Zhitong Hong Kong Stock Analysis | Temasek's Move in Korea Drives Storage, Urban Renewal "14th Five-Year Plan" Activates Real Estate

[Market Dissection]

When technology rises, Hong Kong stocks generally fall, so the Hong Kong Index really needs to be reformed; it can't always be labeled as a "takeout" index by the outside world. The Hang Seng Index fell 0.83% today.

Unexpectedly, the savior of technology is Singapore's sovereign wealth fund Temasek, which plans to make its first direct investment in the South Korean stock market, targeting Samsung Electronics and SK Hynix, viewing these two global memory chip giants as severely undervalued in the AI value chain. This directly catalyzed a 5% increase in the Korean stock market, with Samsung Electronics and SK Hynix both rising over 8%, and the Southern Double Long Samsung Electronics rising over 14%; storage concept stock Lanqi Technology (06809) rose over 7%; and Zhaoyi Innovation (03986) rose over 5%.

The performance of related U.S. stocks also provided a boost: U.S. optical communication giant Lumentum (LITE.US) released its Q4 fiscal 2026 earnings report after the market closed on August 11, significantly exceeding market expectations. Q4 net revenue grew 109% year-on-year to $1.01 billion, with adjusted non-GAAP earnings per share soaring 267% year-on-year to $3.23; non-GAAP net profit increased by 415% year-on-year. At the same time, the earnings guidance for Q1 fiscal 2027 was also significantly stronger than expected, with the median revenue range exceeding market expectations by over 8%, and the median adjusted EPS guidance exceeding market expectations by over 16%. Among comparable stocks, Zhongji Innolight (03308) rose nearly 9%, Cambridge Technology (06166) rose nearly 7%, Haiguang Chip (01191) and Changfei Optical Fiber Cable (06869) rose over 12% and 7%, respectively; Zhitong's August gold stock MINIMAX (00100) will be included in the Hong Kong Stock Exchange Technology 100 Index and the Hong Kong Stock Exchange Technology and U.S. Technology 100 Index after the market closes on August 12, and will officially take effect from August 13. It rose nearly 9% today. The other two PCB direction stocks mentioned in yesterday's sector focus that are expected to be included in the new Hang Seng Technology Index, besides Zhongji Innolight (03308), are Shenghong Technology (02476) and Jiantao Laminated Board (01888), which rose nearly 5% and nearly 11%, respectively. In fact, there are some potential candidates for inclusion that have also risen well, which everyone can explore on their own. Hua Hong Semiconductor (01347) plans to hold a board meeting on August 13 to approve its Q2 financial performance. It rose over 7% today.

Domestically, there are also stimulative measures. The Shanghai Municipal Commission of Economy and Informatization issued the "14th Five-Year Plan for the Development of Software and Information Service Industry in Shanghai" on August 11, clearly proposing the implementation of the "Hundred Thousand" intelligent computing cluster project, laying out plans to build super-large-scale intelligent computing clusters in Songjiang, Lingang, and Qingpu. Alibaba Cloud's Lingjun Zhenwu M890 super node instance has officially launched, with the first batch already on sale in Ulanqab; this super node is the first in the country to successfully run a large model with over 20 trillion parameters; Alibaba Cloud stated that it plans to double the global capacity of modular data centers, and related super node instances will gradually be launched in other regions. This news itself is not a positive for Alibaba (BABA.US), as it is in the investment phase, benefiting mainly IDC service providers like GDS (09698) (GDS.US), which rose over 5% Also, Huiju Technology (01729): is the core supplier of cables for Alibaba Cloud's overall intelligent computing center, relying on Luxshare Precision's high market share in Alibaba's high-speed interconnection, and has the qualification and product compatibility to supply Alibaba Cloud's Lingjun 64-card super node cluster, making it a potential beneficiary. Its AI server-related business is growing very fast, significantly benefiting from the national computing power construction, and today it rose nearly 7%. ZTE Corporation (00763) and Pakistan's leading cloud service provider Sky47 jointly held the completion ceremony of Pakistan's largest integrated data center for communication and intelligent computing in Islamabad, indicating progress in overseas expansion, and today it rose nearly 5%.

On the AI application side, China Literature Group (00772) performed strongly, with a 10.7% increase in revenue in the first half of the year. In the first half, the revenue from China Literature's short drama and AI comic drama business reached 430 million yuan, more than three times that of the same period last year, and the efficient visualization channel for China Literature's IP has been fully opened. The proportion of hit short dramas reached four times the market average; 46 AI comic dramas had over 100 million views, and 367 had over 10 million views. At the same time, the continuous expansion of China Literature's IP influence has also driven the IP derivative business to show stable and sustainable growth, with the GMV of IP derivatives reaching a new high of 780 million yuan, a year-on-year increase of 60%.

The diversified breakthroughs in new IP business formats have driven a year-on-year increase of 41.9% in China Literature's IP copyright revenue to 1.61 billion yuan, further enhancing the profitability of the China Literature IP ecosystem. Today it surged over 10%.

The real estate sector finally has significant movements. Last week, Beijing issued policies to significantly relax controls on purchase restrictions, provident funds, and gifts. The latest is the introduction of the "15th Five-Year Plan for Urban Renewal," which clarifies 23 key tasks and presents 10 quantitative indicators, including: starting the renovation of 115,000 old urban communities, updating about 500,000 dilapidated urban houses, renovating 1,500 old street factories, and promoting the renovation of 4,000 urban villages; an investment of 15 trillion yuan is expected to be completed. Funding mainly relies on a diversified model of "government guidance, market operation, and public participation." This directly brings new business opportunities to the real estate industry, currently mainly concentrated in the stock field. If the stock is revitalized, the next step in the incremental direction may gradually ease. The focus will be on the implementation of policies, especially whether the funding can be in place.

China Jinmao (00817): The cumulative contracted sales amount in the first seven months increased by 7.92% year-on-year, and sales growth will accelerate in the third quarter, today it surged nearly 14%; leading urban village renovation company Yuexiu Property (00123) rose nearly 10%; Longfor Group (00960): According to the announcement on August 11, the company has completed the principal and interest payment of about 1.029 billion yuan for "21 Longfor 06," and all credit bonds maturing within 2026 have been fully repaid, continuously optimizing the debt structure, today it rose nearly 9%; China Resources Land (01109): Its large comprehensive development project, Ruiqing Phase 1, today announced its first price list, involving 102 units, with the developer offering a maximum discount of 16%, with the actual selling price starting from 5.298 million Hong Kong dollars, and the average discounted price per square foot for the first batch is 17,880 Hong Kong dollars. Currently, the local market is in a low-interest environment, coupled with strong local housing demand, both volume and price of primary properties are rising, and the market is optimistic about its sales performance, today it rose nearly 7% JP Morgan (JPM.US) expects that the price of polysilicon will see a recovery, potentially rising to RMB 50-55 per kilogram, which roughly corresponds to the full cost of marginal producers plus a 13% value-added tax. It seems that the last meeting will yield results, with GCL-Poly Energy (03800) rising over 6%; Xinte Energy (01799) increasing nearly 5%.

The Federal Reserve continues to be reluctant to provide clear forward guidance, so the market can only look at inflation data. Tonight, the U.S. July CPI data will be released at 8:30 PM Beijing time. Surveys indicate that the July CPI is expected to rise by 0.1% month-on-month (previous value: -0.4%), while the year-on-year increase is expected to fall to 3.4% (previous value: 3.5%)—marking a cooling for the second consecutive month. Excluding volatile energy and food prices, the core CPI for July is expected to rise by 0.2% month-on-month (previous value: 0.0%) and increase by 2.5% year-on-year (previous value: 2.6%). Overall, the CPI is significantly above the Federal Reserve's 2% target, but the slowdown in year-on-year growth for two consecutive months may buy some time for Federal Open Market Committee (FOMC) decision-makers before deciding on interest rate policy.

【Sector Focus】

On August 12, Emirates Global Aluminium (EGA) plans to resume production early next year after its main smelting plant was shut down due to an attack in March in Iran, which may help alleviate the pressure on the aluminum market caused by supply shortages and soaring prices. EGA stated that the company is investing $400 million in repairs, aiming to restore production to pre-conflict levels in the first quarter of next year while working to accelerate this process. This will boost the aluminum supply outlook in the region—before the conflict, the region accounted for about 10% of global production. The largest aluminum producer in the Middle East stated in a statement on Wednesday that even if production is restored, subsequent shipments will still depend on the reopening of the Strait of Hormuz. Additionally, Norway's Hydro announced that its Alunorte plant in Brazil has reduced alumina production to 50% of capacity due to "natural gas supply" issues. Public data shows that the Alunorte plant has a designed annual capacity of 6.3 million tons and is known as the "largest alumina plant outside of China." Alumina is a key raw material for aluminum smelting. It is evident that the aluminum supply shortage has spread globally, and an increase in aluminum prices is highly likely. Related stocks in the Hong Kong market include Innovation Industry (02788), China Aluminum (02600), China Hongqiao (01378), and Nanshan Aluminum International (02610).

【Stock Picking】

JD Industrial (07618): The company is actively promoting the "Embodied Intelligent Chain" layout to expand overseas business and open a second growth curve.

Recently, at the ESCC Embodied Intelligent Supply Chain Ecological Conference themed "Winning Together with Intelligent Chains," a relevant person in charge of JD Industrial showcased the JD "Embodied Intelligent Chain" layout, which integrates seven links: "sourcing, storage, labeling, training, evaluation, simulation, and measurement." The mid-term performance report will be released this Thursday.

Comment: The company promotes the "Embodied Intelligent Chain" layout through scaling and standardization, enhancing efficiency while also creating new growth points. JD Industrial's profit growth rate far exceeds revenue, with a significant explosion in profitability. The company is the absolute leader in domestic MRO industrial product procurement, the largest industrial supply chain service, sharing JD's nationwide warehousing, enabling same-day/next-day delivery of industrial products nationwide Technical barriers are leading the way. The JoyIndustrial-2.0 industrial supply chain large model has been fully implemented, equipped with 27 AI agents, achieving a 10-fold increase in material standardization efficiency and an 80% reduction in labor costs. The AI procurement orders in the robot manufacturing sector have seen explosive growth, with global supply chain intelligent scheduling automatically allocating domestic consolidation warehouses, overseas stocking warehouses, and local spot warehouses. Overseas procurement costs have decreased by 18%-30%, and procurement efficiency has improved by over 30%. It has been selected as a benchmark case for AI by the World Economic Forum in Davos. The TaiPu intelligent integrated supply chain system is the company's flagship core product, providing a one-stop solution for enterprise procurement sourcing, compliance control, supplier management, warehousing, auditing, and full-process digitization; it can help enterprises reduce procurement costs by 5%-30%, compress procurement cycles from 21 days to 7 days, and has become the standard procurement system for state-owned enterprises and new energy vehicle companies. New energy orders are rapidly increasing, assisting automotive companies in replacing imported tools and precision parts with domestic alternatives. The company is laying out overseas supply chains, with long-term general contracting orders for state-owned energy infrastructure, including: 1) China Coal Energy: a digital supply chain and AI large model procurement framework agreement for the entire group. 2) Shandong Energy Group: full-link procurement services for 461 projects nationwide. 3) China Power Construction: domestic and overseas infrastructure supply chain general contracting and accompanying services. 4) China Resources Gas, State Grid, China State Construction, and China CNR's annual centralized procurement framework for the entire group. BYD, Changan, Dongfeng, Geely, and CATL: total package procurement for MRO across Southeast Asia, Brazil, and Hungary overseas factories; securing a multi-million dollar cross-border cable order in Malaysia, supporting the construction supply for CATL's second-phase factory in Malaysia. The company has 13,300 key accounts as major clients in 2026, all of which are long-term annual framework orders; new clients in robotics, new energy, and energy storage are being onboarded in batches; the number of small and medium manufacturing enterprise clients has surpassed 2.6 million, with platform transaction volume continuously surging. The company continues to capture market share: AI supply chain technology services open up high-margin space, and overseas business has initiated a second growth curve