In Shenzhen, the local government has released an action plan aimed at promoting high-quality development in mergers and acquisitions (M&A) from 2025 to 2027. The plan aims to significantly improve the quality of listed companies in the region, targeting a total market value exceeding 20 trillion RMB for domestic and international listed companies by the end of 2027, along with the formation of 20 companies with over 100 billion RMB market capitalizations. The M&A market is set to experience both quantity and quality strides, with over 200 completed M&A projects worth more than 100 billion RMB, alongside several industry demonstration cases.

The government plans to accelerate the creation of an M&A fund matrix and incubate capable fund managers, leading to a collaborative investment group worth trillions, with a focus on key industrial chain M&A activities to establish a comprehensive M&A ecosystem. There is a specific call to connect with Hong Kong's capital market to facilitate cross-border M&A resources. The initiative will support eligible industry leaders in listing or refinancing in Hong Kong and enhance the efficiency of cross-regional M&A implementations, broadening resource integration.

Tools such as cross-border asset transfers, cross-border dual equity investments, and cross-border syndicate loans will be innovatively utilized to promote orderly integration of domestic and international enterprises, supporting companies in acquisitions through cross-border equity exchanges. Collaborative efforts are encouraged between Shenzhen and Hong Kong in establishing equity investment funds for industry M&A projects. Additionally, cooperation between Shenzhen Stock Exchange and Hong Kong Stock Exchange will be fortified to explore the interconnectivity of M&A and financing mechanisms, enriching M&A financing tools and improving payment flexibility to foster innovative M&A case implementations.

**Market Outlook**: Nasdaq Drops Nearly 1%, Netflix Plummets Over 10% As U.S. markets closed overnight, the Dow Jones Industrial Average fell by 334.33 points (0.71%) to close at 46,590.41; the Nasdaq Composite dropped 213.27 points (0.93%) to 22,740.40; the S&P 500 declined by 35.92 points (0.53%) to 6,699.43. Apple (AAPL.US) fell over 1%, AMD (AMD.US) decreased by 3.2%, and Google A (GOOGL.US) increased by 0.4%. The Nasdaq China Golden Dragon Index closed down 0.92%.

Notably, Netflix reported a Q3 operating profit margin below expectations, causing its stock price to drop over 10%, marking the largest one-day decline since April 2020. Tesla’s financial report indicated revenues exceeded expectations but showed pressure on profits, with the stock down more than 4% in after-hours trading. The Hang Seng Index ADR decreased, settling at 25,776.19 points, reflecting a drop of 5.58 or 0.02% compared to Hong Kong's closing.

**Upcoming Highlights**: Hong Kong Securities and Futures Commission Proposes Optimizing Retail Fund Guidelines to Enhance Global Competitiveness On October 22, the Hong Kong Securities and Futures Commission launched a three-month consultation regarding proposed revisions to the Code on Unit Trusts and Mutual Funds, aimed at aligning Hong Kong’s regulatory regime with the latest international standards and broadening product choices for investors. Currently, unit trusts and mutual funds comprise the majority of financial products approved by the Hong Kong Securities and Futures Commission. As of June 30, 2025, there are 2,424 approved funds, accounting for 80% of all collective investment schemes approved by the Commission.

**U.S. National Debt Surpasses $38 Trillion for the First Time** As of October 21, the total federal government debt of the United States has exceeded $38 trillion for the first time, as reported by the Treasury Department. This milestone comes just over two months after the federal debt first reached $37 trillion in mid-August.

**Tesla's Q3 Net Profit Declines 29%, Missing Expectations** On October 23, Tesla announced its Q3 financial results for 2025, revealing revenues of $28.1 billion, a year-on-year increase of 12%, surpassing the expected $26.36 billion. However, the adjusted net profit for Q3 fell to $1.77 billion, a 29% year-on-year decline, following a 23% drop in Q2. The earnings per share (EPS) stood at $0.39, compared to $0.62 in the same period last year; the adjusted EPS was $0.50, down from $0.72, and below the projected $0.54. The gross margin for Q3 was 18%, beating the estimate of 17.2%, with free cash flow at $3.99 billion, exceeding the forecast of $1.25 billion.

**IDC: China's AI Infrastructure Market Experiences Exponential Growth; Alibaba Cloud Retains Top Market Share** According to IDC's recent report on China's AI infrastructure market, released on October 22, the market for AI infrastructure services in China surged by 122.4% year-on-year in the first half of 2025, reaching 19.87 billion RMB. Alibaba Cloud maintains a dominant market share of 24.7%, ranking first in both GenAI IaaS and Other AI IaaS segments. The AI IaaS sector refers to AI infrastructure powered by dedicated chips such as GPUs. Fueled by the trend in generative AI and large models, the AI IaaS market has seen explosive growth, with expectations that the market size will approach 150 billion RMB by 2029. Related to Hong Kong stocks is Alibaba-W (09988).

**Vanke Secures Three Residential Land Parcels in Chengdu and Xuzhou in One Day** On October 22, Vanke secured three residential plots in Chengdu and Xuzhou, including two plots in Chengdu's Pidu District, which were acquired for a total of 316 million RMB, and one plot in Xuzhou for 213.25 million RMB. Since the second half of this year, Vanke has reportedly replenished its land reserves in at least nine cities, including Shijiazhuang, Dalian, Harbin, Yinchuan, Suzhou, Taiyuan, Xuzhou, and Chengdu, with total land costs amounting to approximately 3.3 billion RMB. Additionally, on August 26 this year, Vanke collaborated with Sanya Urban Investment and Construction Group to obtain a 90% stake in Sanya Luming Jiayuan Development and Construction Co., Ltd., for approximately 1.2455 billion RMB, which oversees developments in the central area of Sanya.

**Cathay Pacific (00293) Sees 21% Year-on-Year Increase in Passenger Volume in September** Cathay Pacific announced that its passenger volume in September 2025 increased by 21% compared to the same month in 2024, with available seat kilometers rising by 20% year-on-year. For the first nine months of 2025, passenger volume grew by 27% compared to the same period in 2024.

**Tao Bo (06110) Reports Interim Results with Profits for Equity Holders Down 9.69%** Tao Bo released its interim results for the six months ended August 31, 2025, reporting revenues of approximately 12.2986 billion RMB, a 5.79% decrease year-on-year, with profits attributable to equity holders approximately 789 million RMB, down 9.69%. The earnings per share stood at 12.72 cents.

**China Unicom (00762) Plans Spin-Off of Smart Network Technology for Listing on Shenzhen's ChiNext** China Unicom announced its plans to spin-off its Smart Network Technology for a listing on the Shenzhen Stock Exchange's ChiNext, taking current market conditions into consideration. If the spin-off occurs, it will be conducted in accordance with the Hong Kong Stock Exchange's Listing Rules.

**Sino Land (00732) to Acquire Approximately 11.43% Stake in Xinli Renshou via Public Tender** Sino Land announced it will submit a public tender to acquire approximately 11.43% equity stake in Xinli Renshou through the property trading platform, with a recommended bid not exceeding 1.05 billion RMB.

**China Unicom (00762) Reports Q3 Earnings of 20 Billion RMB, Up 5.1% Year-on-Year** China Unicom announced its earnings for the first three quarters of 2025, reporting operating revenues of 292.985 billion RMB, a growth of 1% year-on-year; service revenues reached 261.6 billion RMB, marking a 1.1% increase year-on-year, with profits attributable to equity holders of 20 billion RMB, up 5.1% year-on-year.

**Shanxi Installation (02520) to Form Joint Venture with Shanxi Sanjian and Huaneng Power for Pumped Storage Power Station Project** On October 22, Shanxi Installation announced a cooperation agreement with Shanxi Sanjian and Huaneng Power to establish a joint venture company for the Shanxi Qushui pumped storage power station project, with respective contributions of 65%, 25%, and 10% of the registered capital.

**Company Spotlight: JUNSHI BIO (01877) Subsidiary Passes FDA Inspection** JUNSHI BIO announced that its wholly-owned subsidiary, Suzhou Zhonghe Biomedical Technology, underwent an unannounced FDA inspection between June 16 and June 24, 2025. Recently, Suzhou Zhonghe received a signed Establishment Inspection Report (EIR) from the FDA, confirming compliance with CGMP standards. As of the announcement date, the production base in Wujiang has a fermentation capacity of 4,500 liters and holds multiple GMP certifications across various countries, primarily supplying the overseas market for Trepulimab. This successful FDA inspection enhances the company's prospects in the U.S. market and will positively impact its operational performance.