Zhitong Hong Kong Stock Analysis | The scenery is beautiful for technology stocks, and the "Three Musketeers" of consumption are making a collective effort

【Anatomy of the Market】

Hong Kong stocks have adjusted for several consecutive days, but today, driven by the A-shares, there was finally a rebound, with the Hang Seng Index closing up 0.17%.

On Tuesday, the U.S. Department of Commerce officially announced that 407 types of steel and aluminum derivative products, including wind turbines, would be included in the tariff list. The scope of Trump's steel and aluminum tariffs has suddenly expanded, catching U.S. importers off guard. This clearly has a backlash effect on the U.S. economy, and U.S. stocks have fallen into a passive state, with the usual tactic being to play the China card. According to reports, U.S. Treasury Secretary Janet Yellen stated in an interview on the 19th local time: "We have had very good dialogue with the Chinese side, and I expect we will meet again before November. I believe the current work is progressing smoothly."

In addition to the negative impact of tariffs, U.S. tech stocks are also facing bad news: a report from the Massachusetts Institute of Technology (MIT) reveals the harsh reality of corporate investment in AI. This report, combined with the warning from OpenAI's CEO about an AI bubble, has shattered Wall Street's optimistic sentiment, triggering a sharp sell-off in tech stocks. The Nasdaq Composite Index, which has a high weight of tech stocks, closed down 1.4%, marking the largest single-day drop since August 1. Jensen Huang sold 150,000 shares through eight transactions, cashing out $27 million. Nvidia fell 3.5%, while software company Palantir and chip design company Arm plummeted 9.4% and 5%, respectively.

In contrast to the weakness of U.S. tech stocks, the situation in China is quite favorable, with many positive news today. On one hand, DeepSeek announced in its official WeChat group that the online model version has been upgraded to V3.1, with the context length extended to 128k; on the other hand, on August 20, Zhizhu officially released AutoGLM 2.0. This product is powered by the purely domestic models GLM-4.5 and GLM-4.5V, featuring reasoning, coding, and multimodal processing capabilities, and can run on various devices and scenarios, now open to ordinary users.

There are also reports that ByteDance is collaborating with Xinchuan Technology to design an advanced AI computing power chip. In response, a relevant person from ByteDance stated that there is no AI chip-related cooperation with Xinchuan Technology. Whether this clarification matters or not, it doesn't change the fact that they are all using domestically produced chips. Tencent also stated that it has sufficient GPU storage and does not need to purchase H20 chips for the time being. As a result, domestic replacement chip stocks like SMIC (00981) were favored today, rising over 3%. Other varieties such as Yangtze Optical Fibre and Cable (06869) and ZTE Corporation (00763) also saw increases of around 4%.

Funds from U.S. stocks are flowing out of high-risk tech sectors and shifting towards traditional defensive areas, and the Hong Kong stock market is generally following this trend. The new consumption trio is once again leading the way, with Pop Mart (09992) at the forefront. At the mid-term performance conference, Pop Mart's Wang Ning stated that at the beginning of this year, he was very confident in achieving a 50% overall growth, with last year's revenue at 10 billion and hopes to reach 20 billion this year, but now it feels like 30 billion should be easily achievable this year.

This forecast is quite bold, equivalent to doubling again. Objectively speaking, the company's expansion overseas is not an issue; the key is that the revenue from a single IP, such as LABUBU in THE MONSTERS, reached 4.81 billion yuan, accounting for 34.7% of the company's total revenue If a platform-based IP can be formed as Wang Ning mentioned, it is indeed worth looking forward to. This week, the mini version of LABUBU will be released to see if it can become a super hit. Today, it surged over 12%.

Looking at Lao Pu Gold (06181), its performance also exceeded expectations, with a profit attributable to shareholders of 2.268 billion yuan, an increase of 285% year-on-year. In the first half of this year, Lao Pu Gold achieved an average sales performance of 459 million yuan per mall, leading the international luxury giants. According to research data from Frost & Sullivan, the average overlap rate of Lao Pu Gold consumers with those of the five major international luxury brands, including Louis Vuitton, Hermès, Cartier, and Bulgari, is close to 80%. This indicates that more and more consumers of international luxury brands are turning to Lao Pu Gold, and Chinese brands have also become a mainstream force in high-end consumption for the first time. If it can reach the recognition level of international luxury brands, the overseas incremental market will be significant, but building the brand will still take time and foundation. Today, it rose nearly 9%. Additionally, Mixue Group (02097) and Miniso (09896) both rose over 4%.

As mentioned yesterday, Zhenjiu Lidu (06979): Chairman Wu Xiangdong launched the 50th special live broadcast of the Wan Shang Alliance Wealth Creation Forum. The theme of this live broadcast was "What I Did in the Most Tiring 100 Days," attracting 5.74 million views across the internet in just 80 minutes, with a peak online audience of 255,000 and 4.386 million likes, making it the hottest live broadcast of the day. It rose another 4%.

The fruit chain sector mentioned yesterday continues to ferment, with Sunny Optical Technology (02382): Revenue in the first half of the year was 19.65 billion yuan, a year-on-year increase of 4.2%; net profit in the first half was 1.65 billion yuan, a year-on-year increase of 52.6%. Today, it surged over 9%. Other mentioned companies, Lens Technology (06613), AAC Technologies (02018), and GoerTek (01415), all showed stable performance.

The Ministry of Industry and Information Technology held another symposium on the photovoltaic industry to regulate competition in the photovoltaic sector. According to several industry insiders, the meeting held on August 19 was a general meeting and did not discuss the detailed implementation of "anti-involution" in various links. It is expected that the anti-involution details for the battery, component, silicon wafer, and polysilicon sectors will be discussed in the next two days. Fuyao Glass (03606), mentioned in yesterday's stock picking, reported a net profit growth of 37.33% to 4.805 billion yuan in the first half of the year, an increase of 16.94% compared to the same period last year, exceeding the industry growth level; it achieved a total profit of 5.794 billion yuan, a year-on-year increase of 40.46%, with a cash dividend of 0.90 yuan per share (including tax). Today, it surged over 15%.

Today, there are rumors that FAW plans to make a preliminary offer to acquire about 10% of Leapmotor's (09863) shares. China FAW responded that relevant departments are not yet aware of the acquisition of Leapmotor's equity. In fact, on March 3 of this year, China FAW signed a "Strategic Cooperation Memorandum" with Leapmotor. Currently, the first cooperative vehicle development project between the company and China FAW has been launched, and the first model developed in cooperation with Hongqi is in the development process, with plans to utilize FAW's overseas channels for sales in the second half of next year. Most state-owned car companies are having a tough time, and investing in such a strong momentum is also a strategy, as it can lead to the production of blockbuster products through cooperation. Of course, this is also a positive for Leapmotor (09863), as it gains funding and channels Gold is worth paying attention to, China National Gold International (02099) rose nearly 6% today, reaching a historical high; another company, Chow Sang Sang (00116), announced a significant performance forecast, expecting the interim profit attributable to shareholders from continuing operations for the six months ending June 30 to increase to HKD 900 million - 920 million, compared to HKD 502 million for the same period in 2024. This greatly exceeds expectations, with the group stating that the continuous rise in gold prices has led to higher gross margins on gold products. The integration of the retail network and other cost control measures have reduced costs, contributing to profit growth. Today, it surged over 27%.

[Sector Focus]

Xinhua News Agency, Lhasa, August 20 - Xi Jinping, General Secretary of the Communist Party of China, President of the country, and Chairman of the Central Military Commission, arrived in Lhasa on a special plane with the central delegation at noon on the 20th to attend the 60th anniversary celebration of the establishment of the Tibet Autonomous Region. This is the first time in the history of the Party and the country that Xi Jinping, as General Secretary of the Communist Party of China, President, and Chairman of the Central Military Commission, has led a central delegation to Tibet for the celebration of the establishment of the Tibet Autonomous Region, fully reflecting the Party Central Committee's high regard for Tibet's work and its heartfelt concern for the cadres and people of all ethnic groups in Tibet.

Wang Huning, a member of the Standing Committee of the Political Bureau of the CPC Central Committee, Chairman of the National Committee of the Chinese People's Political Consultative Conference, and head of the central delegation, and Cai Qi, a member of the Standing Committee of the Political Bureau of the CPC Central Committee and Director of the General Office of the CPC Central Committee, arrived on the same flight.

Let's see what policy benefits this will bring to Tibet.

Main Varieties: Tibet Water Resources (01115), Everest Gold (01815), China National Building Material (03323), Dongfang Electric (01072).

[Stock Picking]

MINISO (09896): IP Product Sales Surge, Overseas Business Welcomes Peak Season

Recently, MINISO's first MINISOLAND in South China opened on Beijing Road in Guangzhou. Revenue for Q1 2025 increased by 19% to RMB 4.427 billion, while net profit attributable to the parent company decreased by 29% to RMB 416 million. The company will release its interim results tomorrow, expecting revenue growth in the second quarter.

Comment: The company's store and channel upgrades are expected to drive sales growth. Recently, MINISO's first global MINISOSPACE officially opened at Deji Plaza in Nanjing and sold out quickly. The improvement in operational quality brought about by channel upgrades is evident. The average store efficiency of new stores opened by MINISO in Q1 increased by 27% compared to the same period in 2024, and the performance share of large stores continues to expand. This directly led to a 9.1% revenue growth for MINISO domestically, despite a net decrease in the number of stores.

On the revenue side, the overseas market and TOPTOY continue to see high growth, while domestic MINISO growth has accelerated sequentially. In Q1 2025, the number of domestic MINISO/overseas direct/overseas (franchise + agency)/TOPTOY stores were 4,275/548/2,665/280, with a net change of -111/45/50/4 stores quarter-on-quarter. Domestic business grew by 9% year-on-year, while the overseas market overall grew by 30% year-on-year.

On the profit side, the company strategically increased investment in direct-operated stores, leading to fluctuations in profit margins, while EBITDA maintained steady growth. In Q1 2025, the gross margin reached 44.2%, an increase of 0.8 percentage points year-on-year, mainly due to increased contributions from overseas revenue and improved gross margins for TOPTOY. The proportion of IP products at the Nanjing Deji Plaza reached as high as 99%, gathering 29 major global super IPs including Disney, Harry Potter, Chiikawa, and Sanrio On the opening day, products from three core IPs: Toy Story, Feili Cat, and WAKUKU, were launched, forming a rare all-star IP matrix in the industry.

Currently, MINISO Group has surpassed 7,768 global stores and has partnered with over 150 top global IP copyright holders to create a unique global IP co-branding landscape. Starting in 2023, MINISO is implementing a "superstore" development plan globally, opening larger and more distinctive urban flagship stores and IP-themed stores in China. The overseas direct-operated same-store sales are recovering, and a peak season is expected. The company stated that it will accelerate its layout in global core business districts. Driven by overseas direct operations, new store expansion is accelerating, and same-store sales in the United States are expected to show positive trends