Rate cut expectations have been settled and the global markets have breathed a collective sigh of relief. US stocks rebounded overnight, which helped the Hong Kong market open with a gap up, although it softened slightly near the close, ending the session up 0.60%. The fundamental driver behind this rebound is that the market is once again betting on the "Trump TACO trade" - Trump has indicated he will meet with Middle East leaders next week, and he believes the seven-month conflict could end soon. Whether a ceasefire happens immediately or not, the market is content with having expectations, and that's enough to drive stocks higher.
On September 18, Chinese Foreign Ministry spokesperson Guo Jiakun stated that "China and the US maintain communication regarding head-of-state interaction arrangements within the year." While there is still no confirmed news of a Sino-US summit, the possibility of a meeting hasn't been ruled out, and communication channels remain smooth. Given that Trump still has many unresolved issues on his own plate, a September meeting seems unlikely; the more probable scenario is a face-to-face encounter at the APEC summit in November. If that materializes, it would be welcome news. This time, a goodwill gesture was finally extended: the US returned two batches of Chinese cultural relics, including Buddhist statues looted over a century ago.
Another confidence booster is that against the backdrop of US interest rate hikes, on September 18 both onshore and offshore RMB strengthened past the 6.7 handle against the US dollar, hitting a new high since 2023. This strength is underpinned by multiple factors, including robust foreign trade, a healthy current account surplus, and resilient FX settlement. Exchange rates ultimately reflect a nation's comprehensive strength.
The US market rebound was also fueled by AI technology, with Nvidia signaling that chip sales will double next year, heightening expectations of a global computational arms race. Overnight, SanDisk rose over 6%, Micron climbed over 5%, and SK Hynix gained over 4%. In Hong Kong, memory-related stocks followed suit, with GIGADEVICE (03986) surging nearly 10%.
China's strength remains in large language models. At the application level, Chinese LLMs offer exceptional cost-performance, and international expansion is making new strides. MINIMAX-W (00100) was invited to co-build Singapore's Singtel AI subscription package, with several of its AI products to be used for AI skills training for Singaporean citizens. Earlier, HUMAIN, an AI company under Saudi Arabia's Public Investment Fund, released the Arabic LLM HUMAIN M3 based on MiniMax M3 and opened it for research preview. In the first half of the year, MiniMax's overseas revenue accounted for approximately 60%. Its shares surged nearly 19% again today.
As mentioned yesterday, Z.AI (02513)'s LLM has already begun evolving, and today it announced the launch of its GLM-5.3-FlashX model with the API fully open. The new version offers inference speeds up to 200 tokens per second, a 5x improvement over the existing GLM-5.3-Flash model, with pricing set at 2.5 times the original version. The confidence to raise prices so aggressively demonstrates the model's robust capabilities and strong pricing power. The company recently signed revenue-sharing agreements with leading domestic and international cloud service providers, with related revenue expected to be recognized starting in October. As the company expands its computing capacity - a 100,000-chip domestic AI cluster running at full capacity immediately after launch - post-price-increase earnings growth is set to accelerate. Its shares climbed another 5% today.
The strength of LLMs is driving not only token-business related names - such as 迈富时 (02556) up over 11% and 范式智能 (06682) up nearly 10% - but also a wave of computing power stocks, including domestic cloud AI GPU makers 壁仞科技 (06082) and 天数智芯 (09903), both up over 12%, and optical interconnect 曦智科技-P (01879) rallying over 22%. AI server integrator 联想集团 (00992) gained over 9%, while 联想控股 (03396) jumped over 11%.
Newly added Stock Connect names continue to attract capital. 溜溜梅 (06658) ranked first in China's fruit snack industry by retail sales in 2024, holding a 45.7% market share in natural-ingredient jelly, backed by a diversified online and offline sales network. It stands out in the food sector by capitalizing on the natural, additive-free snack trend. Unlike full-category players like Three Squirrels and Bestore, it deepens its focus on plum jelly and prunes as new growth engines while maintaining traditional preserved plums as its core business. These two new products together contribute over half of revenue, completing the transformation from a single-category green plum snack maker to a diversified fruit snack platform. Approaching the Mid-Autumn Festival and National Day peak season, the market is pricing in ahead of time, with the stock soaring over 20% today. Its strength also lifted 安德利果汁 (02218) up over 11% and 安井食品 (02648) up over 7%. Separately, 应星控股 (01440), which focuses on IP derivatives, is exploring building its AI infrastructure and Software-as-a-Service (SaaS) capabilities to support its AI-driven business plans, rising over 11%.
For bottom-tier Stock Connect additions, news catalysts ignite capital inflows. 云迹 (02670) announced on its official WeChat account that its composite polymorphic robot UP has achieved the first mass deployment of 100 units in a medical setting, entering three top-tier hospitals including Tongji Hospital's Guanggu campus to handle drug delivery tasks. The company's robots primarily target the hotel sector, holding a 13.9% market share in 2024, ranking first. Entering the more demanding hospital environment opens up new growth space that can be replicated; the focus now shifts to whether sustained orders follow, with the stock surging over 28% today. 英派药业-B (07630), a scarce synthetic lethality platform biotech in Hong Kong, saw its core commercial product Senaparib officially included in the national medical insurance catalog starting early 2026. Upcoming ESMO conference disclosures on multiple pipeline clinical data points could provide sustained catalysts. Earlier, director and CEO 蔡遂雄 purchased a total of 100,000 ordinary shares in the open market at an average price of approximately HKD 14.6105 per share. The stock rose nearly 16% today.
AI drug discovery is gaining renewed momentum. Global pharma giants are no longer asking "whether to adopt AI" but rather recognizing that without AI, discovery costs become unsustainable. Eli Lilly, Servier, and Takeda signing collaborations with leader 英硅智能 (03696) confirms that MNCs are willing to pay for AI-discovered early-stage assets. Its shares surged over 13% again today. XTALPI (02228) recently reached a strategic collaboration with Eli Lilly (LLY.US) for an AI-enabled bispecific antibody platform valued at up to USD 345 million, including tens of millions in upfront payments and milestones, rising over 16%. 剂泰科技-P (07666), the world's first AI-driven drug delivery platform listed company, integrates its core NanoForge platform with a library of tens of millions of ionizable lipids, covering AiLNP, AiRNA, and AiTEM solutions. On September 8, it signed an AI drug delivery strategic partnership with Luye Pharma; on September 9, it formed a joint venture with Zhaobai Biotech to build an mRNA CDMO platform; and in June, it inked a USD 1.6 billion preclinical TCE licensing deal with Deerfield. The stock rose over 12%.
Earlier, the decline of 宁德时代 (03750) was noted. Most recently, CATL's Chief Manufacturing Officer Ni Jun responded bluntly: "Those who can build cars don't necessarily know how to build batteries." Such a tough stance doesn't sit well sentiment-wise and risks alienating automakers. By that logic, 比亚迪 (01211) is capable of both. Given the challenging macro environment, the industry should be navigating difficulties together rather than having profits concentrated in a single battery maker. Beyond premium models, it appears increasingly inevitable that mid-to-low-end vehicles will adopt second-tier battery suppliers, as there's no generational technology gap. Moreover, automakers combining their own technologies with battery partners should yield acceptable results. Among alternative suppliers, 创新航 (03931) surged over 10% again today.
Where to Focus Next
Onsemi recently issued its latest price adjustment notice, announcing price increases across a broad range of product lines, effective October 10, 2026. This marks its second round of increases this year (the first was on April 1). Notably, not only is global power semiconductor leader Onsemi entering a price hike cycle, but mainland Chinese and Taiwanese power companies are also experiencing robust demand. In September, leading mainland power companies were planning price increases; in October, Taiwanese manufacturers (including Panjit and Taiwan Semiconductor) plan to raise spot prices by 10%-15%. Key Hong Kong listings include INNOSCIENCE (02577), 天岳先进 (02631), and 基本半导体 (09971), as well as power semiconductor foundry 华虹半导体 (01347).
Stock Deep Dive: CFMEE
CFMEE (09630) is accelerating deliveries of high-end PCB equipment orders, with capacity expansion boosting LDI demand. The Phase II base, which came online in Q3 2025, entered its capacity ramp-up phase in H1 2026, with total designed capacity more than double Phase I. The company's H1 2026 revenue reached RMB 1.106 billion, up 69.0% year-on-year; net profit attributable to shareholders was RMB 281 million, up 98.1%; non-GAAP net profit was RMB 277 million, up 104%; and operating cash flow reached RMB 292 million, up 377%. Gross margins have remained stable at 40%-42%, with net margins consistently above 20%.
Analysis: The company delivered outstanding H1 results with high growth in both profitability and cash flow. Accelerated AI PCB capacity expansion is driving upstream LDI demand, with CFMEE holding a full order book and accelerating high-end PCB equipment deliveries. The company is the world's only direct-write lithography equipment manufacturer commercially covering four scenarios: PCB, IC substrates, advanced packaging, and mask blanks. In 2025, its global market share for PCB direct-write equipment reached 18.8%, ranking first worldwide, surpassing Japan's ORC and Israel's Orbotech (a KLA subsidiary). Benefiting from massive capacity expansion of high-end AI server PCBs (high-layer count, mSAP processes), traditional film exposure has hit its process limits, driving continuous LDI penetration rate increases. High-end models continue to ramp, with PCB business gross margins stable above 40%.
The second growth curve lies in pan-semiconductor applications. The WLP2000 wafer-level direct-write lithography machine has passed TSMC's CoWoS-L process validation, making it a scarce domestic large-format advanced packaging lithography tool. Each unit carries a value of RMB 15-20 million with gross margins above 50%, higher than the PCB business. The company has penetrated Shennan Circuits' and Xingsen Technology's IC substrate production lines, accelerating domestic substitution for BT and ABF substrates. Most domestic peers only focus on PCB, with very few having production-capable advanced packaging machines, giving CFMEE a highly favorable competitive landscape and formidable barriers to entry.
The company holds the largest domestic mass-production capacity with an annual production capability of 1,500 units, delivering significantly faster than overseas competitors. Domestic substitution continues to capture market share from Japanese, European, and American manufacturers. Overseas orders are ramping up, initiating an international expansion cycle with rapidly growing orders from Thailand and Vietnam factories, validating the globalization thesis. The order book remains full with capacity utilization at elevated levels.
In Q1 2026, the company's quarterly new orders exceeded RMB 800 million, a record high; Q2 orders maintained the strong momentum seen in Q1. PCB orders: leading PCB manufacturers' capacity expansion continues to materialize, with high-end LDI equipment orders remaining robust. Advanced packaging orders: the WLP2000 machine has over 30 units on order, corresponding to order value exceeding RMB 100 million, with continued adoption by leading domestic packaging and testing houses, while IC substrate equipment orders are steadily growing. Strong AI demand is intensifying supply tightness; the company's AI PCB capacity expansion is driving strong earnings growth, with the WLP2000 wafer-level direct-write lithography machine receiving repeat batch orders and advanced packaging equipment shipments accelerating.
In H1, full-cycle capacity utilization remained at elevated levels across all product series, with the complete equipment order book staying full. Q1 2026 new order intake exceeded RMB 800 million, with Q2 maintaining that high level, particularly in pan-semiconductor advanced packaging and high-end IC substrate equipment. As the domestic leader in direct-write lithography equipment, CFMEE's products are widely applied in PCB and optical communications, positioning it to benefit from the upward industry cycle. The full exercise of H-share over-allotment options further boosts market confidence.