Northbound funds | Northbound capital net sold 1.316 billion. Northbound capital continues to accumulate investments in domestic large models. The performance of the chip duopoly shows a renewed divergence.

On August 14, the Hong Kong stock market saw a net sell of 1.316 billion Hong Kong dollars from Northbound trading. Among them, the Shanghai-Hong Kong Stock Connect had a net buy of 287 million Hong Kong dollars, while the Shenzhen-Hong Kong Stock Connect had a net sell of 1.603 billion Hong Kong dollars. The stocks with the highest net buy from Northbound trading were MINIMAX-W (00100), Z.AI (02513), and Tencent (00700). The stocks with the highest net sell were BABA-W (09988) and Hua Hong Grace Semiconductor (01347). Active Stocks in Shanghai-Hong Kong Stock Connect Active Stocks in Shenzhen-Hong Kong Stock Connect MINIMAX-W (00100) and Z.AI (02513) received net buys of 1.364 billion and 1.321 billion Hong Kong dollars, respectively. On August 8, DeepSeek announced a significant increase in API pricing. Morgan Stanley interpreted this move as a positive signal for improved pricing discipline in the industry. The bank believes the sector is transitioning from price competition to commercialization driven by smart capabilities, with three structural changes happening simultaneously: more rational pricing, tighter open-source licensing, and a surge in model parameter scale. Tencent (00700) received a net buy of 1.114 billion Hong Kong dollars. BOCOM INTL stated that the market will continue to focus on whether Tencent's AI revenue increment is sufficient to offset the rising R&D expenses and capital expenditures, which could bring short-term profit and cash flow pressure. Overall, the bank still agrees with Tencent's strategic logic of accelerating investment in the wave of AI to explore grander business avenues. In the second half of the year, it will pay attention to follow-up key variables such as the release of MIX 4, the commercialization conversion rate of AI applications, and user feedback, to see if they support valuation increases. Semiconductor Manufacturing International Corporation (00981) received a net buy of 644 million Hong Kong dollars. Semiconductor Manufacturing International Corporation reported a second-quarter revenue of 3.006 billion U.S. dollars, a year-on-year increase of 36.1% and a quarter-on-quarter increase of 20%, marking the first time single-season revenue exceeded 3 billion U.S. dollars. The second-quarter gross margin was 25.3%, an increase of 4.9 percentage points year-on-year and 5.2 percentage points quarter-on-quarter. Goldman Sachs noted that Semiconductor Manufacturing International Corporation's second-quarter revenue and gross margin exceeded both their and market expectations, surpassing previous guidance. They maintain a buy rating on the company and have a positive outlook on its long-term growth prospects. YOFC (06869) received a net buy of 395 million Hong Kong dollars. Daiwa published a research report pointing out that Yangtze Optical Fibre And Cable Joint Stock is benefiting from the current strong upward cycle in the fiber optic industry. The company is expected to be supported by its technological leadership and the upside potential of its optical interconnection business, with the gross margin compound annual growth rate of the optical interconnection business projected to be 137%, driving a compound annual growth rate of 135% in net profit from 2025 to 2028. Hua Hong Grace Semiconductor (01347) faced a net sell of 166 million Hong Kong dollars. Credit Suisse released a report stating that Hua Hong Grace Semiconductor's second-quarter revenue was in line with expectations, but it benefited from increased average selling prices and cost control measures, resulting in a gross margin and EBITDA exceeding expectations. Net profit was adversely affected due to other income falling short of expectations. The revenue guidance for the third quarter was below expectations, while the gross margin met expectations. The bank noted that intense competition in mature processes and overcapacity issues may put pressure on its overall profitability. Additionally, KB LAMINATES (01888) received a net buy of 254 million Hong Kong dollars, while BABA-W (09988) faced a net sell of 1.062 billion Hong Kong dollars.