Headline Policy for Chip and Machine Tool Companies

Four Chinese government departments have jointly released a corporate income tax policy regarding non-monetary asset exchanges for integrated circuit firms and industrial machine tool enterprises. Between January 1, 2026, and December 31, 2028, these companies can evenly spread the recognized gains from such exchanges over a period of up to five years for tax calculation purposes. However, any losses incurred from these exchanges cannot be recognized in installments. This policy impacts the Hong Kong-listed semiconductor sector.

Friday's US Market Wrap

US stocks ended mixed on Friday. The Dow Jones Industrial Average fell 107.58 points, or 0.2%, to close at 53,732.41, declining 0.56% for the week. The S&P 500 dropped 13.23 points, or 0.17%, to 7,785.76, but posted a weekly gain of 0.36%. The Nasdaq Composite lost 73.87 points, or 0.28%, to 26,729.16, ending the week up 0.14%. In the storage sector, SanDisk surged over 7%, Seagate Technology added more than 5%, Western Digital gained over 4%, and Micron Technology rose more than 2%. Semiconductor equipment stocks weakened, with Applied Materials falling over 5% and KLA Corp dropping more than 2%. Optical communication stocks advanced, with Applied Optoelectronics jumping over 15%, Corning rising more than 4%, and Lumentum adding over 5%. The Nasdaq Golden Dragon China Index closed 0.61% higher. Hong Kong's Hang Seng Index ADR rose, closing at 25,286.22 on a pro-rata basis, up 169.37 points or 0.67% from its Hong Kong close. WTI crude oil futures for the front-month contract gained $1.15 to settle at $82.40 per barrel, a 1.42% increase. COMEX gold futures for the front-month contract rose $11.60, or 0.26%, to close at $4,432.00 per ounce.

Key Themes to Watch

Trump: Will Declare Strait of Hormuz US Territory After Defeating Iran

US President Donald Trump claimed on April 14 that after "defeating Iran," he would soon "declare the Strait of Hormuz as US territory." Speaking at an event in Long Island, New York, Trump stated that Iran is suffering a severe defeat. He laughed lightly as he made the remark, adding, "This is true."

Anthropic's Q2 Revenue Surpasses $115 Billion

Global AI giant Anthropic reported Q2 revenue exceeding $115 billion, a year-over-year increase of 1,361%. More critically, the company's adjusted operating profit turned positive in the quarter, signaling a new phase in its commercialization. Anthropic is now actively preparing for an IPO, which could potentially set a record for the largest IPO in global history. This news affects the Hong Kong-listed domestic large model sector.

Alibaba (09988) Announces Open Source of Qwen3.8; Global Downloads Exceed 3 Billion

Alibaba (09988) announced on August 14 that it has officially open-sourced the Qwen3.8 series of models. All developers, research institutions, and enterprises can freely download, deploy, and use them. The newly open-sourced Qwen3.8-27B, a native multimodal dense model with only 27 billion parameters, has surpassed the overall capability of Qwen3.7-Plus.

Guangdong's First 'Token Loan' Financial Product Launched in Guangzhou Haizhu

On August 14, the first specialized financial product for the token economy in Guangdong province, the "Token Loan" (Token贷), was launched in Guangzhou's Haizhu district. For example, Bank of China's Guangzhou branch has developed a specific financing product for small and medium-sized computing power enterprises in Haizhu, called the "Computing Power Token Loan." It determines credit limits based on contract or token consumption amounts and can provide credit, accounts receivable pledge, and order financing as primary guarantee methods, with the option to combine guarantees or mortgages to expand the credit line. This impacts Hong Kong-listed IDC companies involved in computing power leasing, including Yuegangwan Smart Computing (01396).

Jinchuan Group International (02362) Reports Interim Results; Net Profit Soars 766.07%

Jinchuan Group International (02362) released its 2026 interim results. The group achieved revenue of $460 million, up 152.35% year-over-year. Profit attributable to shareholders was $47.816 million, a surge of 766.07%. Basic earnings per share were 0.36 US cents. The group's gross profit increased by $129 million from $38.5 million in the first half of 2025 to $167.5 million in the first half of 2026. This was primarily due to higher market copper prices, increased capacity from the Musonoi mine after its commissioning, and higher overall sales volume leading to increased copper product revenue. This was partially offset by higher mining and smelting costs, as well as increased depreciation and amortization related to the Musonoi mine.

Longfor Group (00960) Issues Interim Profit Alert; Expects Net Profit of RMB 1.8-2.0 Billion

According to its announcement, Longfor Group (00960) expects its net profit attributable to shareholders for the first half of 2026 to be between RMB 1.8 billion and RMB 2.0 billion. After excluding the impact of fair value changes in investment properties and other derivative financial instruments, core equity profit is expected to be between RMB 50 million and RMB 100 million.

Sands China Ltd (01928) Reports 2026 Interim Results; Net Profit Down 3.6%

Sands China Ltd (01928) reported its results for the six months ended June 30, 2026. Net revenue was $3.879 billion, up 11.1% year-over-year. Net profit was $398 million, a decrease of 3.6% from the same period last year. Basic earnings per share were 4.92 US cents. An interim dividend of HK$0.50 per share was declared. The increase in total net revenue was mainly due to higher casino revenue.

MINISO Group (09896) Expects Interim Profit of Approximately RMB 940-960 Million

MINISO Group (09896) expects its interim profit to be approximately RMB 940 million to RMB 960 million, an increase of about 4% to 6% year-over-year. The increase in operating profit for the first half was primarily due to a fair value change on an investment in a limited partnership engaged in the AI industry, generating an unrealized mark-to-market gain of approximately RMB 277 million. This was partially offset by (i) higher selling and distribution expenses, and (ii) net exchange losses of approximately RMB 142 million.

Shanghai Fudan-Zhangjiang Bio-Pharmaceutical (01349) Reports Interim Results; Net Profit Jumps 545.58%

Shanghai Fudan-Zhangjiang Bio-Pharmaceutical (01349) reported its results for the six months ended June 30, 2026. The group achieved revenue of RMB 372 million, a decrease of 4.58% year-over-year. Profit attributable to shareholders was RMB 36.895 million, a surge of 545.58%. Earnings per share were RMB 0.0355. The group's net profit margin was 10% in the period, compared to 1% in the same period in 2025. The increase in net profit margin was mainly due to a decrease of approximately RMB 44 million in research and development expenses compared to the same period last year.

SenseTime Group (00020) Issues Profit Alert; Expects Interim Profit of RMB 500-700 Million, Reversing Loss

SenseTime Group (00020) issued a profit alert, expecting an interim profit of approximately RMB 500 million to RMB 700 million, marking a return to profitability. This would be the first consolidated profit for the company since its listing on the Hong Kong Stock Exchange. The expected change in profit under IFRS for the first half of 2026 is mainly due to: (i) reduced losses from the group's core business segments compared to the first half of 2025, and (ii) gains from fair value changes in investments in AI ecosystem enterprises that the group has strategically built over the years.

CALB Group (03931) Issues Profit Alert; Expects H1 Net Profit to Rise 100%-110%

CALB Group (03931) issued a profit alert, expecting a net profit of approximately RMB 1.506 billion to RMB 1.581 billion for the first half of the year, an increase of approximately 100% to 110% year-over-year. The group's net profit last year was approximately RMB 753 million. The board attributes the increase to the expansion of new customers, new application scenarios, and the continued volume growth of new products in the passenger car, commercial vehicle, and energy storage sectors, leading to sustained business scale growth.

Zijin Gold International (02259) Reports Interim Results; Net Profit Surges 178.83%

Zijin Gold International (02259) reported its interim results, with a net profit attributable to shareholders of $1.451 billion, an increase of 178.83% year-over-year. An interim dividend of HK$1.50 per share was declared. In terms of mine operations, the group produced approximately 27.3 tonnes of mined gold in the first half of 2026. Mined gold from controlled mines was approximately 26.0 tonnes, a year-over-year increase of about 37%. Gold sales volume was approximately 26.1 tonnes, with an average selling price of approximately $4,643 per ounce. Mature assets operated stably, with the Buriticá, Rosebel, Left Bank, and Aurora gold mines all achieving year-over-year production increases. The Akim mine in Ghana and the Rygold mine in Kazakhstan, acquired in April and October 2025 respectively, have been fully integrated into the group's operational system, becoming key drivers of production and profit growth.

Genscript Biotech (01548) Reports Interim Results; Net Loss Narrows 29.25%

Genscript Biotech (01548) reported its interim results, with a net loss attributable to shareholders of $129 million, narrowing by 29.25% year-over-year. The increase in revenue was primarily due to: (i) sustained rising demand from AI-driven drug discovery and antibody discovery, accelerating the "gene-to-protein" business; (ii) strong demand recovery in the upstream CRDMO industry, leading to increased project intake and improved capacity utilization; and (iii) continued expansion of the industrial enzyme business, contributing to stable sales growth in the reporting period.

Stock Spotlight: Putian Communication Group (01720) Issues Profit Alert; Expects Interim Net Profit to Surge 410%-480%

Putian Communication Group (01720) announced that it expects to record a profit attributable to shareholders of approximately RMB 40 million to RMB 45 million for the six months ended June 30, 2026. This represents a 410% to 480% increase compared to the profit of RMB 7.8 million attributable to shareholders in the same period of 2025. The expected increase in profit is primarily attributable to higher sales revenue from optical fibers and cables. Benefiting from the accelerated global deployment of AI computing infrastructure, surging demand for optical fibers and cables in both domestic and international markets has driven the company's significant performance growth.