Another brutal day unfolded in the markets. Overnight, the US Philadelphia Semiconductor Index fell over 4%, led by declines exceeding 8% in Marvell and Credo. Google dropped more than 4%, while SpaceX fell over 3%, again breaking below its issue price. SanDisk plunged over 12%. The Nikkei 225 is set for its largest single-day drop since March. The A-share market also suffered heavy losses, with fewer than 500 stocks rising across the entire market. The Hong Kong market couldn't hold up either, with the Hang Seng Index closing down 1.78% for the day.
The United States has escalated its attacks, aiming to pressure Iran into accepting its demands. According to Iranian state media, a new round of US military strikes lasted nearly eight hours from the evening of July 16 to the early hours of today (July 17). Five bridges in Iran were attacked, resulting in multiple casualties. Foreign media reports indicate that Iran has requested Yemen's Houthi forces to prepare to block the Red Sea oil passage if the US, as threatened by President Trump recently, attacks Iranian infrastructure such as power facilities. Following the disruption of shipping through the Strait of Hormuz due to the conflict, major oil producer Saudi Arabia has shifted to exporting crude oil via the Bab el-Mandeb Strait. Data from professional institutions shows that daily crude oil loadings at Saudi Arabia's Yanbu port on the Red Sea coast have recently approached peak levels. If the Red Sea is also blocked, global energy supply will worsen further. WTI crude oil futures extended gains to 2%, while Brent crude oil futures rose 1.86%. Shandong Molong (HK: 00568) recently secured another major overseas order, signing agreements with three foreign oil companies for oil casing, line pipe, and other products, totaling over 150,000 tons. This marks another solid step in the company's overseas strategy implementation. Its shares rose nearly 6% today. Tensions in the shipping sector persist, with OOIL (HK: 00316) and SITC (HK: 01308) both rising over 2%.
Federal Reserve Vice Chair Philip Jefferson stated on Thursday that interest rate hikes should be considered if inflation does not cool soon, but he also noted that current monetary policy is in a good place. However, inflation is expected to rise again. A sharp decline in global diesel supply could reverse this trend and push up prices for everything from pet food to lumber. This past Thursday, the US national average retail price for a gallon of diesel was pushed back up to $5.01. Currently, about 7 million barrels per day of global refining capacity is offline, and Russia's 800,000 barrels per day of diesel exports have been completely cut off—a gap accounting for about 11% of global seaborne diesel trade. Domestic expectations for an interest rate cut are now likely to be delayed again.
During today's session, a tweet from US Ohio Republican Senator Bernie Moreno circulated: "I just received a White House briefing on what will happen tonight. I encourage every American to watch the President's address tonight. This may be the most important Oval Office address since the Cuban Missile Crisis. The era of complacency towards China is over." The market is concerned about potential adverse developments, and negative sentiment is amplified at this juncture. The technology sector was hit hard again, and innovative drugs failed to hold up, which seems somewhat exaggerated.
China's open-source large language model space welcomes another heavyweight product—Moon's Dark Side Kimi K3 has grandly debuted. With 2.8 trillion parameters, it performs excellently on various benchmarks, especially ranking third globally on the AA leaderboard, just behind Fable-5 and GPT-5.6, and achieving the top score globally on Arena.AI's Code Arena leaderboard. Weights will be released on July 27. Pricing-wise, the cost per million tokens for input/output is $3/$15, with a cache hit price of $0.3, the highest among current domestic open-source models, roughly one-third of Fable-5's and half of GPT-5.6 Sol's. Moon's Dark Side is conducting a new funding round with a valuation of approximately $31.5 billion; DeepSeek has also initiated a new funding round with a valuation of about $71 billion. On the morning of July 17, the Chinese head of state attended the opening ceremony of the 2026 World Artificial Intelligence Conference and the High-Level Meeting on Global AI Governance in Shanghai, delivering a keynote speech: Over the next five years, China will provide 5,000 AI training opportunities for developing countries; and will establish International AI Application Cooperation Centers for ASEAN, the Arab League, the African Union, CELAC, the Shanghai Cooperation Organization, and BRICS countries. This directly stimulated Able Digital (HK: 02687): the only dual-theme play in Hong Kong for Physical AI + Higher Education Knowledge Large Models. Its educational AI export has already landed: cross-border joint laboratories have been established with multiple Central Asian countries in the SCO, exporting virtual simulation teaching platforms for new energy and materials science to Kyrgyzstan, Kazakhstan, etc., belonging to official Belt and Road AI cooperation demonstration projects; Physical AI is a key direction for national technology export, covering energy, aerospace, healthcare, and industrial training. The company has accumulated over 30,000 structured knowledge units across disciplines, possessing core advantages in physical simulation, and has already initiated applications in healthcare and industrial fields, precisely matching industrial AI support policies for ASEAN, Middle Eastern, and Central Asian countries. Its recent performance has been quite strong, rising nearly 5% again today.
With the tech sector's sharp decline today, hopes were pinned on pharmaceutical stocks for stability, but they also failed to hold, leaving the overall market weak. Only consumer and defensive utility sectors showed strength. Consumer focus was on textiles and apparel. Stella Holdings (HK: 01836) announced that for the three months ended June 30, 2026, the Group's unaudited consolidated revenue increased by approximately 1.2% to $449.3 million; revenue increased by approximately 1.5% to $786.7 million. The Group plans 2026 as an investment year, expecting most of the profit growth outlined in the three-year plan to materialize in the latter part of the 2026-2028 period. Regarding three new factories in Indonesia, Bangladesh, and Vietnam, the Group expects them to commence operations in the second half of 2026. Furthermore, while maintaining a dividend payout ratio of about 70% for regular dividends (including final and interim dividends), the Group remains committed to distributing up to an additional $60 million in cash to shareholders in 2026 through a combination of share buybacks and special dividends. Its shares rose over 6% today. Others like Topsports (HK: 06110), Yue Yuen Industrial (HK: 00551), and Samsonite (HK: 01910) all gained close to 3%.
Utility stocks generally held firm, such as Anhui Expressway (HK: 00995), Beijing Enterprises (HK: 00392), and Yuexiu REIT (HK: 00270), all rising over 2%. On July 16, TCL Electronics (HK: 01070) announced the acquisition of a 51% controlling stake in TCL Air Conditioner for HK$5.61 billion. The transaction will be completed with a small amount of cash combined with a share issuance. After completion in the fourth quarter, the air conditioning business will be formally integrated into the listed company. The acquisition will fill a core gap in TCL Electronics' white goods segment and create industrial chain synergies. The domestic home appliance market will form a tripartite structure with Haier, Midea, and TCL, with TCL becoming the only company with both global TV leadership and large-scale air conditioning export capacity. Its enhanced overseas comprehensive competitiveness is pressuring the second tier to accelerate full-category integration. Its shares rose nearly 6% today.
BYD Electronic (HK: 00285) has been active over the past two days, with rumors that the company is venturing into the optical module business. In reality, this is not the case; the company has already debunked the rumor. The fact is that many years ago, it recruited a small team from a Wuhan company working on low-speed telecom, which didn't succeed, and the core team members have since left. Investors should be discerning.
Sector Spotlight
On July 17, International Energy Agency (IEA) Executive Director Fatih Birol warned that global energy security would be at risk if oil transportation through the Strait of Hormuz cannot resume within weeks. He said some countries' response measures "cannot last forever"; even a significant increase in US oil production would be far from sufficient to compensate for the supply gap caused by the Strait of Hormuz blockage. Oil shortages will inevitably increase demand for alternative energy sources. Coal prices are expected to strengthen further. Key Hong Kong-listed varieties include China Shenhua (HK: 01088), China Coal Energy (HK: 01898), Yankuang Energy (HK: 01171), and Yancoal Australia (HK: 03668).
Stock Spotlight
Techtronic Industries (HK: 00669): Core Business Achieves High Growth, Ongoing Share Buybacks Boost Confidence. Recently, the company signed an automatic share repurchase agreement with HSBC, planning to repurchase up to $500 million worth of ordinary shares on the Stock Exchange. The company has since continued daily repurchase operations. Institutions estimate the company's first-half revenue at $8.1 billion (up 4% year-on-year) and net profit at $700 million (up 10% year-on-year).
Analysis: The company is a global leader in lithium-ion cordless power tools, with a dual-brand, tiered barrier. Its Milwaukee M12/M18 and RYOBI ONE+ battery platforms are each compatible with over 200 tools. Milwaukee: Tools for North American construction sites, infrastructure, and AIDC data centers, with extremely high loyalty among professional workers and strong brand premium, contributing approximately 66% of revenue and over 80% of profit. In 2025, AIDC-related revenue was about $1.5 billion, accounting for 10% of group revenue and 16% of the Milwaukee brand, growing at 20%-25%, far exceeding the group's overall 4% growth rate. In 2025, brand revenue reached $10.1 billion, up 8.1% year-on-year, maintaining high growth. RYOBI: Affordable home-use lithium-ion tools. The ONE+ battery platform locks in ordinary households, stabilizing the base and achieving steady low-single-digit growth, hedging against real estate cycle fluctuations. Compared to industry leader Stanley Black & Decker: In 2025, Techtronic's gross margin was 41.2%, while its competitor's was only 30.3%, with product structure advantages widening the profit gap. Deep channel partnerships: An exclusive, in-depth 20-year cooperation with Home Depot in North America contributes 45% of total revenue; full coverage of Lowe's and major European supermarkets creates high offline retail barriers. Ample order book: The company has signed annual supply framework agreements with Home Depot and Lowe's, locking in orders for the full year in advance. Orders for RYOBI home garden and basic power tools are stable. AIDC/industrial infrastructure incremental orders are growing rapidly, with North American top infrastructure contractor Quanta Services and data center engineering firms making long-term定点 procurement of Milwaukee industrial tools. With the rollout of massive new AI data centers and new energy grid projects in the US from 2026-2027, industrial maintenance tool orders are expected to持续放量. Institutions predict the AIDC business will achieve a compound annual growth rate of over 20% in the next three years. The company has had a strong start to 2026, with its core Milwaukee and Ryobi businesses expected to achieve mid-to-high single-digit growth. Meanwhile, as tariff mitigation measures implemented in the second half of 2025 gradually take effect, further margin expansion is anticipated. The company's $500 million share buyback plan has significantly boosted investor confidence.
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