Markets are gradually shaking off the influence of US stock declines, with both Hong Kong and mainland markets rising in tandem today. The Hang Seng Index rebounded from its lows to close 0.54% higher. It appears that Trump's rhetoric has been largely bluster, repeatedly claiming a deal was imminent, but the reality is far from it. A draft bill under review by the Iranian parliament has been leaked, proposing to ban US, Israeli, and other hostile nations' ships from passing through the Strait of Hormuz, along with prohibiting goods linked to Israel. Iran has also carried out military strikes on "hostile targets" near the entrance to the Strait, with two explosions reported on Qeshm Island. The Strait's closure, as surreal as it seems, is a reality. Geopolitical tensions have actually boosted the performance of the August pick Pacific Basin Shipping Ltd (02343). Its interim turnover reached USD 1.105 billion, an increase of 8.52% year-on-year; net profit attributable to shareholders was USD 105 million, a surge of 310.35% year-on-year; basic earnings per share were 2.06 US cents. Core business contributed USD 124 million (before management expenses), a 144% increase compared to the first half of 2025. The company primarily operates handysize and supramax dry bulk carriers, which are less affected by such disruptions, making it one of the most resilient shipping plays. The interim dividend is also attractive, with a proposed interim dividend of 15.5 HK cents per share. A simple calculation puts the half-year dividend yield at over 4%, compared to around 2.5% for bank stocks, and less than 2% annualized for bank deposits. This dividend yield is comparable to the previously mentioned Wharf Real Estate Investment Company Ltd (01997), and today, Pacific Basin (02343) surged nearly 14%. The People's Bank of China announced that its gold reserves at the end of July stood at 76.08 million ounces, an increase of 640,000 ounces from the end of June. This marks the 21st consecutive month of gold purchases by the central bank, the longest continuous buying streak since data became available. The monthly increase of 640,000 ounces is the "fourth largest on record" and the highest in the current buying cycle. The central bank's persistent accumulation provides a strong foundation, with Lingbao Gold Group Ltd (03330) and the August pick Zijin Gold International (02259) both rising over 4%. Commodity prices generally move in tandem. In copper-related news, the Democratic Republic of Congo (DRC) government announced a complete ban on the export of copper and cobalt concentrates on August 6th. The DRC is the world's second-largest copper producer (after Chile). This ban represents a further tightening of the export quota policy that has been in place since 2025. However, as this policy was already implemented, with the news only being reported yesterday, there is no significant expectation gap. Tungsten-related stocks performed strongly. The US announced a ban on tungsten scrap exports the day before yesterday, providing a strong stimulus. It is anticipated that the US will intensify efforts to stockpile or source key small metals. Jiaxin International Resources (03858) reversed its decline from yesterday, rebounding nearly 8% today. As mentioned yesterday, institutions like Goldman Sachs were increasing their positions in ZJ Innolight (03308). The stock was performing well today until mid-session, when news emerged that US optical communications manufacturer Applied Optoelectronics announced expansion plans: "Expecting to reach a monthly production capacity of approximately 650,000 units for 800G and 1.6T products by the end of this year, and further increase to 930,000 units by the end of 2027." This caused the stock to fall over 3%. This seems illogical. ZJ Innolight (03308) is the global leader in optical modules, not easily replaceable by a second-tier manufacturer. If the narrative is about decoupling, why did AXT Inc. surge? The logic is inconsistent, suggesting the influence of strong capital and deep-seated market manipulation. According to reports, tech giant ByteDance is in the early stages of training a model with up to 10 trillion parameters – three times larger than China's largest model to date, Moonshot AI's Kimi K3. The current most advanced Mythos5 has approximately 8 trillion parameters, while Fable5 has around 5 trillion. The key is that ByteDance is pursuing an independent path, not involving the "distillation" of existing models from other labs. This puts immense pressure on the US. It is therefore highly unlikely that the US would not go all-in, as failure at this critical juncture would be a complete loss. This is another catalyst for domestic large language models. Zhipu AI (02513) surged over 14%, and the August pick MINIMAX-W (00100), which gained stock connect eligibility yesterday, received capital support and rose nearly 10% again. The technology sector continues to focus on the PCB direction. The major logic is that Nvidia's Rubin platform is set to begin trial production with 10,000 cabinets this year, and companies that have penetrated the supply chain will see performance deliveries next year. Next year's cabinet forecast is 60,000-70,000 units, with optimistic projections reaching 100,000. Goldman Sachs has raised its 2026 and 2027 global AI PCB TAM estimates by 35% and 38%, respectively. It forecasts the market size to reach USD 38 billion by 2027 (previously estimated at USD 27 billion) and further surge to USD 84 billion by 2028. Consequently, stocks in this sector are moving. On August 6th, Kingboard (Jiangxi) New Materials Industrial Park project commenced construction. The project represents a total investment of RMB 3 billion, built in two phases, with the first phase investing approximately RMB 1 billion. Such capacity expansion indicates rising industry prosperity, and today Kingboard Laminates Holdings Ltd (01888) rose nearly 10%. Key stocks mentioned yesterday, Shengyi Technology (02476), rose nearly 11% again, and Guanghe Technology (01989) also rose nearly 11%. Others like Xinji Weizhuang (09630) and Hans CNC (03200) rose over 7%. Positive news for innovative drugs continues. Performance is the primary driver. The August pick Biocytogen (02315) expects its net profit attributable to the parent company for the first half of 2026 to increase by 391.87% to 412.71% year-on-year, reaching RMB 236 million to 246 million. The company started with gene editing and preclinical CRO services, using its proprietary gene editing technology to build a core competitiveness of "full human antibody library + target humanized mouse library". Its stock surged over 11% today. Zai Lab Ltd (09688)'s second-quarter earnings report showed rapid core business growth, with a sequential increase of 11%. The market expects a series of key clinical milestones in the second half of the year. Core oncology and immunology projects like zoci and ZL-1503 are entering critical clinical stages, which is the main catalyst for secondary market speculation. The stock rose over 14% today. AI's catalyst for the pharmaceutical sector is also revolutionary. Researchers at Stanford University have developed a generative AI program called "Evo2" that can write new genomes. They used the program to design and produce 16 synthetic phages – small viruses that infect bacteria, sometimes used as alternatives to antibiotics to kill pathogenic bacteria. Tests showed these new phages were more effective at killing common E. coli microbes. This trend suggests that most innovative drug research can be restructured using AI, not just in terms of efficiency, but a significant leap in productivity. CXO companies are the most direct beneficiaries. Strong performers today include Genscript Biotech (01548), which surged over 16%, Joinn Laboratories (06127), Pharmaron Beijing (03759), WuXi XDC (02268), and WuXi Biologics (02269), all rising over 10%. On August 6th, Unitree Technology confirmed its IPO price at RMB 150.8 per share, giving it a market capitalization of RMB 60.9 billion at issuance. The online and offline subscription date for Unitree is August 10th, with the payment deadline on August 12th. Based on a total share capital of 404,464,340 shares, the issuance market cap is RMB 60.9 billion. Its listing is a new stimulus for the industry. Dobot (02432) recently unveiled the world's first full-body embodied humanoid robot, Dobot LUMO, marking its first entry into the home application market for humanoid robots. Targeting scenarios like home companionship, educational research, and commercial performances, the stock rose over 6%.
Sector Focus
Trump's tariff on polysilicon, effective December 4, 2026, is another expansion of Section 232 tariffs into the new energy supply chain. Measures include a minimum import price and a 15% ad valorem tariff, while authorizing the Department of Commerce to implement reshoring incentives, allowing companies that commit to building factories in the US by 2029 to apply for exemption from Section 232 tariffs. Reports indicate that on the evening of August 6th, eight major domestic polysilicon companies signed an "Anti-Intra-industry Competition Letter of Commitment" in Shanghai, pledging not to sell products below full cost, to monitor and report violations among themselves, strictly implement new energy consumption standards, and proactively phase out high-energy-consumption, outdated capacity. These eight companies collectively account for over 90% of domestic polysilicon effective capacity. The US has set high barriers to protect its domestic solar industry and incentivize investment in US manufacturing. However, this has little impact on Hong Kong-listed solar stocks, as they have no direct product sales to the US or their exposure is minimal. The domestic meeting aims to counter this news; if the signatory companies strictly adhere to the agreement, prices can stabilize, ensuring profitability. Key Hong Kong stocks include: GCL Tech (03800), Xinte Energy (01799), Xinyi Solar (00968), and Flat Glass Group (06865).
Stock Spotlight: Hans CNC (03200)
Hans CNC (03200): PCB revenue share significantly increased; Q2 net profit margin is expected to hit a new quarterly high. The company expects its net profit for the first half of 2026 to be between RMB 900 million and RMB 1 billion, a year-on-year increase of 242% to 280%; net profit for the second quarter alone is expected to rise 94% sequentially. This strong performance is primarily driven by robust demand for AI server PCB equipment. Hans CNC's PCB revenue share has increased significantly, with outstanding performance and rising profitability. The Q2 net profit margin is expected to reach a historical single-quarter high. The company's drilling equipment holds over 30% domestic market share, and laser drilling over 35%, covering 80% of the top 100 global PCB manufacturers. High-end substitution is accelerating. The company's market share in the high-multi-layer board segment for AI servers is over 40% domestically, with prices only 60% of imported equipment. Drilling technology is globally leading: mechanical drilling accuracy ±15μm; CO₂ laser drilling breaks through the 35μm limit aperture; UV laser achieves 25μm precision processing. Delivery advantage: Large-scale capacity and a complete supply chain result in significantly shorter delivery cycles compared to European, American, and Japanese manufacturers. Hans CNC has supplied ultra-fast laser drilling equipment to SLP companies like AKM Meadville and Compeq for 1.6T co-packaged optics applications, replacing Mitsubishi Electric's CO2 solution which had a 12-month lead time, opening up space for domestic substitution. Globalization: The company has established subsidiaries/service centers in Southeast Asia, benefiting from capacity relocation. With PCB expansion in Thailand/Vietnam, the company's localized services are capturing incremental market share. The company has initiated cooperation and verification with downstream major manufacturers, delivered samples to most, and is progressing quickly with some verification processes. In 2025, the company's third-generation automatic positioning system mechanical drilling machine, four-beam dual-table CO2 laser drilling machine, and automatic forming machine have further improved performance, significantly increasing the utilization rate of PCB manufacturing processes and reducing overall production costs. Laser drilling machines have achieved batch shipments. The company's M9 laser drilling solution has passed Nvidia's certification, and this product is expected to achieve mass delivery in 2026. Benefiting from capacity expansion by leading PCB manufacturers, the company's management expects AI business revenue share to increase from approximately 30% in 2025 to about 60% in 2026 (with Shengyi Technology contributing 20% and other manufacturers contributing 40%). Hans CNC has a strong order book and is currently engaged in orderly production and delivery. The company is fully focused on the AI computing power supply chain while also positioning itself in cutting-edge segments like advanced packaging and optical modules/CPO. Related products are already being delivered in volume to several leading AI computing power PCB companies. Strong AI demand is driving a sustained high level of prosperity in the PCB expansion wave. The mass deployment of the company's ultra-fast laser drilling equipment is benefiting from surging orders for 1.6T high-speed optical module PCBs and mSAP substrate capacity expansion. An increasing share of high-value-added CCD back drilling machines is also lifting overall profitability.
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