Zhitong Hong Kong Stock Analysis | Monetary Policy Takes an Independent Path OpenAI Ignites Consumer Hardware Sector

[Market Dissection]

Over the weekend, funds were focused on the favorable policies expected on Monday, but no substantial developments were observed, leading to a day of fluctuations in the Hong Kong stock market, with the Hang Seng Index closing down 0.76%.

After the Federal Reserve's interest rate cut, the market anticipated that we would follow suit, but the latest news indicates that China's 1-year and 5-year LPR remained unchanged in September, marking the fourth consecutive month of "holding steady." The common understanding is that the macroeconomic situation has stabilized and improved in the first half of the year, making it unnecessary to guide LPR downwards for counter-cyclical adjustments in the short term. Here, I quote the People's Bank of China Governor Pan Gongsheng: "China's monetary policy insists on being independent while balancing internal and external factors." This means we have our own pace and will not follow the actions of the Federal Reserve, which highlights the resilience of China's economy and the independence of its monetary policy, reflecting confidence in itself.

Looking at the State Council Information Office's press conference, the market expected new stimulus policies, but none were announced. Continuing with Pan Gongsheng's remarks: today's (22nd) press conference focused on introducing the development of the financial industry during the 14th Five-Year Plan period, mainly reviewing and summarizing the achievements of the "14th Five-Year Plan" from a medium to long-term perspective, without involving adjustments to short-term policies. Content regarding the "15th Five-Year Plan" and the next steps in financial reform will be communicated further after central unified deployment.

Due to many unmet expectations, such as betting on LPR cuts, typical sectors like real estate saw little movement today. Additionally, those betting on stimulating consumption were also disappointed today. Some disappointed funds shifted towards gold; last Friday, New York gold prices surged. On September 22, the gold ETF Huaxia (518850) rose by 1.2%, and the gold stock ETF (159562) increased by 1.06%. Shandong Gold (01787) and Zhaojin Mining (01818) both rose over 6%.

Although there were no direct favorable stimuli, the conveyed signals were clear. China Securities Regulatory Commission Chairman Wu Qing stated at the press conference that the market capitalization of the A-share technology sector now accounts for over 1/4, with the number of technology companies among the top 50 by market capitalization increasing from 18 at the end of the 13th Five-Year Plan to the current 24. This indicates that technology stocks have become the largest mainline in the market.

The news that Moore Threads' Sci-Tech Innovation Board IPO will be reviewed on September 26 led to significant movements in related concept stocks on the morning of September 22. In Hong Kong, the indirectly held stock of China Resources Power (01635) surged over 21% today. Additionally, Changfei Optical Fiber (06869) adjusted due to news that DrakaComteq B.V. reduced its holdings of the company's 5% H shares through block trading on September 19, following a significant previous increase.

Today's explosive news is: According to Global Times citing U.S. tech media Information, OpenAI is rapidly advancing its consumer hardware strategy. The planned products include display-less smart speakers, and they are also considering developing glasses, digital voice recorders, and wearable brooches, with the first batch of devices scheduled for release at the end of 2026 or early 2027. Various media reports indicate that OpenAI has signed an agreement with Luxshare Precision (002475.SZ) to jointly create a consumer-grade device, while also negotiating with Goertek (002241.SZ) for component supply There are reports that OpenAI is also discussing component supply matters with Lens Technology (06613) and AAC Technologies (02018). The stocks mentioned in the rumors have all seen significant increases. From the perspective of OpenAI entering the hardware market, the idea is good, but it is not that easy, as there have been no related blockbuster products seen so far. Take AI glasses as an example; many companies are trying, but just look at the sales to understand. Therefore, don't get too excited; considering that many of these types of products are linked to the Apple supply chain, looking at Apple is more reliable.

According to The Information, due to an unexpected increase in demand for the standard version of the iPhone 17, Apple is raising its production. After experiencing a strong pre-order surge over the weekend, Apple has informed two suppliers to increase the daily production of the iPhone 17 by at least 30%. The company with the highest alignment with the Apple supply chain, GoerTek (01415), surged over 11% today, while other companies like Q Technology (01478) and Sunny Optical (02382) rose over 10% and 6%, respectively. Companies like Foxconn (02038) and BYD Electronics (00285), which are engaged in OEM, also benefited. FIT HON TENG (06088), mentioned last Friday, surged nearly 18% again due to the Apple supply chain theme. Multiple concepts are indeed appealing.

The National Healthcare Security Administration has released the 11th batch of centralized procurement documents, optimizing the price difference control anchor points, and will no longer simply select the lowest bid: 1/4 of the drugs have anchor points that are 34% higher than the lowest price, with the highest increase exceeding 170%. Innovative drugs continue to be catalyzed. WuXi AppTec (02268) announced that the company signed a subscription agreement with WuXi Biologics on September 3, agreeing to issue 24.13 million new shares, accounting for approximately 1.96% of the company's issued share capital as of the last feasible date. After the subscription is completed, WuXi Biologics' shareholding ratio will increase from 48.81% to 50.74%. The major shareholder's continued investment is the biggest support, and WuXi AppTec (02268) rose over 8%. The shovel seller, Crystal International (02228), reported strong growth in drug discovery business, increasing from HKD 60.9 million for the six months ending June 30, 2024, by 615.2% to HKD 435 million for the six months ending June 30, 2025. The group has established significant cooperation with DoveTree Medicines LLC and its affiliates (DoveTree). The group has achieved the first phase milestone of this cooperation and received an initial payment of USD 51 million. Today it rose over 8%.

On Monday afternoon Beijing time, it was reported that American pharmaceutical giant Pfizer is close to acquiring weight loss drug developer Metsera for USD 7.3 billion. This means Pfizer is re-entering the weight loss drug market. Galecto (01672) announced that ASC47 combined with semaglutide showed a weight loss effect that was 56.2% higher than semaglutide alone in obese subjects. Today it rose over 7%. Warren Buffett's Berkshire Hathaway has completely exited its investment in BYD, with its shareholding value reduced to zero; Buffett first purchased 225 million shares of BYD in 2008, holding them for 14 years, during which the market value increased more than 38 times Warren Buffett's investment can be considered perfect; it's better to exit completely, otherwise the funds will always worry about others reducing their holdings.

【Sector Focus】

Recently, at the Huawei Connect 2025 conference, Huawei Technologies Co., Ltd. announced that the number of HarmonyOS 5 (Hongmeng 5) terminal devices has exceeded 17 million, and officially launched the "Tian Gong Plan," which will invest 1 billion yuan in funds and resources to fully support the innovation of the Hongmeng AI ecosystem and jointly develop with developers to enter a new stage of Hongmeng AI.

AI entities are becoming an important direction for the evolution of the Hongmeng ecosystem. With the help of the "Tian Gong Plan," Huawei will support developers in building more AI meta-services, intent frameworks, and intelligent entities. Huawei aims to accelerate the incubation of over 10,000 AI-native meta-services, more than 1,000 intent frameworks/MCPs, and over 5,000 intelligent entities through this plan, forming a strong scale effect to promote the evolution of the Hongmeng ecosystem towards AI and intelligence.

Main varieties: China Software International (00354), UBTECH (09880), VST (00856).

【Stock Picking】

BYD Electronics (00285): Launches new battery products, overall positive for the electric vehicle industry chain

On September 18, BYD Electronics officially launched its new generation energy storage product "Haohan" to the world. BYD joins the ranks of large-capacity energy storage system solution providers with a single machine capacity of 14.5MWh and an energy density of 233 watt-hours per cubic meter. BYD announced today that the launch event for the second-generation Qin PLUS model is scheduled for September 25 at 19:00. From the official sources, it can be seen that this launch event will introduce two models: DM-i and EV.

Commentary: "Haohan" seamlessly connects with BYD's self-developed GC Flux PCS integrated machine and GC Master EMS system, forming a new generation of grid-type energy storage system. The company is a core subsidiary of BYD Group. In terms of automotive electronics: intelligent upgrades, intelligent driving, and intelligent cockpit participate in the "Tian Shen Zhi Yan" intelligent driving system, covering multiple models. The self-developed "Yun Nian" intelligent suspension system has begun mass production. The traditional peak season for consumer electronics in the third quarter is approaching, with major terminals intensively launching new AI smartphones and AR glasses, driving industry demand. In terms of AI business: the company has made significant progress in liquid cooling technology through close cooperation with NVIDIA. The company has mastered immersion liquid cooling technology and plans to launch corresponding server products. The company is developing AMR robots based on the NVIDIA platform to promote intelligent manufacturing. Consumer electronics: major clients and innovative acquisitions of Jabil's (Jabil) partial business deepen cooperation with major clients like Apple. Layout in emerging consumer electronics fields such as foldable screens and AI glasses. The autumn new products like iPhone officially go on sale on September 19, and the high cost-performance ratio of i17 is expected to drive sales beyond expectations. BYD's competitiveness in the global market continues to improve, which also has a positive impact on its subsidiary BYD Electronics. The market response to BYD's new models is good, with rapid sales growth for the Hai Lion 06_EV+DM-i, changes in the brand positioning of the Fangcheng Leopard, and strong sales performance of the Titanium series models The high-end and overseas expansion strategies have shown significant results, with the Qin L_EV model's technology being decentralized and overseas sales increasing significantly year-on-year. BYD Electronics has advantages in the electric vehicle components sector, benefiting from the overall positive trend in the industry. In the future, with the continuous development of automotive intelligence, AI, and consumer electronics, the executives' increased holdings demonstrate confidence in the company's future development, and profitability is expected to improve in the second half of the year