GMT EIGHT - OPPORTUNITIES IN CHINA

Optimal "AI Bubble Trading": Going Long on Both "Pride" and "Prejudice"

The optimal investment strategy in the current AI bubble environment is to simultaneously go long on "arrogance" (leading AI technology companies) and "bias" (overlooked distressed assets) to capture the dual-sided returns during the final peak stage of nominal GDP bubble.

CITIC SEC: Can the pressure from the midterm elections still trigger a "TACO"?

The process of the 2026 midterm elections is more than halfway through, and the primary strategies of both parties are gradually becoming clear. Analyzing state by state, the most likely outcome is that the Democratic Party will take the House of Representatives while the Republican Party will hold onto the Senate.

Broadcom Inc. (AVGO.US) fell 6% overnight: The next hurdle for AI is the cost of financing.

The real risk in the market is not a subprime-style collapse the residual value of AI chips is still on the rise, but the increasing cost of financing is quietly eroding the profit margins of the entire industry chain. This is a valuation compression, not an end of the cycle.

NVIDIA Corporation (NVDA.US) has reduced its guarantee scale for OpenAI data centers by more than 50%.

NVIDIA (NVDA.US) has adjusted its support plan for OpenAI's 10GW data center project in Ohio, USA.

AI version of financial innovation: The seller's guarantee model behind the sharp decline of Broadcom Inc. (AVGO.US)

Affected by the market re-pricing due to the credit risk arising from "seller guarantees," Broadcom's stock price has significantly plunged.

"The 'AI Stock God' blew up, dragging down Jane Street with a massive loss of 15 billion in July, marking the first monthly loss in a decade!"

One of the most mysterious and also the most profitable proprietary trading giants on Wall Street, Jane Street, is paying a rare price for an unexpected AI investment storm.

Bank of America names the midterm elections as the "AI Make-or-Break Situation": If the Republicans hold two key positions, there could be further gains ahead.

The strategy team at Bank of America stated that the artificial intelligence-related stocks, which recently experienced significant volatility, will next face the challenge of the U.S. midterm elections.

$60 billion tech acquisition finalized, Musk officially enters the "Vibe Coding" battlefield.

SpaceX (SPCX.US) has completed the acquisition of the artificial intelligence programming startup Cursor, marking an important step for Elon Musk in catching up with competitors like Anthropic and OpenAI.

"AI Version of Financial Innovation": NVIDIA Corporation's "$500 Billion Grand Calculation"

NVIDIA (NVDA.US) is reshaping its business boundaries in an unprecedented waytransforming from a chip manufacturer to an AI infrastructure "financial partner." At the core of this transformation is a new cloud service revenue-sharing model based on the logic of "bottom-line guarantees in exchange for profit sharing."

Anthropic's second-quarter revenue exceeded $11.5 billion, a year-on-year increase of over 14 times.

According to a document, AI chatbot Claude's developer, Anthropic PBC, is revealing to potential investors that its second-quarter revenue has increased by at least 14 times compared to the same period last year.

Opportunities and Concerns of Tencent's (00700) 84.7 Billion Capital Expenditure

Tencent's capital expenditure for Q2 is 52.8 billion yuan, plus a 51.4 billion yuan prepayment for computing power, suggesting that investment in AI infrastructure may have exceeded 100 billion yuan.

The joint intervention by the US and Japan in the yen has been effective, leading to a more than halving of short positions by hedge funds on the yen.

After the historic joint intervention by the United States and Japan, hedge funds further reduced their bearish positions on the yen, indicating a easing of negative sentiment in the market towards the currency.

Informed sources: Nvidia scales back its plan to provide a $250 billion guarantee for OpenAI's data center.

According to sources, Nvidia and OpenAI are about to reach an agreement to finance a large data center campus in Ohio, but they have modified the deal structure: Nvidia initially guaranteed only half of the project, which is worth hundreds of billions of dollars, rather than providing full guarantees. Some insiders said the revised plan has reduced Nvidia's financial guarantee scale from $250 billion to below $120 billion. This adjustment was made to alleviate investors' concerns about the chipmaker's risk exposureNvidia's goal in utilizing its own balance sheet is to boost market demand for its AI chips. The deal could be signed as soon as this weekend.

The situation in Iran has added further uncertainty, putting pressure on U.S. Treasury bonds, with the 10-year yield rising by more than 5 basis points.

U.S. Treasury yields generally rose on Friday.

Chicago Fed Chair Goolsbee: The recent cooling of inflation is encouraging, but more data is needed to confirm a return to the 2% target.

Chicago Federal Reserve President Goolsbee stated that he is encouraged by the recent cooling of inflation in the United States, but he hopes to see similar improvement trends in the coming months before he is convinced that prices are consistently returning to the Federal Reserve's 2% target.

Berkshire Hathaway's successor has started using massive cash reserves! In the second quarter, Berkshire (BRK.A.US, BRK.B.US) increased its holdings in Delta Air Lines, Inc. (DAL.US) and Alphabet (GOOGL.US) with a net purchase of nearly $20 billion in stocks.

Berkshire Hathaway further increased its holdings in Delta Air Lines and Googles parent company, Alphabet, in the second quarter.

NVIDIA Corporation (NVDA.US) has engaged financial giants on Wall Street, such as Goldman Sachs Group, Inc. and Blackstone, to plan a $500 billion AI financing initiative to inject funds for clients to purchase chips.

Nvidia is collaborating with major Wall Street financial institutions such as Goldman Sachs, Blackstone Group, and Apollo Global Management to plan an AI computing power financing scheme worth up to $500 billion.

Overnight US stocks | The three major indices showed mixed performance, with SanDisk (SNDK.US) rising 7.39%.

As of the close, the Dow fell 107.57 points, a decline of 0.2%, closing at 53,732.41 points; the S&P 500 index dropped 13.23 points, a decline of 0.17%, closing at 7,785.76 points; the Nasdaq fell 73.86 points, a decline of 0.28%, closing at 26,729.16 points.

Anthropic's revenue in the second quarter exceeded $11.5 billion, an increase of at least 14 times compared to the same period last year.

According to reports, Anthropic's preliminary revenue for the second quarter exceeded $11.5 billion, growing by at least 14 times compared to $787 million in the same period last year, and also surpassing the $4.73 billion of the first quarter of this year. The company has achieved positive adjusted operating profit for the quarter. Anthropic was once in a position of catching up in the AI race, but thanks to an increasing number of professionals using its software to streamline workflows such as programming, the companys business growth has noticeably accelerated. By May of this year, Anthropic's annualized revenue had surpassed $47 billion. In comparison, OpenAI previously disclosed an annualized revenue of over $40 billion, although the calculations for both may not be entirely consistent. The competition in the AI sector is intensifying, with IPO financing reaching $256.4 billion so far this year, marking a new high since 2021.

US Stock Market Move | The Q3 financial report exceeded expectations comprehensively but still failed to satisfy the market's "appetite." Applied Materials (AMAT.US) saw a nearly 6% drop in early trading.

On Friday, Applied Materials (AMAT.US) fell nearly 6% in early trading, currently reported at $503.94.

US Stock Market Move | The largest issuance of dollar bonds in history has been completed, and Advanced Micro Devices (AMD.US) rose nearly 4% against the trend.

On Friday, Advanced Micro Devices, Inc. (AMD.US) rose nearly 4% in early trading, currently quoted at $500.37.

Expectations for a rate hike in the U.S. in September continue to cool! Retail sales and consumer confidence are weakening, and the market is betting that the probability of maintaining interest rates unchanged has risen to 71%.

As the latest retail sales and consumer confidence data from the United States weaken, market expectations for the Federal Reserve to continue raising interest rates in September further cool down.

A-shares Evening Highlights | July Financial Data Released, Here Comes the Latest Interpretation

July financial data released: the role of direct financing in supporting the market continues to strengthen, experts provide the latest interpretation.

Jinchuan International (02362) announced its interim results, with shareholders' profit attributable to shareholders reaching 47.816 million USD, a year-on-year increase of 766.07%.

Jinchuan International (02362) announced its interim results for 2026, reporting revenue of $460 million, an increase of 152.35% year-on-year; the profit attributable to owners of the company reached $47.816 million, up 766.07% year-on-year; basic earnings per share were 0.36 cents.

CNBM (03323) plans to increase its capital in China National Materials High-Tech.

China National Building Material (03323) announced that on August 14, 2026, China National Materials High-tech (an associate of the company and an indirect non-wholly-owned subsidiary of the parent company) entered into this capital increase agreement and supplemental agreement with the company, North New Building Materials (a subsidiary of the company), the General Institute of Building Materials (a subsidiary of the parent company), China United Investment (a subsidiary of the parent company), and other Party B, Party C, and Party D shareholders.

MIRAMAR HOTEL (00071) announces its interim results, with shareholders' profit attributable to them rising 3.0% year-on-year to HKD 332 million.

The Mandarin Oriental Hotel (00071) announced its mid-year results for 2026, with the group's revenue declining by 9.8% year-on-year to HK$1.168 billion; profit attributable to shareholders increased by 3.0% year-on-year to HK$332 million; basic earnings per share of HK$0.48. A mid-term dividend of HK$0.23 per share is proposed.

MIRAMAR HOTEL (00071) will distribute a mid-term dividend of HKD 0.23 per share on October 9.

Mirae Asset Hotel (00071) announced that it will distribute an interim dividend of HK$0.23 per share for the six months ending June 30, 2026, on October 9, 2026.

HEARTCARE-B (06609) plans to issue A-shares and be listed on the Sci-Tech Innovation Board of the Shanghai Stock Exchange.

Heartway Medical-B (06609) announced that the board of directors proposes to apply to the relevant regulatory authorities in China for the allocation and issuance of no more than 7,025,592 shares of the company's A-shares, as well as to apply to the Shanghai Stock Exchange for approval for the listing and trading of A-shares on the Sci-Tech Innovation Board.

BAIWANG CO (06657) issues a profit warning, expecting a net loss of approximately 25 million to 45 million yuan, a year-on-year shift from profit to loss.

Baiwang Co., Ltd. (06657) announced that the group expects to record (1) total revenue of approximately RMB 290 million to RMB 310 million for the six months ending June 30, 2026, compared to total revenue of RMB 348 million for the same period in 2025; (2) a net loss of approximately RMB 25 million to RMB 45 million, while the net profit for the same period in 2025 was RMB 3.6 million; and (3) an adjusted net loss of approximately RMB 20 million to RMB 40 million, while the adjusted net profit for the same period in 2025 was RMB 4.6 million.

US Stock Market Move | Tesla, Inc. (TSLA.US) is expected to unveil its "cool air propulsion" Roadster this month, and the stock rose over 3% at one point.

On Friday, Tesla (TSLA.US) surged more than 3% at the start of trading, marking a cumulative increase of 15% since the low at the end of July, currently trading at $344.30.

PETRO-KING (02178) announced its interim results, reporting a loss attributable to shareholders of 35.325 million Hong Kong dollars, an increase of 199.54% year-on-year.

Baiqin Oil Services (02178) announced its interim results for the six months ending June 30, 2026, with the group reporting revenue of HK$48.125 million, a decrease of 56.75% year-on-year; the loss attributable to the company's owners amounted to HK$35.325 million, an increase of 199.54% year-on-year; loss per share was HK$0.0205.

US Stock Market Move | Broadcom Inc. (AVGO.US) fell as much as 5%, making it the largest decliner among S&P 500 components.

As of the time of publication, the stock has dropped by 4.75%, trading at $398.05.

YUEYUN TRANS (03399) released its interim results, with a net profit attributable to shareholders of 171 million yuan, an increase of 20% year-on-year.

Yueyun Transportation (03399) announced its interim results for 2026, reporting a revenue of 3.738 billion yuan, a year-on-year decrease of 1%; net profit attributable to shareholders of the parent company was 171 million yuan, an increase of 20% year-on-year; basic earnings per share were 0.21 yuan.

U.S. consumer confidence declined for the first time in three months in August, with the one-year inflation expectation rising to 4.3%.

In August, U.S. consumer confidence declined for the first time in three months, as households grew increasingly concerned about the deteriorating business environment and rising prices. Consumers' outlook on both the short-term and long-term prospects of the U.S. economy has weakened.

HK CHINESE LTD (00655) issued a profit warning, expecting a mid-term comprehensive loss attributable to shareholders of approximately HKD 450 million, turning from profit to loss year-on-year.

Hong Kong Chinese Limited (00655) announced that it expects the Group to record a loss of approximately HK$440 million from its share of joint ventures for the six months ending June 30, 2026 (the current period), compared to a profit of HK$189 million from its share of joint ventures for the six months ending June 30, 2025 (the prior period). The loss from the Group's joint ventures is mostly non-cash in nature and primarily comes from the losses of investments accounted for using the equity method in the OUE Group and impairment losses recognized on its investment in an entity accounted for using the equity method.

As of the end of July, the comprehensive net asset value per share of PROSP INV HOLD (00310) is approximately HKD 0.03.

Jiajin Investment International (00310) announced that the unaudited consolidated net asset value per share as of July 31, 2026, is approximately HKD 0.03.

JILIN CHANGLONG (08049) announced its interim results, with profit attributable to shareholders amounting to 123 million yuan, a year-on-year increase of 19.25%.

Jilin Changlong Pharmaceutical (08049) announced its interim results for 2026, reporting a revenue of 436 million yuan, a year-on-year decrease of 0.87%; the profit attributable to shareholders was 123 million yuan, a year-on-year increase of 19.25%; earnings per share were 21.92 cents.

Shenzhen Zhaowei Machinery & Electronics (02692) announced its mid-year results for 2026, reporting a net profit attributable to shareholders of 74.6457 million yuan, a year-on-year decrease of 34.1%.

Zhaowei Electromechanical (02692) released its 2026 semi-annual report, showing an operating income of 816 million yuan, a year-on-year increase of 3.80%; the net profit attributable to shareholders of the listed company was 74.6457 million yuan, a year-on-year decrease of 34.10%; the basic earnings per share were 0.30 yuan.

YAN PALACE (01497) will distribute an interim dividend of 2.17 yuan for every 10 shares on September 24.

Yanzhiyu (01497) announced that the company will distribute a mid-term dividend of 2.17 RMB for every 10 shares on September 24, 2026.

BOAN BIOTECH (06955): BA1302 (CD228 ADC) completes Phase Ia clinical research in China.

Bohua Biosciences (06955) announced that its independently developed innovative antibody-drug conjugate (ADC) targeting CD228, BA1302, has completed the single-agent dose escalation phase (Phase Ia) of the Phase I clinical trial in China. The study results indicate that BA1302 has demonstrated good anti-tumor activity in various patients with advanced solid tumors who have experienced disease progression after multiple lines of treatment, with overall good safety and tolerability.

BITSTRAT HLDGS (06113) issues a profit warning, expecting a mid-term loss of no less than approximately 6.88 million ringgit, turning from profit to loss compared to the same period last year.

Bit Strategies (06113) announced that the Group expects to record a loss of no less than approximately 6.88 million Malaysian Ringgit for the six months ending June 30, 2026 (interim period), compared to a profit of approximately 4.6 million Malaysian Ringgit for the six months ending June 30, 2025 (previous period).

BOAN BIOTECH (06955) issued a profit warning, expecting a net loss attributable to shareholders of approximately 79 million to 89 million yuan for the interim period, a change from profit to loss compared to the same period last year.

The announcement from Bohan Biotech (06955) states that the group expects to incur a net loss attributable to equity holders of the company of approximately RMB 79 million to RMB 89 million for the six months ending June 30, 2026 (the reporting period), while for the six months ending June 30, 2025, the company achieved a net profit attributable to equity holders of approximately RMB 21 million.

C STRATEGIC TEC (01725) announces a profit warning, expecting that the profit attributable to shareholders in the first half will not be less than 100 million yuan.

China Technology Group (01725) announced that the Group expects to achieve a profit attributable to equity holders of the company of no less than RMB 100 million for the six months ending June 30, 2026, compared to a loss of approximately RMB 32.4 million for the same period in 2025. The turnaround from loss to profit is mainly attributed to a one-time gain of approximately RMB 197.8 million from the sale of a subsidiary.

US Stock Market Move | The drone concept stocks rose in early trading, with Unusual Machines (UMAC.US) up over 15%.

On Friday, drone concept stocks rose at the beginning of trading.

ASIA TELE-NET (00679) issues a profit warning, expecting a net loss of no more than HK$20 million in the first half of the year.

Asia Internet Technologies (00679) announced that the group expects to achieve revenue growth, increasing from HKD 237 million to HKD 424 million.

US Stock Market Move | Most optical communication concept stocks rose, with Lumentum (LITE.US) up more than 8.6%.

Most optical communication concept stocks have risen.

C CHENG HLDGS (01486) issued a profit warning, expecting a mid-term loss of approximately HKD 13 million to HKD 15 million, a turnaround from profit to loss compared to the same period last year.

Sicheng Holdings (01486) announced that the Group expects to record a loss of approximately HKD 13 million to 15 million for the six months ending June 30, 2026, compared to a profit of approximately HKD 51 million for the same period in 2025. This includes a one-time other income of approximately HKD 49 million recognized from the exercise of the usage right at no cost (i.e., the entire office floor of the building is used for the remaining term of the land use right).

BAGUIO GREEN (01397) issued a profit warning, expecting a mid-term post-tax profit between HKD 27 million and HKD 30 million, a decrease of approximately 54% to 49% compared to the same period last year.

Biyao Green Group (01397) announced that based on currently available information and a preliminary review of the Group's unaudited consolidated management accounts for the six months ending June 30, 2026 (the "Reporting Period"), the Group expects to achieve a post-tax profit of between HKD 27 million and HKD 30 million during the Reporting Period, representing a decrease of approximately 54% to 49% compared to HKD 58.8 million for the six months ended June 30, 2025 (the "Previous Period").

US Stock Market Move | Reddit (RDDT.US) will be included in the S&P 500 index and opened with a surge of over 13%.

On Friday, Reddit (RDDT.US) opened with a surge of over 13%, currently reported at $180.85.

YAN PALACE (01497) announced its mid-term results, with a profit attributable to shareholders of 107 million yuan, an increase of 42.72% year-on-year.

Yan Zhihua (01497) announced its interim results for the first half of 2026. The group achieved revenue of 1.182 billion yuan, an increase of 16.49% year-on-year; the profit attributable to equity shareholders reached 107 million yuan, a year-on-year increase of 42.72%; earnings per share stood at 0.24 yuan, and an interim dividend of 2.17 yuan per 10 shares is proposed.

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The United Nations adds funds to respond to the Ebola outbreak.

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