“AI Plus Manufacturing” Drives Growth Stocks Higher
6 Min. Read Time
Bilibili Q1 Earnings Overview
Bilibili reported Q1 financial results after the Hong Kong close overnight. User growth was a highlight, as daily average users increased 8% year-over-year to 115 million, and monthly active users surpassed 376 million. In their earnings release, the CFO highlighted “…with advertising revenue growth accelerating to 30% year-over-year, gross profit margin improved to 37.1%, marking our 15th consecutive quarter of margin expansion. Supported by our solid topline and operating leverage expansion, we delivered 62% year-over-year increases in our adjusted net profit.”
- Revenue +7% to RMB 7.47B ($1.08B) from RMB 7B, versus expectations of RMB 7.46B.
- Adjusted Net Income +62% to RMB 585.4 million ($84.9 million) from RMB 363 million, versus expectations of RMB 535 million.
- Adjusted earnings per share (EPS) RMB 1.31 ($0.19) from RMB 0.85, versus expectations of RMB 1.14
- Bilibili repurchased 2.5 million shares for a total cost of $60.3 million in the first quarter of 2026.
Key News
Asian equities were mixed as Taiwan, South Korea, and Indonesia underperformed, while the US dollar strengthened overnight.
Mainland China and Hong Kong rallied off morning lows, led by growth and tech stocks, due to several government-led catalysts focused on AI integration into high-end manufacturing.
Premier Li had an inspection focused on the “integration of artificial intelligence (AI) and advanced manufacturing”. The Vice Premier of the State Council, Ding Xuexiang, completed a visit to the “national computing power network” in Beijing, Hebei, and Inner Mongolia, where he stressed “self-reliance and self-strengthening” and the acceleration of technology development and adoption.
The Ministry of Industry and Information Technology (MIIT) held the Employment Promotion Leading Group, which focused on “AI Plus Manufacturing.” Additionally, the State-owned Assets Supervision and Administration Commission (SASAC) held an event for "AI Plus Industrial Manufacturing" for state-owned enterprises (SOEs).
Hong Kong’s narrow rally, which saw decliners outpace advancers, was led by internet stocks. On the other hand, Mainland China experienced a much broader rally, led by semiconductor, software, telecommunications, and tech hardware stocks, as well as electrical equipment and electricity stocks.
The financial sector had a strong day amid a potential brokerage merger and strong bank stock performance. Tencent gained +2.4%, and was Hong Kong’s most heavily traded stock by value, as the company announced: “The Hy3 preview and DeepSeek-V4-Pro models provided in Tencent Cloud's Intelligent Agent Development Platform will end their limited-time free public beta testing and transition to official commercial services starting at 10:00 AM Beijing time on May 27, 2026.”
Baidu gained +1.47% post-Q1 financial results, versus its US-listing's gain of +1.76%.
Bilibili’s Hong Kong shares gained +3.65% in advance of today’s financial results.
Mainland China’s growth rally lifted the STAR Board, which gained +3.81% as semiconductor stocks rallied.
The National Energy Administration reported that April electricity consumption rose by +6% year-over-year (YoY) to 820 billion kilowatt-hours (kWh).
The National Bureau of Statistics (NBS) reported that the April decline in real estate was driven by 2nd- and 3rd-tier cities, as 1st-tier cities saw a +0.4% month-over-month (MoM) increase in used homes and a +0.1% MoM in new homes, led by Shanghai’s new home prices rising +0.4% MoM and +3.7% YoY. It would appear that the real estate market is stabilizing.
The Ministry of Foreign Affairs responded to a question on US-China AI dialogues by saying, “During President Trump's visit to China, the two heads of state had constructive exchanges on AI issues and agreed to conduct an intergovernmental dialogue on AI.”
Online real estate company KE Holdings reported after the Hong Kong close this morning. Results beat analyst expectations as revenue declined YoY, but net income and EPS increased YoY.
A great headline over the weekend was something along the lines of “Tesla raises prices without any explanation.” Have you not looked at gas prices?
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 0.5% |
| Hang Seng Tech | HSTECH Index | 0.3% |
| Hong Kong Turnover | HKTurn Index | -7% |
| Hong Kong Short Sale Turnover | HKSST Index | -15.6% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 16.7% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 161.64 |
| China (Shanghai) | SHCOMP Index | 0.9% |
| China (Shenzhen) | SZCOMP Index | 0.5% |
| China (STAR Board) | Star50 Index | 3.8% |
| Mainland Turnover | .chturn Index | -0.2% |
| Japan | NKY Index | -0.4% |
| India | SENSEX Index | -0.2% |
| Indonesia | JCI Index | -3.5% |
| Malaysia | FBMKLCI Index | 0% |
| Pakistan | KSE100 Index | 0.8% |
| Philippines | PCOMP Index | -0.8% |
| South Korea | KOSPI Index | -3.3% |
| Taiwan | TWSE Index | -1.8% |
| Thailand | SET Index | -0.1% |
| Singapore | STI Index | 1.5% |
| Australia | AS51 Index | 1.2% |
| Vietnam | VNINDEX Index | -0.8% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 104% | 135% |
| Advancing Stocks | 221 | 3110 |
| Declining Stocks | 279 | 1997 |
| Outperforming Factors | Value, Low Volatility, Quality | Quality, Value, Dividend Yield |
| Underperforming Factors | Momentum, EPS Revision, Growth | N/A |
| Top Sectors | Communication, Utilities, Financials | Utilities, Real Estate, Tech |
| Bottom Sectors | Materials, Real Estate, Industrials | Materials, Staples, Healthcare |
| Top Subsectors | Petroleum/Petrochemical, Media/Entertainment, Consumer Durables/Apparel | Semis, Power Industry, Education |
| Bottom Subsectors | Consumer Staples Distribution, Non Ferrous Metal, Electrical Equipment | Petrochemical, Comprehensive Industry, Fertilizer/Pesticide |
| Southbound Connect Buys | Alibaba, CNOOC, HK Tracker ETF (Large), SMIC (Moderate), Tencent (Small) | N/A |
| Southbound Connect Sells | YOFC (Moderate) | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 164 | 0.54 |
| Communication Services | 11 | 2.15 |
| Consumer Discretionary | 28 | 0.43 |
| Consumer Staples | 12 | -0.58 |
| Energy | 6 | 0.19 |
| Financials | 25 | 0.53 |
| Health Care | 16 | -0.31 |
| Industrials | 19 | -0.77 |
| Information Technology | 15 | -0.35 |
| Materials | 14 | -2.24 |
| Real Estate | 1 | -0.85 |
| Utilities | 6 | 1.07 |
| Mainland China Listed | 11 | 0.51 |
| Communication Services | 11 | 1.23 |
| Consumer Discretionary | 26 | 0.14 |
| Consumer Staples | 18 | -0.06 |
| Energy | 11 | 0.17 |
| Financials | 64 | 0.33 |
| Health Care | 29 | -0.05 |
| Industrials | 60 | 0.25 |
| Information Technology | 113 | 1.43 |
| Materials | 58 | -1.24 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | 2.4 |
| Alibaba HK | 9988 HK Equity | 1.2 |
| JD.com HK | 9618 HK Equity | -0.5 |
| NetEase HK | 9999 HK Equity | 1.8 |
| Yum China HK | 9987 HK Equity | 1.3 |
| Baozun HK | 9991 HK Equity | 2.5 |
| Baidu HK | 9888 HK Equity | 1.5 |
| Autohome HK | 2518 HK Equity | 0.6 |
| Bilibili HK | 9626 HK Equity | 3.7 |
| Trip.com HK | 9961 HK Equity | 1.1 |
| EDU HK | 9901 HK Equity | 0.7 |
| Xpeng HK | 9868 HK Equity | -3.5 |
| Weibo HK | 9898 HK Equity | 2.4 |
| Li Auto HK | 2015 HK Equity | -4.3 |
| Nio Auto HK | 9866 HK Equity | -4.8 |
| Zhihu HK | 2390 HK Equity | 3.8 |
| KE HK | 2423 HK Equity | -1 |
| Tencent Music Entertainment HK | 1698 HK Equity | 5 |
| Meituan HK | 3690 HK Equity | 1.1 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TENCENT HOLDINGS LTD | 2.4 |
| ALIBABA GROUP HOLDING LTD | 1.2 |
| SEMICONDUCTOR MANUFACTURI-H | -0.3 |
| CHINA MOBILE LTD-H | 0.5 |
| YANGTZE OPTICAL FIBRE AND-H | -2.4 |
| HUA HONG SEMICONDUCTOR LTD-H | 0.7 |
| CNOOC LTD-H | 3 |
| AIA GROUP LTD | -0.8 |
| XIAOMI CORP-CLASS B | -0.1 |
| CIG SHANGHAI CO LTD-H | 13.3 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ZHONGJI INNOLIGHT CO LTD-A | -1.4 |
| SUZHOU DONGSHAN PRECISION-A | 5.1 |
| CAMBRICON TECHNOLOGIES-A | 8.4 |
| HGTECH CO LTD-A | 7.5 |
| GIGADEVICE SEMICONDUCTO-CL A | 1.1 |
| SUZHOU TFC OPTICAL COMMUNI-A | -5.7 |
| EOPTOLINK TECHNOLOGY INC L-A | -4.6 |
| ACCELINK TECHNOLOGIES CO -A | 10 |
| MONTAGE TECHNOLOGY CO LTD-A | -0.4 |
| SUNGROW POWER SUPPLY CO LT-A | 3.4 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.80 versus 6.80 yesterday
- CNY per EUR 7.91 versus 7.92 yesterday
- Yield on 10-Year Government Bond 1.73% versus 1.76% yesterday
- Yield on 10-Year China Development Bank Bond 1.82% versus 1.83% yesterday
- Copper Price +0.31%
- Steel Price -0.75%
