the 2026 midterm elections is more than halfway through, and the primary strategies of both parties are gradually becoming clear. Analyzing state by state, the most likely outcome is that the Democratic Party will take the House of Representatives while the Republican Party will hold onto the Senate.

Broadcom Inc. (AVGO.US) fell 6% overnight: The next hurdle for AI is the cost of financing.

The real risk in the market is not a subprime-style collapse the residual value of AI chips is still on the rise, but the increasing cost of financing is quietly eroding the profit margins of the entire industry chain. This is a valuation compression, not an end of the cycle.

NVIDIA Corporation (NVDA.US) has reduced its guarantee scale for OpenAI data centers by more than 50%.

NVIDIA (NVDA.US) has adjusted its support plan for OpenAI's 10GW data center project in Ohio, USA.

AI version of financial innovation: The seller's guarantee model behind the sharp decline of Broadcom Inc. (AVGO.US)

Affected by the market re-pricing due to the credit risk arising from "seller guarantees," Broadcom's stock price has significantly plunged.

"The 'AI Stock God' blew up, dragging down Jane Street with a massive loss of 15 billion in July, marking the first monthly loss in a decade!"

One of the most mysterious and also the most profitable proprietary trading giants on Wall Street, Jane Street, is paying a rare price for an unexpected AI investment storm.

Bank of America names the midterm elections as the "AI Make-or-Break Situation": If the Republicans hold two key positions, there could be further gains ahead.

The strategy team at Bank of America stated that the artificial intelligence-related stocks, which recently experienced significant volatility, will next face the challenge of the U.S. midterm elections.

$60 billion tech acquisition finalized, Musk officially enters the "Vibe Coding" battlefield.

SpaceX (SPCX.US) has completed the acquisition of the artificial intelligence programming startup Cursor, marking an important step for Elon Musk in catching up with competitors like Anthropic and OpenAI.

"AI Version of Financial Innovation": NVIDIA Corporation's "$500 Billion Grand Calculation"

NVIDIA (NVDA.US) is reshaping its business boundaries in an unprecedented waytransforming from a chip manufacturer to an AI infrastructure "financial partner." At the core of this transformation is a new cloud service revenue-sharing model based on the logic of "bottom-line guarantees in exchange for profit sharing."

Anthropic's second-quarter revenue exceeded $11.5 billion, a year-on-year increase of over 14 times.

According to a document, AI chatbot Claude's developer, Anthropic PBC, is revealing to potential investors that its second-quarter revenue has increased by at least 14 times compared to the same period last year.

Opportunities and Concerns of Tencent's (00700) 84.7 Billion Capital Expenditure

Tencent's capital expenditure for Q2 is 52.8 billion yuan, plus a 51.4 billion yuan prepayment for computing power, suggesting that investment in AI infrastructure may have exceeded 100 billion yuan.

The joint intervention by the US and Japan in the yen has been effective, leading to a more than halving of short positions by hedge funds on the yen.

After the historic joint intervention by the United States and Japan, hedge funds further reduced their bearish positions on the yen, indicating a easing of negative sentiment in the market towards the currency.

Informed sources: Nvidia scales back its plan to provide a $250 billion guarantee for OpenAI's data center.

According to sources, Nvidia and OpenAI are about to reach an agreement to finance a large data center campus in Ohio, but they have modified the deal structure: Nvidia initially guaranteed only half of the project, which is worth hundreds of billions of dollars, rather than providing full guarantees. Some insiders said the revised plan has reduced Nvidia's financial guarantee scale from $250 billion to below $120 billion. This adjustment was made to alleviate investors' concerns about the chipmaker's risk exposureNvidia's goal in utilizing its own balance sheet is to boost market demand for its AI chips. The deal could be signed as soon as this weekend.

The situation in Iran has added further uncertainty, putting pressure on U.S. Treasury bonds, with the 10-year yield rising by more than 5 basis points.

U.S. Treasury yields generally rose on Friday.

Chicago Fed Chair Goolsbee: The recent cooling of inflation is encouraging, but more data is needed to confirm a return to the 2% target.

Chicago Federal Reserve President Goolsbee stated that he is encouraged by the recent cooling of inflation in the United States, but he hopes to see similar improvement trends in the coming months before he is convinced that prices are consistently returning to the Federal Reserve's 2% target.

Berkshire Hathaway's successor has started using massive cash reserves! In the second quarter, Berkshire (BRK.A.US, BRK.B.US) increased its holdings in Delta Air Lines, Inc. (DAL.US) and Alphabet (GOOGL.US) with a net purchase of nearly $20 billion in stocks.

Berkshire Hathaway further increased its holdings in Delta Air Lines and Googles parent company, Alphabet, in the second quarter.

NVIDIA Corporation (NVDA.US) has engaged financial giants on Wall Street, such as Goldman Sachs Group, Inc. and Blackstone, to plan a $500 billion AI financing initiative to inject funds for clients to purchase chips.

Nvidia is collaborating with major Wall Street financial institutions such as Goldman Sachs, Blackstone Group, and Apollo Global Management to plan an AI computing power financing scheme worth up to $500 billion.

Overnight US stocks | The three major indices showed mixed performance, with SanDisk (SNDK.US) rising 7.39%.

As of the close, the Dow fell 107.57 points, a decline of 0.2%, closing at 53,732.41 points; the S&P 500 index dropped 13.23 points, a decline of 0.17%, closing at 7,785.76 points; the Nasdaq fell 73.86 points, a decline of 0.28%, closing at 26,729.16 points.

Anthropic's revenue in the second quarter exceeded $11.5 billion, an increase of at least 14 times compared to the same period last year.

According to reports, Anthropic's preliminary revenue for the second quarter exceeded $11.5 billion, growing by at least 14 times compared to $787 million in the same period last year, and also surpassing the $4.73 billion of the first quarter of this year. The company has achieved positive adjusted operating profit for the quarter. Anthropic was once in a position of catching up in the AI race, but thanks to an increasing number of professionals using its software to streamline workflows such as programming, the companys business growth has noticeably accelerated. By May of this year, Anthropic's annualized revenue had surpassed $47 billion. In comparison, OpenAI previously disclosed an annualized revenue of over $40 billion, although the calculations for both may not be entirely consistent. The competition in the AI sector is intensifying, with IPO financing reaching $256.4 billion so far this year, marking a new high since 2021.

US Stock Market Move | The Q3 financial report exceeded expectations comprehensively but still failed to satisfy the market's "appetite." Applied Materials (AMAT.US) saw a nearly 6% drop in early trading.

On Friday, Applied Materials (AMAT.US) fell nearly 6% in early trading, currently reported at $503.94.

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