Zhitong Hong Kong Stock Analysis | The "Policy Address" boosts a surge in Hong Kong stocks, this time the interest rate cut may have a different script

[Market Analysis]

The China-U.S. negotiations have come to a temporary conclusion, with U.S. President Trump extending the TikTok ban until December 16, which is quite standard, and further discussions will continue. The Hong Kong government is increasing stimulus measures, and with the Federal Reserve expected to cut interest rates tomorrow, the Hang Seng Index jumped 1.78% today, with the next target directly aiming for the 27,000-point mark.

On September 17, Hong Kong Chief Executive John Lee delivered the 2025 Policy Address at the Legislative Council. In terms of industrial development and innovation, John Lee emphasized artificial intelligence (AI), including advancing AI research and talent advantages, strengthening AI funding advantages, enhancing AI data advantages, and expanding AI applications. John Lee stated that the government had previously announced a HKD 3 billion "Frontier Technology Research Support Program," which will accept applications in the short term to support local funded institutions in attracting top international researchers in AI and other fields to Hong Kong, leading cutting-edge technology basic research. Additionally, the government has reserved HKD 1 billion to establish the "Hong Kong Artificial Intelligence Research Institute" in 2026 to promote upstream AI research and development, midstream results transformation, and explore application scenarios.

It is evident that the overall direction is to develop high technology. Once upon a time, in the glorious 1990s, if Hong Kong had seized the opportunity to develop chips, it would have already soared. Although it is late now, it can still be considered a remedy after the fact. In September, SenseTime (00020), as one of the few local high-tech AI companies, naturally benefited the most, surging nearly 16% today. Meanwhile, core chip stock SMIC (00981) also rose over 7%.

Furthermore, the Policy Address mentioned the goal of shortening the Hong Kong stock settlement cycle from T+2 to T+1, which would encourage more funds to use the Hong Kong Stock Connect to buy Hong Kong stocks.

Core technology stocks are in high demand. According to a message from China Merchants Group's official WeChat account, on September 15, China Merchants Group signed a strategic cooperation framework agreement with Baidu Group (09888) in Shenzhen. According to the agreement, both parties will actively leverage their respective advantages through close cooperation in areas such as the sci-tech industry, transportation logistics, comprehensive finance, and real estate parks to create a win-win situation. Today, the stock surged over 15%.

Alibaba (09988) also saw a rise. Yesterday, state media shared a screenshot comparing the performance of the PingTouGe chip and H20, which performed quite well. The company also completed the issuance of approximately USD 3.2 billion in zero-coupon convertible preferred shares, rising over 5% today. Meituan (03690), mentioned yesterday, participated in a B2 round financing for Yushu Technology before the 2024 Spring Festival, raising nearly RMB 1 billion, and today it rose nearly 5% again.

Contemporary Amperex Technology Co., Limited (03750) is also a core stock favored by foreign capital. Morgan Stanley has issued a call: Contemporary Amperex's self-developed manufacturing line has over 25,000 component units, producing 2.2 million battery cells daily, with over 6,800 quality control points, processing data 340,000 times per second, and building high barriers with molecular-level material science. In terms of production capacity, the current utilization rate exceeds 90%, and it is constructing new capacity of 250 GWh, with a target of reaching 1 TWh next year. The energy storage business can bring a 14% IRR premium in the global market, showing great potential. Today, it also rose over 5%. China Tobacco Hong Kong (06055) also monopolizes the tobacco business, rising nearly 7% today The development of high technology is inseparable from computing power. Shan Gao Holdings (00412) saw funds profit-taking yesterday, but today it corrected itself. The company announced a stock repurchase plan of up to $100 million, and today it surged over 17%. GDS Holdings (09698) also rose over 5%; cloud computing stocks performed well, with Kingsoft Cloud (03896) reporting second-quarter revenue of 2.35 billion yuan, a year-on-year increase of 24.2%; of which, public cloud revenue was 1.63 billion yuan, up 31.7% year-on-year, and industry cloud revenue was 720 million yuan, up 10.1% year-on-year. Today it rose over 9%.

Education stocks also performed strongly today. On the evening of September 14, Yuhua Education (06169) announced that the school recently received approval from relevant government authorities to carry out classified registration for profit-making private schools. This signal is worth paying close attention to. Because private education cannot be listed on the A-share market due to its non-profit nature, high-quality education companies that register as corporate entities and have stable profits in the future can directly land on the A-share market through IPOs, gaining broader capital market financing channels, facilitating business expansion, enhancing influence, and increasing operational flexibility.

Several provinces have stipulated that profit-making universities can independently set tuition standards and can also adjust professional settings and course arrangements more flexibly according to market demand, enhancing profitability. In other aspects, they can accelerate scaling through mergers and acquisitions and franchising. On the shareholder level: the restriction of non-profit nature has been lifted, which is beneficial for listed companies to distribute dividends, allowing shareholders to receive returns and increasing operational enthusiasm. In the short term, although the registration for profit-making requires the transfer of assets such as land and real estate and the payment of back taxes, increasing costs in the short term, the long-term benefits are significant, leading to the marketization and revaluation of assets. Today, China Education Holdings (00839) surged over 16%, Yuhua Education (06169) rose over 10%, and New Higher Education Group (02001) increased over 6%.

The enthusiasm for robotics remains high, with various excavations around Yushu in the A-share market, and high-end varieties are all related to the robotics concept. In the Hong Kong stock market, the authentic variety UBTECH (09880) surged again by over 10%, while Maxon Motor (00179) and Sanhua Intelligent Control (02050) both rose over 5%, which were mentioned yesterday.

The aviation stocks mentioned in yesterday's sector focus received market recognition, with China Southern Airlines (01055), China Eastern Airlines (00670), and Air China (00753) all rising over 6%. As the domestic demand direction approaches the National Day peak season, in terms of incremental aspects, after China's strength, the country continues to relax the visa-free range. A strong country will inevitably attract many foreigners for inbound tourism. Individual stocks like Tongcheng Travel (00780), which were mentioned for exploration, directly benefited and rose nearly 5% today.

At 2 a.m. Beijing time on September 18, the Federal Reserve will announce its interest rate decision, with the market generally expecting a 25 basis point rate cut. If a 50 basis point cut occurs, it would be considered beyond expectations, and the stock market would inevitably surge. However, this possibility is low, as it would scare investors, and Powell also needs to maintain the Federal Reserve's final dignity. Now let's analyze the situation of a 25 basis point cut, first excluding a hawkish rate cut; if it is only this small and still hawkish, it would be very difficult to look at, and it is highly unlikely Based on the high probability of a dovish 25 basis points cut, it is generally expected that the market will be disappointed by this rate cut, even voting with their feet, as this expectation has long been fully priced in. However, considering that there will be multiple rate cuts in the future (this is the power of dovishness), it is believed that the capital that expects the rate cuts to stimulate the economy and create a recovery momentum will likely be in the majority. In fact, the current situation does not allow for a bearish outlook, and one can only close their eyes and go long, so I won't elaborate further due to space constraints. Therefore, the US stock market will likely experience a period of suppression followed by a rise, and the script may need to be rewritten. Regarding the domestic impact, today's market performance has already indicated the attitude, which is certainly a warm welcome for rate cuts, regardless of the amount, as even fluctuations cannot change the upward trend.

【Sector Focus】

Today, the Ministry of Industry and Information Technology publicly solicited opinions on the mandatory national standard for "Safety Requirements for Intelligent Connected Vehicle Combination Driving Assistance Systems." The released draft establishes a safety baseline for intelligent connected vehicle products, requiring that the system can only be activated under its designed operating conditions. For different functions such as single-lane, multi-lane, and navigation assistance, comprehensive safety technical requirements have been set, including human-machine interaction, functional safety, expected functional safety, information security, and data recording, establishing a "triple safety guarantee."

The release of this standard is significant as it will directly promote technological iteration and upgrade, accelerating the implementation of advanced intelligent driving. With the standard in place, going overseas will be smoother. Additionally, it will play a regulatory role in the industry, filling the safety standard gap and reconstructing industry competition rules; clarifying responsibility boundaries and mitigating systemic risks in the industry, providing consumers with safety guarantees and legal backing.

Main Varieties: Horizon Robotics (09660), Black Sesame Intelligence (02533), Suton Juchuang (02498), Youjia Innovation (02431), XPeng Motors-SW (09868); components from Nexperia (01316), Zhejiang Shibao (01057).

【Stock Picking】

Kuaishou-W (01024): Quarterly net profit margin hits a new high, commercialization continues to grow steadily

Recently, Kuaishou e-commerce announced that it will invest 18 billion in traffic subsidies during this year's Double 11 pre-sale period, with total traffic subsidies reaching several hundred billion. In Q2 2025, Kuaishou achieved operating revenue of 35.046 billion yuan, a year-on-year increase of 13.1%, and adjusted net profit of 5.618 billion yuan, a year-on-year increase of 20.1%, corresponding to a profit margin of 16.0%. Kuaishou declared its first special dividend since going public, paying 0.46 HKD per share, totaling approximately 2 billion HKD.

Comment: Kuaishou's Q2 2025 adjusted net profit margin reached a new high for a single quarter, exceeding market expectations. Kuaishou's traffic showed steady growth in Q2 2025. In Q2 2025, Kuaishou's DAU (Daily Active Users) reached 409 million, a year-on-year increase of 3.4%, setting a new historical high. Commercialization continues to grow steadily. In Q2 2025, Kuaishou's online marketing revenue was 19.8 billion yuan, a year-on-year increase of 12.8%, showing marginal improvement quarter-on-quarter. Kuaishou's other revenue was 5.237 billion yuan, a year-on-year increase of 26%, exceeding market expectations, with e-commerce GMV reaching 358.9 billion yuan, a year-on-year increase of 17.6%. The average number of monthly buyers in e-commerce was 134 million, with an increase in repurchase frequency. The GMV of general shelf e-commerce accounted for over 32%. Live broadcast revenue was 10 billion yuan, a year-on-year increase of 8% Keling Technology continues to iterate, achieving revenue of 250 million in Q2 2025, exceeding expectations. Kuaishou will launch the Keling 2.1 series model in May 2025, achieving a comprehensive improvement in model quality. At the WAIC 2025 event, Keling AI announced that the "Linghua Canvas 1.0" will start invitation testing from today, with a "Studio Membership" aimed at professional teams and enterprises set to launch in Q3 2025.

Keling AI currently has over 45 million creators globally, with the product undergoing more than 30 iterations since its release, generating over 200 million videos and 400 million images, and providing API services to over 20,000 enterprise clients. From a commercialization perspective, on one hand, Keling AI's market share continues to rise; according to Poe data, on May 4, 2025, the usage of Kling 2.0/1.6/1.5 reached 30.7%, ranking first. On the other hand, Keling's revenue is growing rapidly, with linear extrapolation suggesting annual revenue is expected to exceed 1 billion