The Hong Kong market saw a downturn today, with the Hang Seng Index falling 0.83%, as a surge in technology stocks often correlates with a broader market decline. The unexpected catalyst came from Singapore's sovereign wealth fund Temasek, which announced plans to make its first direct investment in the Korean stock market, targeting Samsung Electronics and SK Hynix. Temasek views these global memory chip giants as significantly undervalued assets within the AI value chain. This news directly propelled the Korean stock market to expand gains by 5%, with Samsung Electronics and SK Hynix both rallying over 8%. The Hong Kong-listed two-times leveraged Samsung Electronics ETF surged more than 14%. Memory chip concept stocks followed suit, with MONTAGE TECH (06809) rising over 7% and GIGADEVICE (03986) gaining more than 5%.

US-listed stocks in the optical communications sector also provided a boost. Lumentum (LITE.US) reported its fiscal fourth-quarter 2026 earnings after the close on August 11, significantly exceeding market expectations. Net revenue surged 109% year-over-year to $1.01 billion, with non-GAAP adjusted earnings per share soaring 267% to $3.23 and non-GAAP net profit increasing 415%. Its guidance for the first quarter of fiscal 2027 also notably surpassed consensus estimates, with the midpoint of revenue guidance over 8% above market expectations and adjusted EPS guidance midpoint over 16% higher. This drove related Chinese counterparts higher, with shares of a local optical module maker rising nearly 9% and another gaining nearly 7%. MINIMAX (00100), a constituent of the Zhitong August gold stock portfolio, will be included in the Hong Kong Exchange Tech 100 Index and the Hong Kong Exchange Tech & US Tech 100 Index after market close on August 12, effective August 13. The stock surged nearly 9% today. Other potential candidates for the new Hang Seng Tech Index, as highlighted in yesterday's sector focus, also performed well, with PCB-related stocks YUEXIU PROPERTY (00123) and LONGFOR GROUP (00960) rising nearly 5% and 11%, respectively. XINTE ENERGY (01799) plans to hold a board meeting on August 13 to approve second-quarter financial results, with its shares gaining over 7% today.

Domestic stimulus also emerged. The Shanghai Municipal Economic and Information Technology Commission issued the "15th Five-Year Plan for Shanghai's Software and Information Services Industry Development" on August 11, explicitly proposing a "Hundred-Thousand-Ten Thousand" intelligent computing cluster project. This involves deploying 100,000-card-level ultra-large-scale intelligent computing clusters in areas such as Songjiang, Lingang, and Qingpu. Alibaba Cloud's Lingjun Zhenwu M890 super node instance was officially launched, with initial sales in the Ulanqab region. This super node is the first in China to successfully run large models with over 2 trillion parameters. Alibaba Cloud stated it plans to more than double its global production capacity for modular data centers, with related super node instances to be launched in other regions. This news is not directly positive for Alibaba (BABA.US) as it represents an investment phase, but beneficiaries include IDC service partner GCL TECH (03800), which rose over 5%, and MONTAGE TECH (06809), a core supplier of cabling for Alibaba Cloud's intelligent computing centers, which gained nearly 7%. YUEXIU PROPERTY (00123) also rose nearly 5% following progress in overseas expansion, as it jointly built Pakistan's largest integrated general-purpose and intelligent computing data center with local cloud service provider Sky47.

In the AI application sector, a strong performance from a company in the digital publishing space boosted sentiment. Its first-half revenue increased 10.7% year-over-year, with revenue from short dramas and AI comic series reaching 430 million yuan, more than triple the figure from the same period last year. The proportion of hit short dramas was four times the market average, and 46 AI comic series exceeded 100 million views, with 367 surpassing 10 million views. The expanding influence of its intellectual property also drove stable growth in its IP derivative business, with gross merchandise value reaching a new high of 780 million yuan, up 60% year-over-year. This drove IP licensing revenue up 41.9% to 1.61 billion yuan, with the stock surging over 10% today.

The property sector saw a significant catalyst with the release of the "15th Five-Year Plan for Urban Renewal." This plan outlines 23 key tasks and 10 quantitative indicators, including the renovation of 115,000 old urban residential communities, the renewal of approximately 500,000 units of dilapidated urban housing, the renovation of 1,500 old neighborhoods and industrial zones, and the advancement of 4,000 urban village redevelopment projects. The total investment is estimated at 15 trillion yuan, funded through a diversified model of "government guidance, market operation, and public participation." This directly creates new business opportunities for the real estate industry, primarily focusing on existing stock. If the existing stock market is revitalized, it could gradually alleviate pressure on the new supply side. Key areas to watch are the implementation of policies, especially the availability of funds. YUEXIU PROPERTY (00123), a leader in urban village redevelopment, surged nearly 10%. LONGFOR GROUP (00960), which completed the repayment of approximately 1.029 billion yuan in principal and interest for its "21 Longfor 06" bond, clearing all onshore bonds due by 2026, rose nearly 9%. A major developer's large-scale integrated development project also saw strong market reception, with its first batch of units selling well, driving its shares up nearly 7%.

JP Morgan (JPM.US) forecasts a recovery in polysilicon prices, potentially rebounding to 50-55 yuan per kilogram, roughly equivalent to the full cost of marginal producers plus 13% value-added tax. This suggests previous industry talks may yield results, with GCL TECH (03800) rising over 6% and XINTE ENERGY (01799) gaining nearly 5%.

The Federal Reserve's continued reluctance to provide clear forward guidance leaves the market focused on inflation data. The US July CPI data, due at 8:30 PM Beijing time tonight, is expected to show a 0.1% month-over-month increase (vs -0.4% previously) and a year-over-year decline to 3.4% (vs 3.5% previously), marking a second consecutive month of cooling. Core CPI is expected to rise 0.2% month-over-month (vs 0.0% previously) and 2.5% year-over-year (vs 2.6% previously). While overall CPI remains significantly above the Fed's 2% target, two consecutive months of slowing year-over-year growth could provide the FOMC some time before making a decision on interest rates.

Key sector to watch: Aluminium

Emirates Global Aluminium (EGA) plans to resume production early next year following a March attack in Iran that shut down its major smelter. This could help alleviate pressure on the aluminium market, which has seen prices surge due to supply shortages. EGA is investing $400 million in repairs, aiming to restore production to pre-war levels by the first quarter of next year, and is working to accelerate this timeline. This would boost aluminium supply in the region, which accounted for about 10% of global production before the conflict. The Middle East's largest aluminium producer stated that even after production resumes, future shipments will depend on the reopening of the Strait of Hormuz. Separately, Norsk Hydro announced it has reduced alumina production to 50% of capacity at its Alunorte plant in Brazil due to "natural gas supply" issues. Alunorte has a designed annual capacity of 6.3 million tonnes and is considered the largest alumina refinery outside of China. Alumina is a key raw material for aluminium smelters. These developments signal a global spread of aluminium supply shortages, making a price increase highly probable. Related Hong Kong-listed stocks include: GCL TECH (03800), XINTE ENERGY (01799), YUEXIU PROPERTY (00123), and LONGFOR GROUP (00960).

Stock spotlight: JD Industrial (07618)

JD Industrial is actively promoting its "Embodied Intelligence Chain" layout and expanding its overseas business, opening a second growth curve. At the recent ESCC Embodied Intelligent Supply Chain Ecosystem Conference, themed "Smart Chain Future, Win-Win Together," JD Industrial's executives showcased its "Embodied Intelligence Chain" layout, integrating the seven stages of "procurement, storage, labeling, training, evaluation, simulation, and testing." The company is scheduled to release its interim results on Thursday. The company is driving its "Embodied Intelligence Chain" initiative through scale and standardization, aiming to enhance efficiency and create new growth drivers. JD Industrial's profit growth is significantly outpacing its revenue, demonstrating strong profitability. As the absolute leader in China's MRO industrial supplies procurement market, it is the largest industrial supply chain service provider, leveraging JD.com's nationwide warehousing network to achieve same-day/next-day delivery for industrial products across the country. Its technological moat is a generation ahead. The JoyIndustrial-2.0 industrial supply chain large model is fully deployed, equipped with 27 AI agents, improving material standardization efficiency tenfold and reducing labor costs by 80%. AI procurement orders in the robotics manufacturing sector are experiencing explosive growth. The global supply chain's intelligent scheduling automatically allocates orders to domestic consolidation warehouses, overseas preparation warehouses, and local spot warehouses, reducing overseas procurement costs by 18%-30% and improving procurement efficiency by over 30%. This case has been selected as a World Economic Forum AI benchmark case. Its core product, the Taipu Digital Integrated Supply Chain System, is a one-stop solution for digitalizing enterprise procurement, sourcing, compliance control, supplier management, warehousing, and auditing. It can help enterprises reduce procurement costs by 5%-30% and compress the procurement cycle from 21 days to 7 days, becoming the standard procurement system for central state-owned enterprises and new energy vehicle manufacturers. New energy orders are scaling rapidly, assisting car companies in the domestic substitution of imported cutting tools and precision parts. The company is expanding its overseas supply chain, securing long-term general contracting orders from central energy enterprises. Key contracts include: 1) China Coal Energy: Full-group digital supply chain and AI large model procurement framework agreement. 2) Shandong Energy Group: Full-chain procurement services for 461 projects nationwide. 3) PowerChina: Domestic and overseas infrastructure supply chain general contracting and accompanying overseas services. 4) China Resources Gas, State Grid, China Construction, and CRRC: Annual centralized procurement frameworks. 5) BYD, Changan, Dongfeng, Geely, and CATL: MRO general contracting procurement for their entire overseas factories in Southeast Asia, Brazil, and Hungary. It has secured a multi-million-yuan cable cross-border order from Malaysia and is servicing the supply chain for CATL's second-phase factory construction in Malaysia. The company's key accounts for 2026 total 13,300, all long-term annual framework orders. New customers in the robotics, new energy, and energy storage sectors are being added in bulk. The number of small and medium-sized manufacturing enterprise customers has exceeded 2.6 million, with platform transaction volume surging. The company is continuously gaining market share: its AI supply chain technology services are opening up high-margin space, and its overseas business is launching a second growth curve.