**Market Analysis**

Following the conclusion of US-China negotiations, US President Trump on Tuesday extended the TikTok ban execution to December 16th, maintaining a moderate approach with continued negotiations ahead. The Hong Kong government ramped up stimulus measures, and with the Federal Reserve expected to cut rates tomorrow, the Hang Seng Index jumped 1.78% today with gaps up, targeting the next milestone of 27,000 points.

On September 17th, Hong Kong Chief Executive John Lee delivered the 2025 Policy Address at the Legislative Council. In terms of industrial development and innovation, Lee emphasized artificial intelligence (AI), including advancing AI research and talent advantages, strengthening AI funding advantages, enhancing AI data advantages, and expanding AI applications.

Lee announced that the government previously unveiled a HK$3 billion "Frontier Technology Research Support Program" which will accept applications shortly, supporting local funded institutions to attract top international AI researchers to Hong Kong to lead frontier technology basic research. Additionally, the government has reserved HK$1 billion to establish the "Hong Kong AI Research and Development Institute" in 2026, promoting upstream AI R&D, mid-to-downstream achievement transformation, and application scenario development.

The clear direction is high-tech development. Back in the glorious 1990s, if Hong Kong had seized the opportunity to develop semiconductors, it would have soared much earlier. Though late, it's better than never.

SenseTime (00020), selected as a September Zhitong Golden Stock and a rare local high-tech AI enterprise, naturally benefited most, surging nearly 16% today. Core chip stock and September Zhitong Golden Stock SMIC (00981) couldn't be left behind either, rising over 7% today.

The Policy Address also mentioned efforts to shorten Hong Kong stock settlement cycles from T+2 to T+1, which would stimulate more capital to use Stock Connect for Hong Kong stock purchases.

Core technology stocks were widely sought after. According to China Merchants Group's official WeChat, on September 15th, China Merchants Group and Baidu Group (09888) signed a strategic cooperation framework agreement in Shenzhen. Under the agreement, both parties will leverage their respective advantages through close cooperation in technology innovation industries, transportation and logistics, comprehensive finance, real estate and parks, creating a win-win situation. The stock surged over 15% today.

Alibaba (09988) also performed well. Yesterday, official media showed a screenshot comparing Pingtouge chips with H20, demonstrating quite impressive performance. The company also completed issuing approximately $3.2 billion in zero-coupon convertible preferred shares, rising over 5% today.

Meituan (03690), mentioned yesterday for participating in Unitree Technology's B2 round financing of nearly RMB 1 billion before the 2024 Spring Festival, rose another nearly 5% today.

CATL (03750) is also a core favorite among foreign investors. Morgan Stanley came out supporting: CATL's self-developed manufacturing lines have over 25,000 component units, producing 2.2 million battery cells daily, with over 6,800 quality control points, processing 340,000 data points per second, combined with molecular-level materials science to build high barriers. In terms of capacity, current utilization exceeds 90%, with 250GWh new capacity under construction, targeting 1TWh next year. Energy storage business can bring 14 percentage points IRR premium in global markets with huge potential. It rose over 5% today.

China Tobacco International (06055), with its monopolistic tobacco business, also rose nearly 7% today.

High-tech development requires computing power. SinTech Holdings (00412) saw profit-taking yesterday but corrected today. The company announced a stock buyback program of up to $100 million, surging over 17% today. GDS Holdings (09698) also rose over 5%.

Cloud computing stocks also showed strong performance. Kingsoft Cloud (03896) reported Q2 revenue of RMB 2.35 billion, up 24.2% year-over-year; public cloud achieved revenue of RMB 1.63 billion, up 31.7% year-over-year, while industry cloud achieved revenue of RMB 720 million, up 10.1% year-over-year. It rose over 9% today.

Education stocks also performed strongly today. On September 14th evening, Yuhua Education (06169) announced that the school recently received approval from relevant government authorities to conduct profit-oriented private school classification registration. This signal deserves high attention.

Since private education cannot list on A-shares due to its non-profit nature, future registration as enterprise entities with stable profitability could allow quality education enterprises to directly access A-shares through IPO, gaining broader capital market financing channels, facilitating scale expansion, enhancing influence, and increasing operational flexibility.

Other aspects include accelerated scale expansion through mergers, acquisitions, and franchising models. From shareholders' perspective, the removal of non-profit restrictions facilitates listed company dividends, allowing shareholders to receive returns and improving operational enthusiasm.

Short-term, while profit-oriented registration requires completing asset transfers and tax payments, increasing short-term costs, the long-term benefits are substantial, achieving market-oriented asset revaluation. China Education Group (00839) surged over 16% today, Yuhua Education (06169) rose over 10%, and China New Higher Education Group (02001) rose over 6%.

Robotics continues to attract high interest. A-share markets are extensively mining around Unitree, with high-momentum stocks being robotics concepts. In Hong Kong, authentic player UBTECH Robotics (09880) surged over 10% again, while Johnson Electric Holdings (00179) and Sanhua Intelligent Controls (02050) both rose over 5%, all mentioned yesterday.

Aviation stocks mentioned in yesterday's sector focus gained market recognition. Air China (00753), China Eastern Airlines (00670), and China Southern Airlines (01055) all rose over 6%. With the domestic National Day peak season approaching, and China continuously expanding visa-free ranges as the country grows stronger, a prosperous nation will naturally attract many foreign tourists. Trip.com (00780) mentioned in individual stock mining directly benefits, rising nearly 5% today.

At 2 AM Beijing time on September 18th, the Federal Reserve will announce its interest rate decision, with markets widely expecting a 25 basis point cut. A 50 basis point cut would be beyond expectations, inevitably boosting stocks significantly, though this possibility is very low as it would frighten investors and Powell needs to maintain the Fed's final dignity.

Analyzing the 25 basis point scenario, excluding hawkish rate cuts (which would be unseemly given such a small cut), the probability is low. Based on a likely dovish 25 basis point cut, markets might typically be disappointed and vote with their feet, especially since expectations are already fully priced in.

However, considering multiple future rate cuts (the power of dovishness), capital believing rate cuts will stimulate economic recovery momentum will likely dominate. Reality doesn't allow pessimism; only optimistic positioning works. US stocks will likely decline first then rise, potentially rewriting the script.

For domestic impact, today's trend shows the attitude - welcoming rate cuts regardless of magnitude, with upward trends unchanged despite volatility.

**Sector Focus**

Today, the Ministry of Industry and Information Technology publicly sought opinions on the mandatory national standard "Safety Requirements for Intelligent Connected Vehicle Combined Driving Assistance Systems."

This draft establishes safety baselines for intelligent connected vehicle products, requiring systems to activate only under designed operational conditions. For different functions like single-lane, multi-lane, and navigation assistance, it sets comprehensive safety technical requirements including human-machine interaction, functional safety and anticipated functional safety, information security, and data recording, constructing "triple safety guarantees."

This standard's release is significant, directly driving technological iteration and acceleration of advanced autonomous driving deployment. With standards in place, overseas expansion becomes smoother. It also regulates the industry, fills safety standard gaps, reconstructs competitive rules, clarifies responsibility boundaries, resolves systemic industry risks, and provides safety guarantees for consumers with legal basis.

Key stocks: Horizon Robotics (09660), Black Sesame Technologies (02533), RoboSense (02498), Minieye (02431), XPeng Motors-SW (09868); components include Nexteer Automotive (01316) and ZF TRW (01057).

**Individual Stock Spotlight**

**Kuaishou-W (01024): Record Quarterly Net Profit Margin with Steady Commercial Growth**

Recently, Kuaishou e-commerce announced 18 billion traffic subsidies during this Double 11 pre-heating phase, with full-cycle traffic subsidies reaching hundreds of billions.

Kuaishou Q2 2025 achieved operating revenue of RMB 35.046 billion, up 13.1% year-over-year, with adjusted net profit of RMB 5.618 billion, up 20.1% year-over-year, corresponding to a 16.0% profit margin. Kuaishou declared its first special dividend since listing, distributing HK$0.46 per share, totaling approximately HK$2 billion.

**Commentary**: Kuaishou Q2 2025 achieved record quarterly adjusted net profit margin, exceeding market expectations. Q2 2025 Kuaishou traffic grew steadily, with DAU (Daily Active Users) reaching 409 million, up 3.4% year-over-year, hitting historical highs.

Commercial growth remained steady. Q2 2025 Kuaishou online marketing revenue reached RMB 19.8 billion, up 12.8% year-over-year with marginal sequential improvement. Other revenue of RMB 5.237 billion rose 26% year-over-year, exceeding market expectations, with e-commerce GMV achieving RMB 358.9 billion, up 17.6% year-over-year. Monthly average e-commerce buyers reached 134 million with improved repurchase frequency. Shelf e-commerce GMV exceeded 32% of total. Live streaming revenue reached RMB 10 billion, up 8% year-over-year.

Kling technology continued iterating, achieving RMB 250 million revenue in Q2 2025, exceeding expectations. Kuaishou launched Kling 2.1 series models in May 2025, achieving comprehensive improvements in model quality. At WAIC 2025, Kling AI announced immediate beta testing of "Dynamic Canvas 1.0" with "Studio Membership" for professional teams and enterprises launching in Q3 2025.

Kling AI currently has over 45 million creators globally, with over 30 product iterations since launch, generating over 200 million videos and 400 million images, serving over 20,000 enterprise customers through APIs. Commercially, Kling AI's market share continues rising. According to Poe data, on May 4th, 2025, Kling 2.0/1.6/1.5 usage reached 30.7%, ranking first. Kling revenue grows rapidly, with linear projection suggesting annual revenue could exceed RMB 1 billion.