The Hong Kong stock market has recently delivered an impressive performance, increasingly taking on the characteristics of a global capital safe haven, with the benchmark index surging 1.96% on a gap-up open today. Its internal structural advantages have transformed from a weakness into a strength at the current juncture.
Other markets continue to be mired in the technology sector's turmoil. Looking at South Korea, the Korea Exchange triggered a circuit breaker on the KOSDAQ index earlier today, halting trading for 20 minutes. Shortly after, the KOSPI index plunged over 8%, also triggering a market-wide trading halt for 20 minutes. By the close, the KOSPI had fallen 5.98%, with Samsung Electronics dropping over 5% and SK Hynix losing nearly 10%. As the global bellwether for AI, tech stocks have sunk once again. With the weakness in Korean stocks, capital is expected to flow back into Hong Kong.
Initial Purpose for Heading
While AI hardware weakens, the application side is thriving. While everyone is fixated on the large model leaderboards, Tencent (00700) has emerged as a surprise leader in the Agent niche. The June rankings for domestic PC-side AI office agents were released, with Tencent WorkBuddy taking first place with 20.97 million monthly visits. ByteDance's Trae domestic version was second with 12.79 million, and Alibaba's QoderWork was third with 7.88 million — the two combined still fell short of Tencent's tally. The underlying reason is Tencent's vast ecosystem: WeChat, Yuanbao, Tencent Docs, Tencent Meeting, and WeCom can all be integrated with WorkBuddy. It is anticipated that the potential for future development remains significant. Tencent rose over 4% today.
Its gaming segment also received a boost. Recently, the National Press and Publication Administration issued game licenses for July 2026, approving a total of 197 games. This represents the largest single batch of approvals in the past five years. Among them, 193 were domestic licenses, a year-on-year increase of 52% and a month-on-month increase of 21%, hitting a three-year high. This demonstrates unprecedented policy support. Bilibili-W (09626) and XD Inc (02400) both gained over 3%.
Recently, Diandian Data released the June list of top 30 Chinese non-gaming companies by overseas revenue. The data shows that Meitu (01357) 's image editing apps, including AirBrush and BeautyCam, have seen sustained month-over-month growth in overseas revenue, with the US market performing particularly strongly. This propelled the company's ranking to third on the list, further demonstrating the commercialization potential of AI-powered visual creative products in overseas markets. Its Kaipai APP leverages lightweight AI capabilities to break down technical barriers and uses vertical scenario solutions to address industry pain points, achieving cost reduction and efficiency gains in short video presentation creation. With its rapid development momentum, it is poised to become a new growth driver, surging over 13% today.
Subsequent Focus Area
We mentioned the auto sector yesterday. Today, the 2026 Fortune Global 500 list was released, with a total of eight Chinese auto companies making the cut. BYD Company Limited (01211) maintained its top position among Chinese automakers, ranking 91st globally, flat compared to last year, and overtook Tesla to become the global leader in electric vehicle sales. In 2025, BYD achieved revenue of $111.853 billion and a net profit of $4.538 billion. Geely Holding continued its steady growth trajectory, moving up 17 places to 138th, with revenue growing 10% to a record $87.866 billion. Chery Automobile (09973) was the biggest highlight on the 2026 list, appearing as an independent listed entity for the first time, ranking 383rd globally and officially entering the Fortune 500 ranks. However, CATL (03750) remains the most profitable company in China's automotive and parts industry, with a net profit of $10.05 billion, surpassing the combined net profits of the eight listed Chinese auto companies. For more stable investment, focusing on companies of this scale and strength is most reliable. Among the mentioned stocks, Chery Automobile (09973) rose over 8%; Geely Auto (00175) , which recently launched the 9X five-seater version with a limited-time price starting at RMB 451,900, showcasing strong competitiveness, and its joint venture Ford is cutting into European production capacity, further upgrading its overseas expansion logic, rose over 6% today; BYD and CATL gained over 4% and 2%, respectively.
Other auto stocks also rallied collectively. On the evening of July 30, Xiaomi's Pengcheng series technology conference is set to debut. Ahead of this, Xiaomi (01810) made another strategic move. Business registration information shows that Zhejiang Xinglihang New Energy Technology Co., Ltd. recently completed an equity change, with Xiaomi's Hanshang Venture Capital officially taking a stake, investing RMB 30 million for approximately 23% ownership. The company's registered capital increased from RMB 100 million to RMB 130 million. This investment in Xinglihang signals Xiaomi's energy replenishment strategy evolving from "fast charging + cooperation" to a three-pronged approach of "fast charging + battery swapping + cooperation," leaving the door open for joining the battery swap route in the future. This move primarily supports the upcoming launch of its range-extended electric vehicle (EREV), which has a smaller battery pack than pure EVs, making battery swapping more cost-effective and naturally suited for the scenario, allowing a full charge in just 3 minutes. Additionally, Xiaomi 's MiMo large model API calls have surpassed one trillion tokens, ranking it first globally in terms of usage. This model is a huge boon for the entire Xiaomi ecosystem, leading to a nearly 9% surge today.
Xiaomi 's momentum has been strong recently. Li Auto (02015) Chairman and CEO Li Xiang also rode the wave, posting on Weibo: "Warmly welcome Mr. Lei to the EREV track, wishing Xiaomi Pengcheng great success!" Li Auto rose nearly 10% today, with additional stimulus coming from a major shakeup in the pure EV market order. On July 27, Leapmotor (09863) opened blind orders for the A05. The A05 is the company's second A-series model, expected to officially launch in August. A key factor is profitability in overseas markets. For example, the Leapmotor C10 is priced at around EUR 39,000 in the EU market (approximately RMB 300,000), while the same model sells for around RMB 150,000 in China, roughly double. Leveraging Stellantis' sales network, Leapmotor has entered over 40 overseas markets with more than 1,000 overseas stores, successfully taking its products global. In March 2026, Leapmotor registered over 11,000 units in Europe, a 754% year-on-year increase. In Italy specifically, it registered 5,513 units, up 2,827%, securing a leading 33.5% share of the Italian pure EV market. Leapmotor rose over 9% today.
Another concept riding the wave of auto sector strength is robotics. BYD plans to debut its first humanoid robot prototype in August. Li Auto is set to release a bipedal robot within the year, and nearly 20 mainstream global automakers have entered the field through self-development, joint ventures, or incubation. Objectively, automakers have inherent advantages in robotics, but generating profit from it is still a distant prospect. Currently, it serves more as a marketing tool. While robot hardware is nearing maturity and can perform various actions, the key deficiency is the inability to act autonomously like a human — simply put, they still lack a "brain." Overcoming this requires breakthroughs in large models; without solving the cognitive problem, robots will remain limited to simple procedural tasks.
The weakness in AI stocks is also linked to fund repositioning. In the first quarter, funds were heavily invested in optical modules, semiconductors, and gaming stocks. By the second quarter, a number of consumer-themed funds had shifted back to buying traditional consumer stocks like baijiu, home appliances, and food & beverage. Some fund managers believe the market may gradually recover from the extreme "20/80" market divergence to a more balanced state. Industries or companies showing signs of bubbles may face pressure in the second half of the year, prompting managers to increase allocation to the undervalued broad consumer sector. Identifiable names in this space include trendy toy company Alco Holdings (00328) , which rose nearly 16%, Mixue Group (02097) , up over 7%, and uniquely themed CTIHK (06055) , up over 8%. The agricultural product sector, mentioned multiple times previously, is benefiting from the risk of inflation triggered by heightened overseas tensions. Dairy prices themselves are also improving, leading to significant improvements in corporate performance. CH Modern D (01117) and Youran Dairy (09858) both surged over 10%. The previously underweighted textile and apparel sector is also showing signs of recovery, with stocks reporting good performance attracting capital. Anta Sports (02020) and 361 Degrees (01361) released their Q2 2026 operational data. For Anta, by brand, retail sales for the main brand/FILA/other brands grew by high single digits/low double digits/40%-45% year-on-year. For 361 Degrees, Q2 2026 main brand retail sales grew by mid-to-high single digits year-on-year, children's wear offline grew by mid-to-high single digits, and e-commerce grew by high single digits. Both stocks rose over 3% today. The OEM manufacturer Crystal International (02232) performed even stronger, surging over 11%. The National Medical Products Administration issued an announcement regarding the registration and filing of cosmetics, encouraging the first launch of new cosmetic products in China. Chicmax (02145) rose over 10%, and Mao Geping (01318) gained over 7%.
Sector Focus
Just days after the release of the "Photovoltaic Industry Cost Accounting Model General Rules," the first compliance guidance activity on pricing was quickly organized. The State Administration for Market Regulation plans to hold a photovoltaic industry pricing compliance guidance event on July 31. The meeting will invite leading domestic PV companies across the entire supply chain, from polysilicon to wafers, cells, and modules, involving dozens of companies with one or two representatives each. Against the backdrop of deep industry price wars and widespread losses, the formal implementation of a unified cost benchmark signifies a shift from industry self-regulation to institutional constraints. The aim is to guide the PV industry in strengthening cost accounting, implementing the "General Rules," and curbing irrational competition. While many industries are seeing an improvement in internal competition, the PV sector has seen little progress, making institutional constraints necessary. This is expected to bring positive changes to the industry. Key Hong Kong-listed players include Xinyi Solar (00968) , Flat Glass (06865) , and GCL Technology (03800).
Stock Picks
Estun Automation (02715) : The company forecasted a net profit attributable to the parent of RMB 150 million to RMB 180 million for the first half of the year, a year-on-year increase of over 21 times. This was driven by an optimized product mix and cost reduction efficiency improvements, which significantly boosted gross margins. In its intelligent production workshop, heavy-duty and assembly robots work in close coordination to precisely assemble a robot base in just 20 minutes. This smart factory, which uses "robots to build robots," is named "ESTUN." The company's significant performance improvement stems from its high-quality development strategy and gains from the asset restructuring of a participating company. In the first quarter, it ranked first in the domestic market for industrial robot shipments. Profitability is rising, with single-quarter net profit exceeding the full year of 2025, and gross margin up 7.52% year-on-year. Overseas business, with Europe as the core engine, grew substantially. High growth continued in Europe and Southeast Asia in early 2026. Overseas gross margins exceed 30%, significantly higher than domestic, making it the primary source of profit growth over the next 2-3 years. The company's industrial robot market share continues to rise, with production maintaining high growth. It shipped 33,400 units in 2025, holding a 10.6% market share, surpassing the "Big Four" foreign families (Fanuc, Yaskawa, etc.) for the first time, ranking first domestically for eight consecutive years, and entering the supplier list of leading global automotive parts manufacturers. Order backlog is strong, with the latest data showing approximately RMB 8.5 billion in orders, up 67% year-on-year, and robot orders up around 50%, maintaining high growth and stable order quality. Downstream sectors (automotive including NEV, 3C, PV/lithium battery) account for over 70% of orders. Major contracts include a 12,000-unit robot contract with BYD (delivery through Q1 2026). A single overseas project (Saris) is valued at over RMB 80 million, with an expected RMB 150 million in orders for 2026. Capacity utilization is over 90%, with the order book extending into Q2-Q3 2026, with heavy-duty models having longer lead times, indicating a full order book and tight delivery schedules. Its globalization strategy is taking shape with an A+H share listing. It has acquired Germany's Cloos (welding) and the UK's TRIO (motion control). Factories in Europe and Poland are established, with service coverage in 75 countries. The company has a fully vertically integrated R&D system, with 95% of core components self-developed and controlled. It has developed its own iER.OS intelligent ecosystem and Juliet robot language. Its collaborative robots are ramping up production quickly, covering over 107 scenarios with rapid expansion in electronics, lithium batteries, and medical fields. The 1200kg heavy-duty robot's core components are 100% domestically produced and hold national first-unit certification. As the proportion of collaborative robots increases and overseas business surges, with full order books and significantly higher overseas gross margins, the company represents the core of future profit elasticity. The industrial robot sector is experiencing a demand boost.
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