Geopolitical Tensions Weigh on Markets; Lithium Carbonate Price Surge Sparks Rally

Stock News11-17

**Market Overview** The decline in Hong Kong and mainland markets today was unsurprising given weekend headwinds, with the Hang Seng Index dropping 0.71% at the open—a relatively mild retreat. The primary drag stems from escalating Sino-Japanese tensions. Provocative remarks by Japan’s Prime Minister regarding potential military intervention in Taiwan have drawn sharp rebukes from China, including warnings of "substantive countermeasures" and travel advisories against Japan. Cultural exchanges, such as delayed anime film releases, further reflect the strain. While Japan’s diplomatic envoy arrived in Beijing for talks, expectations for de-escalation remain low.

Amid the uncertainty, defense stocks like COMEC (00317) and AVICHINA (02357) gained, though gold—typically a safe haven—fell as markets priced in economic rather than military confrontation. The U.S. added pressure by alleging Alibaba’s ties to China’s military, briefly disrupting its new AI platform’s launch. Meanwhile, the PBOC’s ¥800B reverse repo injection aimed to ease mid-term liquidity but did little to lift sentiment ahead of the November LPR decision.

**Sector Highlights** *Lithium Rally*: At the CBIS2025 summit, Ganfeng Lithium’s (01772) chairman forecast lithium carbonate prices could surge beyond ¥150,000/ton if demand growth exceeds 30% by 2026, driven by energy storage (up 57.5% YoY in Q1-Q3 2025). The commodity’s futures rose 4% today, lifting Ganfeng by 9% and Tianqi Lithium (09696) by 6%.

*Hydrogen & Robotics*: Sinohytec (02402) climbed 4%, while UBTech Robotics (09880) gained 2% amid IPO buzz for Unitree Tech. Shoucheng Holdings (00697) jumped 7% ahead of its earnings call, expected to unveil robotics updates.

*Aviation Recovery*: China Eastern Airlines (00670) swung to a Q3 profit of ¥3.5B (+34% YoY), buoyed by international route expansion (24% passenger traffic growth) and lower fuel costs. The carrier plans to launch a record-breaking Shanghai-Auckland-Buenos Aires route, capitalizing on visa-free travel demand.

**Corporate Spotlight** - *POP MART (09992)*: Sony’s acquisition of film rights for its Labubu doll could amplify global brand reach. - *CATL (03750)*: Fell 3% after a major shareholder unveiled a ¥18.4B stake sale. - *MOBVISTA (01860)*: Outperformed as AppLovin’s ad-tech earnings beat forecasts, echoing Google’s AI-driven ad growth.

**Tech Catalyst** Huawei’s upcoming November 21 AI breakthrough—boosting GPU/NPU utilization to 70%—could benefit partners like Chinasoft International (00354).

**Commodity Watch** Organic silicon producers, including DONGYUE GROUP (00189), may rebound if industry-wide output cuts materialize after an 80% price slump since 2021.

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