Zhitong Hong Kong Stock Exchange Unravels | Global Food Price Inflation Has Resurfaced, Yushu Technology's listing robot creates momentum

[Anatomy Dashboard]

The periphery is still unstable, and it is time to test resilience. Fortunately, both markets have borne the pressure. Hong Kong stocks rose slightly by 0.07% today.

On August 17, the 60-day negotiation window set out in the US-Iran Memorandum of Understanding expired. When asked if the US plans to extend the memorandum of understanding with Iran, Trump gave a negative answer. The midterm elections are already very close. Trump's latest poll shows that the approval rating has dropped to 33%, a new low during his second term. The Iran issue is now a hot potato. Without any other solution, Trump can only continue to be tough: not in a hurry to end the war with Iran, and if Oman blocks negotiations, it will “bomb it hard.” Iran, on the other hand, maintained a tough stance and warned of a full-scale attack. Iran continues to increase its control over the Strait of Hormuz, and a fuel carrier stopped after repeatedly making a U-turn. The logic of shipping continues to strengthen, and Dexiang Shipping (02510) continued to increase by more than 5%; Dongfang Overseas International (00316) and Haifeng International (01308) rose more than 2%.

Although US memory chip stocks and optical communication stocks are still rising against the market, the memory chip stock SanDisk closed up nearly 9%, Coherent closed up nearly 8%, Lumentum rose 4.6%, and the chip index rebounded 1.6%. It looks like they are returning to the bull market, but the domestic market is no longer keeping up because the next issue is not encouraging.

The apparent prosperity was based on debt. AI infrastructure spawned a record wave of debt issuance, and US investment-grade bonds broke the record again during the year. As of August 17, US investment-grade bonds reached 145.2 billion US dollars in August, a record high for the same month of the previous year; furthermore, so far this year, the six-month debt issuance scale was the highest or second highest in the same month of the previous year.

There is an even bigger problem. The US Treasury Department: China and Japan took the lead in selling US treasury bonds overseas in June. The three major “creditors” of China, Japan, and the UK all cut their holdings, and China's debt holdings hit a new low since 2008. As US bonds, Japanese bonds, British bonds, and German bonds have recently plummeted, and yields have soared to the highest levels in years and even decades, causing widespread concern. Robin J Brooks, a senior Brookings Institution researcher, said in the latest report that there is no intuitive way in the world to predict when a country will break out of debt; yet, as shown in the past week, market pressure is clearly building up rapidly.

With the food crisis resurfacing, Komo recently released the latest report predicting that the global food price inflation rate will rise from 2.8% in the first half of this year to 5% in the first half of next year. The reason is that traffic through the Strait of Hormuz was blocked due to the war in the Middle East. Coupled with strong El Niño, a combination of factors will impact agricultural production, causing food prices to remain high in the first half of 2027. The report predicts that the food price inflation rate will reach 5% in the first half of 2027, driving up the overall inflation rate by 0.6 percentage points. In October, rice fields (09676) surged by more than 14%; Modern Animal Husbandry (01117) rose 6.69% to HK$1.515; Excellent Animal Husbandry (09858) rose more than 5%, and Dekang Agriculture and Animal Husbandry (02419) rose more than 3%.

Yushu Technology will be listed on the Science and Technology Innovation Board of the Shanghai Stock Exchange on August 19. Related robot concepts continue to gain momentum. Yesterday, some varieties were gaining momentum, and today there was another batch. The superstar legend (06683), which has a cooperative relationship with Yu Shu, has a sharp rise in capital at the end of the market. The hype is that the joint venture “Star Entertainment” with both parties each holding 50% of the shares to develop a consumer-grade IP robot is estimated to make full use of IP “Classmate Zhou” to achieve a win-win situation. However, if consumer-grade robots don't solve the brain problem, it's not much different from ordinary toys. Today it surged nearly 35%.

Other robot concept stocks are moving. Eston (02715) rose more than 8%, T-chain Sanhua Intelligent Control (02050) rose more than 5%, and the harmonic reducer Laifu Harmonic (03952) rose more than 2%.

According to statistics from the China Construction Machinery Industry Association, in July 2026, excavator sales were 19,521 units, up 13.9% year on year; of these, 1,1913 units were exported, up 21.2% year on year, accounting for a record high of about 61%; loader sales were 11,774 units, up 30.8% year on year. This high loader growth rate directly benefits China Longgong (03339): The company's core strength is loaders, which have a stable market share in the first tier, and the competitive pattern for overseas loaders is much friendlier than excavators. The company's overseas layout is early, and the channels in Southeast Asia, Central Asia, the Middle East and Latin America are relatively complete; loaders are highly standardized products, making it easy to go overseas. As Zhitong's August gold stock, today it surged more than 11%. Sany International (00631): Yesterday, the first batch of SKT110ei pure electric driverless mining cards was sent to South America. This is the first time that driverless technology for Chinese mines has landed in the Latin American market, and overseas sales revenue grew rapidly in the first quarter. Today's increase is over 9%.

Kingsley (01548) is once again leading innovative drugs. The core highlights are that its AIDD business doubled year-on-year, orders from AI pharmaceutical companies exploded; and the volume of integrated gene-protein platforms. Today, it once again rose by more than 8%; the Pharmaceutical Group once again led CXO. Pharmaceutical Federation (02268): The BCM3 facility at the company's Singapore base successfully achieved GMP release, marking a new stage in the expansion of its global production capacity. Today, it has risen by more than 7%; Pharmacovigilance (02269) was selected on the best practices list of leading global companies in sustainable biomedicine. The list brings together leading global pharmaceutical companies such as MSD, Eli Lilly, Johnson & Johnson, AstraZeneca, Takeda Pharmaceuticals, GlaxoSmithKline, and Bayer. It can be seen that the volume is not light, up more than 5%. Kanglong Chemical (03759) officially announced its results on August 21. The previous forecast was that net profit for the first half of the year is expected to increase by 4% to 10% year-on-year, up nearly 6% today. Gloria Ying (06821) will also perform on August 25, up 5% today.

The internet giants seem very lonely in this wave of AI; they can only try hard to catch up with them in the back. Alibaba (09988) is subtracting. It used to be a frenzied takeover, but now it is shifting to contraction. Recently, Zhou Bingshu, CEO of Lingxi Mutual Entertainment, announced in an internal letter that Alibaba will sell its shares in Lingxi Mutual Entertainment, and Xinchen Capital will become the new shareholder. According to industry news, the price of this transaction is over 1.5 billion US dollars, which is equivalent to more than 10 billion yuan. AI is too expensive. As early as the beginning of last year, Ali CEO Wu Yongming announced that in the next three years, Ali will invest more than 380 billion yuan. This recovery is to reserve “ammunition” for AI. Today's increase is 3.68%.

On the other side, on August 18, Tencent Cloud, a subsidiary of Tencent Holdings (00700), announced that it will launch services in Johor, Malaysia. The first phase of the plan is to set up three availability zones. This is the first time Tencent Cloud has launched a service in Malaysia. After the launch of the service, Johor will become an important node for Tencent Cloud in Southeast Asia. Local companies can deploy AI-related services nearby to meet the rapidly growing demand for AI smart applications in the region. The Tencent Cloud Data Lake Computing DLC broke two world records for TPC-DS100TB performance and cost performance. The overall performance score reached 654 million, nearly 10 times the previous record; the unit performance cost was reduced to 11.04 yuan, which is only about one-sixth of the previous record. The competition between giants continues.

[Section Focus]

According to media reports, China is speeding up the reduction of its dependence on US technology, and has requested some state-owned institutions to uninstall Microsoft's customized Windows 10 operating system. This move brought forward the scheduled decommissioning of this operating system by several months, reflecting China's growing concern over the use of foreign software in sensitive government systems.

This version of Windows 10 was developed by China Internet Communications (CMIT). It is a joint venture between Microsoft and the state-owned enterprise China Telecom. It was founded in 2016 to transform Windows to meet China's cybersecurity and national security requirements. Shenzhou Netcom originally planned to stop supporting the software in February 2027, and the new instructions brought the timing forward even further.

This news has not been confirmed, but from a safety point of view it is sooner or later. Favourable domestic software alternatives: Jinshan Software (03888), China Software International (00354).

[Individual Stock Mining]

Nexteer (01316): The Thai factory successfully launched 20000 CEPS and follow-up order catalysts are worth looking forward to

On July 31, Nexteer's Thai plant reached a key production milestone. Factory employees gathered at the site to witness the successful launch of 20,000 cylindrical electric power steering systems (CEPS). From commissioning to mass production, 20,000 CEPS products were launched in just three months, verifying the base's efficient production delivery capacity and mature quality control system.

Comment: Currently, the electrification and intelligent transformation of Southeast Asian automobiles is accelerating, and market demand continues to be released. The successful closure of the Thai factory means that the company's expansion in Southeast Asia has achieved phased results. Using this as radiation, the globalization process is directly accelerated. The company achieved revenue of US$2,242 billion in the first half of the year, up 3.9% year on year; net profit to mother was US$86 million, up 35.2% year on year. Free cash flow of US$109 million was achieved, a significant increase from US$37 million in the same period last year.

The company has formed a complete wire-controlled product matrix for wire-controlled steering, rear-wheel steering, EMB, and MotionIQ software packages. As industry intelligence and advanced autonomous driving accelerate penetration, and high value-added products with wire-controlled chassis enter the release cycle, it is expected that 2026E wire-controlled steering will begin to gradually expand.

Follow-up highlights: In the first half of 2026, two new wire-controlled switching projects entered mass production. For example, the Krypton 9x and other models supplied by the company are in the release cycle; 1 L4 Robotaxi wire-controlled steering project in North America has already been mass-produced (2 customers are in the development stage); 4 projects have been targeted yet to be mass-produced (1 customer is in the development stage), and 1 wire control project in Europe has not been mass-produced. According to management, orders for the full year of this year are expected to reach 6 billion US dollars (about 4.9 billion US dollars in 2025).