【Market Analysis】Overnight, all three major US stock indices experienced adjustments, and Europe also faced troubles as French Prime Minister Bayrou has decided to initiate a no-confidence vote regarding his significant budget reduction plan, though all three major opposition parties stated they would not support the vote. French stocks led European declines, with the French CAC 40 index falling over 2%. Hong Kong stocks surged too aggressively yesterday, so today's adjustment is normal. The market closed down 1.18%.

Wall Street's optimism about Fed rate cuts hasn't had time to warm up before Trump's threat to remove Fed Governor Lisa Cook sparked new concerns. Cook's term was originally set to end in 2038, and if Trump successfully removes Cook, he would have the opportunity to secure a majority of four seats in the Fed's seven-member Board of Governors, potentially directly influencing future monetary policy. Once the Fed's independence is questioned, confidence in dollar assets will waver. Investors will turn their attention to traditional safe-haven assets like gold, Japanese yen, and cryptocurrencies.

Gold stocks strengthened again, with China Gold International (02099) turning profitable in its interim results, showing strong growth momentum in its core business and significant room for future capacity expansion, including the Jiama mine and Yulungbu tailings facility. Additionally, the company is conducting exploration work in the Bayi Ranch and Zegulangbei exploration areas, which have shown great resource potential and are expected to support larger-scale expansion in the future. Today it surged over 10%, while other gold stocks like Lingbao Gold (03330) also rose over 9%; Zhaojin Mining (01818) and Shandong Gold (01787) gained over 4%.

Trump is once again wielding the tariff weapon, threatening to impose approximately 200% tariffs on China regarding rare earth magnet supplies. China certainly won't accommodate him, but Europe is another story. On Monday Eastern Time, Trump threatened that if countries imposing digital taxes don't repeal such legislation, the US would impose "subsequent additional tariffs" on goods from these countries. US tech giants—including Google parent Alphabet, Meta, Apple, and Amazon—are all deeply affected by this tax. Trump's threats to Europe usually work, and they'll likely repeal it, which represents considerable money that would flow to the treasury.

The US government proposed on Monday to include copper, silicon, silver, and other materials in the 2025 critical minerals list due to their importance to US economic and national security. Additionally, the US Geological Survey stated it would analyze the potential inclusion of uranium and metallurgical coal. The US tariff war has reached a point where they're concerned about backfire, and these critical minerals will likely be exempt from tariffs, otherwise they simply couldn't withstand it. Jiangxi Copper (00358) and China Nonferrous Mining (01258), mentioned yesterday, rose over 2% again.

Gaming stocks mentioned yesterday received another catalyst, with NagaCorp (03918) delivering strong interim results. First-half gaming gross revenue was approximately $332 million, up 17.2% year-over-year; net profit was approximately $149 million, up 68.8% year-over-year. The stock surged nearly 18%, reaching new phase highs, while other gaming stocks like Melco International Development (00200) rose over 9%, and Wynn Macau (01128) gained over 5%.

Auto stocks remain in brutal elimination rounds. Previously we discussed competing mainly on orders, but the latest view is competing on R&D speed. Over the past forty years, automotive R&D pace has barely changed: a new car typically takes four to five years from project initiation to market launch. This cycle ensures quality and supply chain stability. However, Chinese EV companies and Tesla are disrupting this logic: compressing the timeline to two years, allowing a completely new model to journey from concept to mass production. The pace has nearly doubled. By this standard, those who can't keep up will likely struggle to survive. Currently, the market recognizes XPeng (09868) and Great Wall Motor (02333).

Puma, which long held a top-three industry position, can no longer withstand pressure. Recent market reports suggest the Pinault family is considering strategic options for German sportswear brand Puma, including a potential sale. The Pinault family is working with advisors and has contacted potential buyers including Anta and Li Ning, while also exploring interest from other US sportswear companies and Middle Eastern sovereign wealth funds. Anta (02020) responded: "We do not comment on market rumors." Li Ning (02331) responded: "As of now, the company has not engaged in any substantive negotiations or evaluations regarding the transactions mentioned in the aforementioned rumors." Currently, few have the capability, and Chinese companies are likely the ones who could take over. Both companies have opportunities; continue monitoring subsequent developments.

Overseas companies struggle because Chinese companies are becoming increasingly competitive, continuously eroding foreign companies' market share. Therefore, domestically strong companies that can expand territory have greater staying power, such as Time Angel (06699) with interim results showing revenue of $161.4 million, up 33.1% year-over-year. Gross profit was approximately $100 million, up 32.9% year-over-year. Adjusted net profit was $19.5 million, up 84.8% year-over-year. Profit attributable to owners was $14.643 million, up 362.65% year-over-year; earnings per share $0.09, with a special interim dividend of HK$0.46 per share.

The domestic invisible orthodontics market has high concentration, with Time Angel holding 41.70% market share and ranking first in 2022. The global invisible orthodontics market shows a "one leader, multiple strong players" pattern, with Invisalign maintaining 64% global market share in 2023, while Time Angel's global market share is only 4%. The company still has significant development space in overseas markets. The focus is on overseas markets, with today's surge over 10%.

Global renowned index company MSCI previously announced its August 2025 index review results. Meitu (01357) was included in the MSCI China Index, taking effect after today's (26th) market close. Today it rose nearly 8%.

【Sector Focus】The State Council recently issued "Opinions on Deeply Implementing 'AI+' Actions," proposing that by 2027, AI should achieve extensive deep integration with six key areas first, with penetration rates of new-generation intelligent terminals and intelligent agents exceeding 70%, rapid growth in core AI economic industry scale, significantly enhanced role of AI in public governance, and continuously improved AI open cooperation systems.

Key content includes: strengthening collaborative innovation between AI and bio-manufacturing, quantum technology, sixth-generation mobile communications (6G), and other fields; increasing financial and fiscal support for AI; vigorously developing intelligent connected vehicles, AI smartphones and computers, intelligent robots, smart homes, intelligent wearables, and other new-generation intelligent terminals.

Looking at the timeline of less than 1.5 years, it's quite urgent. Capital expenditure will focus on AI areas going forward. Main beneficiaries include chip companies: SMIC (00981); computing power and large model company SenseTime; others include WeiMeng Group (02013), Fourth Paradigm (06682), Kingdee International (00268), and Mingyuan Cloud (00909).

【Individual Stock Analysis】SENSETIME-W (00020): Recent Financial Report Expected to Show Improvement, Leading Global Technology Stack Competitiveness

According to predictions, SenseTime's full-year 2025 revenue is expected to be 4.872 billion yuan. Based on historical seasonal distribution, the first half typically accounts for 40%-45%, so interim revenue is expected to be between 1.95-2.20 billion yuan, representing year-over-year growth of approximately 25%-30%. Regarding profitability, first-half 2025 losses are expected to narrow to 1.8-2.0 billion yuan, a year-over-year reduction of about 10%-20%. If Lingang AIDC revenue exceeds expectations, there's potential for turning profitable. The company will disclose its fiscal 2025 interim results on August 28.

Commentary: The company's recent strong performance may be related to improved financial expectations. The company's technology stack innovation index ranks second globally and first domestically, particularly leading Alibaba Cloud and Baidu Intelligent Cloud in resource utilization optimization and model compression. Its "Daily New" large model matches GPT-4 in multimodal capabilities, with Q2 2025 model call volume up 300% year-over-year, and customer payment willingness in finance and government sectors increasing six-fold.

The company's intelligent cockpit visual AI software has maintained the world's number one market share for five consecutive years (Q1 2025: 38%). Jueying Intelligent Driving holds 7.2% market share in urban NOA (third place), with end-to-end solution UniAD completing high-difficulty real vehicle tests and over 2.6 million units delivered. The company holds over 1,200 patents, with self-developed AI chip "Meta Brain" achieving international mainstream energy efficiency levels. Solid-state battery R&D has entered pilot production phase (energy density 350Wh/kg), with mass production planned for 2027.

Global expansion: Overseas revenue proportion increased from 18% in 2023 to 27% in 2024, but Q1 2025 growth slowed to 15%. Attention needed for geopolitical risks (such as European and American AI regulatory policies). The company collaborates with the Chinese Academy of Sciences on semi-solid-state battery development and holds stakes in New Source Power (hydrogen fuel cell stacks). In 2024, it participated in establishing the Shanghai AI Ecosystem Fund (10 billion yuan scale), focusing on large model industry chain investments.

We're optimistic about the catalyst from major tech companies' intensive AI+AR glasses launches and the enhancement of AI+AR glasses interaction capabilities through large model multimodal iterations.