Another monthly green candle emerged, with the Hang Seng Index maintaining its upward trajectory for five consecutive months. September exhibited higher volatility than August, with the index trading within a range of 25,013.26 to 27,058.03 points. Reflecting on our previous monthly report's perspective: "Overall, September's market will likely remain range-bound, with no clear signals for unidirectional upward movement." Indeed, Hong Kong stocks did not demonstrate a one-sided rally in September, though the oscillation amplitude exceeded expectations positively. Remarkably, the Hang Seng Index never broke below its 60-day moving average, indicating exceptionally high market stability.
September's stability stemmed from the absence of genuine negative catalysts, with short-selling pressure primarily originating from profit-taking. Examples include the post-September 3rd military parade selloff, which lasted merely two days. Subsequently, markets focused on Federal Reserve rate cuts, Hong Kong government policy initiatives, and progress in lithography technology.
September's most notable characteristic was the resurgence of internet giants, with the Hang Seng Tech Index surging nearly 14%. These tech behemoths finally ceased their internal competition in food delivery services, as excessive cash burning became unsustainable. Companies rationally returned to their core businesses, particularly advancing AI initiatives. Current market sentiment favors those investing heavily, anticipating greater future returns. Alibaba (09988) delivered impressive September gains exceeding 53%, while Baidu (09888) surged over 54% due to its Kunlun chip design subsidiary, AI cloud services, and autonomous driving factors. Tencent (00700) remained relatively subdued with smaller gains but maintained steady upward momentum.
The strongest performing sectors were gold and metals. Gold's core varieties gained over 30%, with September pick Zhaojin Mining (01818) rising over 34%. Non-ferrous metals saw Luoyang Molybdenum (03993), Minmetals Development (01208), and Jiangxi Copper (00358) all exceeding 30% gains, while China Non-Ferrous Mining (01258) surged over 50%.
In semiconductors, Hua Hong Semiconductor (01347) led with over 50% gains, while golden stock SMIC (00981) rose over 31%. AI large model sector featured September pick SenseTime (00020) gaining over 30%. Southbound funds aggressively traded newly included Hong Kong Stock Connect names, with Aurora Mobile-B (06681) surging up to 220% and MIRXES-B (02629) rising over 67%. Shanghai Dazhong Public Utilities (01635), with stakes in Moore Threads and Unitree Robotics, peaked at 70% gains. Privatization plays included September pick Skyworth Group (00751) rising nearly 50%.
Generally, investors remain relatively optimistic about October's market performance. Statistical data shows that since 2010, the probability of gains during National Day holidays reached 86.7% over 15 years, with the Hang Seng Index averaging 2.1% gains. When the index is already in an upward trend, the probability rises to 87.5% with average gains of 2.8%.
Regarding negative factors, China-US relations remain the primary concern, mainly manifesting through tariff issues with occasional unusual tariff impositions and various sanctions. However, markets have developed strong immunity to these factors, including repeated disruptions to the pharmaceutical industry. Ultimately, the US finds it difficult to decouple from Chinese supply chains. Moreover, China possesses considerable countermeasures, with rare earths serving as the most potent weapon, explaining why the US no longer acts as recklessly as before. Fundamentally, the US holds few viable cards while China retains many options.
Other aspects include ongoing geopolitical tensions. The Russia-Ukraine conflict shows no immediate resolution signs, though its influence continues diminishing. The Middle East situation requires more complexity, as Israel's direct actions in Qatar against Hamas officials triggered strong reactions across the Arab world, with Saudi Arabia seeking nuclear protection from Pakistan. Israel's Gaza operations may not proceed as smoothly as anticipated. Overall, significant issues only arise if the US deploys ground forces.
Recent developments include the US Office of Management and Budget announcing that current federal funding "will expire at 23:59 tonight," instructing government agencies to implement "orderly shutdown" contingency plans. This marks the first federal government shutdown in nearly seven years, primarily due to intensified bipartisan conflicts over healthcare benefits, failing to reach consensus on new temporary spending legislation.
Direct consequences include: First, delayed release of key employment data, such as September non-farm payroll reports and September Consumer Price Index (CPI). Second, President Trump's threat to permanently dismiss certain government employees could significantly impact operations. The Congressional Budget Office's September 30th report indicates government shutdowns could affect up to 750,000 federal employees daily, with total daily compensation around $400 million. Each week of government shutdown reduces GDP by 0.1 percentage points.
US government shutdowns are routine occurrences that eventually reach resolution. Short-term impacts are expected, but recovery should be swift. The key factor is timing. Regarding whether delayed data releases will affect month-end Federal Reserve rate decisions, the impact appears minimal. September's rate cut already fell short of expectations, and markets ultimately accepted it anticipating continued cuts. If October dares not cut rates, various stakeholders would struggle to accept it, given deteriorating economic data and weakening labor markets with recession concerns emerging. Without timely rate cuts for relief, actual recession would create accountability issues the Federal Reserve cannot bear. Therefore, October likely sees the Fed continue with a 25 basis point cut as planned.
Another significant factor is US strategic contraction. Recently, Defense Secretary Hegseth urgently convened military leaders globally - an extremely rare occurrence. Analysis suggests US military focus is shifting from "deterring China" toward the Western Hemisphere and domestic territory, potentially reducing European deployments. Simply put, since deterrence proves ineffective, focus shifts to practical matters: addressing domestic opposition, combating international drug trafficking (as pretext), and reducing military spending through base closures or consolidations. This global movement clearly signals weakening military hegemony.
Domestically, following the Federal Reserve's 25 basis point September cut, the central bank's failure to immediately follow disappointed some investors. However, concerns are unnecessary. Delaying immediate rate cuts isn't negative - it demonstrates China's policy independence, not blindly following US actions. Additionally, it signals China's economic resilience, maintaining stability without rate cuts. This confidence is justified, as China's August above-scale industrial profits rebounded from July's 1.5% decline to 20.4% growth, indicating broader improvements.
September's lack of cuts doesn't preclude October action, preserving market expectations. Attention should focus on October LPR movements. Markets anticipate the Fourth Plenum of the 20th Central Committee convening October 20th, focusing on the "15th Five-Year Plan." This plan emphasizes four key areas: technological self-reliance (including AI, chips, lithography), new productive forces (high-end manufacturing), domestic consumption (service consumption, new consumption), and anti-involution (solar, batteries). This new five-year plan will provide market direction.
Growing numbers of foreign institutions favor Chinese markets. Goldman Sachs maintains "overweight" positioning on Chinese assets, expecting emerging market stocks to rise before year-end driven by macro positives, AI development, and policy reforms. Morgan Stanley's Chief China Equity Strategist Laura Wang discovered during roadshows that over 90% of clients are willing to increase China investments - the highest interest level since 2021. Fidelity International portfolio managers are increasing Chinese equity holdings, emphasizing that current revaluation is driven by fundamental improvements rather than pure policy reliance, creating more stable confidence.
Regarding domestic capital, September saw net inflows exceeding 170 billion Hong Kong dollars, with single-day net inflows of 15.5 billion Hong Kong dollars on the 30th. Domestic capital has become crucial liquidity support for Hong Kong stocks.
Looking ahead to October, the Hang Seng Index challenging the 29,000-point level appears promising. For defense, avoiding breaks below 26,000 points is crucial. Key inflection points include LPR announcement timing, major meeting schedules, and Federal Reserve rate cut timing.
**October 2025 Investment Strategy: Maintain Focus on Market Themes**
September's golden stocks significantly outperformed the broader market. During September, the Hang Seng Index's maximum gain reached 7.9%, while the ten golden stocks averaged 21.9% maximum gains. Skyworth Group (00751) rose 49.3%, SenseTime-W (00020) gained 35.1%, Zhaojin Mining (01818) increased 34.1%, SMIC (00981) rose 31.7%, Tianneng Power (00819) gained 20.2%, China ZhengTong Holdings (00881) rose 16.6%, BYD Electronic (00285) increased 13.4%, Xinyi Solar (00968) gained 11%, Angelalign (06699) rose 4.6%, and Luye Pharma (02096) increased 3.1%.
September's golden stocks achieved balanced performance with overall satisfaction - three stocks exceeded 30% gains, eight surpassed 10%, capturing core varieties across major themes including AI large models, semiconductors, gold, and energy storage.
Given relative market optimism for October, this period offers relatively favorable conditions. However, achieving excess returns requires correct directional positioning. Therefore, October's strategy is: **Maintain focus on market themes without wavering**.
Undoubtedly, technology represents the biggest theme, suited for grand narrative conditions. Current China-US competition centers on AI advancement, with both sides inevitably increasing investments in this field, evident from global tech giants' capex levels. Companies like Nvidia, Oracle, and Microsoft frequently engage in investment closed-loops, directly stimulating stock price surges. Domestically, Alibaba has high-profile AI entry. Technological progress drives continuous industry iteration, including hardware-side semiconductor manufacturing breakthroughs and software-side DeepSeek upgrades. OpenAI officially announced its Developer Conference (DevDay) scheduled for October 6, 2025, in San Francisco. This conference will attract over 1,500 developers, potentially becoming the largest developer event to date, catalyzing semiconductor manufacturing and AI applications.
Second, non-ferrous metals will maintain high intensity. From anti-involution, supply-side, demand-side, and continued rate cuts perspectives, this sector offers compelling narratives. Most varieties are in trending upward channels with significant gains already achieved. Value revaluation opportunities merit exploration.
October will bring numerous robotics catalysts. Tesla needs no introduction - Musk's return to physical business plus substantial incentive mechanisms make robots important valuation enhancers. Unitree's IPO may accelerate to October. XPeng will release its fifth-generation humanoid robot in October, likely at the 1024 XPeng Technology Day. Fourier Intelligence announced its first "Carebot" humanoid robot GR-3 featuring full-sensory interaction systems will officially launch and begin deliveries in October 2025. October-November will see Gen3 robot finalization, with subsequent order confirmations providing sustained sector catalysts. Leading companies will benefit most.
Consumer aspects include: 1) Consumer electronics - Huawei's autumn new product launch scheduled for October-November will feature the Mate 80 series. Bloggers speculating from Huawei WATCH GT 6 Pro smartwatch pre-order timing suggest Huawei Mate 80 series may launch October 21st (subject to official confirmation). The 2025 World VR Industry Conference is scheduled for October 19-20 in Nanchang, Jiangxi. Many represent overlapping concepts. 2) Gaming - National Day expectations are high with hotel bookings full; subsequent performance depends on related reports. 3) Gaming - AI-enabled advertising business improvements serve as catalysts.
**Specific Recommendations:**
**Robotics:** UBTECH ROBOTICS (09880) **Semiconductors:** SHANGHAI FUDAN (01385) **Software:** FOURTH PARADIGM (06682) **Metals:** MCC (01618) **Machinery:** SANY INT'L (00631) **Rail Transit:** TIMES ELECTRIC (03898) **Gaming:** Galaxy Entertainment (00027) **Automotive:** XPeng-W (09868) **Gaming:** Bilibili-W (09626) **Optics:** Sunny Optical (02382)
**Detailed Analysis:**
1. **UBTECH ROBOTICS (09880)** The company reported 2025 half-year results with revenue of 621 million yuan, up 27.55% year-over-year, and reduced net losses. Revenue growth was primarily driven by new consumer product launches and contracted project deliveries. Educational intelligent robots and solutions generated 240 million yuan revenue, up 48.8% year-over-year, driven by 2024 and 2025H1 contracted project deliveries. Logistics intelligent robots and solutions contributed approximately 56.2 million yuan, while other industrial custom intelligent robots and solutions generated about 63.8 million yuan, mainly due to 2025H1 focus on new application scenario product development with new products launching in 2025H2 and revenue recognition expected then.
Consumer robots and other hardware devices achieved 260 million yuan revenue, up 48.9% year-over-year, driven by continuous new product launches. The company's main businesses show promise across multiple segments: 1) Educational intelligent robots target K-12 education scenarios, with solutions simultaneously launching in Yixing, Suqian, Yangquan, and Longsheng. The company also pursues industry-education integration, supporting AI general education through industry activities and competition ecosystem operations. 2) Logistics intelligent robots continue deepening full-stack unmanned logistics solutions. The Wali T8000 received hundreds of unit orders from customers; second-generation unmanned forklifts reached industry-leading levels; unmanned logistics vehicles completed trials from closed campuses to public roads, with new-generation unmanned logistics vehicle Chitu S officially initiated for market launch. 3) Commercial robots achieved phased results with recent Cruzr S2 launch for multi-task commercial sorting, handling, and reception scenarios. 4) Consumer robots introduced pool cleaning robots, developing smart lawn mowers and smart vacuum cleaners.
The company is actively pursuing humanoid robot business with anticipated production and sales increases this year. In April, the company received its first small-batch industrial manufacturing scenario embodied intelligent humanoid robot procurement contract. In July, it won Miyi Automotive's 90.51 million yuan robot equipment procurement project. Simultaneously, July announcements indicated Tiangong Xingzhe's existing orders reached hundreds of units, with over 300 humanoid robot deliveries expected in education and research sectors alone this year, with over 60% being mid-to-high configuration versions.
The company has commenced humanoid robot mass production, with delivery acceptances expected to benefit this year's revenue. Overall, the company represents one of China's few full-stack technology humanoid robot enterprises possessing large brain-small brain-body-core components-applications, with clear competitive advantages and market positioning.
2. **SHANGHAI FUDAN (01385)** The company achieved 25H1 revenue of 1.839 billion yuan, up 2.49% year-over-year; net profit of 194 million yuan, down 44.38% year-over-year; adjusted net profit of 182 million yuan, down 40.96% year-over-year. Despite 2.49% revenue growth and 0.31 percentage point gross margin improvement to 56.80%, net profit declined 44.38% primarily due to reduced integrated circuit design enterprise VAT credit amounts and government subsidies upon project completion, plus increased inventory impairment provisions due to demand declines and aging for certain products. The company provisioned approximately 172 million yuan in various impairments for 2025H1, including 143 million yuan in inventory impairment losses.
The company is actively adjusting inventory structure and reducing certain product inventory levels, with improvements expected in the second half. 2025H1 product line revenues included: security and identification chips approximately 393 million yuan, non-volatile memory approximately 440 million yuan, smart meter chips approximately 248 million yuan, FPGA and other products approximately 681 million yuan, and testing services revenue (post-consolidation elimination) approximately 77 million yuan. Except for non-volatile memory business year-over-year decline, other product lines achieved varying degrees of growth, with FPGA and other products revenue growing 23.15% year-over-year, providing crucial operational support.
The company is China's leading FPGA product supplier, currently offering FPGA, PSoC, and FPAI (programmable AI chips) sub-series with EDA development tools. Current product lines center on 28nm process billion-gate FPGA and PSoC chips as flagship products, while actively advancing customer introduction and mass production of ultra-large-scale FPGA, RF-FPGA, and RFSoC products based on 1xnm FinFET advanced processes and 2.5D advanced packaging.
3. **FOURTH PARADIGM (06682)** 2025H1 achieved operating revenue of 2.626 billion yuan, up 40.7% year-over-year. Benefiting from substantial revenue improvements and further operational leverage effects, the company maintains strong confidence in continuous technology innovation investment, staying at the forefront of AI technology exploration and commercial implementation. 25H1 R&D expenses totaled 893 million yuan, up 5.1% year-over-year, with R&D expense ratio at 34.0%, down 11.5 percentage points year-over-year as scale effects emerged.
The company focuses on "AI agent + world model," driving core business rapid growth. 25H1 business breakdown: Fourth Paradigm Prophet AI platform revenue of 2.149 billion yuan, up 71.9% year-over-year, accounting for 81.8% of total revenue; SHIFT intelligent solutions business revenue of 371 million yuan, accounting for about 14.1%; Fourth Paradigm AIGS services business revenue of 106 million yuan, accounting for about 4.1%.
The company deeply advances "AI agent + world model" implementation and applications, fully capturing enterprise customer AI transformation demands in high-value scenarios, driving high growth in core business Fourth Paradigm Prophet AI platform revenue. "AI agent + world model" value paths achieved comprehensive deployment across enterprise customers, with 25H1 benchmark user average revenue up 56.6% year-over-year.
4. **MCC (01618)** Copper possesses both industrial and monetary attributes. Medium-to-long-term, with AI development, energy transition, and automotive electrification advancement, copper demand grows annually. Supply-side sees declining ore grades, insufficient exploitable resources, and obvious cost increases, expanding supply-demand gaps. Short-term, strengthened Federal Reserve rate cut expectations with high September and multiple annual cut possibilities, plus tariff-driven inflation expectations, support copper price upward cycles amid dollar declines.
The company currently operates three overseas mines producing nickel, cobalt, copper, lead, zinc, and gold metals. During rate cut cycles, valuations may improve, with 2025H1 contributing 550 million yuan net profit, representing 17.7%. The Aynak and Saindak copper projects are actively advancing. Aynak copper mine has proven reserves of 12.36 million tons with 1.56% average grade, representing a rare undeveloped world-class high-grade copper mine. The project has restarted preliminary work with 8.9 kilometers of mine access road completed. The supporting Baghdad hydropower station has signed cooperation agreements and entered construction phases with positive progress under China-Afghanistan promotion.
5. **SANY INT'L (00631)** 2025H1 achieved operating revenue of approximately 12.24 billion yuan, up 13.8% year-over-year; profit of approximately 1.29 billion yuan, up 31.3% year-over-year; profit attributable to parent company owners of approximately 1.29 billion yuan, up 10.3% year-over-year. Basic earnings per share reached 0.39 yuan. Company performance met expectations.
According to 2025 interim reports, H1 mining equipment segment revenue declined 21.9% year-over-year, mainly due to weakened coal enterprise capital expenditure amid low coal prices, reducing tunneling and comprehensive mining equipment revenue. However, mining truck business, particularly large-tonnage mining trucks and mining aftermarket business, maintained slight revenue growth.
6. **TIMES ELECTRIC (03898)** 2025H1 achieved operating revenue of 12.214 billion yuan, up 17.95% year-over-year, and net profit of 1.672 billion yuan, up 12.93% year-over-year. According to official China Railway reports, 2025H1 national railway fixed investment reached 355.9 billion yuan, up 5.5% year-over-year, with positive passenger and freight transport growth. The company maintained stable market share in 2025H1 EMU and locomotive tenders. Additionally, CR450 EMU performance verification progressed smoothly, serialized new energy locomotive R&D continued advancing, urban rail traction systems secured new leading industry orders, and cross-platform maintenance business achieved new breakthroughs.
7. **Galaxy Entertainment (00027)** 25Q2 achieved net revenue of 12.04 billion Hong Kong dollars, up 10.3% year-over-year and 7.5% quarter-over-quarter. Gaming/non-gaming businesses (excluding construction materials) contributed 9.66/1.61 billion Hong Kong dollars respectively, with year-over-year changes of +12.3%/+8.4% and quarter-over-quarter changes of +8.2%/+3.3%, representing 80%/13% respectively.
8. **XPeng-W (09868)** 2025Q2 XPeng delivered 103,000 vehicles, up 241.6% year-over-year and 9.8% quarter-over-quarter; total revenue reached 18.27 billion yuan, up 125.3% year-over-year and 15.6% quarter-over-quarter; net loss of 480 million yuan improved from 1.29 billion yuan year-over-year and 660 million yuan in 2025Q1.
9. **Bilibili-W (09626)** 25Q2 achieved total operating revenue of 7.34 billion yuan, up 19.8% year-over-year and 4.8% quarter-over-quarter; net profit attributable to parent company of 220 million yuan, achieving year-over-year turnaround to profitability. Traffic-wise, 25Q2 DAU reached 109 million, up 7% year-over-year; average daily usage time of 105 minutes increased 6 minutes year-over-year.
10. **Sunny Optical (02382)** The company released 2025 interim results with revenue of 19.652 billion yuan (up 4.20% year-over-year) and shareholders' attributable profit of 1.646 billion yuan (up 52.56% year-over-year). H1 mobile-related product revenue reached 13.248 billion yuan (up 1.68% year-over-year), representing 67.4%. January-August 2025 mobile lens shipments totaled 807 million units (down 7.6% year-over-year), while mobile camera module shipments reached 313 million units (down 16.0% year-over-year).