Analyzing the Market: Yesterday, A-shares staged a rebound fueled by large funds buying broad-based ETFs, but the momentum did not carry over into today as the market stalled once again. It appears that state support funds are only stepping in at key index levels and cannot withstand the broader macroeconomic pressure. On the Hong Kong side, the Hang Seng Index also slipped 0.13%, while the Hang Seng Tech Index gained 0.91%.
Rising oil prices remain a persistent headache. Although Trump announced the import of diesel from Russia to suppress oil prices, the first batch of roughly 2.25 million barrels is only enough to cover just over one day of U.S. demand, and the total agreement of 4.8 million tons amounts to only about ten days of U.S. consumption. Diesel futures barely budged and actually moved higher on Tuesday. Execution-level uncertainties are equally prominent, with Russian refineries under continued attack and export capacity in doubt. A fresh problem has also emerged: Yemen's Houthi military spokesman Yahya Saree stated on social media on the 14th that Houthi forces had attacked Saudi Aramco facilities in Dhahran, King Khalid Airport in Riyadh, and Saudi Aramco's refinery in Riyadh, adding that operations targeting airports and oil facilities would continue over the coming days. Without U.S. intervention, the situation is unlikely to stabilize. This suggests oil prices will struggle to come down. China Oilfield Services Ltd (02883) rose over 3%, and SINOPEC Engineering Group Co Ltd (02386) gained more than 2%. Trump has devised yet another plan: on the 14th, he posted on social media that large-scale oil, natural gas, and mineral resource exploration would soon begin in Greenland. Clearly, this is a case of distant water unable to quench present thirst. With nothing yet set in stone, and setting aside whether Denmark or Greenland would even permit extraction, even if they did, any actual production would be years away, by which time Trump would likely be out of office.
The market continues to speculate around energy themes, with shipping still climbing. Names such as COSCO SHIPPING Energy Transportation Co Ltd (01138) and Orient Overseas (International) Ltd (00316) keep pushing higher. Yesterday it was noted that tech stocks can hardly be described as stabilizing, as investors harbor doubts about whether AI can deliver profitability. Tonight, Anthropic, the developer of the Claude chatbot, will gather a group of potential institutional investors at its San Francisco headquarters for a Pre-IPO investor day, where the company will disclose its third-quarter revenue figures for the first time. The market is very anxious; if results fall short of expectations, it would deal another heavy blow to the tech sector. Turning to South Korea, foreign investors have net sold a cumulative $141.5 billion in the Korean market this year, with Samsung Electronics and SK Hynix accounting for 86% of total foreign selling. Samsung Electronics' foreign ownership ratio has dropped to its lowest since 2008, and SK Hynix's foreign holding ratio has also fallen below its ten-year average. Today, Montage Technology Co Ltd (06809), YOFC (06869), and Cambridge Technology (06166) all dropped more than 6%.
With no major way out in sight overall, long-term funds have begun positioning in the core holdings of the Hang Seng Tech Index. On October 7, the Hang Seng Tech Index introduced major rule reforms, with adjusted constituent stocks scheduled for announcement on November 20 and officially taking effect from December 7. According to iFinD data, as of September 30, 2026, the top ten weighted stocks in the Hang Seng Tech Index were NetEase Inc (09999), Alibaba Group Holding Ltd (09988), Tencent Holdings Ltd (00700), Meituan (03690), Lenovo Group Ltd (00992), Xiaomi Corp (01810), BYD Co Ltd, Semiconductor Manufacturing International Corp (00981), JD.com Inc (09618), and Baidu Inc (09888), with the top ten together accounting for 73.33%. Today's better performers were mainly Meituan-W and Xiaomi Group-W, both up more than 5%; these two lean toward large consumer themes. Alibaba-W also rose over 3%, driven by its AI large model, chip, and cloud business directions. Going forward, investors should focus on tech names that could newly qualify for inclusion in the Hang Seng Tech Index.
AI short dramas are gaining strong momentum, with giants accelerating their positioning. According to data from the China Netcasting Services Association, in the second quarter of 2026, a total of 239,000 micro short dramas were released domestically, of which 153,000 were AI dramas, accounting for 64%; in the second quarter that proportion exceeded 95%. On the user side, DataEye data shows that in 2025 the domestic anime short drama user base was only about 120 million. Entering the first half of 2026, the domestic AI drama and anime drama user base is expected to rapidly surpass 600 million, achieving an unexpected doubling from the previously estimated 280 million. Giants are also accelerating their positioning. In AI short dramas, ByteDance is undoubtedly at the forefront with the most complete ecosystem, including Tomato Novel, the Seedance production model, and Hongguo Short Drama, with Hongguo Short Drama already holding a first-mover advantage. However, Tencent, relying on its social traffic pool, launched "Lvp泡泡 Short Drama," setting AI dramas and anime dramas as first-level content entries from the start, with AI dramas even placed ahead of live-action dramas in homepage recommendations. Kuaishou Technology (01024) updated its short drama incentive policy, offering up to 200,000 yuan per drama, and simultaneously launched the "AI National Creation Season." Having already launched the "AI National Creation Season," Kling AI is becoming the technological foundation of Kuaishou's short drama ecosystem. The new Kling AI model Kling 4.0 has entered internal testing and will officially launch in October.
The biggest beneficiaries include China Literature Ltd (00772): on October 8, two of the top three live-action short drama hits were produced by China Literature, showing a significant head effect. Among them, "The First Assistant's Beloved Wife," produced by China Literature Short Drama and adapted from a China Literature IP, held the TOP 1 spot on the live-action drama hit list for multiple consecutive days, rising over 4%. Another is copyright leader Foobao Group (03738): it plans to acquire Anqing International, the entity behind Dreamesh, for HK$75 million, accelerating the integration of content protection and AI video generation technology. Dreamesh is an AI video generation platform for content creators and film and television studios, with its core capability built on multi-agent collaboration technology. The platform currently has over 20,000 creators, and the stock rose over 5%.
Recently, the market has continued to dig into large consumer names, such as MINISO Group Holding Ltd (09896): third-quarter U.S. market GMV grew about 20% year-on-year, September grew over 30% year-on-year with same-store sales turning positive, and its proprietary IP YOYO exceeded RMB 1 billion in GMV in the first nine months of 2026, expanding to 53 countries and regions globally. It appears that in a consumption downgrade environment, selling inexpensive small items still has a market. Institutions are bullish on its future potential, and the stock rose nearly 6%.
China Resources Building Materials Technology Holdings Ltd (01313) is interesting. On October 12, it issued a profit warning, expecting an attributable loss of approximately RMB 750 million to RMB 850 million for the nine months ended September 30, 2026, compared with a profit of RMB 331 million in the same period of 2025. Despite the profit warning, the stock held firm because fundamentals are improving. September marks the traditional peak sales season, the Guangxi Xijiang River is about to enter its dry season reducing the impact of incoming cement from outside, the opening of the Pinglu Canal is also boosting the cement landscape in Guangdong and Guangxi, staggered production is shrinking supply, energy consumption dual control and environmental production restrictions are compressing capacity, and rising coal prices—with coal surging to 970-990 yuan per ton—led Guangdong cement prices to rise again in October, with Pearl River Delta bulk prices up 50 yuan per ton. The stock rose nearly 8% today.
Meanwhile, PATEO CONNECT Technology (02889) saw its shares rise after the latest announcement that directors and senior management committed not to sell or dispose of their shares within 12 months; Guangzhou Ping'an extended its lock-up period from 12 months to 18 months after listing, and Sanfeng Holdings also committed to a 6-month lock-up. With major shareholders' stakes locked up, the stock rose over 14% today. U.S. September CPI will be released tonight Beijing time. This report is the last inflation data before the Federal Reserve's October 27-28 meeting and could directly affect market pricing of the Fed's policy path. Overall, September inflation is intensifying. Economists expect headline inflation to rise from 3.4% to about 3.6% in September, above August's 3.4%; on a monthly basis, September CPI is expected to rise 0.6%, above the previous month's 0.4%.
Sector Focus
On October 14, in response to the positive results achieved by the China-EU trade and investment consultation mechanism, multiple automakers including BYD, Chery Group, and Geely Holding Group issued statements today. BYD stated that the second regular meeting of the China-EU trade and investment consultation mechanism was successfully held in Beijing recently. Both sides conducted intensive and constructive consultations on multiple key economic and trade cooperation topics, forming a number of positive outcomes and practical consensus. Geely Holding Group stated that it welcomes and supports the positive results of the second regular meeting of the China-EU trade and investment consultation mechanism, and appreciates the efforts of both sides to properly handle automobile trade differences through intensive consultations based on the principles of mutual respect and equal consultation. The auto industry is intensely competitive domestically, and the hope lies in going overseas, especially in the European market. This round of positive progress in China-EU trade talks is good news for relevant automakers. Related names include: BYD Co Ltd (01211), Geely Auto (00175), XPeng Inc (09868), and NIO Inc (09866).
Stock Spotlight
HUTCHMED (China) Ltd (00013): Savolitinib plus Osimertinib selected for SAFFRON global Phase III at ESMO meeting, worth anticipating. The ESMO meeting is about to convene, and LBA titles have been published on the official website. The 2026 ESMO meeting will be held from October 23-27 (local time) in Madrid, Spain. Late-Breaking Abstract (LBA) titles have already been published on the official website, and regular abstracts will be released on October 19 (local time), with the international influence of Chinese innovative assets continuing to rise. The ESMO official website published over 90 LBA titles, of which 12 of the most breakthrough and practice-changing LBA studies will be presented at the ESMO plenary session. HUTCHMED's two Phase III lung cancer studies of savolitinib plus osimertinib were both selected as LBA breakthrough abstracts and oral presentations.
Commentary: This ESMO will disclose: complete OS/PFS curves, subgroup data, detailed safety data, and quality of life scores. The key focus is savolitinib (HUTCHMED) plus osimertinib (AstraZeneca), compared with chemotherapy, for EGFR-mutant non-small cell lung cancer after osimertinib resistance with MET overexpression/amplification. Once the data is strong, it will bring a catalyst. The company is one of the few domestic fully integrated independently innovative oncology drug platforms: from early drug discovery and clinical development to domestic commercial production and integrated sales. It has developed four Class 1 anti-tumor drugs (fruquintinib, surufatinib, savolitinib, and vorolanib), all approved domestically. Fruquintinib successfully went overseas to Europe, the U.S., and Japan, making it one of the earliest domestically developed original targeted drugs to achieve global commercialization. Flagship product fruquintinib (ELUNATE): a domestic benchmark, approved in 38 countries globally, with overseas sales handled by Takeda. New indications for kidney cancer and endometrial cancer have been included in medical insurance, and domestic sales have returned to a growth trajectory, with overseas sales being the company's largest revenue source. The pipeline continues to deliver: savolitinib (ORPATHYS, China's first MET inhibitor) added a gastric cancer indication; newly approved vorolanib (AILINGDA) fills the gap in FGFR2 fusion treatment for intrahepatic cholangiocarcinoma; and the immunotherapy pipeline candidate sovleplenib is advancing its marketing application. Large BD milestone revenue elasticity: the ATTC platform HMPL-A830 collaboration with GSK will continue to bring cash inflows through tiered milestones for future clinical, launch, and sales milestones, enhancing R&D funding. The expectation ahead is SAFFRON global Phase III: AstraZeneca submitting FDA/EMA marketing applications (NDA/MAA). SAFFRON is a global multicenter study, and after ESMO publishes the complete OS, subgroup, and safety data, AstraZeneca will advance global filing based on this dataset.
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