New energy passenger vehicle wholesale sales in China for June are estimated to reach 1.51 million units, marking a 22% year-on-year increase and a 12% month-on-month rise, achieving double-digit growth on both fronts. This signals the new energy vehicle (NEV) sector has entered a clear recovery channel after previous adjustments. The growth rate significantly outpaces the overall passenger vehicle market during the same period, establishing NEVs as the core engine driving market growth.
Key drivers for the strong growth in NEVs include the oil price inversion, supply-side optimization, and export momentum. First, persistently high domestic retail fuel prices, influenced by disruptions in the Strait of Hormuz, have significantly increased the cost of operating traditional internal combustion engine vehicles, dampening consumer demand and accelerating a shift towards NEVs, providing solid support for sales. Second, major automakers are actively transitioning from conventional vehicles to NEVs, leading to optimized production scheduling and capacity release, which helped push the month-on-month wholesale growth above 10% in June. Third, surging international oil prices have triggered explosive growth in overseas markets, where consumers are increasingly seeking low-energy-consumption, cost-effective NEVs. Chinese brands, leveraging mature electrification technology and significant cost advantages, are strongly replacing traditional vehicles in these markets, steadily expanding export volumes which in turn further bolster domestic production and sales.
Market Outlook
U.S. stocks closed mixed overnight. The Dow Jones Industrial Average rose 594.83 points, or 1.14%, to close at a record high of 52,900.07. The S&P 500 was essentially flat, gaining a marginal 0.01 point to 7,483.24. The Nasdaq Composite fell 207.36 points, or 0.8%, to 25,832.67. Memory and semiconductor sectors saw significant declines, with the Philadelphia Semiconductor Index dropping over 5%. SanDisk fell more than 14%, KLA dropped over 11%, and Western Digital declined nearly 10%. Arm fell over 6%, while Micron Technology and Intel both dropped over 5%. AMD and ASML were down over 4%. Major tech stocks were mixed: Apple rose nearly 5%, with its market capitalization surpassing $4.5 trillion; SpaceX gained nearly 3%, while Meta fell over 4% and Tesla dropped over 7%, marking its largest single-day decline in nearly a year. The Nasdaq Golden Dragon China Index closed down 1.77%, with most popular Chinese American depositary receipts declining. Hong Kong's Hang Seng Index ADRs rose, indicating a potential gain of 222.76 points or 0.97% to 23,277.79 at the Hong Kong open. On the commodities front, the front-month WTI crude oil futures contract on the New York Mercantile Exchange fell 12 cents, or 0.17%, to $68.46 per barrel. The front-month COMEX gold futures contract rose $53.10, or 1.30%, to $4,135.5 per ounce. Due to the U.S. Independence Day holiday on July 3rd, U.S. stock markets will be closed on Friday, July 3rd. Trading for CME Group's precious metals, energy, foreign exchange, U.S. Treasury, and stock index futures contracts will close early at 01:00 Beijing Time on July 4th. ICE's Brent crude oil futures contract trading will close early at 01:30 Beijing Time on July 4th.
Key Developments to Watch
The State Council has approved the "15th Five-Year Plan for Building a Leading Sports Nation," aiming to anchor the goal of building a sports powerhouse. The plan focuses on improving the public fitness service system, reforming the management and operational mechanisms for competitive sports, strengthening youth sports work, promoting the revitalization and development of the "three major ball sports," accelerating the qualitative expansion and upgrading of the sports industry, vigorously promoting the Chinese sports spirit, deepening international sports exchanges and cooperation, enhancing the support capacity for sports development, and continuously improving public satisfaction with sports work and its contribution to economic and social development, thereby writing a new chapter in accelerating the construction of a sports powerhouse within the process of Chinese modernization. This involves the Hong Kong-listed sporting goods sector.
The Hong Kong Monetary Authority injected HK$634 million in liquidity into the banking system via the discount window on July 2nd.
CSPC Pharmaceutical Group Limited (ASX: 01093) announced that its developed Sucrose Iron Injection has received approval for marketing from the National Medical Products Administration of China. This product is the first domestic variety considered to have passed the generic drug quality and efficacy consistency evaluation. Its approval will further enrich the group's product portfolio in the field of blood diseases.
German media reported that the German Federal Ministry for Economic Affairs and Energy has approved Chinese e-commerce company JD.com's €2.2 billion acquisition of German electronics retailer Ceconomy, subject to certain conditions. A ministry spokesperson stated in a Tuesday declaration that the approval was granted after assessing the potential impact of the transaction on German public order and security, but with attached conditions: the Chinese tech firm must ensure the protection of personal data for Ceconomy's German customers. Additionally, the German government has obtained extensive supervision and control rights, with the authority to revoke the approval if future violations occur.
HUTCHMED (China) Limited (ASX: 00013) announced that its new drug application for Orpathys (savolitinib) has received conditional approval from China's National Medical Products Administration for the treatment of adult patients with locally advanced or metastatic gastric or gastroesophageal junction adenocarcinoma harboring MET amplification who have failed at least two prior lines of systemic therapy.
CSPC Pharmaceutical Group Limited (ASX: 01093) has entered into a collaboration, option, and license agreement with AstraZeneca for the development of siRNA drugs. Under the agreement, the two parties will jointly discover and develop preclinical candidate drugs targeting two specific targets with potential for treating various kidney disease indications. For each PCC project, AstraZeneca will have the option to obtain exclusive rights for development, manufacturing, and commercialization globally or in regions outside China. CSPC will retain the rights for development, manufacturing, and commercialization of one PCC in China. CSPC will also receive an upfront payment of $30 million and is eligible for potential milestone payments of up to $5.4 billion for research and development and up to $12.0 billion for sales, as well as potential single-digit royalties based on the annual net sales of the relevant products.
The Baldon wind-storage integration project in Australia, jointly developed by Goldwind and partners, has recently received grid connection approval for its generator performance standards from the Australian Energy Market Operator and transmission operator Transgrid. The first phase of the project plans for 360MW of wind power and 132MWh of energy storage, adopting Goldwind's innovative DC-coupled wind-storage technology. Unlike traditional independent configurations of wind and storage, the Baldon project integrates wind turbines, energy storage, and control systems as a holistic solution from the design stage, endowing the power station with greater flexibility and grid-friendliness.
Anhui Conch Cement Company Limited (ASX: 00914) announced that on July 2, 2026, its wholly-owned subsidiaries, Hefei Conch and Ulanqab Conch, intend to acquire cement assets located in Chaohu City and Ulanqab City from Wanwei High-Tech and its wholly-owned subsidiary Mengwei Technology, respectively. The consideration is approximately RMB 275 million and RMB 344 million, respectively, with a maximum total consideration of about RMB 691 million.
Kuaishou Technology (ASX: 01024) announced that on July 2, 2026, Beijing Keling, 21 independent investors, Party A, Party B, Beijing Keling Group Company, Lucky Labs, and Beijing Kuailingrui entered into a capital increase agreement. The initial investors agreed to inject a total cash capital of RMB 13.824 billion (or $2.028 billion) into Beijing Keling, subject to the fulfillment or waiver of conditions. Beijing Keling is an indirect wholly-owned subsidiary expected to hold Kuaishou Group's Kling AI-related assets and businesses post-restructuring.
Good Property Company Limited (ASX: 00199) has acquired a land parcel valued at RMB 2 billion in Nantong, Jiangsu Province, with plans to develop a green intelligent computing center and related businesses. Upon completion of the acquisition, ITC Strategic Holding will hold a 20% stake in the entire issued share capital of PYI Investment. The core assets of the PYI Investment group consist of multiple land parcels held through Yangtong Kaitou Group, located in the Xiaoyangkou area of Rudong County, Nantong City, Jiangsu Province. This coastal area in eastern China boasts excellent geothermal geological conditions. Constructing an AI computing power center in this area aligns with national policies for synergistic development of computing and electricity, giving the related core assets of the PYI Investment group significant long-term strategic value and growth potential.
China Shenhua Energy Company Limited (ASX: 01088) announced that recently, Unit 5 of the Dingzhou Phase III project and Unit 5 of the Cangdong Phase III project have both successfully passed the 168-hour trial operation and have officially commenced commercial operation. Currently, work on Unit 6 of the Dingzhou Phase III and Unit 6 of the Cangdong Phase III is progressing steadily, with plans for commercial operation in the near future. Once fully operational, these two projects will effectively alleviate grid peak-shaving and heating pressure in their respective regions, providing energy security for the Beijing-Tianjin-Hebei area.
Tuopu CNC (ASX: 07688) reported a significant increase in the value of newly signed contracts in the first half of the year to approximately RMB 470 million. The notable increase is primarily due to contributions from aerospace-related projects amounting to about RMB 403.5 million for the six months ended June 30, 2026, significantly higher than the total value of new contracts from new aerospace-related projects for the full year ended December 31, 2025, which was approximately RMB 188 million.
Hang Seng Indexes Company announced that as NetEase, Inc. (ASX: 09999) has been included in the Southbound Stock Connect and meets the relevant fast-entry rules for related indices, it will be included in the following indices after the market close on Friday, July 17, 2026, with effect from Monday, July 20, 2026.
Latest data from the Hong Kong Stock Exchange shows that on June 30th, Hallgain Management Limited reduced its holding in Kingboard Holdings Limited (ASX: 00148) by 4 million shares at an average price of approximately HK$119.461 per share, involving a total amount of about HK$478 million. After the disposal, its latest shareholding is approximately 385 million shares, representing a 34.30% stake.
Stock in Focus
Midea Group Co.,Ltd. (ASX: 00300): European Air Conditioner Penetration Enters Uptrend Cycle. Heatwaves are sweeping across Europe, with record-breaking temperatures in many areas. CITIC Securities points out that local air conditioner penetration remains low, constrained by building policies, labor costs, and electricity expenses. Midea's launch of the PortaSplit mobile split-type air conditioner has gained recognition from European consumers, demonstrating the product competitiveness of Chinese white goods. The overseas expansion of Chinese white goods is still in its early stages, with vast growth potential in overseas home appliance markets, making it a key focus. Citi published a research report stating that the increasing frequency of extreme heat in Europe is becoming a structural driver for the local air conditioner penetration rate to enter a multi-year upward cycle. Currently, the household air conditioner penetration rate in Europe is only about 20%, far below the approximately 90% in the United States and Japan. The bank maintains its preferred order within the Chinese home appliance sector as Midea Group, followed by Haier Smart Home and Gree Electric Appliances.
Comments