**Market Analysis**

Despite downward pressure from overseas markets, the Hang Seng Index found support at its 60-day moving average during early trading today before launching a counterattack, closing up 0.92%. US non-farm payroll data delivered a "surprise" to markets: July job additions were only 73,000, well below market expectations of 100,000. Even worse, the previous two months' employment figures were dramatically revised down by 258,000, triggering fresh recession concerns and pushing markets into risk-off mode with panic selling of risk assets as investors flocked to government bonds, gold, and other safe-haven assets.

This directly caused 10-year US Treasury yields to plunge from 4.4% to 4.2%, while the dollar index dove and major stock indices declined as gold surged. Shandong Gold (01787) and Chifeng Gold (06693) both gained over 9%.

The disappointing data undoubtedly dealt a blow to Trump's tariff achievements, prompting his fury and dismissal of officials responsible for releasing these statistics. This represents an almost unprecedented move in America's century-long economic statistics history. On August 3rd local time, Trump indicated he would announce a new Bureau of Labor Statistics director within three to four days.

While US data revisions are routine due to incomplete sampling, the key issue is Trump's perception of being undermined, necessitating personnel changes to ensure complete loyalty. This incident highlights that the US labor market may not be as robust as advertised, suggesting the broader economy might not be as ideal either. Even with personnel changes allowing data manipulation, trust has been significantly damaged.

The silver lining of poor data is rapidly rising market expectations for September rate cuts, surging from 37.7% to nearly 85%. Powell will almost certainly be forced to cut rates before September, with his replacement likely to emerge soon.

**Policy Signals for Capital Reflow**

Several weekend policy signals emerged: Starting August 8th, two departments will resume collecting value-added tax on interest income from newly issued government bonds. This measure aims to squeeze out risk-free capital that has been clustered in bond markets, redirecting it toward equity markets.

Additionally, taxpayers have recently received notifications from tax authorities requiring legal declaration and payment of overseas income taxes, indicating strengthened supervision of individual overseas income, including overseas stock trading profits. This measure should have some effect, especially with US stocks at high levels.

Various measures are being implemented to encourage capital reflow to domestic stock markets.

**AI Competition and National Security**

A commentary highlighted concerns about NVIDIA, citing examples of potential "pause buttons" on new energy vehicles, computers, and even medical surgical robots. Chips can continuously upload sensitive information like server load rates and IP addresses directly to the US, potentially exposing Chinese commercial secrets. These represent real security concerns rather than fabricated issues, unless NVIDIA can provide sufficient evidence of no "backdoors."

This reinforces the push for domestic alternatives. InnoCare (02577) surged again today. While NVIDIA's H20 sales might be affected, this represents a small portion of total business. The company primarily supplies NVIDIA data center power systems, and domestic chip power support similarly relies on local supply chains. InnoCare has passed Ascend certification and entered domestic server manufacturer (such as Inspur) supply chains. Jefferies estimates the AI data center GaN market will reach $2.5 billion, with InnoCare as a core supplier potentially capturing over 30% market share, driving gains of over 30%.

Other beneficiaries included Hua Hong Semiconductor (01347) up over 8% and Shanghai Fudan (01385) up 5%.

US AI investment continues accelerating. Since Q1 2023, US information processing equipment investment has grown 23% after inflation adjustment, while GDP increased only 6% over the same period. In the first half of this year, information processing investment contributed over half of America's 1.2% GDP growth rate.

The AI race has begun, with domestic investment expected to increase substantially. Optical fiber benefits first, with Yangtze Optical Fibre (06869) rising nearly 7%.

OpenAI CEO Sam Altman revealed GPT-5 will launch mini and nano versions in August, opening to external users through APIs. Expected impacts on related applications benefit advertising business Mobvista (01860) up nearly 12%, cloud services Kingdee International (00268) up nearly 5%, and Agent Mainfirst (02556) up nearly 8%.

**Defense and Military Sector**

Military sector enthusiasm remains high. Following the J-10CE, China's Z-10ME has been deployed with Pakistan's military. Official media released coverage of drone "swarm" and robotic "pack" coordinated combat exercises, with the Fujian carrier entering final commissioning phases. AVIC Heavy Machinery (02357) and China Shipbuilding Industry (00317) both gained over 5%.

**Robotics Industry Catalysts**

The World Robot Conference opens August 8th in Beijing, expecting over 200 top companies including Unitree Robotics, with over 100 debut products. The world's first robot consumer festival launches with enterprise robot purchases eligible for up to 250,000 yuan subsidies.

Additional catalysts include: August 15th humanoid robot sports competition at Bird's Nest stadium, attracting global participation with teams from Portugal, Japan, and UAE already training at the humanoid robot football base. August 27-29, the 2025 AGIC Shenzhen International AGI Conference and Industry Expo will feature 100 disruptive AI technology debuts covering AI chips, generative AI, intelligent robots, and embodied intelligence.

UBTECH Robotics (09880) announced completion of its placement, selling 30.16 million shares raising HK$2.41 billion total. This represents the largest humanoid robot listed company stock placement financing in capital market history, attracting sovereign funds, industrial capital, long-term funds, and multi-strategy funds. With orders ahead and financing behind, UBTECH surged over 10%.

**Automotive Sector Performance**

Strong-selling automotive stocks also moved. Leapmotor (09863) announced July deliveries of 50,129 units, up over 126% year-over-year, marking the first time monthly sales exceeded 50,000 units, driving gains of over 8%.

Great Wall Motor (02333) reported first seven months cumulative production of approximately 672,200 vehicles and sales of 674,100 units, up 4% and 3.57% respectively. July production reached 101,045 units (up 18.22% year-over-year) and sales hit 104,372 units (up 14.34%), showing accelerating growth momentum. The Brazil factory is scheduled for August SOP, further expanding into Latin America. The stock gained over 5%.

Market rumors suggest Anta Sports (02020) is close to completing acquisition of US athletic shoe brand Reebok. The company's communications department stated: "We don't comment on market rumors. We recommend following official company information." Neither confirming nor denying, this bears watching.

**Sector Focus: Copper Mining**

According to official sources on August 4th, Chilean President Boric announced that a mining accident in the central O'Higgins region resulted in 6 deaths, with all 5 trapped miners perishing. Codelco has launched an accident investigation with all underground operations suspended. The duration of the shutdown and impact on production targets remains unclear. This mine accounts for over one-quarter of Codelco's total output, producing 356,000 tons of copper last year.

The mine suspension news boosted already tight copper market sentiment. London Metal Exchange copper prices rose 0.4% Monday, reaching $9,672 per ton, extending previous session gains. This incident provides short-term copper price stimulus, with medium-term factors including US dollar exchange rates, tariffs, and demand. Key companies include Jiangxi Copper (00358), Minmetals Resources (01208), and China Nonferrous Mining (01258).

**Individual Stock Focus**

**Bilibili (09626): Strong Gaming Performance, Q2 Results Expected to Show Steady Growth**

Q1 2025 revenue reached approximately 7 billion yuan, up 24% year-over-year, with gaming, advertising, value-added services, and IP derivatives revenues growing 76%, 20%, 11%, and -4% respectively. Gross margin improved to 36.3%, with non-GAAP net profit of approximately 363 million yuan, achieving profitability.

Commentary: Revenue growth and profit improvement continue, with strong gaming market performance. "Romance of the Three Kingdoms: The Land of Stratagem" drove gaming revenue growth exceeding expectations, with Season 8 launching May 31st aiming to build reputation. Advertising revenue grew 20% year-over-year, with performance advertising up over 30%, benefiting from increased advertiser numbers and AI technology improvements.

From a user perspective: 1) User base continues expanding with Q1 2025 DAU and MAU reaching 107/368 million. 2) Platform remains young with average user age of 26 and over half being post-2000 users. 3) Platform maintains high stickiness with daily usage averaging 108 minutes; 50 million users spend over 2 hours daily; 15-year user retention rate reaches 90%.

Under strategic direction, e-commerce advertising demand on the platform remains strong while the company continues upgrading monetization tools. With the recently launched InsightAgent, efficiency of facilitating commercial orders during 618 shopping festival improved 5-fold, with data insight efficiency up 3-fold.

For gaming business, evergreen titles remain stable while watching new game performance. Looking ahead, expectations include "Romance of the Three Kingdoms: The Land of Stratagem" traditional Chinese version launch effects in Hong Kong, Macau, and Taiwan, plus performance of new games like "Escape from Yakfu" and "Toot Toot Face Pranks."

Q2 financial results expected to show steady growth, with mobile game revenue projected to grow 61% year-over-year driven by stable "Romance of the Three Kingdoms - Strategy Edition" performance. Advertising business should benefit from increased clients and technology upgrades, expected to achieve 18% year-over-year growth.