Major financial events for the week of August 25 - August 31 (all times in Beijing time):

Key focus this week: US July PCE, Q2 GDP, July durable goods orders data, China's August official PMI, July industrial enterprise profits year-over-year, US "reciprocal tariff" of 50% on India takes effect.

On the earnings front, NVIDIA, Alibaba, MEITUAN-W, Luxshare Precision, Innolight Technology, and Accelink Technologies will release financial data.

**Economic Indicators**

**US July PCE Price Index Year-over-Year**

On the 29th, the US will release its July PCE price index. US services inflation is accelerating upward, highlighting tariff impacts. The June PCE price index rose 2.6% year-over-year, above the expected 2.5%, with the previous value revised up 0.1 percentage point to 2.3%. Month-over-month came in at 0.3%, matching expectations. Meanwhile, consumer spending showed signs of fatigue. Real consumer spending adjusted for inflation increased only 0.1% in June, meeting expectations but failing to reverse the previous month's decline.

With US money supply M2 returning to its 5% peak and PPI rising to high levels among multiple factors, "second wave" inflation concerns are building. Economists warn that the current situation bears striking similarities to the 1970s when central banks cut rates prematurely, leading to recurring inflation, making the Federal Reserve's cautious approach crucial.

Citi believes tariff impacts on consumer prices will be slower and more persistent than market expectations, with August-September serving as a critical window to verify this trend. The PCE price index could reach 3.2% in Q4 2025.

**US Q2 Real GDP Annualized Quarter-over-Quarter Revised Value**

Last month's initial reading showed US Q2 GDP, after removing inflation, grew at an annualized 3% pace, reversing Q1's contraction and significantly exceeding market expectations of 2.6%. However, deeper analysis reveals this prosperity is deceptive. A sharp contraction in imports artificially inflated overall data, masking the fact that domestic demand clearly slowed.

UBS predicts in a recent research report that US GDP will slow dramatically from Q2's 2.0% annual growth rate to 0.9% in Q4, notably below economists' consensus expectation of 1%. The report cites supporting reasons including: demand overdraft from pre-tariff purchases, depletion of excess savings, slower immigration, the Infrastructure Investment and Jobs Act creating slight fiscal drag in 2025, and rising effective interest rates during debt rollovers.

However, UBS also specifically noted in the report that despite upside risks to the US economy, the economic slowdown trend is unavoidable. The bank identified potential factors driving economic upside including:

- 10% stock price gains adding 0.6%-1% to GDP through wealth effects - Generative AI-related capital expenditure: UBS forecasts hyperscale companies' capital spending will grow 60% this year - Investment reshoring to the US: commitments from South Korea, Japan, and the EU in recent tariff negotiations equivalent to 5% of GDP over the next three years - Loose financial conditions

**US July Durable Goods Orders Month-over-Month Initial Value**

On the 26th, the US will release July durable goods orders month-over-month initial value. Last month, US June durable goods orders plummeted 9.3% month-over-month, slightly better than market expectations but still the worst performance since the 2020 pandemic. This dramatic volatility stemmed mainly from large adjustments in non-defense aircraft orders, switching from May's 230% month-over-month surge to June's 50% decline.

Core data performed steadily after excluding Boeing order effects. Durable goods orders increased 0.25% month-over-month, better than the expected 0.1%, with 2.23% year-over-year growth. In the first half of this year, business planners faced dual challenges from the policy level: frequently changing tariffs and uncertainty surrounding tax and spending legislation. This environment significantly suppressed corporate investment willingness.

**China's August Official Manufacturing PMI**

On the 31st, China will release August official manufacturing, non-manufacturing, and composite PMI. Last month, manufacturing PMI fell to 49.3%, with manufacturing sentiment declining from the previous month. The new orders index was 49.4%, indicating some slowdown in manufacturing market demand.

Minsheng Securities' Tao Chuan believes "anti-involution" policy effects are beginning to differentiate, with price expectations improving immediately but production beginning to slow in stages; entering a new trade phase, export sentiment has changed, with the leading PMI new export orders index signaling marginal downward pressure on July exports. Guosheng Securities believes subsequent policies may "support but not boost" with flexible increases.

**China July Above-Scale Industrial Enterprise Profits Year-over-Year**

Last month's data showed that in June, above-scale industrial enterprises' profit decline narrowed by 4.8 percentage points compared to May, with manufacturing showing significant improvement. The automotive industry achieved 96.8% profit growth driven by automaker promotions boosting sales growth combined with key enterprise investment income increases. The "two new" policy effect continued to show, with intelligent unmanned aircraft manufacturing and computer manufacturing industries achieving profit growth of 160.0% and 97.2% respectively.

**Financial Events**

**US Imposes Additional 25% Tariff on India, Total Tariff Rate Reaches 50%**

According to Xinhua News Agency's August 6 report, US President Trump signed an executive order on the 6th, imposing an additional 25% tariff on Indian imports to the US, citing India's "direct or indirect importation of Russian oil." This means the US total tariff rate on India will reach 50%. The announcement stated that except for some exceptions, the new tariff measures will take effect 21 days after the executive order's publication. According to Trump's executive order signed July 31, the US began imposing 25% tariffs on Indian imports from August 7. Combined with the additional tariffs announced on the 6th, Indian imports to the US will face an overall 50% tariff rate.

Indian companies are facing Asia's most severe earnings forecast downgrades. Analysts have significantly slashed earnings expectations for Indian companies, highlighting the impact of trade tensions on Asia's third-largest economy. According to latest LSEG IBES data, earnings forecasts for Indian large and mid-cap companies over the next 12 months were downgraded 1.2% in the past two weeks, the largest decline in Asia. Bank of America's latest fund manager survey shows India's stock market status underwent a dramatic reversal in just two months, falling from the most favored Asian stock market to the least popular.

Although India's economy is primarily domestic demand-driven, with Nifty 50 constituent companies deriving only 9% of revenue from the US market, tariff threats still pose significant risks to economic growth. To address this challenge, according to previous Wall Street articles, Indian Prime Minister Modi plans to reform the goods and services tax, planning to reduce and simplify the current four tax brackets of 5%, 12%, 18%, and 28% to two brackets of 5% and 18% to boost the economy while responding to tariff shocks. Standard Chartered economists expect this tax reform will contribute 0.35-0.45 percentage points to GDP growth in fiscal 2027.

**Earnings Reports**

**NVIDIA**

NVIDIA will release its latest earnings next Wednesday, with Q3 guidance becoming the market focus. KeyBanc Capital Markets' latest report shows NVIDIA may temporarily exclude direct revenue from the Chinese market in its next fiscal quarter guidance, as the specific timing of semiconductor export license approvals remains uncertain under US export restrictions.

KeyBanc analysts stated that if Chinese business based on H20 and RTX6000D (B40) chips were included, it could bring NVIDIA $2-3 billion in incremental revenue. Currently, the market broadly expects NVIDIA's Q3 revenue of $45.92 billion and earnings per share of $1.01. Capacity improvements support fundamentals. Despite short-term uncertainty in the Chinese market, NVIDIA's business fundamentals remain strong, providing solid support for long-term growth.

KeyBanc emphasized in its report that NVIDIA's GPU supply and capacity are improving significantly, which is the core driver of its continued performance improvement. Data shows NVIDIA's GPU supply increased 40% in the quarter ending July, and supply is expected to grow another 20% in the quarter ending October with B200 volume production; meanwhile, newer, more powerful B300 chips will begin shipping in the October quarter and are expected to account for half of Blackwell series shipments.

Additionally, server rack production efficiency is improving. The report noted server ODM manufacturers' GB200 rack manufacturing yield rates have approached 85%, with rack shipments expected to reach 15,000-17,000 units by year-end. Therefore, the firm raised its full-year GB200 rack shipment forecast from 25,000 to 30,000 units.

Wall Street maintains optimistic expectations. KeyBanc analyst John Vinh, while issuing the warning, still raised NVIDIA's target price from $190 to $215 and maintained an "overweight" rating. Susquehanna analyst Christopher Rolland also sees continued momentum in NVIDIA's data center business, raising the target price from $180 to $210 and maintaining a "positive" rating. Despite two Wall Street firms raising target prices, market reaction remains relatively cautious.

**Alibaba**

Alibaba Group's fiscal 2026 Q1 results to be released on the 29th will serve as a key window to test the effectiveness of its "user-first, AI-driven" strategic transformation. Multiple brokerage forecasts show the group's overall profits will face significant pressure due to Taobao's 50 billion yuan flash purchase subsidy program.

According to Essence Securities forecasts, Alibaba's fiscal 2026 Q1 total revenue is expected to reach 249 billion yuan, up 2% year-over-year, but adjusted EBITA is expected to decline 15% year-over-year to 38.2 billion yuan, with profit margin dropping to 15%. Orient Securities and Morgan Stanley also provided similar forecasts, believing the combined EBITA of Taobao Tmall Group and Local Services Group will decline significantly by 16%-20%.

Brokerages generally attribute profit declines to massive subsidy investments in flash purchase business. Since announcing the 50 billion yuan subsidy program on July 2, Taobao's daily flash purchase orders quickly climbed from 10 million to 80 million, but this aggressive expansion strategy is expected to result in Local Services division adjusted EBITA of -5.7 billion yuan, significantly worse than market expectations of -1.12 billion yuan.

In contrast to e-commerce business profit pressure, Alibaba Cloud business shows strong growth momentum. Brokerages forecast Cloud Intelligence Group Q1 revenue will reach 32.5 billion yuan, up 22% year-over-year, with AI-related product revenue achieving triple-digit growth for seven consecutive quarters, potentially becoming the group's new profit growth driver.

**MEITUAN-W**

MEITUAN-W is scheduled to announce its second-quarter results on August 27, 2025. Market consensus expects the company will record steady revenue growth in its upcoming Q2 financial report, but profitability faces significant pressure due to intense subsidy wars in core food delivery business, making this earnings disclosure an important test of strategic resilience.

According to performance preview data from Suntime, analysts forecast MEITUAN-W's Q2 revenue will range between 92.404 billion yuan and 95.67 billion yuan, representing 12.3% to 16.3% year-over-year growth. However, profit forecasts show warning signs, with net profit expected to decline 29.3% to 50.6% year-over-year, and adjusted net profit also expected to fall 17.7% to 46.9% year-over-year. This expectation aligns with management guidance following Q1 results. Although MEITUAN-W's Q1 performance exceeded market expectations, management clearly warned at the time that gross margin would see "significant compression" in Q2 due to intensified market competition and aggressive subsidy activities in food delivery.

Food delivery business remains MEITUAN-W's strategic core and the main source of current profit pressure. Haitong International Securities noted in a report that facing subsidy competition from JD.com and Ele.me, MEITUAN-W management has made clear its position to "take all necessary measures" to defend its market leadership position.

Instant retail business (Meituan Flash Purchase) is one of the biggest highlights. According to Haitong International Securities data, this business achieved 50% year-over-year order growth in Q1, driven mainly by fast-moving consumer goods and high-value items like electronics and home appliances. This indicates consumer demand for instant delivery is extending from food delivery to broader retail categories. In-store business also performed steadily. Benefiting from support in education, fitness and other projects, as well as expansion in services and healthcare categories, MEITUAN-W's annual active merchants grew over 25% year-over-year in Q1.

**Luxshare Precision**

Luxshare Precision announced that the company submitted an application on August 18 to the Hong Kong Stock Exchange for issuing overseas listed shares (H shares) and listing on the Hong Kong Stock Exchange Main Board, publishing application materials on the Hong Kong Stock Exchange website the same day.

Public information shows Luxshare Precision was founded in 2004 and has grown over more than twenty years to become a global innovative technology enterprise in precision intelligent manufacturing. The company mainly focuses on providing comprehensive products and services for consumer electronics, automotive electronics, communications and data centers, and other high-tech fields, covering cross-domain vertically integrated development and intelligent manufacturing solutions from precision components and functional modules to complete systems.

Prospectus disclosures show that from 2022 to 2024, Luxshare Precision achieved revenues of 214 billion yuan, 231.9 billion yuan, and 268.8 billion yuan respectively. Net profits for the same periods were 10.5 billion yuan, 12.2 billion yuan, and 14.6 billion yuan, achieving steady growth. In Q1 2025, Luxshare Precision's growth momentum continued, achieving revenue of 61.8 billion yuan, up 17.9% year-over-year. Net profit reached 3.4 billion yuan, up 31.3% year-over-year.

Specifically, Luxshare Precision's business is divided into four major segments: consumer electronics, automotive electronics, communications and data centers, and others. Among these, consumer electronics business remains the absolute foundation of its revenue. In 2024, this business segment contributed revenue of 233.1 billion yuan, accounting for 86.7% of total revenue. Prospectus data shows that based on 2024 sales volume, globally, every two smartphones and every three smart wearable devices on average contain one of the company's products.

**Mixue Group**

Mixue Group announced on the Hong Kong Stock Exchange that a board meeting will be held on Wednesday, August 27, 2025, to (among other things) consider and approve the group's interim results for the six months ended June 30, 2025, and their release, as well as handle other matters.