Zhitong Hong Kong Stock Market Unravels | Technology hits a downturn, US tariffs cut, concept stocks strengthen
[Anatomy Dashboard]
I didn't expect today's A-shares to fall like a dog again; they have come to a large number of stops. The Hong Kong stock index has stabilized. The Hang Seng Index is still up 0.54%, but technology stocks are also the hardest hit area.
The tension between the US and Iran continues. The market still thought Trump would do TACO, but this time it became tough. Trump rejected the navigation framework plan previously submitted by Iran through mediation channels and demanded that the Persian Gulf waterways be reopened unconditionally. We'll talk about it later; if we don't get along, we can't rule out trying again. International oil prices rose sharply this morning. Brent crude oil and WTI crude oil both increased by more than 1% during the day. CNPC shares (00857) rose more than 3%. There is an episode: the Iranian president came to the General Assembly and was almost detained by the US. All preparations were made, but they were released at the last minute. I think they are afraid to go ahead and weigh the pros and cons.
The first talks between China and the US have come to a successful conclusion, and 8 agreements have been reached this time. However, there are also differences, showing that competition has not been eliminated; the two sides have agreed to manage risk and not move towards full-scale confrontation. The differences remain at the negotiation table, reducing geographical uncertainty in the global market.
It is undeniable that the game of great powers cannot be bridged by first talks in just a few dimensions. On September 25, four bipartisan US senators proposed a bill to ban the optical modules of Zhongji Xuchuang (03308) and Xinyisheng (300502.SZ) and not allow them to enter the US government's national security system. As a result, Zhongji Xuchuang (03308) fell by more than 12%, and the A-share optical fiber category Hengtong Optoelectronics (600487.SH) planned to raise an additional capital of 6.636 billion yuan, which directly fell to a standstill, and the Hong Kong stock Changfei Optical Fiber (06869) fell by more than 16%. In terms of software, OpenAI revealed that the smart device was out of control and stopped the development of cutting-edge models for the second time in three months. The zero-day vulnerability was revealed just two days after Muse went viral. Sentiment in tech stocks took another hit, and the decline fell flat.
However, there are positive aspects to this meeting. For us, the core is to establish a trade council and other mechanisms, reach a 30 billion US dollar reciprocal tax reduction arrangement, and extend the trade truce for 60 days. According to the US White House, Chinese goods that the US side plans to give more preferential tariff treatment include small household appliances, toys, festival decorations, child car seats, etc., and the market is speculating on these related individual stocks.
Child car seat concept Goodboy International (01086): As the main force in the US market, the acquired local brand Evenflo is a well-known infant brand in North America. The individual brand has an annual revenue of about HK$2 billion. The company focuses on child safety seats, strollers, and children's play products, which just falls on the current US tariff reduction list (child car seat). CYBEX high-end safety seats are also sold in the US, positioning the high-end market. If tariffs are cut this time, Evenflo's gross profit margin will be directly improved. Today it surged more than 24%.
Toy stock Bruker (00325): Building block building toys, mainly IP blocks (IP such as Ultraman and Planet). The total overseas revenue for the first half of 2026 was 366 million yuan, and the US (mostly the US) had revenue of 198 million yuan, +349% over the same period; the US accounts for 54% of overseas revenue, and the US is Bruker's largest single overseas country. In terms of channels, online: Amazon; offline successfully entered the shelves of the two major US mainstream supermarkets, Walmart and Target. These three channels are the core positions of toy retail in the US. Overall, the US business volume is small, but the growth rate is rapid. Export production capacity to the US is basically domestic, and tariff cuts are more flexible. The next catalyst was to confirm participation in the WF2026 Shanghai exhibition to be held from October 3 to 4. A number of major new products will be unveiled for the first time. Today's increase is nearly 7%.
VTech (00303), an early education toy concept: North America is the largest market. The company has two major brands, LeapFrog and VTech, and supplies major US supermarkets such as Walmart and Target. The basic domestic production of products is a direct beneficiary of the proposed tariff reduction list. Today it's up almost 3%.
According to data from the National Energy Administration, by the end of July 2026, the installed capacity of photovoltaic power generation in China reached 1,286 billion kilowatts, surpassing the 1,285 billion kilowatts of coal power, making it the largest power category with installed capacity. This marks the breaking of the long-standing pattern of coal power as the largest power source, the rapid transformation of new energy from supplementary energy to the main installed power, and the accelerated construction of a new power system centered on new energy sources. Relying on the clean power base of photovoltaic manufacturing and energy storage, Zhonghuan New Energy (01735) continuously extends upward to AI data centers and computing power centers at the infrastructure level, building an irreplaceable competitive advantage in the AI industry chain. The differentiated path chosen comes from the “computational and electronic collaboration” concept. For example, special photovoltaic modules for the Huanxi-AIDC artificial intelligence data center were released. The company also launched Huanxi-D for Shagehuang and Huanxi-W modules for surface power plants to form a scenario-based product matrix. At present, a series of component products have entered the North African and South American markets. In the first half of the year, the company achieved revenue of about HK$6.33 billion, up 56.3% year on year; gross profit of about $130 million, up 50.0% year on year. The revenue structure ushered in a qualitative change. As the second growth curve for the AI computing power business, revenue soared to 1,047 billion yuan during the period, accounting for nearly 20%. Today it surged more than 13%.
El Niño concept stocks are also growing, such as chemical fertilizers. The International Nitro Fertilizer Industry Development Summit Forum and Heart to Heart Nitro Product Launch Conference was held in Guangzhou. At the conference, China Heart Link Chemical Fertilizer (01866) and Spain's Sirogra reached a strategic cooperation and launched four series of seven new nitro fertilizer products, officially opening a new era of “activated nitro fertilizer”. It rose more than 7%; other H&H International Holdings (01112), which has a milk powder concept, rose more than 6%, and Dekang Agriculture and Animal Husbandry (02419), which has a pork concept, rose more than 4%.
The performance of car companies is quite poor. The vast majority of individual stocks have not climbed out of the bottom. Under these circumstances, how to get through difficult times together is a big problem, and horizontal cooperation has become an option. The former “marriage” between FAW Group and Guangzhou Automobile (02238) broke through by reducing domestic consumption and improving efficiency. Furthermore, GAC and Huawei have begun a new strategic cooperation in a new environment. Qijing Auto will be equipped with the most advanced intelligent technology from Huawei's Qiankun. Qijing Auto will cover a wide range of models in the next three years, and the 2027 sales target will hit 100,000 vehicles. GAC Group (02238) rose more than 4%.
The latest energy supplementation is becoming the fiercest part of the competition between car companies and battery companies in 2026. On September 28, NIO (09866) and Geely Holding Group (00175) announced that they have officially reached a strategic cooperation in the field of charging and switching. Both parties have cross-shareholding, and interests are bound. According to the agreement, the two sides will jointly establish unified C-side electric exchange technology and standards. Geely Holdings will develop C-side electric exchange models. Its Cao Cao Chuxing large-scale operation fleet and Robotaxi are important grippers, and NIO Energy will provide services for Geely Holdings' C-terminal electric exchange models. Qin Lihong, CEO of NIO, predicts that after the two parties are integrated in the future, the power exchange business for operating vehicles will increase the revenue of individual power exchange stations by 15-20% and reduce operating costs by 40%. Overall, it is a win-win pattern. Judging from market feedback, Geely (00175) has risen even better, by more than 3%, because its driverless fleet benefits more directly, and new models with electricity will also sell better. The operation of NIO (09866) is quite complex, and today it has slightly increased by more than 1%.
The real estate direction is relatively active. The game is about introducing a national mortgage interest rate discount and further downpayment/interest rate reduction policies around the National Day. Local authorities have continued to increase housing purchase subsidies. For example, Guangxi introduced a maximum purchase subsidy of 30,000 yuan for new homes on September 25, etc. The industry itself is the peak season for the traditional property market in September-October, and capital is gambling on marginal improvements in new housing transaction data in core cities to lay out a rebound in the market ahead of schedule. Related individual stocks, China Jinmao (00817), rose more than 6%; other C&D International Group (01908), Greentown China (03900), and China Overseas Hongyang Group (00081) rose more than 4%.
[Section Focus]
Recently, S&P Global released research forecasts that by 2060, global energy demand may increase by more than 60% due to economic development in emerging countries. Among them, Brazil, India, Nigeria, and Indonesia are increasing energy production and imports to meet the needs of their rapidly growing economy. The report also points out that the role of oil and gas in the energy mix will also last longer than many expected. However, in the short term, the continuing turbulence in the Middle East, combined with the upcoming peak winter energy consumption season, may further catalyze the trend of energy stocks.
According to Wind data, as of September 23, the 5,500 kcal thermal coal report for Qinhuangdao Port was 987 yuan/ton, up 85 yuan/ton from the beginning of the month, and is once again approaching the 1,000 yuan mark.
Currently, the low level of old energy is still stable because there is less interference from the outside world, and it is stable and controllable. Coal is a top priority, and the dividends are also very powerful. The main varieties of Hong Kong stocks: Power Development (01277), China Shenhua (01088), China Coal Energy (01898), Yancoal Australia (03668), Shougang Resources (00639), and Yankuang Energy (01171).
[Individual Stock Mining]
Shougang Resources (00639): Steady rise in raw coal production, accelerated rise in coal prices, led to a sharp improvement in gross profit
The company's revenue for the first half of the year was HK$3.24 billion, +54% year over year; net profit to mother was HK$589 million, +46% year over year, reaching 61% of the previously anticipated net profit of HK$967 million for the full year. Gross profit was HK$1,122 million, an increase of 75% over the same period last year, and gross margin increased from 31% to 35%.
Comment: The supply and demand pattern continues to be tight, and the prices of thermal coal and coking coal are rising at the same time. The company operates three coal mines in the core coking coal production area of Liulin, Shanxi, and Xingwu, Jinjiazhuang and Zhaiyadi, with a total approved annual production capacity of 6.3 million tons of raw coal. The company 1H26 achieved 2.79 million tons of raw coking coal production, +6% over the same period, an increase of 150,000 tons; the production of fine coking coal was 1.95 million tons, +27% over the same period; based on the two estimates, the elution rate may increase by more than 10 pcts. The company believes that it mainly benefits from the increase in the production ratio of medium sulfur coking coal and the decrease in the proportion of coal gangue.
The company's 1H26 coking coal achieved an average average price of 1,237 yuan/ton, an increase of 170 yuan/ton over the same period (between +17% and high sulphur coking coal in Liulin). The company's 1H26 coking coal unit production cost was 385 yuan/ton, +17% over the same period, an increase of 57 yuan/ton; the unit processing fee for fine coking coal was 47 yuan/ton, +7% over the same period, an increase of 3 yuan/ton. Considering the increase in the washing out rate, it is estimated that the unit cost of the company's coking coal is -3% compared to the same period, a reduction of 20 yuan/ton. Average prices increased and costs decreased. The company's gross margin after deducting the coal trading business in 1H26 reached 44%, +4.2pct year-on-year.
Against the backdrop of stricter domestic safety regulations, the country's coking coal supply has shrunk markedly. 26H1 national/Shanxi coking coal production fell 4%/7% year on year, respectively, and fell 10%/23% year on year in June. As of August 12, production capacity of 71.9 million tons in Shanxi was still in a state of discontinuation, and production of resumed coal mines decreased by an average of 34% compared to before production was stopped. The contraction in domestic production combined with rising import costs of Mongolian coal is expected to maintain a high level of operation at the H2 coking coal price center.
The company's finances are extremely stable, historically maintaining a high dividend strategy, and outstanding dividend returns. The balance ratio is only 18.63%, almost no interest-bearing debt, and abundant cash flow. 1H26 plans to pay an interim dividend of HK10 cents per share, an increase of 4 HK cents over the previous year, with a payout ratio of 86% (40%/53%/76% for 1H23/1H24/1H25, respectively), continuing the high-ratio dividend strategy, which is highly attractive. After performance fluctuations brought about by the conversion of coal from one group to another in 2025, the company has consistently provided stable returns to shareholders, highlighting the value of dividend allocation.
The company's refined coal production surged 27% in the first half of 2026. The rise in coal prices led to a sharp improvement in gross profit. The three mines gradually reached production, and raw coal production rose steadily.