Zhitong Hongguo Zao Zhidao | US Core CPI Increase Exceeds Expectations DeepSeek Integrated Machine Intensive Release

【Today's Headlines】

U.S. Core CPI Rises More Than Expected, Supporting the Federal Reserve's Cautious Approach to Rate Cuts

Last month's basic inflation in the U.S. rose more than expected, supporting the Federal Reserve's cautious approach to rate cuts. The U.S. Bureau of Labor Statistics reported on Wednesday that the core Consumer Price Index (CPI), excluding food and energy, rose 0.4% month-on-month in January, up from 0.2% in December last year. The year-on-year increase was 3.3%. Economists believe that the core CPI better reflects fundamental inflation trends than the overall CPI, which includes the frequently fluctuating costs of food and energy. The overall CPI rose 0.5% month-on-month and 3% year-on-year. The U.S. Bureau of Labor Statistics stated that nearly 30% of the increase was driven by housing prices.

Analyst Anstey commented on the U.S. CPI: This is not good news for the Federal Reserve. As we heard from Summers yesterday, this may raise speculation that the next move in interest rates could be higher, not lower. U.S. President Trump stated on the Truth Social platform on Wednesday that interest rates should be lowered, which would go hand in hand with the upcoming tariff policy, although economists expect the tariff policy to exacerbate inflation and delay rate cuts.

【Market Outlook】

NASDAQ Golden Dragon China Index Rises 2.7%

Overnight, the Dow Jones Industrial Average closed down 225.09 points, a decline of 0.50%, at 44,368.56 points; the NASDAQ rose 6.09 points, an increase of 0.03%, at 19,649.95 points; the S&P 500 index fell 16.53 points, a decline of 0.27%, at 6,051.97 points. Amazon (AMZN.US) and NVIDIA (NVDA.US) both fell over 1%, while Tesla (TSLA.US) rose 2.4%.

The NASDAQ Golden Dragon China Index closed up 2.7%, with Alibaba (BABA.US) rising nearly 5%, reaching a new high since July 2022, while JD.com (JD.US) fell over 3%. The Hang Seng Index ADR rose, closing at 21,990.48, up 132.56 points or 0.61% compared to the Hong Kong close.

【Hot Topics Ahead】

OPEC Plans Could Completely Change the Currency Market

The Organization of the Petroleum Exporting Countries (OPEC) and its allies plan to gradually lift production cuts starting in April, which could completely change the currency market. During the production limits imposed by oil-producing countries, trading volumes for crude oil have remained high, and oil prices may fall below the long-term range's bottom, alleviating inflationary pressures. This would allow the Federal Reserve to cut rates, potentially leading to a correction in the dollar's upward trend. The appreciation of the dollar and its impact on other currencies has been central to currency market activities, with other currencies declining, some even hitting historical lows. If oil prices fall, any correction in the dollar could relieve pressure on many emerging currencies, leading to significant changes in sentiment. A drop in oil prices would also harm the economies of major oil-producing countries, with the U.S. being one of the largest oil producers.

MSCI Index Quarterly Adjustment Includes Several Hong Kong Stocks, Including UP Fintech (09880)

MSCI has released the results of its quarterly index adjustment for February 2025, which will take effect after the market closes on February 28. The MSCI China Index has newly included Hong Kong stock J&T Express (01519), further enriching the investment portfolio of the MSCI China Index The MSCI Global Small-Cap Index has included 6 Hong Kong stocks in the China region, including: YouRan MuYe (09858), JiuFang ZhiTou Holdings (09636), ChiZiCheng Technology (09911), WanWuYun (02602), SuTeng JuChuang (02498), and YouBiXuan (09880); it has removed China Oriental Group (00581), Oconee Vision Biotechnology (01477), HaoHai Biotechnology (06826), SOHO China (00410), among others.

Excavator sales in January slightly decreased year-on-year due to the impact of the Spring Festival holiday, while exports showed steady growth

The construction machinery industry continues to recover, with domestic excavator sales in January slightly decreasing year-on-year, while exports showed steady growth. According to the China Construction Machinery Industry Association, on February 11, it was disclosed that in January 2025, major domestic excavator companies sold 12,500 excavators of various types, a year-on-year increase of 1.1%. Among them, domestic sales were 5,405 units, a year-on-year decrease of 0.3%; export volume was 7,107 units, a year-on-year increase of 2.19%. Additionally, 18 electric excavators were sold.

During the same period, major domestic loader companies sold 7,920 loaders of various types, a year-on-year increase of 1.51%. Among them, domestic sales were 3,706 units, a year-on-year decrease of 1.01%; export volume was 4,214 units, a year-on-year increase of 3.84%. Additionally, 1,086 electric loaders were sold. January this year coincided with the Spring Festival holiday, while last year's Spring Festival holiday began in February, and the overlap of holidays significantly impacted the domestic sales and year-on-year growth rate of excavators for the month.

The first nuclear power unit of the Year of the Snake is about to start construction, with many local government work reports mentioning the promotion of new projects

According to The Paper, the National Nuclear Safety Administration issued construction permits for Units 1 and 2 of the Guangdong Lufeng Nuclear Power Plant on February 10. This means that the Lufeng Nuclear Power Phase I has obtained the most critical approval document before construction—after obtaining the "Nuclear Power Plant Construction Permit" issued by the National Nuclear Safety Administration, the main engineering work of the nuclear power project can pour the first batch of concrete (FCD) and begin full construction. According to The Paper, Unit 1 of the Lufeng Nuclear Power Plant will officially start construction soon. This will be the first new nuclear power unit to start construction in the Year of the Snake, marking the beginning of this year's nuclear power construction.

DeepSeek integrated machine releases intensify

As DeepSeek continues to gain traction, the popularity of the DeepSeek intelligent computing integrated machine has surged. China Telecom's Tianyi Cloud recently launched the XiRang Intelligent Computing Integrated Machine - DeepSeek version. JD Cloud previously released the DeepSeek large model integrated machine, which features full compatibility with domestic computing power, supports a rich variety of large model parameter specifications, AI applications ready to use, and ultra-high cost performance. Additionally, Lenovo and MuXi Co., Ltd. jointly released an integrated machine solution based on DeepSeek. Huafu Securities stated that the launch of DeepSeek is expected to accelerate the development of edge-side models in terms of breadth and depth, and to rapidly increase the shipment volume and penetration rate of AI terminal products and their industrial chain links.

Prudential (02378) is currently evaluating the possibility of listing ICICI Prudential Asset Management According to the Zhitong Finance APP, Prudential (02378) announced that Prudential plc is currently evaluating the possibility of listing ICICI Prudential Asset Management Company Limited, which involves a partial reduction of its shares, subject to market conditions, necessary approvals, and other considerations. After the completion of this reduction, the net proceeds are intended to be returned to shareholders. We will provide further updates at the appropriate time.

GDS Holdings Limited-SW (09698): DayOne has no specific or final plans for an initial public offering

According to the Zhitong Finance APP, GDS Holdings Limited-SW (09698) announced that the company has learned of media reports speculating that DayOne Data Centers Limited (DayOne, formerly known as DigitalLand Holdings Limited or GDS International) is considering an initial public offering.

COSCO Shipping Energy Transportation (01138): Plans to invest CNY 3.496 billion to build 6 oil tankers

COSCO Shipping Energy Transportation announced that the company's board of directors has approved a proposal to build 2 Aframax, 2 LR2, and 2 Panamax oil tankers. The total investment for the project is approximately CNY 3.496 billion, including about CNY 469 million for 2 Panamax methanol fuel reserve crude/product oil tankers, about CNY 629 million for 2 Aframax methanol dual-fuel crude oil tankers, and about CNY 650 million for 2 LR2 methanol dual-fuel crude/product oil tankers. This proposal involves related party transactions, and related directors abstained from voting.

Sunny Optical Technology (02382) issues profit warning, expects shareholder profit for the year 2024 to be approximately CNY 2.639 billion to CNY 2.749 billion, an increase of about 140.0% to 150.0% year-on-year

According to the Zhitong Finance APP, Sunny Optical Technology (02382) announced that the group expects to achieve a profit attributable to shareholders of approximately CNY 2.639 billion to CNY 2.749 billion for the year ending December 31, 2024, an increase of about 140.0% to 150.0% compared to approximately CNY 1.099 billion for the year ending December 31, 2023.

【Stock Highlights】

Horizon Robotics-W (09660): Horizon Journey 6 globally debuts on BYD's Tian Shen Zhi Yan, large-scale mass production delivery to officially start in February

It is reported that with the BYD models equipped with the Tian Shen Zhi Yan C high-level intelligent driving three-eye version officially delivered to users, the Journey 6 series will also officially start large-scale mass production delivery in February. Previously, BYD launched its universal intelligent driving strategy at the intelligent strategy release conference and introduced the Tian Shen Zhi Yan C. This release marks the global debut of Horizon's latest generation of in-vehicle intelligent computing solution Journey®6 series on BYD's Tian Shen Zhi Yan. The Tian Shen Zhi Yan C will first launch 21 models, covering intelligent driving functions such as high-speed navigation and intelligent parking, achieving large-scale implementation of high-level intelligent driving