U.S. midterm elections have delivered a major impact on global capital markets. When Democrats swept both chambers, the market initially viewed the outcome positively, but their regulatory crackdown and restrictions on AI triggered a sharp selloff in technology stocks, which is where investors are most concerned. Although Hong Kong technology stocks also fell sharply, the surge in buying interest toward internet giants listed on the Hang Seng Index actually drove the index higher last week.
On the U.S.-Iran front, small-scale maneuvers continue while peace talks are also ongoing. Israel's political landscape has undergone dramatic changes, with President Herzog set to authorize Integrity Party leader Eisenkot to form a new government. If the formation succeeds, it could present an opportunity for easing tensions with Iran, though significant uncertainties remain. Friday's nonfarm payrolls report showed 165,000 new jobs and unemployment falling to 4.1%, pushing the probability of a Federal Reserve rate hike in December up to 80%. This week's release of U.S. October CPI data will directly reinforce that outcome.
The technology sector remains under pressure. The European Central Bank is considering reviewing bank loans to data centers, and protests have erupted across multiple European countries demanding a halt to data center construction. Anthropic is preparing for an IPO, with its valuation revised down from 1.5 trillion to below 1.25 trillion, and a formal listing expected in mid-November. OpenAI has also accelerated its IPO pace and is likely to absorb substantial capital. On Friday evening, China's State Council executive meeting made clear its commitment to improving capital market stabilization mechanisms, enhancing the inherent stability of the stock market, and promoting the stable and healthy development of capital markets. Policy support combined with previously provided liquidity has led some bargain-hunting capital to enter the Hong Kong market. However, sustainability will still depend on external developments.
The market as a whole is currently favoring defensive sectors, with notable focus on livelihood-related areas such as power. The National Energy Administration stated that during the 15th Five-Year Plan period, China will add electricity consumption equivalent to three Shanghais each year, with new-type energy storage installed capacity targeted at 300 million kilowatts by 2030. Additionally, cold wave warnings are at maximum levels, with 15 provinces experiencing temperature drops exceeding 10 degrees Celsius, and rain and snow weather arriving, providing catalysts for the heating sector. In other developments, Apple's research team disclosed progress on robot "brain" research, achieving an average success rate of 91% on individual task tests. Robotics, as a surviving segment in the technology space, is expected to see divergence, with focus on orders, earnings, and names with positive expectations.
Top Stock of the Week
UBTECH ROBOTICS (09880)
Apple's HALO further validates the feasibility of the Sim2Real approach. UBTECH ROBOTICS leads in technology as a pioneer among body manufacturers deeply engaged in physical AI. Over the past year, the company has accelerated its physical AI layout, covering embodied large models, simulation platforms, and real-world scenario data, making it one of the few humanoid robot body manufacturers with deep physical AI engagement. In April, it proposed "hierarchical end-to-end plus dual data flywheel," and in November it was first to launch the Thinker-Sim simulation platform, ahead of Apple's HALO paper publication. Currently, the company has accumulated approximately 11 million real-machine data entries, over 80% from industrial scenarios, gradually building a positive flywheel of "body-scenario-data-model."
Commercialization is accelerating through dual B-end and C-end drivers, with humanoid robots already becoming the largest revenue source. The company covers industrial, commercial, and home consumer scenarios, advancing on both B-end and C-end fronts. In 2026H1, full-size humanoid robot revenue reached 590 million yuan with a gross margin of 66.8%, becoming the company's largest revenue source. With product iteration, application scenario expansion, and scaled delivery, the robot business is expected to continue growing, with net profit turnaround anticipated by 2027 and an operational inflection point approaching. Huachuang Securities believes expectation gaps will bring revaluation. This can be compared to the undervalued "XPeng" during the intelligent driving era, when XPeng was unpopular due to high R&D investment and sustained losses until intelligent driving value gradually materialized and revaluation followed. Today's UBTECH ROBOTICS has a similar cognitive gap: the market still prices it as a traditional robot company, not fully recognizing its humanoid robot business progress and underestimating the long-term value of its physical AI layout.
Industry Watch
Goldman Sachs' Beijing research this week (covering property experts, developers, agents, building materials companies, and financial institutions) formed a consensus judgment: macro demand expectations are cautious, policy stimulus expectations are low, and industry stabilization will no longer rely on strong demand-side stimulus but on a three-track parallel approach of "controlling new supply, destocking, and providing quality supply." Secondary market volume and prices in core cities stabilize first, while new home price inflection lags, with leading state-owned developers and well-capitalized local platforms benefiting most. Weak-balance-sheet private enterprises face widening funding gaps over the next two years, with default risks re-emerging. On the supply side, the "August 28 reform" actively reduces new land supply, eliminating delivery risks. Land auction premium rates across 300 cities hit historic lows, with new construction and land investment accelerating their decline through 2027-2028 and stabilizing around 2029. The secondary transaction proportion continues to rise. Major central SOEs gain share through industry consolidation, while low-leverage small and medium developers in tier-3 and tier-4 cities survive through product standardization. On destocking, mortgage interest subsidies accelerate compliant new home inventory clearance but with narrow coverage. Special bonds for purchasing unsold land and completed homes are systematic backstops, though the pace remains slow. On quality upgrading, "good house" standards (floor height, soundproofing, elevators) drive strong new project absorption, creating clear pricing divergence from old inventory. On the demand side, first-tier city secondary markets have partially stabilized (Shanghai volume up, prices steady), while new home inventory destocking is slow and prices continue to probe lower. The market has not truly bottomed. The major price-cut phase has passed, but genuine stabilization will take about five years, with the declining share of young population after 2030 continuing to suppress demand. On the investment side, future property investment will be mainly driven by urban renewal, especially "self-directed renewal/demolish-and-rebuild" where residents have willingness to pay (core city reconstruction costs about 5,000 yuan per square meter, corresponding to large asset value recovery elasticity). The government gains transaction taxes and supplementary land transfer revenue. Although there is no one-time land sale revenue, it can drive broad demand, though execution difficulty is not low. Goldman Sachs maintains a preference for leading central SOEs in the developer sector: Buy China Overseas Land & Investment, China Resources Land, China Merchants Shekou, and Jinmao. In building materials, Buy Oriental Yuhong and BNBM, Sell Skshu.
Data Watch
Hong Kong Exchange data shows that Hang Seng futures (November) total open interest stands at 116,036 contracts, with net open interest at 37,101 contracts. The Hang Seng futures settlement date is November 27, 2026. The Hang Seng Index is at 24,482 points, with bull-bear certificates generally deviating from the midpoint. Hong Kong stocks are watching U.S. equity trends while remaining cautious themselves. The U.S. AI bull market has encountered the largest selloff wave in four years, with capital re-examining the investment logic of massive large-scale infrastructure. Market expectations for a Fed rate hike in December are very high, and the Hang Seng Index is seen as bearish this week.
Editor's Note
From an industry perspective, the current U.S. AI sector is in the late stage of frenzy. U.S. AI development is in a complex phase of heavy reliance on debt-financed expansion, with earnings expectations about to peak. The ratio of total U.S. market capitalization to M2 has exceeded that of the 2000 internet bubble period, with market-absorbed capital entering a high range. The Buffett indicator has again exceeded the trendline by two standard deviations since last year's second quarter, surpassing the 2000 dot-com bubble level. On the Shiller P/E dimension, the Nasdaq Shiller P/E is approximately 75, at a high percentile since 2000, while the S&P 500 Shiller P/E exceeds 40, approaching the 2000 high of 44.2; the safe zone for this indicator is 16-17. All three indicators suggest that the current U.S. AI bubble has entered a dangerous fermentation stage. The storm is brewing.
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