Unitree IPO Overcomes AI Pullback
6 Min. Read Time
Key News
Asian equities were a sea of red as AI supply chain/picks and shovels were hit hard across Korea, Taiwan, Japan, and Mainland China’s Science & Technology (STAR) Board, as Hong Kong was the only market in the region that managed to close in positive territory.
One important item: The State Council Information Office is hosting a press conference this Friday at 10 am, following Monday’s State Council meeting on addressing weak domestic consumption following July’s weak economic data. Will we get tangible fiscal stimulus? At a minimum, we will hear about the RMB 100 billion consumption stimulus plan. My fingers are crossed that they can over-deliver. Here are the two lines from Monday’s release that jumped out to me:
- “we should clearly see that the problem of insufficient domestic demand is still prominent, and some industries are facing more difficulties, while the external environment uncertainty is rising”
- “we should speed up the implementation of the plan”, which includes “expanding domestic demand”
Second important item: Unitree’s IPO: Yushu Technology, i.e., Unitree, which started trading overnight under the ticker 688836 CH, gained +460% after raising RMB 6.1 billion ($904 million), giving the company a market cap of about $50 billion. The company is profitable after having shipped 5,500 humanoids in 2025. We can anticipate that the company can scale rapidly. Unlike Tesla, Unitree's humanoid robot production has left the whiteboard as it scales up production. The 2026 World Robot Conference kicked off in China after the Vice Chairman of the Ministry of Information gave a keynote address.
Overnight, Hong Kong-listed internet companies, Hong Kong and Mainland-listed banks, and oil & gas all outperformed. Meanwhile, Hong Kong and Mainland China’s "Four Horsemen" of AI (semiconductors, semiconductor equipment, electronic components, and electrical equipment) were hit hard, as the STAR Board fell -6.89% along with CATL, which fell -3.38% in Hong Kong and -1.83% in Mainland China. Foundry Hua Hong Semiconductor fell -11.70% after yesterday’s weak guidance, and the Financial Times' reports that Tencent and ByteDance will buy Nvidia chips likely contributed to the regional AI sell-off. It was hard not to see how China’s AI "picks & shovels" trade with their regional peers.
Although Alibaba fell -1.97% after yesterday’s surge, Tencent gained +1.08%, Meituan gained +1.75%, JD.com gained +1.44%, and Trip.com gained +0.635. Baidu fell -11.03%, which now has a Hong Kong share market cap of $31 billion, versus cash of $35 billion (they have $1 bilion worth of debt), following yesterday’s poor results after the Hong Kong close. Xiaomi gained +4.81% following yesterday’s decline.
Real estate had a strong session, following yesterday’s State Council announcement. Mainland investors sold a healthy net $1.35 billion worth of Hong Kong-listed stocks and ETFs, including the Hong Kong Tracker ETF, Xiaomi, and Hua Hong Semiconductor, all of which saw strong outflows. Mainland China had a terrible breadth day with only 407 stocks up versus 4,729 stocks down.
Dunkin’ Donuts had a great commercial about the guy who had to get up and make the donuts at an absurdly early part of the day. He would mutter, “It’s time to make the donuts.” With earnings season in full swing, we’ve had some early mornings, which is typical. Tomorrow we’ve got Alibaba, NetEase, and AutoHome reporting after the close in Hong Kong.
China’s Foreign Minister Wang Yi will visit South Korea for the first time in five years.
Today’s after-the-Hong Kong close financial results:
Kuaishou (1024 HK), China's "YouTube" and AI video generation platform, beat low analyst expectations.
- Revenue grew 1.4% to RMB 35.535B from RMB 35.046B versus expectations of RMB 35.5B
- Adjusted Net Income declined -30.3% to RMB 3.913B from RMB 5.618B versus expectations of RMB 3.89B
- Adjusted EPS declined to RMB 0.90 from RMB 1.33 versus expectations of RMB 0.89
Full Truck Alliance (YMM US), China’s "Uber for trucks", beat analyst expectations while providing a strong Q3 guidance.
- Revenue grew 4.4% YoY to RMB 3.381B ($498mm) from RMB 3.2B versus expectations of 3.1B
- Adjusted Net Income grew to RMB 1.433B ($211mm) from RMB 1.352B versus expectations of RMB 1.26B
- Adjusted EPS grew to RMB 1.36 ($0.2) from RMB 1.27 versus expectations of RMB 1.23
Weibo (9898 HK, WB US), the "Twitter of China", beat muted/low analyst expectations as costs took a bite out of the bottom line.
- Revenue grew +2% to $453mm from $444mm (RMB 2.98B) versus expectations of $441mm
- Adjusted Net Income declined to $102mm from $143mm (RMB 1B) versus expectations of $92mm
- Adjusted EPS declined to $0.38 from $0.54 (RMB 3.90) versus expectations of RMB $0.35
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 0.1% |
| Hang Seng Tech | HSTECH Index | -1.2% |
| Hong Kong Turnover | HKTurn Index | -0.9% |
| Hong Kong Short Sale Turnover | HKSST Index | 14.9% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 0.2 |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | -1,356.42 |
| China (Shanghai) | SHCOMP Index | -2.4% |
| China (Shenzhen) | SZCOMP Index | -4.9% |
| China (STAR Board) | Star50 Index | -6.9% |
| Mainland Turnover | .chturn Index | 3.9% |
| Japan | NKY Index | -3.2% |
| India | SENSEX Index | -0.4% |
| Indonesia | JCI Index | -0.9% |
| Malaysia | FBMKLCI Index | -0.1% |
| Pakistan | KSE100 Index | -0.6% |
| Philippines | PCOMP Index | -1.7% |
| South Korea | KOSPI Index | -5.8% |
| Taiwan | TWSE Index | -1.3% |
| Thailand | SET Index | -0.7% |
| Singapore | STI Index | -0.1% |
| Australia | AS51 Index | -0.2% |
| Vietnam | VNINDEX Index | -0.0005 |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 89 | 100 |
| Advancing Stocks | 170 | 407 |
| Declining Stocks | 349 | 4729 |
| Outperforming Factors | Low Volatility | Low Volatility, Dividend Yield, Value |
| Underperforming Factors | Liquidity, Momentum, Growth | Momentum, Liquidity, Growth |
| Top Sectors | Energy, Financials, Real Estate | Financials, Utilities, Energy |
| Bottom Sectors | Industrials, Materials, Tech | Tech, Communication, Materials |
| Top Subsectors | Household/Personal Products, Banks, Petroleum/Petrochemical | Banking, Marine, Motorcycle |
| Bottom Subsectors | Paper/Packaging, Semis, Tech Hardware | Communication Equipment, Electronic Components, Semis |
| Southbound Connect Buys | Tencent (Small) | N/A |
| Southbound Connect Sells | HK Tracker ETF, Xiaomi, Hua Hong Semi (Very Large), KB Laminates (Large), SMIC, YOFC (Moderate), Z AI (Small), Alibaba (Tiny) | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 165 | -0.13 |
| Communication Services | 11 | 0.11 |
| Consumer Discretionary | 28 | -0.67 |
| Consumer Staples | 13 | -0.15 |
| Energy | 6 | 1.31 |
| Financials | 25 | 1.2 |
| Health Care | 16 | -0.28 |
| Industrials | 22 | -2.5 |
| Information Technology | 12 | -1.25 |
| Materials | 14 | -1.47 |
| Real Estate | 7 | 0.69 |
| Utilities | 11 | -0.15 |
| Mainland China Listed | 386 | -3.08 |
| Communication Services | 8 | -3.19 |
| Consumer Discretionary | 26 | -1.13 |
| Consumer Staples | 19 | -0.22 |
| Energy | 12 | 0.4 |
| Financials | 64 | 0.77 |
| Health Care | 31 | -1.34 |
| Industrials | 58 | -2.36 |
| Information Technology | 95 | -7.49 |
| Materials | 52 | -2.41 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | 1.1 |
| Alibaba HK | 9988 HK Equity | -2 |
| JD.com HK | 9618 HK Equity | 1.4 |
| NetEase HK | 9999 HK Equity | 0.3 |
| Yum China HK | 9987 HK Equity | 0.2 |
| Baozun HK | 9991 HK Equity | -0.9 |
| Baidu HK | 9888 HK Equity | -11 |
| Autohome HK | 2518 HK Equity | 0 |
| Bilibili HK | 9626 HK Equity | 0.9 |
| Trip.com HK | 9961 HK Equity | 0.6 |
| EDU HK | 9901 HK Equity | 4.2 |
| Xpeng HK | 9868 HK Equity | -2.8 |
| Weibo HK | 9898 HK Equity | -1.2 |
| Li Auto HK | 2015 HK Equity | 0 |
| Nio Auto HK | 9866 HK Equity | -2.5 |
| Zhihu HK | 2390 HK Equity | -1.9 |
| KE HK | 2423 HK Equity | 1.4 |
| Tencent Music Entertainment HK | 1698 HK Equity | -1 |
| Meituan HK | 3690 HK Equity | 1.8 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| SEMICONDUCTOR MANUFACTURI-H | -3.8 |
| XIAOMI CORP-CLASS B | 4.8 |
| HUA HONG GRACE SEMICONDUCTOR | -11.8 |
| ALIBABA GROUP HOLDING LTD | -2 |
| TENCENT HOLDINGS LTD | 1.1 |
| Z AI CO LTD | -3 |
| YANGTZE OPTICAL FIBRE AND-H | -10.2 |
| LENOVO GROUP LTD | -3.9 |
| KINGBOARD LAMINATES HLDG LTD | -6.4 |
| BAIDU INC-CLASS A | -11 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| VISUAL CHINA GROUP CO LTD-A | -4.6 |
| SHANTUI CONSTRUCTION MACHI-A | 0.1 |
| ZHONGJI INNOLIGHT CO LTD-A | -9.4 |
| GIGADEVICE SEMICONDUCTO-CL A | -7.6 |
| CXMT CORP-A | -2.8 |
| YUSHU TECHNOLOGY CO LTD-A | 460.3 |
| EOPTOLINK TECHNOLOGY INC L-A | -9 |
| SUZHOU TFC OPTICAL COMMUNI-A | -4.8 |
| CAMBRICON TECHNOLOGIES-A | -9.6 |
| BOE TECHNOLOGY GROUP CO LT-A | -7.1 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.74 versus 6.74 yesterday
- CNY per EUR 7.82 versus 7.80 yesterday
- Yield on 10-Year Government Bond 1.68% versus 1.69% yesterday
- Yield on 10-Year China Development Bank Bond 1.75% versus 1.74% yesterday
- Copper Price -0.93%
- Steel Price 0.63%
