Last week, Hong Kong stocks rebounded and closed higher, pulled by a significant surge in the A-share market. This week, the U.S. market may face turbulence as the Supreme Court has set January 20th as the next date for a tariff opinion, potentially ruling on the Trump tariff case; it will also hear the case regarding Trump's dismissal of Federal Reserve Governor Cook. Both cases are likely to impact the market. However, a potential offset could come from the expected announcement of the nominee for the new Federal Reserve Chair next week.
Geopolitical issues remain the most significant disturbance. According to reports, U.S. President Trump announced on the 17th that, starting February 1, 2026, a 10% tariff will be imposed on all goods exported to the U.S. from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland. The tariff rate will increase to 25% from June 1, 2026. These eight European countries have jointly stated that the U.S. tariff threat is "unacceptable." There is still a buffer period, with key attention on actions towards Iran.
Domestically, regulatory moves in the latter half of last week to lower margin leverage ratios led to a rapid cooling of the market. A recent commentary emphasized adhering to a "steady" approach, indicating that the A-share market needs a "long bull" rather than a "crazy bull." The essence of the regulatory "cooling" is not to "extinguish the fire" or suppress the market, but to squeeze out bubbles, curb speculation, and guide capital towards high-quality assets, thereby restoring market confidence.
Key Chinese economic data for 2025 will be released this week. The State Council Information Office will hold a press conference at 10 a.m. on January 19, where Kang Yi, Commissioner of the National Bureau of Statistics, will present the performance of the national economy in 2025 and answer questions. Additionally, the January Loan Prime Rate (LPR) quotation will be announced on January 20, with a key focus on whether it will be lowered. Overall, following the intense adjustment and cooling-off period, the market is expected to rebound again.
Regarding market direction, the commentary's tone suggests that hot concepts like commercial aerospace and AI applications represent future industrial trends, and their popularity reflects market recognition and confidence in technological development. Specific catalysts include: the upcoming massive IPO of China's chip giant—ChangXin Technology's application for a Sci-Tech Innovation Board IPO has been accepted; the potential for a multiple-fold release of domestic advanced process capacity, catalyzing sustained tightness in advanced packaging and testing capacity, coupled with domestic substitution drivers. The Spring Festival Gala has completed its first rehearsal, with CCTV confirming that robots will once again appear on stage; Elon Musk released a video dancing with a robot, showcasing extremely smooth movements. The 2026 Beijing International Commercial Aerospace Exhibition is scheduled for January 23-25, expecting over 300 global companies to participate, including domestic giants like China Satellite Network, Aerospace Science and Technology Corp, and LandSpace. SpaceX set a record with one rocket launching 29 satellites, and the real-time number of Starlink satellites in orbit exceeds 9,500. Trading is expected to revolve around semiconductors, aerospace, and robotics this week.
This week's featured stock is CAOCAO INC (02643), focusing on market reshaping from ride-hailing to the autonomous vehicle era: The industry is evolving from the taxi era and ride-hailing era towards the autonomous vehicle era over the next decade. The core change is the replacement of the driver's role by algorithms, and the shift of vehicle management from individual drivers to leasing companies or operating platforms, which is expected to reshape the market and expand its size. China market potential: Shared mobility costs per kilometer are about half that of private cars, potentially replacing part of the private car market in the long run (the current private car travel market is approximately 11 trillion yuan); passenger volume, market scale, and fleet size in domestic shared mobility are projected to rise systematically by 2035; a critical point of a single operator managing over 10,000 vehicles may appear in China by 2028, with the penetration rate of autonomous vehicles in the ride-hailing market expected to reach 50% by 2030. Market landscape and global trends: In the domestic ride-hailing market, Didi holds a 70% share, with CAOCAO INC ranking second at 14%; aggregate platforms account for 25%-30% of orders. Globally, North America is developing the fastest, followed by China and the Middle East; global Robotaxi volume is forecast to exceed 1.5 million units by 2030, with faster model validation in overseas markets where labor costs are high. Backed by Geely Group, CAOCAO INC is the most developed among automaker-affiliated ride-hailing companies, with a Geely-dominated equity structure; it firmly holds the second position in the industry compared to other automaker platforms like SAIC's T3 and GAC's offerings. CAOCAO INC forms a strong alliance with Geely's Qianli ZhiJia, primarily handling traffic operations, user maintenance, vehicle dispatch, Geely's battery swap services, and centralized vehicle management and maintenance. Its business model is the most mature, positioning itself as a third-party traffic platform similar to Didi, with vehicle supply potentially coming from multiple sources. Soochow Securities' automotive research team estimates the company's 2025/2026 revenue at 20.7/26.2 billion yuan, corresponding to PS ratios of 0.71x/0.56x. This appears relatively undervalued compared to Didi's 0.8x 2025E PS valuation, and the company is expected to have faster subsequent growth and greater Robotaxi-related upside potential. Short-term industry catalysts (2026): Tesla's SUB CAR production starting in April; XPeng's rollout of its second-generation VRA large model in February-March; policy-wise, strong expectations for the release of L3/L4 national standards, and accelerated regional promotion through interconnected vehicle mutual recognition in six Greater Bay Area cities (Guangzhou, Shenzhen, Foshan, Dongguan, etc.).
Last week, TSMC provided guidance that exceeded expectations. Its Q4 2025 results surpassed expectations across the board, with the compound annual growth rate for its AI business from 2025-2029 revised upwards to 55%-59%. It also guided for 2026 capital expenditures as high as $52-56 billion, significantly exceeding market expectations. TSMC's stronger-than-expected capex guidance further validates AI demand, indicating that advanced process capacity will remain tight even in 2026. Micron plans to acquire Powerchip Semiconductor Manufacturing Corp's Taiwanese wafer fab for $1.8 billion to rapidly expand DRAM capacity post-2027. The fact that Micron, a downstream player, is choosing to acquire an existing fab rather than build new ones sends a strong signal: firstly, that original manufacturers anticipate a huge DRAM capacity gap in the next two years, and secondly, that time costs now outweigh capital costs. The accelerated implementation of NVIDIA's BlueField-4 architecture and new storage optimization solutions like Engram indicate that AI's demand for memory is expanding from a single type to a full range of products. The memory sector is in a transition window from "price determined by supply" to "value determined by demand."
Domestically, the Ascend 950 and other local computing power chips are gradually ramping up production. DRAM/NAND prices continue to rise significantly, advanced logic processes are seeing price increases, and packaging and testing sectors are experiencing both price hikes and capacity expansion. With ChangXin's IPO imminent, the construction of domestic computing power is accelerating. The memory shortage is intensifying and spreading to the packaging and testing segment, with leading manufacturers already implementing price increases of up to 30%. Capacity utilization rates at domestic packaging and testing plants have also risen substantially, and it is expected that both foundry and packaging/testing capacity expansions will exceed expectations. In Hong Kong stocks, focus on the performance of HUA HONG SEMI (01347), GIGADEVICE (03986), BIREN TECH (06082), and ILUVATAR COREX (09903).
Data from Hong Kong Exchanges and Clearing shows that the total open interest for Hang Seng Index Futures (January) is 121,616 contracts, with a net open interest of 49,339 contracts. The settlement date for the January Hang Seng Index futures is January 29, 2026. With the Hang Seng Index at the 26,845 point level, and the dense area of bull contracts below nearing the central axis, data suggests a potential continued downward tendency for the index. In the U.S. market, there is growing wariness towards the frenzy of investment in AI infrastructure, posing downside risks.
Currently, market hotspots revolve around semiconductors, aerospace, and robotics. However, some value-oriented sectors also deserve attention, such as Hong Kong's local property stocks. From the perspectives of transaction volume, price, and rental yield, fundamentals are improving at an accelerating pace, with a positive future outlook. Furthermore, these stocks offer attractive dividends, presenting a high probability of success at their current levels.
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