Northbound funds | Beijing's net buying amounted to 3.077 billion. Beijing aggressively bought Semiconductor Manufacturing International Corporation (00981) over 1.7 billion Hong Kong dollars and continued to reduce its holdings in Hua Hong Grace Semiconductor (01347).

On August 17th, in the Hong Kong stock market, northbound trading saw a net purchase of HKD 3.077 billion. Among this, the net purchase via the Shanghai-Hong Kong Stock Connect amounted to HKD 1.974 billion, while the Shenzhen-Hong Kong Stock Connect saw a net purchase of HKD 1.103 billion. The stocks with the highest net purchases by northbound investors were Semiconductor Manufacturing International Corporation (00981), Z.AI (02513), and Tencent (00700). The stocks with the highest net sales were Hua Hong Grace Semiconductor (01347) and KB LAMINATES (01888). Active trading stocks via the Shanghai-Hong Kong Stock Connect Active trading stocks via the Shenzhen-Hong Kong Stock Connect Semiconductor Manufacturing International Corporation (00981) garnered a net purchase of HKD 1.774 billion, while Hua Hong Grace Semiconductor (01347) faced a net sale of HKD 778 million. The divergent performance of SMIC and Hua Hong post-earnings was mainly due to a "scissors gap" between market expectations and actual performance. Hua Hong Grace Semiconductor's net profit for the second quarter was USD 38.6 million, slightly below the market expectation of USD 39.4 million, coupled with a third-quarter revenue guidance that fell short of expectations, triggering profit-taking after positive sentiment. In contrast, Semiconductor Manufacturing International Corporation not only exceeded expectations across the board in its second-quarter performance but also raised its gross margin guidance for the third quarter, prompting multiple institutions to upgrade their ratings. Z.AI (02513) and MINIMAX-W (00100) registered net purchases of HKD 1.672 billion and HKD 306 million, respectively. On August 8th, DeepSeek announced a significant increase in API prices. Morgan Stanley perceived this move as a positive signal of improved pricing discipline in the industry. The firm believes the industry is shifting from price competition to commercialization driven by intelligent capabilities, with three structural changes happening simultaneously: pricing is becoming more rational, open-source licensing is tightening, and model parameter scales are increasing. Tencent (00700) received a net purchase of HKD 533 million. Daiwa stated that while short-term capital expenditures might remain high, Tencent believes that current AI expenses can be justified by attractive long-term returns. Management pointed out that computing power can now be monetized through resale, but the company still prioritizes advancing AI initiatives, as it believes they can create greater long-term value. The firm anticipates that the substantive benefits of WorkBuddy and small business initiatives will gradually manifest, requiring patient waiting from investors. BABA-W (09988) saw a net purchase of HKD 422 million. Alibaba announced that on August 14th, it formally open-sourced the Qwen 3.8 series models, allowing all developers, research institutions, and enterprises to freely download, deploy, and use them. The Qwen 3.8-27B model from Boai NKY Medical is a native multi-modal dense model with only 27 billion parameters, surpassing the overall level of Qwen 3.7-Plus. YOFC (06869) encountered a net sale of HKD 418 million. According to Jefferies, the globally announced new capacity for optical fiber preform is 19,400 tons for the years 2026-2028, with 2026 still likely experiencing a supply tightness period; the risk window lies between 2027-2028. Nomura previously warned that if new entrants successfully develop high-end products (such as hollow-core fibers and multi-core fibers) and successfully implement their capacity expansion plans, market competition will intensify, and existing participants may face pressure on profit margin expansion. Additionally, Cig Shanghai (06166) achieved a net purchase of HKD 191 million, while GigaDevice Semiconductor Inc. (03986) and KB LAMINATES (01888) faced net sales of HKD 297 million and HKD 439 million, respectively.