The Hong Kong stock market's performance has been commendable recently, having risen for three consecutive weeks. A key factor is the influx of incremental capital: the US has confirmed to China that the national emergency concerning Hong Kong under Executive Order 13936 will not be extended upon its expiration this year, and the order will be terminated. This implies a relaxation for US institutions investing in Hong Kong stocks, with forward-looking capital entering the market early. Today, the market gapped up again, rising 2.36%.
The World Cup curse that plagued the stock market for over a month has come to an end. Spain defeated Argentina 1-0 in extra time to win its second World Cup title; FIFA (Fédération Internationale de Football Association) made a huge profit, set to generate over $9 billion in revenue in 2026. When the economy is weak, such top-tier events attract more viewers as emotions need an outlet. FIFA President Gianni Infantino, having tasted the benefits of expansion, has already begun proposing to further increase the tournament to 64 teams by 2030. Is this an attempt to get everyone to spend more? Another big winner is Adidas, which accurately "predicted" the champion and runner-up; its shareholders are indeed formidable.
With the World Cup over, it's unreasonable for the battered stock market not to rise. Action is being taken. Two major state-affiliated investment platforms, China Reform Holdings and China Chengtong Holdings, announced on Sunday that they have increased holdings in Chinese stocks to stabilize the domestic capital market and pledged to continue raising their shareholding ratios in central state-owned enterprises and other companies.
Undoubtedly, such funds are targeting index-linked stocks. In Hong Kong, TENCENT (00700), Alibaba (09988), and Meituan (03690) rose over 3% today. The three leading insurance institutions—Ping An Insurance (Group) Company of China, Ltd. (02318), China Pacific Insurance (Group) Co., Ltd. (02601), and New China Life Insurance Company Ltd. (01336)—issued announcements on "firmly supporting the development of the capital market and enhancing shareholder returns/actively rewarding investors," releasing positive signals to the market. China Taiping Insurance Holdings Company Ltd. (00966) issued a first-half performance forecast, indicating that net profit attributable to shareholders increased by approximately 85%-95% year-on-year for the first half, rising over 8% today. New China Life Insurance Company Ltd. (01336) and China Pacific Insurance (Group) Co., Ltd. (02601) both rose over 4%.
However, tensions persist in the Middle East. On the evening of July 19 local time, US President Trump, upon arriving at Joint Base Andrews via Air Force One, told the media that in retaliation for the deaths of three US military personnel in a Middle Eastern country, the US military was carrying out "intense bombing" against Iran. In the early hours of July 20 local time, Iran's Islamic Revolutionary Guard Corps stated in an announcement that Iran had precisely struck and destroyed 20 US military hideout locations in the Azraq area of Jordan, killing dozens of US military personnel. It appears the situation has escalated between both sides. Brent crude and WTI crude oil rose over 3% this morning, with Brent touching $91 per barrel for the first time since June 11.
Today, the alternative energy sector—coal—performed well. As mentioned in last Friday's sector focus, ongoing geopolitical conflicts in the Strait of Hormuz continue to disrupt coal transportation and prices, and increased production in Indonesia is unlikely to translate into significant export growth to China. On July 20, CHINA COAL (01898) and China Shenhua Energy Company Limited announced favorable news regarding dividends and share buybacks. Among them, CHINA COAL announced that its controlling shareholder plans to increase its shareholding by RMB 50 million to 100 million. China Shenhua Energy announced it will maintain the frequency of cash dividends and continue interim dividends. Among the mentioned related stocks, CHINA COAL (01898) and Yankuang Energy Group Company Limited (01171) rose over 8%.
Coal and power are generally linked. Currently, we are in the peak phase of a new round of high temperatures from July 18-23, with the Central Meteorological Observatory continuously issuing high-temperature warnings. At the 2026 World Artificial Intelligence Conference, a National Energy Administration official revealed that China will accelerate the construction of a new energy system to empower AI development. DATANG POWER (00991), Longyuan Power Group Corporation Limited (00916), China Power International Development Limited (02380), and Huaneng Power International, Inc. (00902) all rose over 4%.
The AI hardware bellwether continues to be South Korea. Although South Korean regulators intervened last week to address irregularities in leveraged ETFs for individual stocks, the South Korean stock market corrected today, falling to circuit breaker levels again. This led to renewed weakness in hardware-related stocks in both markets today.
The market can only explore the application side. Last week, Kimi K3 was heavily launched, topping the global code leaderboard, narrowing the gap between Chinese and US large models. The official version of DeepSeek V4 is also expected to be released soon, directly catalyzing demand for Tokens. In Hong Kong, Chinasoft International Limited (00354) officially announced today that it has signed a "Moon Landing Plan" cooperation agreement on Token revenue sharing and joint innovation with Moon's Dark Side. Specifically, it involves using Chinasoft International's self-developed enterprise intelligent operating system, the AllMeta platform, paired with Moon's Dark Side's K2.7Code and K3 models and subsequent iterations as the core technological foundation, to jointly advance the innovation and large-scale commercial application of enterprise-level agent technology, products, and solutions in industries such as energy, power, and finance. Simply put, it's "model + computing power" to achieve Token revenue sharing. It surged nearly 23% today.
Another company, XUNCE (03317), announced on July 19 that it has formally signed a strategic cooperation memorandum with Qingdao Xinchen Technology Innovation Industrial Co., Ltd., the parent company of Hongtai Fund. This marks the first systematic and large-scale entry of the company's TokenOS operating system into the private equity investment field, accelerating the implementation of Token commercial scenarios. This opens up a new revenue line, surging over 18% today.
China and the US have released signals of easing tensions. The Ministry of Foreign Affairs stated that China and the US are maintaining communication regarding arrangements for leader-level interactions within the year, and the foreign ministers of China and the US may meet in Manila. Sentiment towards innovative drugs has improved. The Hong Kong Stock Connect Innovative Drug ETF Huabao (520880) rose 3.94%. RemeGen Co., Ltd. (09995) announced last night that it will use no less than RMB 25 million and no more than RMB 50 million of its own funds and/or raised funds to repurchase A-shares through centralized bidding transactions. The repurchased shares are intended for employee stock ownership plans or equity incentives. It rose nearly 10% today. Among other index constituents, DUALITYBIO-B (09606) rose 12%, while CONMAB-B (02162) and Junshi Biosciences (01877) rose over 7%.
According to the latest data released by the China Construction Machinery Association, the construction machinery industry continues its high prosperity, with excavator and loader sales in June both achieving better-than-expected growth. The combined support of domestic and external demand underpins the industry's sustained recovery. Since the beginning of the year, leading enterprises such as Sany Heavy Industry Co., Ltd. (06031), XCMG Construction Machinery Co., Ltd. (000425.SZ), and Zoomlion Heavy Industry Science and Technology Co., Ltd. (000157.SZ) have successively issued product price adjustment notices. Sany Heavy Industry Co., Ltd. (06031) rose over 9%, and First Tractor Company Limited (00038), which has strong export momentum, rose over 7%.
According to the China Securities Regulatory Commission (CSRC) website, on the morning of July 20, CSRC Party Secretary and Chairman Wu Qing conducted research at a securities business department in Beijing and presided over an investor symposium, engaging in face-to-face discussions with eight representatives including various types of investors from large to small retail investors. The purpose was to listen to opinions and suggestions on promoting the stable and healthy development of the capital market. We will see what specific measures follow.
Sector Spotlight
At the Jeju Forum in South Korea on July 20, Chey Tae-won publicly stated: AI drives storage demand growth of 50%-100% annually, and the global storage supply-demand gap will further widen in 2027; global manufacturers have almost no plans for new storage capacity expansion next year, and high-end HBM capacity faces long-term shortages. This corrects the market's previous panic logic of "overcapacity in 2027," leading to a collective flow of funds back into the storage sector. On July 20, US pre-market storage stocks fluctuated higher: Micron Technology rose 4.07%, Western Digital rose 2.47%, Seagate Technology rose 2.46%, SanDisk rose 4.32%, and SK Hynix rose 5.36%. This is expected to stimulate related Hong Kong-listed stocks: GIGADEVICE (03986), Montage Technology Co., Ltd. (06809), Huahong Semiconductor Ltd. (01347), and Semiconductor Manufacturing International Corporation (00981).
Individual Stock Analysis
KINGDEE INT'L (00268): AI Operating System 'Lingji' Catalyzes, Overseas Revenue Grows Rapidly
KINGDEE INT'L showcased its enterprise AI operating system "Lingji" at the WAIC World Artificial Intelligence Congress on July 19, proposing the digital employee concept of "humans set goals, AI implements execution." Huazhu Group recently signed a strategic cooperation agreement with Kingdee to jointly build AI smart financial solutions for the hotel industry, validating its ability to expand large clients. The company expects first-half revenue to increase by 13% to 14% year-on-year, with attributable net profit of approximately RMB 40 million to 60 million, achieving a turnaround to profitability.
Analysis: KINGDEE INT'L's profitability continues to improve, primarily driven by rapid growth in subscription revenue and strong demand for AI-native products. The AI product system is accelerating its implementation. The company is the only local vendor selected for the Gartner Cloud ERP Magic Quadrant. Its AI code assistance and business intelligence agents offer comprehensive coverage, with AI-generated code expected to account for 70% of R&D by 2026; full-stack domestic adaptation for Kirin, Tongxin, Dameng, and Kunpeng. The transition to subscription SaaS is thorough; the company is the only leading ERP vendor in the industry to have completed a full subscription model transformation, while Yonyou still heavily relies on traditional licensing. In 2025, cloud service revenue accounted for 81.6% of total revenue, with subscription revenue growth exceeding 20%; ARR (Annual Recurring Revenue) reached RMB 4.09 billion (2025). Large enterprise business is expanding rapidly. Revenue from Cangqiong + Xinghan reached RMB 1.94 billion in 2025, a year-on-year increase of 28%; of this, subscription revenue was RMB 528 million, a year-on-year increase of 35.4%. High-end group clients have high unit prices and long renewal cycles, offsetting competitive pressures in the mid-market segment. The AI-native full product line is booming, with the launch of the enterprise AI operating system Lingji, featuring intelligent agents for finance, production, supply chain, and human resources across all scenarios; AI automatically generates vouchers, production schedules, risk warnings, and business analysis, significantly enhancing customer willingness to pay. Globalization and overseas expansion represent a second growth curve, with strong digitalization demand in Southeast Asia, Hong Kong, and Macau's manufacturing sectors. Overseas subscription revenue has grown at over 30% for multiple consecutive years. Ample order backlog: the mid-market Xingkong segment provides a stable base, generating over RMB 1.5 billion in stable subscription revenue annually with 19% growth. The large group Cangqiong/Xinghan segment offers high-growth increments with subscription growth exceeding 35%; high-end client contracts range from millions to tens of millions. AI add-on packages provide new incremental revenue, with a full-year 2026 target of RMB 1 billion, mostly from existing clients adding purchases. Recently, JPMorgan increased its holding in KINGDEE INT'L by approximately 13.9413 million shares at an average price of about HK$7.04 per share, involving approximately HK$98.20 million. After the increase, its shareholding ratio rose to 7.1%. The company's cloud subscription revenue maintains a steady growth rate of around 20%, overseas revenue grows rapidly, profit margins continue to rise, and profit scale is expected to potentially double compared to 2025. JPMorgan's nearly HK$100 million increase in holdings boosts market confidence.
Comments