Healthcare Rules The Day, Week In Review

Week in Review

• Last week’s Politburo release continues to garner attention, as the language on fiscal support evolved from “using fiscal tools fully” to “strengthening and enhancing” fiscal support.
• There was chatter that AI model maker Moonshot, which is one-third owned by Alibaba, will file for a Hong Kong IPO and is looking to raise $3 billion. This comes after the company announced it will use Alibaba Cloud for its computing needs.
• AI model developer MiniMax was officially added to the Southbound Stock Connect.
• BYD’s July auto sales were strong, as they sold 419,211 hybrid and fully electric vehicles, representing growth of +21.76% year-over-year (YoY), though exports accounted for 43% of sales, or 179,841 units, representing growth of +124% (YoY).
• STAR Market-listed semiconductor company Advanced Micro-Fabrication Equipment (AMEC) announced that first-half profits will increase between 282% and 310%, and revenue will increase approximately 34%.

Key News

Asian equities were mixed overnight as Mainland China and Hong Kong outperformed, while South Korea, Taiwan, and India underperformed.

Mainland China closed higher after starting the day nearly flat, while Hong Kong was able to edge out a gain after trading most of the day flat. Both markets largely looked past a mild U.S. market decline, even as Treasury yields moved higher and investors weighed earnings results, new labor data, and continued uncertainty surrounding the Strait of Hormuz.

Hong Kong had a relatively strong finish, with the Hang Seng Index closing higher by +0.5% and the Hang Seng Tech Index by +0.8%. The healthcare sector was the biggest bright spot for Hong Kong, gaining +6.04%, and was closely followed by technology (+2.78%) and materials (+2.69%). Internet stocks were mixed as Alibaba fell by -0.5%, Tencent was down -0.1%, NetEase was up +1.1%, and JD.com was up by +0.2%. Top subsectors included non-ferrous metals, pharmaceuticals, and semiconductors, while bottom subsectors included household appliances, consumer services, and telecommunications.

Hong Kong-listed biotechnology company Zai Labs surged +18.4% after posting better-than-expected second-quarter results, leading the healthcare sector higher. Large language model stocks, including Z.AI (+14.6%) and MiniMax (+9.8%), continued their momentum following yesterday's DeepSeek news about planned price hikes.

Beijing is making a strong push for domestic companies to ramp up usage of local AI components as an alternative to Nvidia's products. Overall, this move is clearly part of China's broader effort to reduce its reliance on American technologies. According to Bloomberg, Chinese companies expect to spend 46% of their AI chip budget over the next year on locally made chips, up from 30% now.

For a third day in a row, Mainland investors were slight sellers of Hong Kong-listed stocks and ETFs overall, with a net sell of -$99.34 million through the Southbound Stock Connect. Both Alibaba and Tencent were large net sells, but newly added MiniMax was the largest net buy via the Southbound Stock Connect.

Mainland China had a very strong day, with Shanghai gaining +1.0%, Shenzhen gaining +1.4%, and China's Science and Technology (STAR) Board closing higher by +2.5%. Similar to Hong Kong, Mainland China's healthcare, technology, and material sectors outperformed, while financials and consumer discretionary underperformed. Top subsectors included biotechnology, pharmaceuticals, and electronic components, while bottom subsectors included agriculture, telecommunications, and household appliances.

Mainland's Wuxi AppTec gained +8.5%, as healthcare names broadly advanced on strong earnings visibility.

Last Night's Performance

Country / Index	Ticker	1-Day Change
China (Hong Kong)	HSI Index	0.5%
Hang Seng Tech	HSTECH Index	0.8%
Hong Kong Turnover	HKTurn Index	1.7%
Hong Kong Short Sale Turnover	HKSST Index	-0.9%
Short Turnover as a % of Hong Kong Turnover	N/A	0.2
Southbound Stock Connect Net Buy/Sell (US $ Millions)	N/A	-99.34
China (Shanghai)	SHCOMP Index	1%
China (Shenzhen)	SZCOMP Index	1.4%
China (STAR Board)	Star50 Index	2.5%
Mainland Turnover	.chturn Index	5.5%
Japan	NKY Index	-0.1%
India	SENSEX Index	-0.6%
Indonesia	JCI Index	1%
Malaysia	FBMKLCI Index	-0.1%
Pakistan	KSE100 Index	-0.2%
Philippines	PCOMP Index	0.2%
South Korea	KOSPI Index	-0.6%
Taiwan	TWSE Index	-0.4%
Thailand	SET Index	-0.2%
Singapore	STI Index	1.1%
Australia	AS51 Index	-0.1%
Vietnam	VNINDEX Index	-0.0005

Indicator	Hong Kong	Mainland China
Today's Volume % of 1-Year Average	94%	107%
Advancing Stocks	44	151
Declining Stocks	47	141
Outperforming Factors	Growth	Growth
Underperforming Factors	Value	Value
Top Sectors	Technology, Materials. Healthcare	Technology, Materials. Healthcare
Bottom Sectors	Communications, Consumer Staples, Consumer Discretionary	Agriculture, Communications, Software
Top Subsectors	Pharmaceuticals, Semiconductors, Non Ferrous Metals	Biotechnology, Pharmaceutical, Electronic Components
Bottom Subsectors	Household Appliances, Consumer Services, Telecommunications	Agricultural, Telecommuications, Household Appliances
Southbound Connect Buys	MiniMax (Large), Wuxi Bio	N/A
Southbound Connect Sells	Tencent (Large), Alibaba (Large)	N/A

MSCI China All Shares Index	# of Stocks	Average 1-Day Change (%)
Hong Kong Listed	165	0.44
Communication Services	11	-0.01
Consumer Discretionary	28	-0.26
Consumer Staples	13	-0.55
Energy	6	0.93
Financials	25	-0.71
Health Care	16	6.04
Industrials	22	0.32
Information Technology	12	2.78
Materials	14	2.69
Real Estate	7	0.14
Utilities	11	-1.28
Mainland China Listed	386	1.26
Communication Services	8	-0.03
Consumer Discretionary	26	-0.37
Consumer Staples	19	0.05
Energy	12	0.41
Financials	64	-0.34
Health Care	31	4.6
Industrials	58	0.53
Information Technology	95	2.46
Materials	52	2.48

US & Hong Kong Dually Listed	Ticker	1-Day Change (%)
Tencent HK	700 HK Equity	-0.1
Alibaba HK	9988 HK Equity	-0.5
JD.com HK	9618 HK Equity	0.2
NetEase HK	9999 HK Equity	1.1
Yum China HK	9987 HK Equity	0.5
Baozun HK	9991 HK Equity	-4.2
Baidu HK	9888 HK Equity	-0.3
Autohome HK	2518 HK Equity	-3.2
Bilibili HK	9626 HK Equity	-1.9
Trip.com HK	9961 HK Equity	-0.8
EDU HK	9901 HK Equity	-1.5
Xpeng HK	9868 HK Equity	1.3
Weibo HK	9898 HK Equity	0.3
Li Auto HK	2015 HK Equity	1.6
Nio Auto HK	9866 HK Equity	0.4
Zhihu HK	2390 HK Equity	-1.6
KE HK	2423 HK Equity	1
Tencent Music Entertainment HK	1698 HK Equity	-0.1
Meituan HK	3690 HK Equity	0

Hong Kong's Most Heavily Traded by Value	1-Day Change (%)
MINIMAX GROUP INC	9.8
Z AI CO LTD	14.6
KINGBOARD LAMINATES HLDG LTD	9.9
TENCENT HOLDINGS LTD	-0.1
ALIBABA GROUP HOLDING LTD	-0.5
SEMICONDUCTOR MANUFACTURI-H	2.4
YANGTZE OPTICAL FIBRE AND-H	5.8
HUA HONG GRACE SEMICONDUCTOR	3.3
GIGADEVICE SEMICONDUCTOR I-H	6.8
XIAOMI CORP-CLASS B	0.7

Shanghai and Shenzhen's Most Heavily Traded by Value	1-Day Change (%)
ZHONGJI INNOLIGHT CO LTD-A	-3.7
GIGADEVICE SEMICONDUCTO-CL A	8.3
CXMT CORP-A	1
EOPTOLINK TECHNOLOGY INC L-A	-0.2
SUZHOU DONGSHAN PRECISION-A	4
VICTORY GIANT TECHNOLOGY -A	12
CAMBRICON TECHNOLOGIES-A	2.7
JCET GROUP CO LTD-A	2.5
HENGTONG OPTIC-ELECTRIC CO-A	6
CHINA JUSHI CO LTD -A	8.8

Last Night's Exchange Rates, Prices, & Yields

• CNY per USD 6.75 versus 6.75 yesterday
• CNY per EUR 7.78 versus 7.79 yesterday
• Copper Price -0.05%
• Steel Price +0.17%