Zhitong Finance Hong Kong Stock September Investment Strategy and Top Ten Stocks

The Hang Seng Index appears to have achieved a four-month consecutive rise above 25,000 points, but in reality, the performance of Hong Kong stocks in August is more appropriately viewed as a box range fluctuation. The index operates within a range of 24,372.51 to 25,918.86 points.

Throughout August, there was no trend-driven upward market, as previously mentioned: "From the market's perspective, the rise over the past few months has accumulated quite a bit of profit-taking, such as in banks and innovative pharmaceuticals, etc. Therefore, the market index direction in August is unlikely to see significant improvement." Indeed, the inherent structure of the market has largely determined its trajectory.

Of course, two major events provided some stimulus. First, the United States extended tariffs on China for another 90 days, giving the market some buffer time; second, Federal Reserve Chairman Jerome Powell delivered a dovish speech at the Jackson Hole central bank annual meeting, stating that the downside risks to the labor market are increasing, and that labor force growth has significantly slowed this year. Tariffs have begun to push up prices for certain goods, but the basic assumption is that the impact is one-time. Long-term inflation expectations remain well anchored and will not allow inflation to become a persistent issue. Given that monetary policy is in a tightening phase, we may need to adjust our policy stance. This marks a shift in Federal Reserve policy. Domestically, the main stimulus comes from the Ministry of Finance implementing interest subsidy policies for personal consumption loans and loans for service industry operators in the consumption sector, equivalent to another "national subsidy" in the consumer loan sector, prompting active capital inflow into the market.

As most innovative pharmaceuticals and bank stocks entered a correction, funds flowed into other sectors, leading to active performance in many individual stocks. In terms of continuity, the stocks that performed well in July have basically cooled off, with only the e-commerce company Dongfang Zhenxuan (01797) showing a peak increase of 144% in August. The best-performing new stock in August was Hong Teng Precision (06088), which saw a maximum increase of 126.6%, mainly benefiting from connections with NVIDIA and Apple. Overall, the AI sector is quite strong, with InnoTek (02577), which provides AI power to NVIDIA, reaching a peak increase of 114%, and Fubo Group (03738), involved in AI copyright, achieving a peak increase of 102%. The leading material hollow fiber optic company, Changfei Optical Fiber and Cable (06869), saw a maximum increase of 64%; others include the consumer liquor brand Zhenjiu Lidu (06979), which rose nearly 63%.

In August, Hong Kong stocks did not experience a unilateral rise and continued to fluctuate, with a downward trend towards the end of the month, indicating that the market situation in September will be quite complex. According to Bank of America data, the probability of the S&P 500 declining in September over nearly a century is 56%, and in the first year of a president's term, the probability increases to 58%, with an average decline of 1.62%. Analysis shows that September and October have been the two months with the highest volatility in U.S. stocks over the past thirty years.

The aftereffects of U.S. tariffs on the global market have yet to manifest, and this issue will continue to unfold. Some believe there may be a turning point regarding tariffs: According to CCTV News, on August 29, it was reported that a U.S. appeals court ruled that most of the global tariff policies implemented by President Trump were illegal. The court stated that these tariff measures could remain in place until October 14 to allow the U.S. government to appeal to the Supreme Court. Trump claimed that if the tariffs were removed, "it would bring a complete disaster to the United States." If the tariffs are ruled invalid, it would overturn the results of months of negotiations with the EU, Japan, South Korea, and other countries The likelihood of this is very low, as it would undermine Trump's governing foundation. Currently, there is no impact on China, as there is a three-month grace period, but it is difficult to avoid further disruptions to the global supply chain.

Trump's interference with the independence of the Federal Reserve is also a concern for the market. The dismissed Cook is seeking to appeal, but it is unlikely to succeed. If Trump takes control of the Federal Reserve, it would significantly damage the credibility of the US dollar.

Geopolitical tensions are escalating. The meeting between Putin and Trump in August briefly gave the market hope for a ceasefire, but ultimately no results were achieved, and the Russia-Ukraine conflict is escalating instead. According to CCTV News, on August 29 local time, Ukrainian President Zelensky stated that the situation in the Pokrovsk direction is the most severe, with Russian troops gathering up to 100,000 in that direction and preparing for offensive actions. Russian Defense Minister Andrei Belousov stated that the pace of the Russian military's advance in the special military operation is accelerating.

Essentially, the United States is the winner, as it continues to provide weapons to Ukraine, but the funding comes from Europe. Europe cannot sit at the table anyway, and continuing to foot the bill is the only option. As for the so-called trilateral talks, hopes are not high. US President Trump told the Daily Caller that a trilateral meeting with Ukrainian President Zelensky and Russian President Putin would take place, although he himself is not clear about the details. Previously, the White House stated that President Trump was dissatisfied after learning that Russia had attacked Ukraine with missiles and drones overnight. Meanwhile, the situation in the Middle East is also tense. The Houthi armed group in Yemen confirmed on August 30 that its "Prime Minister" Ahmed and several "government ministers" were killed in an Israeli airstrike on August 28, with several "ministers" injured. This situation will only lead to increased tensions in the Middle East, and Yemen's retaliatory actions could unfold at any time.

What is worth looking forward to in September is the Federal Reserve's interest rate cut. This is highly certain, as on September 9, the US Department of Labor (BLS) will release the annual benchmark revision of non-farm payroll data. The main reasons for the downward revision are twofold: first, the birth-death model is distorted, overestimating the jobs created by new businesses. Second, the significant reduction in illegal immigration has led to a systematic overestimation of the labor force population. According to projections from Goldman Sachs, Standard Chartered Bank, and others, this revision could be a significant adjustment of 550,000 to 800,000 jobs. If such a large adjustment occurs, it would indicate a very pessimistic employment situation. Therefore, even if inflation data is high, it should be difficult to affect the Federal Reserve's interest rate cut. There are voices in the market suggesting that Powell may once again face the choice of "whether to cut rates by 50 basis points at once." A 50 basis point cut would provide significant stimulus to the market, while a 25 basis point cut would be within expectations and not surprising. After the Federal Reserve cuts rates, it will be important to observe whether China's one-year and five-year LPR will follow suit, especially the five-year LPR, which directly impacts real estate.

At the beginning of the month, there was the 93rd National Day parade and the Shanghai Cooperation Organization Tianjin Summit. Generally, there is early speculation in the market regarding such major events, unless something unexpectedly new emerges.

What is still trustworthy is to look at the funds. EPFR data shows that in August, foreign capital net inflow into Hong Kong stocks was $5.22 billion, with passive funds contributing the majority ($14.78 billion), while active funds saw a net outflow of $8.1 billion The scale of global hedge fund purchases of Chinese stocks has reached a new high since February. Currently, foreign capital remains bullish on the Chinese market, but the allocation is still at a relatively low level, with expectations of continued inflows.

Domestic capital is also very active, with net inflows of southbound funds into Hong Kong stocks reaching HKD 120.5 billion in August, a historical high for the same period, with technology and financial stocks accounting for over 60%. This positive signal in capital flow may continue into September, especially after the Federal Reserve's interest rate cut. Historical data shows that for every 1% appreciation of the Hong Kong dollar, the Hang Seng Index averages a 2.3% increase.

Overall, the market in September is likely to remain volatile, with no signs of a one-sided rise, and attention should be paid to major events that could trigger a change in trend.

Investment Strategy for September 2025: A Balanced Approach

Zhitong Finance's gold stocks in August significantly outperformed the market again. The maximum increase of the Hang Seng Index in August was 4.62%; the average maximum increase of the top ten gold stocks in August was 23.74%. The specific maximum monthly increases of the top ten gold stocks are as follows: FIT HON TENG (06088) up 126.6%, Weimob Group (02013) up 29.7%, Maanshan Iron & Steel Company (00323) up 23.9%, Kelun-Biotech (06990) up 19.8%, Bilibili-W (09626) up 11.6%, Guoquan (02517) up 6.8%, Kuaishou-W (01024) up 6%, Kangzheng Pharmaceutical (00867) up 5.5%, Kingdee International (00268) up 3.83%, and Haijia Medical (06078) up 3.63%.

This time, the maximum average increase exceeded last month, with the best-performing stock in August more than doubling, and several stocks rising over 20%. However, there were also some underperformers, and I hope the performance in September can be more balanced.

The market in September is clearly not as optimistic as in August, so we cannot only think about how to attack; the allocation direction also needs to consider defensive strategies. The strategy is to adopt a balanced approach.

From the offensive side, the AI sector should be highly recognized by the market, as DeepSeek-V3.11 uses the parameter precision of UE8M0FP8Scale. DeepSeek indicates that the new precision format is aimed at the upcoming next-generation domestic chip design, suggesting that future training and inference based on the DeepSeek model are expected to be more applied to domestic AI chips.

According to The Wall Street Journal, Alibaba is developing a new artificial intelligence chip aimed at filling the gap left by Nvidia in the Chinese market. In February 2025, Alibaba proposed to invest HKD 380 billion over three years to build cloud + AI hardware infrastructure, exceeding the total of the past decade. Capex is a forward-looking indicator of the explosion in cloud infrastructure resources, and as Alibaba Cloud's Capex investment pace continues to accelerate, future growth rates for Alibaba Cloud are expected to rise further. Therefore, several leading AI stocks should benefit.

The anti-involution photovoltaic sector is also an important direction, with the industry reaching a basic consensus and positive changes occurring in fundamentals, with price adjustments expected to come soon. Although the automotive sector is highly competitive, car dealers are rapidly transitioning from traditional fuel vehicles to new energy vehicles, and the fundamentals are facing re-evaluation. The lead-acid battery sector shows high prosperity Consumer electronics have a catalyst, and Apple is expected to launch the iPhone 17 series at its fall event on September 10. Huawei is also holding a new product launch event in advance, which is favorable for the related industry chain.

From a defensive perspective, the focus is mainly on innovative drugs. This sector has only adjusted for about a month in August, so it is expected to make a comeback in September. The logic is that the capital involvement in this sector is very deep, and there are many themes, often stimulated by various positive news. The Federal Reserve's interest rate cuts are also a significant benefit for innovative drugs, as financing costs decrease. China has a clear advantage in innovative drugs, and the rate cuts will attract a lot of foreign investment. Other sectors with overseas expansion include dental and home appliances. Of course, gold is also indispensable.

Specific varieties:

Pharmaceuticals: Xiansheng Pharmaceutical (02096)

Chips: SMIC (00981)

AI: SenseTime-W (00020)

Photovoltaics: Xinyi Solar (00968)

Electronics: BYD Electronics (00285)

Appliances: Skyworth Group (00751)

Dental: Angelalign (06699)

Automotive Sales: Zhongsheng Holdings (00881)

Batteries: Tianneng Power (00819)

Gold: Zhaojin Mining (01818)

Detailed list as follows:

1. Xiansheng Pharmaceutical (02096)

On August 21, the company announced its 1H25 performance, with revenue of 3.585 billion yuan (+15.1% yoy), net profit attributable to shareholders of 604 million yuan (+32.2% yoy), and adjusted net profit of approximately 651 million yuan (+21.1% yoy). The main adjustments were for the net amount of financial assets measured at fair value with changes included in profit and loss, as well as interest expenses on redeemable liabilities. The company's innovative drug revenue in 1H25 was 2.776 billion yuan, accounting for 77.4%, an increase of 6.7 percentage points compared to 1H24, driving performance growth. By field: 1) CNS revenue was 1.249 billion yuan (+37.3% yoy), with Xianbixin injection continuing to expand hospital coverage and sublingual tablets successfully listed, leading to rapid growth in collaborative sales; Daliresheng was approved in 6M25 and is not yet included in Class II mental control, expected to bring new sales increments; 2) Oncology revenue was 874 million yuan (+24.4% yoy), with the acceleration of hospitalization after the inclusion of Cetuximab β and Trastuzumab in medical insurance, coupled with the approval of Suvorexant in July, expected to continue to increase sales in this sector in the second half of the year; 3) Autoimmune/other fields had revenues of 878 million yuan and 584 million yuan, respectively, with new products Mavacamten and Ledeqi monoclonal antibodies submitting listing applications in 3M25 and 7M25, respectively, expected to be approved in 2026, likely driving sector growth.

The company's overseas project progress is smooth: 1) SIM0500 is in the Phase I stage in China and the U.S., achieving U.S. FPI in 6M25; 2) SIM0278 is expected to initiate several Phase II indications in 2H26; 3) CDH6 ADC is collaborating with biotech NXTC, which specializes in ovarian cancer, to validate the reliability of the ADC platform, expected to initiate overseas clinical trials in 2H25 Multiple early-stage products demonstrate global competitiveness, optimistic about BD's overseas expansion path: 1) The new generation NMTi payload ADC pipeline brings upgrades in the ADC field, with global first-in-class potential for EGFR/cMet, cMet/B7H3ADC, etc.; 2) The ADC pipeline based on TOPOi toxins is fully entering clinical trials, with CDH6 ADC and FGFR2b ADC achieving domestic first-in-human trials, and CDH17 ADC, LRRC15ADC, etc. expected to enter clinical trials successively; 3) In the autoimmune field, multiple-target products are being promoted, which are currently the most focused track for multinational corporations in the autoimmune field. Molecules such as TL1A/IL-23p19 bispecific antibodies and IL-4Rα hormone conjugates are expected to significantly improve efficacy compared to existing single-target molecules; 4) Xianbi's new sublingual tablet has received FDA breakthrough therapy designation, and the overseas phase III plan has been confirmed.

In summary, while the company solidifies its performance foundation, its innovation system is gradually being validated through opportunities in commercialization and overseas business expansion: 1) A series of innovative pipelines have entered the commercialization stage, driving revenue growth in conjunction with mature products; 2) Products like SIM0500 have achieved overseas expansion, and several early-stage cutting-edge innovative product lines have global market potential, expected to make continuous progress in the next 12 months.

2. Semiconductor Manufacturing International Corporation (00981)

The company announced that in Q2 2025, it achieved revenue of USD 2.209 billion, a year-on-year increase of 16.2% and a quarter-on-quarter decrease of 1.7%, exceeding the guidance range (quarter-on-quarter -4% to -6%); it achieved a net profit attributable to the parent company of USD 132 million, a year-on-year decrease of 19.5% and a quarter-on-quarter decrease of 29.5%. In Q2 2025, the company's gross margin was 20.4%, exceeding the gross margin guidance range (18%-20%). Among them, the company's wafer shipment volume in Q2 2025 was 2.39 million pieces (equivalent to 8 inches), a quarter-on-quarter increase of 4.3%, while the ASP of sold wafers decreased by 6.4% quarter-on-quarter, mainly due to customers stocking up in response to policy impacts, which is expected to continue into the next quarter.

By downstream application areas, in Q2 2025, the company's shares in smartphones, computers and tablets, consumer electronics, internet and wearables, and industrial and automotive were 25%, 15%, 41%, 8%, and 11%, respectively. By size, the revenue share of 8-inch and 12-inch wafers was 24% and 76%, respectively, with 8-inch wafer revenue increasing by 7% quarter-on-quarter. By process platform, demand for analog chips has grown significantly, with revenue from image sensor platforms increasing by over 20% quarter-on-quarter, and RF revenue also showing a high increase quarter-on-quarter. The company expects a quarter-on-quarter revenue growth of 5%-7% in Q3 2025, with wafer shipment volume and ASP expected to achieve simultaneous growth, and the gross margin for Q3 2025 is expected to be 18%-20%.

Benefiting from the company's clients' market share growth and geopolitical factors, the company expects demand to remain strong in Q3 2025, and its current production capacity is still in short supply. As one of the world's major semiconductor consumer countries, China's current semiconductor demand still relies to some extent on imports. With the growth of domestic semiconductor design companies, there is still room for improvement in the domestic wafer foundry market share In addition, influenced by geopolitical factors, the local for local industrial trend is expected to open up market space for domestic semiconductor foundries. In the next 3-5 years, the company expects to maintain an annual capacity growth of around 50,000 12-inch wafers. In summary, benefiting from domestic substitution and the near-sourcing of the global semiconductor supply chain, the company is actively expanding its capacity and is optimistic about the performance growth brought by the gradual release of its industrial capabilities.

 3. SenseTime-W (00020)

As a global leading artificial intelligence platform company, SenseTime has always focused on technological innovation as its core driving force since its establishment in 2014, achieving a series of breakthrough results in computer vision, deep learning, and large models. The company's business is mainly divided into three major sectors: generative AI, traditional AI, and smart vehicles, with revenue from the core generative AI business expected to exceed RMB 2.4 billion in 2024, a year-on-year increase of 103.1%. Starting in 2024, SenseTime will promote strategic focus through a "1+X" organizational restructuring, with some subsidiaries having successively obtained independent financing. The AI industry is shifting from a pre-training paradigm to a "post-training + inference" paradigm, leading to a continuous increase in demand for computing power.

In this trend, the global AI infrastructure, especially the IaaS + PaaS market, is experiencing unprecedented growth, with domestic and foreign tech giants increasing their CapEx investments. AI + SaaS applications, represented by B-end applications, are also entering a period of explosive growth. SenseTime leverages its underlying technological advantages in generative AI to create differentiated competitive barriers through four major industry solutions. The SenseCore large device, as a new type of AI infrastructure with high efficiency, low cost, and scalability, realizes a full-link, batch process from data labeling, algorithm design, to model training and deployment, with computing power achieving unified scheduling across the country; the launch of SenseCore 2.0 has driven the efficient landing and large-scale application of large model technology with exceptional cost performance. The upgraded SenseNova V6 further enhances long-term thinking, reasoning, and multimodal capabilities; in June 2025, it received the highest rating of 4+ in the first round of evaluation of trustworthy AI multimodal large models by the China Academy of Information and Communications Technology.

In summary, the company has a rich accumulation of underlying technology, and its large model capabilities are in the first tier, making them scarce. At the same time, the company's loss-making business lines are gradually achieving independent financing, and the main business of generative AI is growing well. Institutions give the company an "overweight" rating.

 4. Xinyi Solar (00968) 

In the first half of 2025, the company achieved revenue of RMB 10.932 billion, a year-on-year decrease of 6.5%; net profit attributable to the parent company was RMB 746 million, a year-on-year decrease of 58.8%; gross margin was 18.3%, a year-on-year decrease of 8.6 percentage points; net profit margin attributable to the parent company was 6.8%, a year-on-year decrease of 8.7 percentage points. The overall performance met expectations. In the first half of 2025, the company's photovoltaic glass business sales volume (measured in tons) increased by 17.5% year-on-year, achieving revenue of RMB 9.474 billion, a year-on-year decrease of 7.3%, with a gross margin of 11.4%. Although sales volume increased in the first half of the year, profitability remains under pressure, mainly due to a significant year-on-year decline in photovoltaic glass prices and the impact of fixed costs from idle production capacity From the perspective of sales regions, in the first half of 2025, the revenue share of the photovoltaic glass business from overseas regions increased to 31.6%, with revenue from high-premium areas such as North America and Europe accounting for 8.1%, an increase of 5.8 percentage points compared to 2024. In the face of the industry's supply-demand surplus, the photovoltaic glass sector has begun to self-adjust, initiating a new round of production cuts. The supply side continues to shrink, coupled with rising prices of main materials, leading to increased inventory accumulation in the component sector. Recently, the inventory in the photovoltaic glass sector has shown a downward trend, driving up new order prices in August. As the process of reducing competition continues, photovoltaic glass prices are expected to bottom out and rebound in the second half of the year, restoring profitability in the sector.

In addition, in the first half of 2025, the company's photovoltaic power station business achieved revenue of 1.438 billion yuan, a year-on-year increase of 0.7%, with a gross profit margin of 63.5%. The gross profit margin slightly declined due to power restrictions in some regions and increased depreciation expenses. Due to the uncertainty in the return on new projects, the company will focus on project development and preparation work in the second half of the year, with the scale of new grid-connected projects expected to be relatively limited.

In summary, as the supply-demand situation in the industry improves, the profitability of the company's photovoltaic glass business is expected to recover, and the power station business remains stable; the current valuation level is at a low point in recent years, highlighting the investment cost-effectiveness.

5. BYD Electronics (00285)

The company's Q1 revenue was 36.88 billion yuan, a year-on-year increase of 1.1%, and a quarter-on-quarter decrease of 33.2%; gross profit was 2.32 billion yuan, a year-on-year decrease of 7.4%, and a quarter-on-quarter decrease of 28.2%; net profit attributable to the parent company was 620 million yuan, a year-on-year increase of 1.9%, and a quarter-on-quarter decrease of 48.3%; gross profit margin was 6.30%, a year-on-year decrease of 0.57 percentage points, and a quarter-on-quarter increase of 0.43 percentage points; net profit margin was 1.69%, a year-on-year increase of 0.01 percentage points, and a quarter-on-quarter decrease of 0.49 percentage points. The performance was below market expectations, with the decline in gross profit and gross profit margin primarily due to the decrease in demand for high-margin structural component products in the consumer electronics business. The automotive electronics business maintained rapid growth due to the increase in BYD automobile sales and the ramp-up of new products such as intelligent driving domain control and thermal management, while the adjustment in business structure led to a decline in gross profit. The relatively stable net profit margin was mainly due to reduced loan interest and the company's internal quality improvement and efficiency enhancement, with effective improvement in period expenses. Looking ahead to 2025/2026, the company's "A customers + automotive + computing power" three-pronged growth strategy will be emphasized, along with attention to the company's AI robot layout.

1. Consumer Electronics: The acceleration of AI applications on the edge is empowering functional innovation, driving a new round of replacement cycles in consumer electronics. The company's share in the A customer iPad and mobile phone glass business continues to increase, the casing business continues to improve quality and efficiency, and the company continues to deepen its expansion around A customer AI mobile phones (including foldable phones), AI wearables, laptops & pads, and robotics product lines, expected to benefit from the upward cycle of AI in the next three years, further expanding scale; Android continues to focus on mid-to-high-end products, with trends in upgrading and innovating structural components such as titanium alloy and fiberglass materials accelerating. The new round of replacement cycles driven by AI mobile phones and subsidy policies is expected to bring incremental growth, contributing to profitability

2. New Energy Vehicle Business: Continuing to benefit from the accelerated evolution of automotive electrification and intelligence, the shipment volume of smart cockpits and thermal management continues to grow, and the intelligent driving system (low, medium, and high computing power platforms) is experiencing simultaneous growth in shipment volume and product specifications. The intelligent suspension products have entered a stage of rapid growth, with the value per vehicle continuously increasing. The company's new energy vehicle business is expected to usher in a high-speed growth period characterized by simultaneous increases in "volume + price + market share." Additionally, the company's collaboration with external clients such as NVIDIA (in computing power and intelligent driving), Continental Electronics, and Bosch continues to deepen, and its industry position is expected to be gradually established. In the long term, it is anticipated that the company will grow into a leading domestic new Tier 1 manufacturer relying on the growth of its parent company.

3. Computing Power-Related Products: The company's expansion in the AI data center field is promising in terms of breadth and depth. AI servers and liquid-cooled power supplies are expected to experience rapid growth in 2025, and the company is also laying out new tracks in high-speed communications. With years of collaboration with NVIDIA, new growth momentum is expected to emerge.

4. AI Robotics Field: Leveraging its rich experience in system integration, the company has a deep accumulation in sensor fusion and software computing power for intelligent driving. It will comprehensively layout core components and system assemblies such as sensors, actuators, and controllers in AI robotics.

In summary, BYD Electronics, as a leading precision manufacturing enterprise in China with deep material research, product design, structural components, and vertical integration capabilities, possesses significant growth potential due to its quality customer resources, forward-looking business layout, and global production capacity. The company has potential share increase space in the "finished products + structural components" business with A clients, and products in new energy vehicles, 3D printing, AI computing power, and robotics are expected to flourish relying on its R&D and manufacturing capabilities.

 6. Skyworth Group (00751)

Skyworth Group announced its mid-year results for 2025, with total revenue of 36.264 billion yuan, a year-on-year increase of 20.3%; the profit attributable to equity holders of the company was 125 million yuan, a decrease of 67.4% year-on-year; earnings per share were 5.66 cents. During the period, the revenue from the mainland China market was approximately 28.29 billion yuan, an increase of 24.6% compared to the same period last year. This was mainly due to the strong performance of the new energy business, which saw a significant increase in revenue of 53.5% compared to the same period last year. Revenue from overseas markets was 8.053 billion yuan, a year-on-year increase of 7.1%. The overall gross profit margin for the first half of 2025 was 12.3%, down 1.5 percentage points from 13.8% in the same period last year.

In the first half of 2025, the narrowing gross profit space in the modern service industry business dragged down the overall gross profit of the group. The raw material costs in the home appliance industry were also affected by global supply chain tensions and U.S. tariff policies; the cost increases of certain raw materials such as steel and electronic components also put pressure on the group's overall gross profit. On the other hand, the new energy business continued to introduce more financing partners and optimize cooperation models during this period, positively impacting the improvement of gross profit margins. The group will continue to promote refined management of operations, adopting various comprehensive measures such as moderately reducing OEM business, focusing on self-owned brand sales, and high-end product markets to enhance product gross margins, reduce operating costs, and ensure the healthy operation of the enterprise During the 2025 618 shopping festival, the retail sales of the home appliance industry saw a comprehensive acceleration in growth, with low-priced small home appliance products breaking through in pricing, and the core categories of large home appliances continuing to grow. Leading companies fully enjoyed the policy dividends, leading to a continuous upgrade of the industry product structure.

In addition, the replacement of old consumer goods with new ones will continue to advance steadily in the second half of 2025, with national subsidy funds soon to follow, and the subsequent rhythm of subsidy fund usage may be more stable, with annual demand expected to continue to be released steadily. At this current point, expectations for domestic demand in the home appliance industry are on the rise, the sector's exposure to the U.S. is not high, and leading companies have ample room to respond to structural upgrades and global capacity layouts. Coupled with leading companies operating with high quality and high dividends, it is recommended to actively pay attention to the investment value of home appliances.

7. Angelalign Technology (06699)

On August 25, the company disclosed its mid-term performance announcement for 2025. In the first half of 2025, the company achieved revenue of USD 161.4 million, a year-on-year increase of 33.1%; net profit reached USD 14.2 million, a year-on-year increase of 583.6%; and adjusted net profit was USD 19.5 million, a year-on-year increase of 84.8%. By region, in the first half of 2025, the company achieved revenue of USD 71 million in global markets outside mainland China, a year-on-year increase of 123%; domestic business achieved revenue of USD 89.7 million, a slight year-on-year increase.

In terms of case numbers, the total number of cases in the first half of 2025 was 225,800, a year-on-year increase of 47.7%. Breaking it down, the company achieved 117,200 cases in global markets outside mainland China, a year-on-year increase of 103.5%; and 108,600 cases in the mainland Chinese market, a year-on-year increase of 14%. The globalization strategy of the company showed significant results in the first half of 2025, with overseas case numbers surpassing those of the domestic market for the first time, and overseas business is expected to continue contributing to growth momentum.

In terms of profitability, the adjusted operating loss of the overseas division in the first half of 2025 narrowed significantly from USD 16.08 million in the same period last year to USD 3.57 million, mainly due to the delayed operation of medical design centers and production bases outside mainland China, the postponement of recruitment in several areas such as sales, marketing, clinical support, and customer service, as well as the expansion of business scale. The adjusted profit in the domestic market was USD 19.7 million, mainly benefiting from increased sales scale and improved operational efficiency.

Looking ahead, the company will focus on 1) strengthening R&D capabilities and continuing to innovate invisible orthodontic solutions; 2) increasing investment in IT, legal, and operational teams and infrastructure to ensure full compliance with data security and privacy regulations in major jurisdictions; 3) enhancing legal capabilities, increasing legal expenditures, further strengthening intellectual property compliance and innovation, and actively protecting intellectual property; 4) optimizing medical service capabilities; 5) expanding production capacity, especially establishing and operating medical design centers and production bases and teams outside mainland China; 6) expanding the sales network and enhancing brand influence; 7) continuing to explore global markets. In summary, institutions are optimistic about the company's ongoing international layout, steady growth in domestic business, and maintain a "buy" rating  8. Zhongsheng Holdings (00881) 

The interim report shows that the group achieved total revenue of RMB 77.322 billion during the period, a decrease of 6.2% year-on-year; profit attributable to equity holders of the parent company was RMB 1.011 billion, a decrease of 36% year-on-year; basic earnings per share were RMB 0.427. In the first half of 2025, the group's after-sales service revenue reached RMB 11.45 billion, an increase of 4.4% year-on-year. During the same period, the gross profit from after-sales service reached RMB 5.44 billion, an increase of 8.1% year-on-year. This strong financial performance benefited from 4.54 million active customers generating 4 million after-sales service visits, both of which increased by 15.2% and 1.7% year-on-year, respectively.

Since November 2024, the group has completed the largest network optimization in its history, including splitting existing stores into properties operating multiple businesses, converting dealerships into Zhongsheng maintenance service centers, and changing business types based on existing properties. Over 20% of the stores participated in this adjustment. During this period, the group added a total of 57 dealerships and 20 maintenance service centers, while closing 37 dealerships. Among the new dealerships, 48 are luxury brands, including 36 Aito, 1 HIMA, 1 Mercedes-Benz, 3 Lexus, 1 Audi, and 6 Volvo. In the first half of 2025, the group's new car sales were approximately 229,000 units, a decrease of about 4,000 units or 1.7% year-on-year.

With the adjustment of brand structure, the Aito brand contributed to the business for the first time, contributing an incremental 11,000 new cars during the period, partially offsetting the decline in sales of other brands. The sales proportion of luxury brands increased to 62.3%, aligning with the group's strategic luxury positioning. Government measures against excessive competition and structural reforms at the corporate level are expected to drive a turnaround in the automotive industry by 2026, with related stocks likely reflecting this expectation starting in the second half of 2025. Market communication indicates that most investors have shifted their focus to potentially undervalued targets in the second half of 2025, and the current competitive environment and weak profitability leading to low attention make Zhongsheng Holdings fit this investment logic.

9. Tianneng Power (00819) 

The company is a leader in the lead-acid battery industry, with mid-2025 revenue of RMB 24.192 billion, a decrease of 51.53% year-on-year; profit attributable to shareholders was RMB 820 million, a decrease of 11.68% year-on-year; basic earnings per share were 72.8 cents. The decline in performance was mainly due to the significant increase in the prices of key raw materials for lead-acid battery production (such as lead), which directly raised production costs and eroded profit margins. Additionally, the previously invested unprofitable lithium battery projects also faced asset impairment.

Looking ahead, the company is actively transforming, suspending the unprofitable lithium battery projects, and refocusing on its advantageous lead-acid battery business, which has a large customer base (reportedly over 45% market share). The 2024 version of the new national standard for electric vehicles relaxes the weight limit for lead-acid battery vehicles from 55kg to 63kg, and the "Implementation Plan for Promoting the Replacement of Old Electric Bicycles with New Ones" encourages the replacement of old lithium-ion battery electric bicycles with lead-acid battery bicycles. These policies affirm the lead-acid battery technology route at a macro level, and with the implementation of the new standards, The sales of new two-wheeled vehicles are expected to recover, and the market anticipates that Tianneng Power's lead-acid battery business will achieve volume and profit recovery by 2025.

Additionally, the rapid development of AI has brought new demands for energy storage disaster recovery power sources. At the same time, the company is actively exploring new markets, with overseas layouts such as the assembly plant in Vietnam now in production, aiming to create new growth points.

10. Zhaojin Mining (01818)

The company achieved revenue of 6.973 billion yuan in H1 2025 (yoy +50.69%) and a net profit of 1.777 billion yuan (yoy +144.58%), with a net profit attributable to the parent company of 1.440 billion yuan (yoy +160.44%). In Q2, the net profit attributable to the parent company was 781 million yuan (yoy +135.5%, qoq +18.4%). The excellent year-on-year performance in H1 2025 was mainly due to the rise in gold prices. According to Wind, the average gold price in H1 2025 increased by 38.9% year-on-year to 724.29 yuan/gram. In H1 2025, the company completed a total gold production of approximately 14.3 tons, up 8.42% year-on-year; of which, mined gold was about 10.2 tons, up 13.77%, and refined gold was about 4.1 tons. In the first half of the year, the Ruihai project accelerated infrastructure construction, successfully conducting a one-time water trial run of the 12,000 tons/day beneficiation system, initially demonstrating industrial production capacity.

At the same time, key projects such as the deep development of the Xiadian gold mine and the capacity enhancement of backbone mines are progressing in parallel, providing strong support for the continuous release of the group's capacity. In addition, in the first half of the year, the group adhered to the core strategy of resource priority, establishing a special exploration fund of over 100 million yuan, focusing on multiple key exploration areas in global key mineralization belts, and discovering an additional 25 tons of gold metal.

On the evening of August 22, the Federal Reserve Chairman delivered a speech titled "Monetary Policy and the Fed’s Framework Review" at the Jackson Hole annual meeting, providing guidance for a potential rate cut in September and maintaining the forecast for two more rate cuts within the year. The most critical reference indicator for the Fed's rate cut path will be non-farm data. It reiterated that rate cuts are expected to drive real interest rates down, which is favorable for gold, but a short-term breakthrough of previous highs may require unexpected data or events. In the medium to long term, unless the U.S. restores high growth with low inflation and effectively reduces the deficit rate, buyers represented by central banks may continue their current gold purchasing strategy, and the upward trend of gold may persist.

In summary, if the Fed's rate cut materializes, it is expected to drive down U.S. real interest rates, which is favorable for gold. In the medium to long term, the upward trend of gold may continue, and the company's ongoing projects are progressing, with institutions maintaining a buy rating.

Written by/ Wan Yongqiang (Director of the Zhitong Finance Research Center)