Zhitong Hong Kong Stock Analysis | Sino-U.S. Talks Land to Welcome Development Period, Strategic Resource Sector Collective Explosion

[Market Dissection]

The morning's performance was relatively normal, with Hong Kong stocks opening higher due to the Federal Reserve's interest rate cut, while A-shares had already reflected this in advance. However, there was a sharp drop in the afternoon, and later Hong Kong stocks recovered quite a bit. The Hang Seng Index closed down 0.24%.

First, let's talk about the interest rate cut. The Federal Reserve's decision to cut by 25 basis points was expected. However, Powell's speech was very hawkish: he specifically emphasized the internal divisions within the Federal Open Market Committee (FOMC) and downplayed the view that a rate cut in six weeks is a foregone conclusion. When discussing bets on a rate cut in December, he stated, "In fact, far from it," citing that the job market is still cooling and there are short-term upward pressures on inflation. It is normal to leave some suspense; otherwise, if it were all set to go down, it would be too undignified to clearly state that a rate cut is coming. At least some independence and dignity of the Federal Reserve should be preserved. However, it is highly likely that there will be another rate cut in December. The U.S. stock market has been reacting nervously, which actually reflects concerns about the upcoming meeting between the Chinese and U.S. leaders.

According to CCTV News, the meeting between the Chinese and U.S. leaders concluded at noon local time on October 30. After this meeting, due to the absence of customary agreements, joint press conferences, and on-site interviews, some believed it did not meet expectations. As a result, some began to sell off in the afternoon. There was even some capital that pushed up rare earth stocks, with JLMAG (06680) rising nearly 6%. The rise of such countermeasures further exacerbated the panic. Gold also moved, with newly listed Zijin Mining International (02259) rising over 8% and Chifeng Jilong Gold Mining (06693) rising over 4%. The rise in gold is seen as a rebound from overselling; otherwise, why didn't A-shares move?

The results of the meeting were officially released after 3 PM: the U.S. canceled the 10% tariff on Chinese goods related to fentanyl, suspended the implementation of the 50% penetrative export control rules for one year, paused the 301 investigation into maritime issues with China, and continued to suspend the 24% tariff for another year. This outcome is quite satisfactory, as the U.S. made concessions. Especially the reduction of the fentanyl tariff by 10% means that the gap compared to other countries is now not significant. As for the core issues like chips and rare earths, everyone has postponed them, at least providing a buffer period without major actions. Considering that Trump will face midterm elections next year, China will continue to play this card, announcing a visit to China in April next year, as some face-saving is still necessary. According to U.S. Treasury Secretary Janet Yellen, the talks went very well. This meeting at least indicates one thing: China has finally become a respected opponent of the U.S., rather than being treated with various arrogance based on power dynamics. This reflects strength and confidence. Supporting this logic, in the CXO sector, apart from the decline of WuXi AppTec (02359) due to share reductions, other companies like Tigermed (03347) and Zai Lab (06127) rose over 7%.

Although the meeting has concluded, the contradictions have not been resolved. According to media reports, the G7 is about to announce the establishment of a critical minerals production alliance, aimed at avoiding being "choked" by us. Aluminum prices have risen to a three-year high, approaching the historical upper range. The demand driven by electric vehicles, solar energy, and data centers has surged, while China's production capacity is nearing the limit of 45 million tons. The current situation is that either aluminum prices will rise and impact the global economy, or the global supply chain will become more reliant on Chinese companies operating overseas Currently, it is probably very difficult for the G7 to engage in mineral resources again, and as for other areas, they can't even manage electricity. Even if they manage to produce it, they will lack competitiveness. Therefore, it is highly likely that they will continue to rely on our production capacity. As a result, China Aluminum (02600) and China Hongqiao (01378) have become strategic varieties, both rising over 8% today. Copper is the same; China Nonferrous Mining (01258), Jiangxi Copper (00358), and Luoyang Molybdenum (03993) have all risen over 5%.

Today, the hottest topic is energy storage. On October 28, the "Suggestions of the Central Committee of the Communist Party of China on Formulating the 15th Five-Year Plan for National Economic and Social Development" was released. The policy document once again provided guidance on carbon reduction targets and the new energy system, proposing to vigorously develop new energy storage. It is expected that total demand for lithium batteries next year will exceed 2,700 GWh, with a year-on-year growth rate of over 30%, among which the demand for energy storage batteries will exceed 900 GWh, and multiple links in lithium batteries may face shortages. The price of lithium carbonate is currently at a low level, and according to the cycle, the price turning point for lithium carbonate may come next year. Performance-wise, this is also being verified; Ganfeng Lithium (01772) reported an operating income of 14.625 billion yuan in the first three quarters, a year-on-year increase of 5.02%; the net profit attributable to shareholders of the listed company was 25.52 million yuan, compared to a loss of 640 million yuan in the same period last year; Tianqi Lithium (09696) turned a profit in the third quarter, earning 95.4855 million yuan; these two varieties rose nearly 15% and over 9%, respectively; other varieties such as Zhongchuang Xinhang (03931) rose over 10%, and Ruipu Lanjun (00666) and Longpan Technology (02465) both rose over 5%.

Photovoltaics also performed well, with the core logic being anti-involution. Recently, there have been rumors of a photovoltaic consortium, and as of September, the effects of anti-involution have begun to show, with significant turnaround and even profitability in the silicon material sector. Additionally, the recent reduction in tariffs has also brought profit expectations for lithium batteries and photovoltaics, with photovoltaic stocks such as Xinte Energy (01799), GCL Technology (03800), and Xinyi Solar (00968) all rising over 4%.

The privatization process is accelerating. Recently, Aneng Logistics (09956) announced that a consortium composed of Dazhang Capital, Temasek, and Danming Capital, in conjunction with Aneng Logistics Group Co., Ltd., intends to propose a cash option of HKD 12.18 per share through an agreement arrangement. Based on equity value, Aneng is valued at approximately HKD 14.3 billion. Today, it rose over 22%, with a price of HKD 11.49, which is quite close.

COSCO Shipping Energy (01138) intends to acquire 100% equity of Shanghai Liquefied Natural Gas Transportation Co., Ltd. Shanghai LNG is a company focused on LNG transportation, with long-term stable project contracts. As one of the world's largest LNG importers, China's LNG transportation demand has long-term growth potential. The acquisition will directly enhance valuation, and today it rose over 12%.

Last time, I mentioned that newly listed stocks are performing well, especially Dipu Technology (01384), which had an oversubscription of 7,500 times in this IPO, setting a new record for oversubscription of newly listed stocks on the Hong Kong main board, with an amount exceeding HKD 270 billion, becoming the oversubscription king in the 18C special technology field for Hong Kong stocks this year. According to existing information, the company ranks fifth in the market for enterprise-level large model AI application solutions in China in 2024, with its two core solutions, FastData for enterprise-level data intelligence and FastAGI for enterprise-level artificial intelligence, deeply empowering consumer retail In multiple fields such as manufacturing, healthcare, and transportation, large-scale implementation has been achieved, with revenue reaching 73.07 million yuan in the first half of 2025, a year-on-year increase of 191%, accounting for 55.3% of total revenue. With performance and themes, funds continue to chase, surging nearly 48%.

According to market news, global artificial intelligence leader OpenAI is preparing for its initial public offering (IPO), which could value the company at up to $1 trillion. This is expected to create the largest IPO in history. Industry insiders say that OpenAI is considering submitting its listing application to securities regulators as early as the second half of 2026, with preliminary discussions indicating a financing scale of at least $60 billion. This news is expected to reignite competition in the AI sector. Meanwhile, NVIDIA's market value has surpassed $5 trillion, and Chinese companies need to step up.

【Sector Focus】

Recently, the Ministry of Industry and Information Technology publicly solicited opinions on the "Implementation Measures for Capacity Replacement in the Steel Industry (Draft for Comments)." The draft points out that new construction and expansion of steel smelting projects are prohibited outside compliant parks in the Yangtze River Economic Belt region. In key areas, the total amount of new steel capacity is strictly prohibited, and the transfer of steel capacity from non-key areas to key areas is also prohibited, as well as the transfer of steel capacity between different key areas. Provinces and cities with clear national steel capacity control targets are not allowed to accept steel capacity transferred from other regions.

On October 30, the "Action Plan for Upgrading and Improving the Steel Industry in Henan Province" was issued. It mentioned accelerating the restructuring and integration of enterprises. It supports advantageous enterprises inside and outside the province to integrate local steel resources through methods such as increasing capital and shareholding, cross-shareholding, and mixed ownership reform. Under the continuous trend of reducing supply, the steel industry's supply and demand are expected to return to a balanced state, thereby stabilizing steel prices and improving corporate profitability.

Main varieties: Maanshan Iron & Steel Co., Ltd. (00323), Ansteel Company Limited (00347), Chongqing Iron & Steel Company Limited (01053).

【Stock Picking】

Goldwind Technology (02208): Q3 Performance Exceeds Expectations with Strong Order Growth

On October 20, the Beijing International Wind Energy Conference released the "Wind Energy Beijing Declaration 2.0," proposing that the annual new installed capacity during the 14th Five-Year Plan period should not be less than 120GW, with offshore wind power not less than 15GW; by 2030, the cumulative installed capacity should reach 1300GW. The company's revenue for the first three quarters of 2025 was approximately 48.147 billion yuan, a year-on-year increase of 34.34%; the net profit attributable to shareholders of the listed company was approximately 2.584 billion yuan, a year-on-year increase of 44.21%.

Comment: During the 14th Five-Year Plan period, the annual average installed capacity of wind power is expected to double. The company's profitability is continuously improving. Q3 performance exceeded expectations, with revenue of 19.61 billion yuan, a quarter-on-quarter increase of 2.9%, and a year-on-year increase of 25.4%; net profit attributable to the parent company was 1.1 billion yuan, a quarter-on-quarter increase of 19.3%, and a significant year-on-year increase of 170.6%. Order growth is strong. As of the end of Q3 2025, the company's orders on hand reached 52.5 gigawatts, of which external orders were 50 gigawatts, a year-on-year increase of 21%. Notably, the overseas market performed well, with overseas orders on hand reaching 7.2 gigawatts, a year-on-year increase of 29%. This strong order growth not only reflects the company's market competitiveness but also provides assurance for sustained future performance growth In addition, the company's wind turbine shipments reached 18.4 gigawatts in the first three quarters of 2025, with 7.8 gigawatts shipped in the third quarter. Although this represents a slight decrease of 3% quarter-on-quarter, it shows a year-on-year growth of 70%, demonstrating the company's leading position in the industry. The company's installed capacity has achieved significant growth in regions such as Asia (excluding China), South America, Oceania, North America, and Africa, further consolidating its global market position. With the acceleration of the global energy transition, wind power, as an important component of clean energy, continues to see growing market demand. As a leading enterprise in the industry, Goldwind Technology's layout in high-power wind turbines and overseas markets lays a foundation for future growth and is expected to benefit from the medium to long-term development of the industry