The US stock market experienced a significant sell-off last Friday, with the Nasdaq Composite closing down 4.18%, marking its largest single-day decline since April 2025. The Philadelphia Semiconductor Index plunged 10.26%.
Given that the recent market rally in A-shares has been driven by the technology sector, the impact was pronounced. Today, the Shanghai Composite Index fell 1.7%, breaching the 4,000-point mark.
The South Korean market was hit hardest, plummeting 8.2% today and triggering a circuit breaker. Despite attempts to stabilize the market, including favorable chip procurement news from Jensen Huang and supportive comments from South Korean President Lee Jae-myung, the decline persisted. Samsung Electronics Co Ltd fell over 10%, while SK Hynix Inc dropped more than 7%.
The Nikkei 225 also closed down 3.85%, and the Hong Kong market declined 1.22% today.
The primary catalyst was the stronger-than-expected US May non-farm payrolls data, which showed an addition of 172,000 jobs versus an estimate of 88,000 and a previous figure of 115,000.
While this data superficially suggests economic strength, it contains significant distortions, largely linked to the upcoming FIFA World Cup. For instance, the leisure and hospitality sector contributed a seasonally high 70,000 new jobs, with 48,000 coming from food services.
The more substantial negative impact is the significantly heightened market expectation for the Federal Reserve to further tighten monetary policy.
Attention now turns to the release of US May CPI data on June 10. A resurgence in inflation would likely push US Treasury yields higher again and solidify expectations for an interest rate hike.
Furthermore, the European Central Bank is scheduled to hold its monetary policy meeting this week, with the market widely anticipating an announcement of a rate hike. Such a move would be unfavorable for technology stocks.
Geopolitical tensions also contributed. On the evening of June 7, local time, Iran's Mahshahr Petrochemical Company was attacked by Israel, damaging some facilities. Iran responded with a ballistic missile attack on the Ramat David Airbase in northern Israel, retaliating for Israeli military actions in Lebanon.
This marks Iran's first attack on Israel since the ceasefire took effect on April 8. While former President Trump reportedly urged Israeli Prime Minister Netanyahu to de-escalate, it was ineffective. Netanyahu, seeking to avoid trial, cannot afford to stop the war. Israel retaliated, expanding the scope of attacks, with Yemen's Houthi forces joining the assault.
Iran's timing coincides with the 100th day of the current US-Israel-Iran conflict and appears calculated to exploit a perceived vulnerability of the Trump administration: the stock market. Iran seems to have concluded that what cannot be gained on the battlefield will not be gained at the negotiating table.
A positive note is that the US is unlikely to become directly involved this time. The stocks most sensitive to the conflict were Shandong Molong Petroleum Machinery Company Limited (HKEX: 00568), which surged nearly 26% today, and Petro-King Oilfield Services Ltd (HKEX: 02178), up over 9%.
The market performance mirrored last Friday's pattern, with technology weakening and robotics-related stocks gaining.
This Monday, NVIDIA announced it is expanding its collaboration with South Korea's Doosan Group to advance cooperation in physical artificial intelligence, robotics, and AI factory infrastructure, involving Doosan Robotics, Doosan Bobcat, Doosan Energy, and Doosan's electrical materials business unit.
The narrative driving its strength lies in Physical AI (Physical AI). As the third generation of the AI revolution, its core involves enabling large models to learn physical laws, understand the real world, and drive physical hardware, achieving a "perception-reasoning-decision-execution" physical closed loop. It serves as the fundamental underlying platform for humanoid robots, industrial smart manufacturing, autonomous driving, and flexible manipulation.
The year 2026 is seen as the starting point for the industrialization of Physical AI, with NVIDIA, Alphabet, Microsoft, and Tesla Motors all making significant bets. The core breakthrough involves embedding real-world physical rules—such as mechanics, optics, fluid dynamics, thermodynamics, spatial geometry, kinematics, and dynamics—into AI models, generating vast amounts of real-world data through high-precision physical simulation.
The physical simulation layer, representing the highest barrier to entry, has long been dominated by overseas companies like Ansys and Siemens, creating substantial room for domestic substitution. 51WORLD (HKEX: 06651) stands to benefit the most, rising over 9% again today.
Estun Automation Co.,Ltd. (SZSE: 002747): A leader in the implementation of industrial Physical AI, combining industrial robotic arms with independently controllable motion controllers. Leveraging Physical AI algorithms, it enables adaptive grasping, dynamic adaptation, and flexible production on assembly lines, making it a hardware play with the fastest implementation in the industrial sector. It rose over 14% today.
Shenzhen Zhaowei Machinery&Electronics Co.,Ltd. (SZSE: 003021): A core component supplier for dexterous end-effector transmission, focusing on multi-degree-of-freedom dexterous hand precision transmission structures. It adapts to Physical AI's requirements for refined grasping and flexible interaction scenarios, representing a scarce play in humanoid robot end-effectors. It gained over 4% today.
The above stocks were mentioned last Friday. Humanoid robots represent the ultimate core application scenario. On June 7, UBTECH ROBOTICS (HKEX: 09880) announced that its consumer-grade humanoid robot brand, UWorld, received over 2,110 pre-orders for its ultra-bionic humanoid robot within six days of launch.
This signal is noteworthy, indicating the company's shift from a B2B to a B2C focus, which opens up a massive market. Emotional companionship is emerging as the most certain B2C scenario within the trillion-dollar humanoid robot track, with Goldman Sachs predicting the global market size will exceed $10 billion by 2035.
Future performance will depend on order fulfillment. The stock rose nearly 7% today.
QUANTGROUP (HKEX: 02685): The company's wholly-owned subsidiary, Silicon Intelligence, signed a strategic cooperation framework agreement with Beijing Ruihong Embodied Intelligence Robot Technology Co., Ltd., which is currently an expression of mutual intent. Additionally, a June 6 report indicated that the company's actual controller extended the lock-up period, sending a stabilizing signal to the market. The stock surged over 12% today.
Regarding the decline in AI tech stocks, a Citigroup report suggests that AI capital expenditure is in a "one-time supercycle," currently only at its "mid-point." John Flood, Head of Americas Equity Execution Services at Goldman Sachs, stated, "We view the current pullback as a buying opportunity. The path for the S&P 500 to reach 8,000 or even higher this year is quite clear."
In US pre-market trading, most tech stocks rebounded, with NVIDIA up 1%, Marvell Technology rising over 5%, and Micron Technology gaining over 3%.
Within the AI sector, PCBs (Printed Circuit Boards) have one of the strongest fundamental logics. The leading player, KB LAMINATES (HKEX: 01888), rose over 12%, while KINGBOARD HLDG (HKEX: 00148) surged over 15%. HANS CNC (HKEX: 03200) in the PCB equipment segment is also worth watching.
ILUVATAR COREX (HKEX: 09903) was officially included in the Southbound Stock Connect list starting June 8. Domestic general-purpose GPU companies benefit from high demand for computing power and the acceleration of import substitution. The company has adapted over 610 algorithm models through its DeepSpark open-source community. Its stock rose over 12% today.
Another GPU-related stock added to the list, BIREN TECH (HKEX: 06082), gained over 2%.
The construction machinery sector continues to exhibit strong momentum. CME previously estimated May sales growth at approximately 25%-28%, but the actual data significantly exceeded expectations, reflecting industry demand resilience stronger than consensus. In May 2025, the industry sold 24,794 excavators, a year-on-year increase of 36.2%.
Domestic sales were 11,628 units (including 24 electric excavators), up 38.6% year-on-year. Exports reached 13,166 units (including 25 electric excavators), growing 34.2% year-on-year, significantly surpassing expectations.
Following price increases initiated by domestic excavator leaders in May, crane leaders followed suit with price hikes in June. Sany Heavy Industry Co.,Ltd. (HKEX: 06031), which has ranked first in excavator market share for consecutive years, rose over 7%. Lonking Holdings, Ltd. (HKEX: 03339), known for its cost-effective loaders, gained nearly 5%. Zoomlion Heavy Industry Science And Technology Co.,Ltd. (HKEX: 01157), a leader in concrete machinery and construction cranes, advanced over 3%.
Sector Spotlight
Following the significant correction in commodities and equities, lithium prices have gradually stabilized in the range of 160,000 to 170,000 yuan per tonne. Sector valuations have dropped to around 10 times the projected 2026 earnings based on a lithium price of 150,000 yuan.
Upstream lithium companies have clear pricing confidence, with low inventories and strong orders validating robust demand. Feedback from industry research indicates that mainstream local lithium producers are experiencing ample lithium salt orders, continuous downstream pick-ups, and extremely low inventory levels. Some even report operating at full capacity but still being unable to fully meet customer demand.
The demand narrative remains unchanged, with production schedules showing strength. The importance of energy storage is underscored from an energy security perspective, and its demand growth rate is expected to continue. The new energy vehicle sector demonstrates strong fundamental resilience, supported by impressive export performance and increasing battery capacity per vehicle.
With production schedules steadily rising, capacity additions in Q3, a year-end installation rush in Q4, and clear demand visibility for 2027, demand expectations have been reinforced. Key Hong Kong-listed players include Tianqi Lithium Corporation (HKEX: 09696) and Ganfeng Lithium Group Co.,Ltd. (HKEX: 01772).
Company in Focus
Midea Group Co.,Ltd. (HKEX: 00300): Accelerating Overseas Expansion and Continuing Substantial Share Buybacks
On June 8, 2026, Midea Group repurchased 965,000 A-shares via the Shenzhen Stock Exchange. On June 5, the company spent approximately RMB 100 million to repurchase 1.218 million A-shares.
The company issued 73,310 A-shares to participants exercising options under its ninth-phase stock option incentive plan, at an issue price of RMB 45.16 per share, representing about 0.001073% of the total issued share capital before the repurchase.
For the first quarter, the company's operating revenue was RMB 131.581 billion, a year-on-year increase of 2.45%. Net profit attributable to shareholders reached RMB 12.675 billion, up 2.03% year-on-year.
Analysis: Midea Group hit a record high in 2025, with steady growth in Q1 2026 earnings. The company has successfully transitioned from an appliance manufacturer to a technology group, focusing on three key areas: AI, robotics, and new energy.
Its ToB segment is experiencing explosive growth, representing a second growth curve with a scale in the hundreds of billions. Its growth rate is significantly higher than the ToC segment, with higher gross margins. The company operates on a dual-engine model (ToC + ToB).
ToC (67%): Holds a 35% market share in air conditioners. Its high-end brands, COLMO and Toshiba, are expected to generate over RMB 20 billion in high-end revenue in 2025, accounting for more than 15% of the total.
ToB (33%, high growth): Revenue reached RMB 122.8 billion in 2025 (+17.5%). In Q1 2026, building technology revenue was RMB 10.8 billion (+10.1%), and robotics revenue was RMB 8.2 billion (+11.8%).
The company has a global presence with 29 R&D centers and 43 manufacturing bases covering 50 countries. Overseas revenue in 2025 was RMB 195.9 billion (+16%), constituting 43% of total revenue. It maintains a fully integrated industrial chain, self-developing and producing core components like compressors, motors, and controllers, achieving costs 10%-15% lower than peers and shorter delivery cycles.
It operates six "Lighthouse Factories" (ranking first in the home appliance industry), with its Chongqing building technology factory being the world's first fully AI-driven Lighthouse Factory in the central air conditioning industry.
In robotics, combined orders for KUKA and self-developed humanoid robots exceed RMB 2 billion, with concentrated deliveries expected in the second half of 2026. Orders for new energy vehicle components exceed RMB 5 billion, supplying top-tier automakers.
In AI and premiumization, the target for AI appliance penetration is 40% by 2026. COLMO has over 2,000 stores, with high-end revenue targeted to exceed 20%. The company is deepening its globalization strategy, promoting its own brands (OBM) overseas, with high growth in Southeast Asia, North America, and the Middle East. Its business now covers over 200 countries and regions.
Overseas and ToB businesses are showing robust growth. Driven by the expanding application of AI-supported energy and robotics solutions, along with increased focus on high-growth industries like advanced manufacturing and data centers, Midea Group's ToB business growth is expected to outpace its ToC business.
Dividend Policy: The company aims to return 100% of net profit to shareholders (through dividends and buybacks). The expected dividend yield for 2026 is approximately 5%. The ongoing substantial share repurchases, coupled with strong profit growth and an active shareholder return policy, have significantly boosted investor confidence.
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