**Market Overview**

Despite weathering difficult conditions yesterday, today's markets unexpectedly stumbled again, with both mainland and Hong Kong markets showing weakness. The Hang Seng Index experienced nearly unidirectional decline, closing down 1.73%. US stocks rebounded strongly, with the Trump administration demonstrating effective market rescue measures. Treasury Secretary Bessent also moved to reassure markets, stating on Monday that China and the US have significantly de-escalated tensions. Both sides conducted extensive communications over the weekend, with more talks expected.

More significantly, on October 13 local time, OpenAI and Broadcom announced a strategic partnership to jointly develop custom chips with a total capacity of 10GW (gigawatts). OpenAI will handle chip design, while Broadcom will undertake chip development and deployment starting from the second half of 2026. OpenAI has consecutively announced major partnerships, signing agreements worth approximately $1 trillion with giants including Oracle, NVIDIA, and AMD, covering computing power, cloud services, and other key areas. This series of strategic moves is expected to provide OpenAI with over 30GW of computing power support over the next decade.

The US companies are undeniably playing the AI game exceptionally well, directly forming a "closed loop" in the AI ecosystem. Since this cannot be disproven for now, the bubble can continue to inflate, and capital markets are buying into this narrative. Technology stocks celebrated collectively, with Taiwan Semiconductor surging nearly 8%. In Hong Kong, InnoCare (02577) benefited from this sentiment, rising nearly 5%. CCTL (01888) also gained nearly 3%.

Overall, US markets completely sidelined the rare earth sanctions, presumably believing they won't materialize. It seems the US thinks canceling their arbitrarily imposed tariffs can offset potential sanctions. Conversely, Chinese technology and semiconductor stocks experienced significant declines today, likely influenced by the Wingtech Technology Co.,Ltd. (600745.SH) incident.

On October 12, the Dutch government announced administrative orders against Nexperia Semiconductors, citing concerns that Nexperia might transfer technology to its Chinese parent company Wingtech Technology Co.,Ltd.. With the situation escalating, a spokesperson for the Dutch Ministry of Economic Affairs stated that the US was not involved in the Netherlands' decision regarding Nexperia, and the timing coinciding with escalating China-US trade conflicts was "purely coincidental."

Media coverage reveals the underlying tensions. One outlet noted that the Dutch government's statement didn't specifically explain why it considered the company's operations risky, suggesting the move was related to the September tightening of US Commerce Department restrictions on China. Another outlet directly stated that this Dutch action would exacerbate Western-China friction in high-tech sectors, with multiple outlets warning that this extraordinary measure would further deteriorate China-EU tensions.

Clearly, the Netherlands' action is aimed at asset grabbing under the US-led encirclement, attempting to leverage ASML's advantages to claim a share in the AI feast and become Europe's AI leader. In contrast, Serbian President Vučić revealed in a recent interview that the US had requested Serbia nationalize its oil industry company to circumvent sanctions. "I told them, 'this is unacceptable to me,'" Vučić stated. "We don't like appropriating others' funds and property." This highlights the stark difference in approach.

Western jungle law mentality has penetrated to the bone over centuries, with "survival of the fittest" becoming commonplace. However, times have changed, and remaining intoxicated with the strongman era of a century ago will only bring heavy costs. The Netherlands has considerable business presence in China. ASML alone saw its China mainland revenue surge to €10.195 billion in 2024, accounting for 36.1% of total revenue. As of August 2025, ASML's market cap exceeded $400 billion, surpassing half of the Netherlands' annual GDP. Other Dutch companies include Shell, Unilever, Philips, and Heineken. We await subsequent countermeasures, as dealing with such actions requires methods they understand.

This incident has caused investor concerns about the semiconductor industry. Hua Hong Semiconductor (01347) fell over 13%, Shanghai Fudan (01385) dropped over 9%, and SMIC (00981) declined over 8%. Whether recovery can be swift depends on whether the 2025 Greater Bay Area Semiconductor Industry Ecosystem Expo (October 15-17) can deliver significant announcements, which would greatly impact domestic substitution sentiment.

Countermeasures continue. In response to US Section 301 investigation measures against China's maritime, logistics, and shipbuilding industries, and with approval from the National Coordination Mechanism for Countering Foreign Sanctions, the Ministry of Commerce announced counter-sanctions against five US-related subsidiaries of Hanwha Ocean Co., Ltd., prohibiting Chinese organizations and individuals from engaging in transactions and cooperation with them, effective from today (14th).

The Baltic Dry Index surged over 10%. COSCO SHIPPING Holdings (01919) plans to repurchase up to 100 million A-shares while simultaneously implementing H-share buybacks, rising over 4% today. OOIL (00316) also showed steady performance. Shipbuilding company CSSC (00317) also saw unusual activity.

With technology weakness, funds again sought safe-haven assets. Gold stocks should theoretically perform well, but they weakened due to eased Gaza conflict tensions as Trump arrived at Israel's parliament in Jerusalem. At the summit, leaders from Egypt, the US, Qatar, and Turkey signed the "Gaza Ceasefire Agreement Comprehensive Document." Before his parliamentary speech, Trump told media that "the Gaza war is over, Hamas will be disarmed." Gold stock timing is difficult to grasp due to overseas pricing power, causing collective metals adjustments.

Consequently, funds returned to dividend stocks. Bank stocks, having adjusted sufficiently with solid performance, gained favor today, mainly smaller banks like Chongqing Rural Commercial Bank (03618) rising over 6%. Chongqing Bank (01963), China Merchants Bank (03968), and China Everbright Bank (06818) all gained over 3%. Utilities like toll roads also performed well, with Anhui Expressway (00995) and Jiangsu Expressway (00177) both gaining 3%.

On September 17, China Mobile Hong Kong Limited officially completed its HK$5.9 billion tender offer for Hong Kong Broadband Network Limited, acquiring 78.08% equity stake. Post-transaction, Hong Kong Broadband will become an indirect subsidiary of China Mobile, maintaining existing business structure, workforce, and fixed assets. Hong Kong Broadband (01310) surged over 12%, while HKT Limited (01097) gained over 14%.

Renowned investor Duan Yongping's social media statement "bought some Moutai today" sparked market discussion. He believes Moutai possesses unique brand moats with significant long-term value. Duan's views carry market influence, particularly at this timing when hot themes are absent. Premium baijiu company Zhenjiu Li Du (06979) was consequently speculated upon, rising over 5% today. Other consumer stocks like Pop Mart (00325) also gained nearly 4%.

Rumors suggest important photovoltaic policies may be announced, with new progress in anti-involution measures. Relevant authorities may issue notices on strengthening photovoltaic capacity regulation. The Photovoltaic Association clarified "three consecutive days of meetings" rumors, stating they were monthly association meetings. Photovoltaics remain among the few sectors still at bottom levels, sensitive to positive news. Flat Glass (06865) and Xinyi Solar (00968) both showed unusual activity.

**Sector Focus**

Shanghai's Commission of Economy and Information Technology recently issued the "Shanghai Smart Terminal Industry High-Quality Development Action Plan (2026-2027)," strengthening robotic terminal capabilities. The plan aims to create humanoid robots with listening, speaking, emotional intelligence, cognitive abilities, and skills, supporting research, development, and mass production of humanoid robot products while advancing industrialization breakthroughs in edge chips, dexterous hands, and batteries. It promotes industrial robot integration, focusing on key components and high-end complete machines to address industrial chain weaknesses. The plan accelerates robotic terminal penetration into consumer markets, creating companion robots and household robots.

Foreign Ministry spokesman Lin Jian noted that the International Federation of Robotics' "World Robotics Report 2025" shows China's industrial robot inventory exceeded 2 million units in 2024, ranking first globally. Chinese robots are demonstrating broad application prospects in automotive, electronics, metal machinery, household services, medical education, and other fields, gradually transitioning from laboratories to production lines and households worldwide.

Key Hong Kong-listed robotics stocks include: UBTECH ROBOTICS (09880), SANHUA (02050), MEDBOT-B (02252), and DOBOT (02432).

**Individual Stock Analysis**

**WEICHAI POWER (02338): Core Business Under Pressure, Emerging Businesses Growing Rapidly**

For 2025, WEICHAI POWER delivered interim results of RMB113.152 billion in revenue and RMB5.643 billion in net profit attributable to shareholders. Despite unfavorable conditions with traditional heavy-duty truck engine sales declining, revenue increased 0.59% year-over-year, though net profit decreased 4.4%.

**Analysis:** Short-term profit pressure on the company. WEICHAI POWER is in a critical strategic transformation period. Subsidiary KION's layoffs resulted in RMB1.51 billion in severance costs, impacting short-term profits. In H1 2025, engine sales reached 362,000 units, down 9.5% year-over-year. Traditional core heavy-duty truck engine sales totaled 125,000 units, decreasing 22.4%. WEICHAI POWER's market share in natural gas heavy-duty truck engines dropped from over 70% to 51.85%.

Contrasting sharply with traditional business performance, emerging businesses showed rapid growth. In H1 2025, M-series large-bore engine sales exceeded 5,000 units, up 41%. Data center engine products reached nearly 600 units, surging 491%. New energy business also performed excellently, with battery sales of 2.3GWh (up 91%) and new energy vehicle sales exceeding 10,000 units (up 255%).

**Technical Breakthrough:** Diversified mining power solutions debuted. The company's newly launched 12M25 diesel engine delivers maximum power of 1,224PS and peak torque of 5,116N·m, suitable for 90-100 ton mechanical transmission mining trucks and 165-ton excavators. WEICHAI POWER's M-series large-bore mining product line now covers 522kW-2,800kW power ranges, meeting various large mining equipment requirements.

Overseas market expansion showed significant results, with sales in Guinea, Saudi Arabia, and Algeria achieving double-digit growth. In new energy transformation, WEICHAI POWER maintains balanced positioning across new energy, natural gas, and traditional diesel power sectors. The company's new energy sector positioning is expected to continue driving growth momentum.