**Market Analysis**

Despite volatility in A-shares, Hong Kong stocks showed resilience today with late-session recovery, closing up 0.22%. This indicates foreign investors remain optimistic about future prospects.

The Federal Reserve will hold its monetary policy meeting on September 16-17. On September 14 local time, President Trump told reporters he expects the Fed to announce "significant rate cuts" at this week's meeting, stating "I think there will be a major rate cut." Trump's statement suggests a possible 50 basis point cut - otherwise, why would capital markets listen to him? Foreign investors in Hong Kong stocks likely share this expectation.

CXO sector stocks benefited significantly from rate cut expectations, with Pharmaron Beijing (03759), Joinn Laboratories (06127), and WuXi Biologics (02269) all rising over 7%.

However, another major development is creating market disturbance. The Ministry of Commerce spokesperson revealed that He Lifeng, member of the CPC Central Committee Political Bureau and Vice Premier of the State Council, will lead a delegation to Spain for talks with the US from September 14-17. Both sides will discuss US unilateral tariff measures, export control abuses, and TikTok-related trade issues.

Typically, any bilateral talks generate positive market sentiment, but this round comes amid heightened tensions. On September 12, the US Commerce Department added multiple Chinese entities to its export control "Entity List." In response, China's Ministry of Commerce announced anti-dumping investigations on US-origin analog chips starting September 13, and launched anti-discrimination investigations regarding US integrated circuit measures against China.

Today brought further escalation. According to the State Administration for Market Regulation website on September 15, following preliminary investigation, NVIDIA Corporation violated China's Anti-Monopoly Law and related acquisition conditions for Mellanox Technologies. Market regulators have decided to conduct further investigations.

This series of actions aims to increase negotiating leverage. Since both sides prefer this approach, it's a case of "fighting fire with fire." Previously, such tactics weren't viable due to insufficient strength - now circumstances have changed. NVIDIA carries significant weight in US markets, and the targeting is precisely calibrated, focusing only on acquisitions without broader business restrictions. The message is clear, with NVIDIA dropping about 2% in pre-market trading.

Capital markets are taking a wait-and-see approach - perhaps these are all feints before reaching agreement? Regardless, semiconductor domestic substitution remains a firm strategic direction. We continue favoring SMIC (00981) and Hua Hong Semiconductor (01347) as key players.

**Stock Connect Stars Continue Surging**

Recently added Stock Connect stocks remain exceptionally strong. Chia Tai Tianqing Pharmaceutical Group (02617), mentioned last Friday, surged another 115% today with frenzied short-term capital flows. Aurora Mobile (06681) from the same batch rose nearly 35%.

IFBH (06603), parent company of Thailand's famous coconut water brand "if," also gained over 10%. The company's core brands are "if" and "Innococo" - "if" focuses on natural, healthy Thai beverages and foods designed for diverse consumer tastes, while "Innococo" provides healthy alternatives to traditional sports drinks. According to Frost & Sullivan, IFBH ranks first in mainland China's coconut water market by retail value. Other potential Stock Connect additions like Auntea Jenny (02589) rose over 8%.

**Energy Storage Policy Boost**

The National Energy Administration released new mainland energy storage policies showing 100 gigawatts of new storage capacity planned for 2025-2027, equivalent to 300 gigawatt-hours, estimated to drive RMB 250 billion in investment over three years. Lithium-ion battery storage remains the dominant technology.

CATL (03750) maintains its leading position. According to SNE Research, the company's global power battery usage market share reached 38.1% in January-May 2025, up 0.6 percentage points year-over-year, staying globally first. In energy storage, CATL ranked first globally in battery production for January-June 2025.

CATL's full-year production capacity reached 750+ as of mid-last week, significantly exceeding expectations. The company raised its 2026 order guidance to 1,100GWh, up 46% year-over-year. Following convention, order guidance typically exceeds production, which exceeds billing, suggesting 2026 production of 900-1,000GW and billing around 800-900GW. The stock rose over 7% today.

Re-Fire Technology (02570) focuses on hydrogen fuel cell systems. According to Frost & Sullivan data, Re-Fire ranked first in China's hydrogen fuel cell system market by 2023 heavy truck total output power, total sales output power, and total sales, with market shares of 23.8%, 42.4%, and 29.4% respectively. After three consecutive days of gains from the bottom, it rose over 6% today.

**Automotive Sector Developments**

The China Association of Automobile Manufacturers issued the "Initiative for Payment Standards of Supplier Accounts by Auto OEMs," providing regulatory guidance for key aspects of procurement contracts between OEMs and suppliers. Major automakers including SAIC Motor and BYD responded positively, expressing commitment to implementing payment protection regulations for SMEs.

This policy represents macroeconomic adjustment, as automakers have been using capital to expand capacity or engage in price wars. Industry standardization should benefit sector recovery, particularly benefiting auto parts stocks like Zhejiang Shibao (01057) and Nexteer Automotive (01316), which rose over 11% and 6% respectively. Li Auto (02015) showed positive rebounds from the bottom.

According to NIO's official announcement, NIO Day 2025 will be held on September 20, featuring the official launch of the new ES8. NIO (09866) rose over 3%.

**Consumer Electronics Competition**

iPhone 17 series pre-orders began at 8 PM Beijing time on September 12, with PDD's billion-subsidy program quickly launching iPhone 17 series products at the largest known discount rates. iPhone 17 starts at RMB 5,099, iPhone 17 Pro at RMB 7,999, and iPhone 17 Pro Max at RMB 8,999.

JPMorgan expects iPhone 17 series market demand to exceed last year's iPhone 16 series. AAC Technologies (01415) benefits most from Apple supply chain developments, precisely positioned in smartphone camera upgrade core tracks with continuously increasing market share, plus forward-looking layouts in LiDAR and AR/VR emerging fields. It rose nearly 7% today.

Consumer electronics competition intensifies as companies race against time. On September 15, Xiaomi Group President Lu Weibing announced on social platforms that the new Xiaomi 17 series will launch this month, one month earlier than the previous generation, representing "the most significant leap in Xiaomi's digital series history." The Xiaomi 17 series will be the global first to feature the fifth-generation Snapdragon 8 Elite mobile platform, directly competing with iPhone 17 series. Xiaomi (01810) rose nearly 2%.

Skyworth Group (00751), mentioned last Friday as a September Golden Stock pick, repeated its pattern today with sudden afternoon strength, rising over 7% again with over RMB 700 million turnover for two consecutive trading days. This stock characteristically launches surprise attacks - after two days of gains, it will likely enter consolidation, presenting good arbitrage opportunities on volume spikes.

**Sector Focus: Pre-prepared Food Standardization**

Recent heated debates between Luo Yonghao and Xibei regarding "pre-prepared food" have repeatedly topped trending topics, fundamentally addressing how to define and regulate pre-prepared food. Consumers deserve transparency rather than paying premium prices for undisclosed pre-prepared meals.

This exposure isn't negative - it will accelerate policy implementation. Reports indicate the National Health Commission's "Pre-prepared Food Safety National Standards" draft has quietly passed expert review and will soon be open for public comment. This will provide unified definitions for pre-prepared food "identity" and first-time mandatory disclosure requirements for restaurant usage.

This marks the key transition from "wild growth" to "compliance era" for the pre-prepared food industry. Standardization will bring healthy development to the restaurant sector. Key Hong Kong-listed companies include Anjoy Foods (02648) and Xiabuxiabu Catering Management (00520).

**Individual Stock Deep Dive: Nexteer Automotive (01316)**

**L3 Industrialization Accelerates with Multiple OEM Steer-by-Wire Orders**

On September 13, 2025, eight ministries including MIIT jointly issued the "Automotive Industry Stable Growth Work Plan (2025-2026)," conditionally approving L3-level vehicle production access.

The company achieved first-half revenue of $2.2 billion, up 7% year-over-year, outperforming the market by 450 basis points. This profitability improvement stems from increased production, efficiency gains, and strong operational performance. Automotive exports maintain stable growth.

In Q1 2025, the company launched 23 projects (19 new or newly acquired), with new energy vehicle projects accounting for 60.9% (14 projects), representing 65.2% of all Asia-Pacific projects. Q1 highlights included continued strong orders from Chinese NEV manufacturers. Additionally, substantial column orders from North American customers enhanced competitive positioning and scale effects in North American column business.

The company expects more "steer-by-wire" technology orders within the year. Full-year order target is $5 billion, with Q1 orders reaching $800 million (16.0% of annual target).

For new business, the company continues increasing R&D investment. Beyond last year's RWS business launch, new product electro-mechanical braking (EMB) is under active development.

Recent stock price pressure from US tariffs remains manageable overall. Main impacts come from Canadian and Mexican component and raw material supplies. For non-exemptible tariff costs, the company is securing customer compensation to offset expenses.

Nexteer will directly benefit from autonomous driving-related business, high-availability electric power steering systems, and advanced steer-by-wire and rear-wheel steering business units. Notably, Nexteer has secured steer-by-wire orders from Tesla, Li Auto, Zeekr and other OEMs, with deliveries starting in 2026. Deep cooperation continues with XPeng, Xiaomi, GAC and others, providing significant future growth potential for steer-by-wire business.

The company is accelerating acquisition of advanced electric power steering, rear-wheel steering, and steer-by-wire orders, positioned to enter a new profit upward cycle through product structure optimization.