【Market Analysis】Excessive market exuberance often leads to issues, a common pattern. The specific trigger is less important; what matters is that some are always looking to take profits first, which describes today's market. Hong Kong stocks rose initially but closed down 0.22%. Following Iran's response to the U.S. proposal, Trump expressed dissatisfaction. On the 11th, the U.S. President again met with the national security team to discuss follow-up plans regarding Iran. Reports suggest one option under consideration is restarting the so-called "Freedom of Navigation" program to escort ships through the Strait of Hormuz; another is resuming military action against Iran. An Iranian official stated that if attacked again, Iran might choose to increase uranium enrichment levels to 90%. The situation has become tense again, with PetroChina (00857) rising nearly 4% and coal stock Power Resources (01277) gaining almost 3%. However, these are temporary moves; any renewed strikes would likely wait until after Trump's visit to China. Trump is confirmed to visit China from the 13th to the 15th, accompanied by a large business delegation including CEOs like Musk, Cook, and leaders from Boeing, BlackRock, Micron, and over ten other top companies spanning technology, finance, and aviation. NVIDIA CEO Jensen Huang is absent because high-end chips are not allowed for sale, and low-end ones are not wanted, meaning no orders are possible. This visit is strongly desired by the U.S. side, as Trump's time is running short, his approval ratings continue to fall, and he urgently needs results; otherwise, the midterm elections could be perilous. The U.S. hopes to secure orders for Boeing aircraft and agricultural products to at least show some progress. Additionally, China and the U.S. will hold a new round of economic and trade consultations on May 12-13, mainly to manage differences, reach consensus where possible, and avoid awkward situations. In short, Trump's visit this time lacks the previous confidence because he lacks sufficient bargaining chips, given the need for China's cooperation. Whether he can achieve the expected results depends on his sincerity and the concessions he is willing to make. Amid AI excitement, a "cold shower" arrived. On the morning of the 12th, the KOSPI, a global AI bellwether, continued to climb to 7999.68 points—just 0.03 points shy of the historic "8000-point milestone." South Korean Presidential Chief of Staff Kim Yong-bum posted on Facebook: Samsung and SK Hynix reported first-quarter net profit surges of 755% and 398%, respectively. Why shouldn't the excess profits from AI be shared with all citizens ("citizen dividend")? Market interpretation: Is this a move to tax giants? Regardless, funds naturally fled first. In fact, foreign capital had already begun withdrawing earlier. Asset managers started reducing positions after South Korean stocks achieved the world's best gains. BlackRock's iShares MSCI South Korea ETF, with nearly $23 billion in assets, recorded a net outflow of $970 million last week, the largest weekly withdrawal in history. South Korea is just a microcosm and does not represent a universal phenomenon, nor does it mean AI has peaked. It merely indicates that AI has caused localized overheating. Choice data shows that as of May 8, the balance of margin trading and securities lending in A-shares exceeded 2.8 trillion yuan, with leveraged funds accelerating their deployment in the technology sector. Meanwhile, brokers like Orient Securities have upgraded their risk control systems, adding indicators such as "immediate liquidation lines." Although overall leverage risks are controllable, the crowding of financing in some individual stocks and sectors warrants caution. Investors should avoid chasing high-priced stocks driven purely by speculative sentiment. Today, some AI-related stocks in Hong Kong still performed strongly, such as Tianyue Advanced (02631), mentioned yesterday, which rose nearly 10% again; Changfei Optical Fiber (06869) gained over 4%; and InnoScience (02577) and ASMPT (00522) rose over 2%. Among them, SMIC (00981), a May top pick, continued to show resilience. The company's share issuance for asset acquisition and related-party transaction was approved by the Shanghai Stock Exchange. As capacity and yield improve, stronger performance is expected. On the application front, DeepTech (01384), in collaboration with Zhongguancun Fengtai Park, launched the country's first government service intelligent agent "Feng Xiaozhi," marking the implementation of AI in government scenarios. The stock surged over 12% today. Market reports suggest Kuaishou-W (01024) plans to spin off its video generation large model "Kolingo AI" with a $20 billion valuation for a Pre-IPO funding round, aiming to raise $2 billion. It is currently in talks with investors like Tencent, though the deal is not yet finalized. Kuaishou itself is valued at less than $200 billion; is Kolingo overvalued or is Kuaishou undervalued? During the A-share midday break on May 12, Hengrui Medicine (01276) suddenly announced a major partnership with international pharmaceutical giant Bristol-Myers Squibb (BMS): The companies have entered into a global strategic collaboration and licensing agreement to jointly advance 13 early-stage projects covering oncology, hematology, and immunology, with a potential total transaction value of approximately $15.2 billion. However, today's gain was modest, less than 5%, because according to the agreement, BMS will pay up to $950 million in related payments to Hengrui, including a $600 million upfront payment, a first anniversary payment of $175 million, and a conditional second anniversary payment in 2028 of $175 million. In short, short-term benefits are limited; the rest are long-term, phased, and uncertain. Recently, the U.S. Food and Drug Administration (FDA) authorized the marketing of four Glas brand electronic nicotine delivery system (ENDS) products through the premarket tobacco product application (PMTA) pathway. This action marks the FDA's first approval of non-tobacco-flavored and non-menthol-flavored e-cigarette products. Additionally, the FDA issued guidance on enforcement priorities for unauthorized ENDS and nicotine pouch products, effectively allowing leading companies to directly enter the flavored market. SMOORE INTL (06969), a core supplier in the global novel tobacco market, is deeply tied to key global vaping brands, with heated tobacco products accelerating as a second growth curve. The stock rose nearly 5% today. The standout performer today was WELLCELL H-NEW (02477). After a stock split on April 21, it was officially included in the Hong Kong Stock Connect list starting May 6, leading to significantly increased trading volume. Enhanced liquidity brought a premium. The stock is primarily driven by the concept of its actual controller, Qian Fenglei, known as a capital player. Of course, the stablecoin payment platform TOPAY offers many stories to tell, with relative monopoly and cross-border chain payment being recent hotspots. The earlier stock split was to facilitate renewed speculation, and the stock surged over 24% today. At 20:30 Beijing time, what is considered the "most perilous" set of U.S. macro inflation data since the U.S.-Iran conflict will be released. Driven by surging energy prices, rising AI hardware costs, and a "technical catch-up" in data, the April CPI is expected to show the highest increase in nearly three years. According to the median forecast from a media survey of economists, the year-on-year increase in the U.S. Consumer Price Index (CPI) for April is expected to reach 3.7%, up from the previous 3.3%. The month-on-month CPI increase is also projected to rise significantly by 0.6%. Excluding energy and food prices, the so-called core CPI is expected to climb to 2.7%, the highest since last September, with a month-on-month increase of 0.3%. If the data materializes, the prospects for Federal Reserve rate cuts will become very slim. 【Sector Focus】Three listed subsidiaries of JD.com plan share buybacks: JD Health (06618) announced that the board has authorized and approved a plan to repurchase up to $1 billion of the company's shares in the open market over a 48-month period from the approval date. JD Logistics (02618) announced that the board has authorized and approved a plan to repurchase up to $1.2 billion of the company's shares in the open market over a 48-month period from the approval date. JD Industry (07618) announced that the board has authorized and approved a plan to repurchase up to $200 million of the company's shares in the open market over a 24-month period from the approval date. All are open-market repurchases, with an upper limit not exceeding 10% of the issued shares; funded by internal cash, they do not affect daily operations or capital expenditures. After repurchase, shares will be canceled or held as treasury stock, reducing total share capital, enhancing shareholder returns, and boosting earnings per share. 【Stock Pick】InnoScience (02577): Final ruling confirms no infringement of Infineon's related patents; strong sales growth in gallium nitride chips. On May 8, the company announced that the U.S. International Trade Commission (ITC) issued a final ruling in investigation No. 337-TA-1414, confirming that InnoScience's current gallium nitride (GaN) power device products do not infringe Infineon's related patents and can continue to be imported and sold in the U.S. without restrictions. The company achieved annual revenue of approximately 12.13 billion yuan, a year-on-year increase of 46.4%; comprehensive gross margin improved from -19.5% the previous year to 7.3%, with adjusted EBITDA turning positive for the first time, indicating a significant enhancement in operational efficiency. Comment: This final ruling means the company's U.S. business is unaffected. InnoScience's GaN is the only 8-inch mass-produced with a yield over 95%; it holds the global market share lead (approximately 30%+). Sales in the AI and data center sectors were impressive, reaching 0.63 billion yuan, a substantial year-on-year increase of 50.2%, reflecting strong downstream demand. The company made breakthroughs in key sectors like new energy vehicles and humanoid robots. GaN chip shipments for new energy vehicles increased 105% year-on-year, generating revenue of about 0.58 billion yuan, with technological breakthroughs in onboard chargers, DC-DC converters, and inverters. Bulk shipments for humanoid robot drive solutions achieved sales of about 1.26 billion yuan. During the reporting period, the company launched 87 new chip products, provided solutions for 1,182 customer projects, and cumulative GaN chip shipments exceeded 2 billion units, with cumulative shipment value surpassing 80 billion yuan. The company's high- and low-voltage 3.0 process platform has fully entered mass production, with over 70 new products launched and product yield stable above 90%. The company recently released its self-developed 1200V GaN new product, already in mass production for medium- to high-power power supplies, with plans to expand into new energy vehicles and AI data centers, showcasing technological strength and business expansion potential. The company has received a filing notice from the China Securities Regulatory Commission regarding the full circulation of H-shares. According to the notice, 35 shareholders holding a total of approximately 374 million domestic unlisted shares (40.85% of total share capital) are permitted to convert them into H-shares for listing and trading on the Main Board of the Stock Exchange. Upon completion, InnoScience's H-share capital will surge to about 899 million shares, accounting for over 98% of total shares. This move enhances share liquidity and market appeal. Additionally, with Google's new-generation TPU set to launch soon, demand for GaN (gallium nitride), a key power component for efficient power supply in TPU clusters, is expected to strengthen, further boosting market confidence in the company's future growth.
Comments