Overnight, U.S. stocks staged a collective rebound; if they continue to rise, they might very well set new historical highs. Hong Kong stocks also gapped up directly today, closing 1.35% higher, with the Hang Seng Index reclaiming ground above the 27,000-point mark. Tensions in the Middle East persist. U.S. Central Command announced on social media on January 26th that the USS Abraham Lincoln carrier strike group "is being deployed to the Middle East." According to informed sources, former President Trump has not yet made a final decision. He may hold more internal consultations and receive briefings on military options this week. Observing the situation, offensive action appears imminent, most likely around the end of the month. Gold broke through the $5,000 per ounce barrier for the first time in history; with an intraday surge of over 2%, it is on track for its largest monthly gain in forty years this month. Silver skyrocketed 14% intraday in New York to a historical high of $118 before retreating, nearly erasing all gains and closing up only 1%. Today, the vast majority of gold stocks experienced a pattern of rising sharply before falling back, although some continued to advance. ZIJIN MINING (02899) and ZIJIN GOLD INTL (02259) jointly announced that on January 26th, ZIJIN GOLD INTL, controlled by ZIJIN MINING, signed an Arrangement Agreement with Allied Gold. ZIJIN GOLD INTL intends to acquire all issued common shares of Allied Gold for a cash price of C$44 per share, with a total consideration of approximately C$5.5 billion (equivalent to approximately RMB 28 billion or USD 4 billion). Allied Gold is a Canada-based gold mining company whose core assets include the producing Sadiola gold mine in Mali, the Côte d'Ivoire gold complex (comprising the Bonikro and Agbaou mines), and the Kurmuk gold mine in Ethiopia, scheduled for commissioning in the second half of 2026. According to publicly disclosed information, as of the end of 2024, Allied Gold held gold resources of 533 tonnes with an average grade of 1.48 grams per tonne; it produced 10.7 tonnes and 11.1 tonnes of gold in 2023 and 2024, respectively; and expects to produce 11.7–12.4 tonnes in 2025. The aforementioned projects are all large-scale open-pit mines that are either producing or about to commence production, capable of contributing to output and profits immediately upon acquisition, with substantial overall resource reserves, favorable mineralization conditions, and significant potential for resource expansion. In short, it's a quite cost-effective acquisition. Zhitong's January top stock pick, ZIJIN GOLD INTL (02259), rose nearly 11% again today, bringing its cumulative gain for the month to a hefty 70%. Due to booming commodity trading, NANHUA FUTURES (02691), mentioned yesterday, continued its ascent, gaining over 5%. The potential visit of UK Prime Minister Keir Starmer to China, previously mentioned, was officially confirmed today. It is reported that Starmer will arrive in China on January 28th, potentially becoming the first UK Prime Minister to visit China in nearly eight years. In an interview, Starmer stated: the UK does not have to choose between the US and China, while emphasizing that it is unwise to bury its head in the sand and ignore China, and that UK businesses face "significant opportunities" in the Chinese market. Starmer's trip will include visits to Beijing and Shanghai, with a delegation comprising about 60 leaders from businesses, universities, and cultural institutions. Similar in nature to [former Bank of England Governor] Carney's stance, it reflects recognizing the situation, changing perspectives, and actively engaging in trade and economic relations, which is perfectly reasonable. As the closest ally of the United States, this move is highly significant. Will Trump threaten the UK with similar tariff measures? If he doesn't intervene, what happens when others follow suit? This news provides a substantial boost to market confidence. The main drivers of the market today were insurance stocks. Data indicates that tens of trillions in household deposits are set to mature this year, sparking a battle for wealth management. With a reduction in medium-to-long-term, risk-free financial products, participating insurance policies now account for eighty percent of new policies issued by insurers, reflecting massive client demand for participating insurance and long-term, stable-yield wealth management products, thus highlighting the advantages of insurance products. Where there's demand, there's a market, and the current红利 (dividend/high yield) wave in insurance is quite favorable. CHINA LIFE (02628) surged over 5%, while AIA (01299), PICC Group (01339), and NCI (01336) all gained over 3%. The technology sector also performed robustly, primarily driven by price hike speculation. For instance, wafer foundry and packaging & testing quotes are showing signs of increases. HUA HONG SEMI (01347) continuously hits new highs, SHANGHAI FUDAN (01385) rose over 5%, and packaging & testing firm ASMPT (00522) gained over 3%. Currently, SMIC (00981) is relatively lagging in terms of gains. Optical fiber, mentioned yesterday, is also beginning to see price hikes, with YOFC (06869) rising nearly 4% again. Chip design quotes are also expected to rise. It is reported that major IC design house MediaTek has clearly stated it will adjust prices appropriately. Overseas, clear signs of chip design price hikes have already emerged. Leading global analog chip company Analog Devices plans to increase prices across its entire product line effective February 1, 2026, with increases for general commercial-grade products typically ranging from 10% to 15%, and about 15% for industrial-grade products. NOVOSENSE (02676) and GIGADEVICE (03986) both rose nearly 5%. Tencent's (00700) AI assistant "Yuanbao" has officially launched a new social AI feature called "Yuanbao Pai," defining a new track of "social intelligent agents." It is currently still in an internal testing phase, open only to some invited users for experience. DeepSeek released a new visual model, DeepSeek-OCR2, with significantly improved efficiency. The launch of various new products is expected to stimulate cloud business, and subsequent price hikes are also anticipated. KINGSOFT CLOUD (03896), mentioned yesterday, rose nearly 10% again. Mentioned yesterday, the Nipah virus: China's National Disease Control and Prevention Administration stated that no cases of Nipah virus disease have been discovered in China, and the impact of the outbreak on the country is relatively small. This topic primarily depends on developments in India. SIHUAN PHARM (00460), which has operations in India and was mentioned yesterday, continued its rise, gaining over 5%, while other related stocks lacked sustainability. Preventive medicine stock CSPC PHARMA (01093) rose over 3%. Zhitong's January top stock pick, CIMC ENRIC (03899): Multiple innovative businesses have seen breakthroughs, such as the Phase I commissioning of the Zhanjiang green methanol project in Guangdong; revenue and total orders for aerospace storage equipment are expected to exceed RMB 100 million collectively in 2025. The stock rose over 4% again today, hitting a recent high.
At the beginning of 2026, news emerged from COMAC's final assembly line: two C919 passenger aircraft have completed final assembly and entered the delivery process. This pace suggests the potential to achieve a target of delivering one aircraft every 10 to 15 days this year, with annual deliveries expected to be no less than 28. Compared to the 15 aircraft delivered in the entirety of 2025, this represents a significant acceleration. Although the engines still rely on imports, the C919's overall localization rate has increased from 10% at the project's inception to 60% in 2025, and is projected to exceed 70% in 2026. The localization rate for the airframe structure exceeds 90%. The European Union Aviation Safety Agency (EASA) has commenced flight test evaluations of the C919 in Shanghai, with initial assessments being "good performance and safe and reliable." However, officials estimate the certification process will still take 3 to 6 years, with the earliest possible airworthiness certification not expected until 2028. Related Hong Kong stocks: AVICHINA (02357), BOC AVIATION (02588), CALC (01848).
SMIC (00981): Capacity Utilization Rate Rises, 2026 Foundry Price Hikes Worth Anticipating. In the third quarter of 2025, the company achieved quarterly revenue of RMB 17.162 billion, up 9.95% year-on-year and 6.95% quarter-on-quarter; net profit attributable to shareholders was RMB 1.517 billion, up 43.15% year-on-year and 60.64% quarter-on-quarter; adjusted net profit was RMB 1.273 billion, up 39.74% year-on-year and 73.52% quarter-on-quarter. Commentary: Performance across the semiconductor industry chain is broadly increasing. Accelerated industry chain transitions and ongoing channel inventory replenishment led the company to actively cooperate with customers to ensure shipments, resulting in a 4.6% quarter-on-quarter increase in 25Q3 wafer sales volume to 2.499 million wafers (8-inch equivalent). Concurrently, due to changes in the product mix and increased shipments of products with more complex processes, the average selling price per wafer in 25Q3 increased 3.8% quarter-on-quarter. This combination of volume and price growth drove the company's 25Q3 revenue higher both year-on-year and quarter-on-quarter. Rising capacity utilization and increased output offset the impact of rising depreciation, leading to a better-than-expected gross margin in 25Q3. The 25Q3 gross margin was 25.49%, up 1.57 percentage points year-on-year and 4.79 percentage points quarter-on-quarter. The 25Q3 net profit margin was 14.00%, up 3.81 percentage points year-on-year and 7.48 percentage points quarter-on-quarter. The company's 25Q3 capacity utilization rate was 95.8%, up 3.3 percentage points quarter-on-quarter. The company possesses a rich portfolio of process technology platforms, currently with mass production capabilities across multiple platforms including logic circuits, power/analog, high-voltage drivers, embedded non-volatile memory, non-volatile memory, mixed-signal/RF, and image sensors, while continuously advancing process iteration and product performance upgrades. In the first three quarters of 2025, the development of the company's specialty processes steadily improved across multiple technology platforms; the ultra-low-power 28nm logic process entered mass production, providing customers with lower-power, higher-quality solutions; CIS and ISP process technologies underwent continuous iteration, improving light sensitivity, image quality, and signal-to-noise ratio, while developing optical process platforms covering more wavebands; the embedded memory platform expanded from consumer markets to automotive-grade and industrial MCU fields; in specialty memory, NOR Flash and NAND Flash processes offered higher density, smaller size, and lower-power, high-reliability memory platforms; additionally, the company seized growth opportunities in the automotive chip market, launching multiple specialty processes such as automotive-grade Sensor, BCD, MCU, RF, memory, and display, providing customers with system-level solutions. The market anticipates a round of across-the-board price increases for wafer foundry services in 2026. For 12-inch wafers, leading foundry TSMC is expected to raise prices for advanced processes (7nm and below) by 3% to 10% in 2026. SMIC's price increase notice clearly indicates a roughly 10% price hike for 8-inch BCD process foundry services.
