**Market Overview**

Today marked the final trading session of August. Despite some institutional portfolio rebalancing pressures, the Hang Seng Index remained relatively stable, supported by positive performances in both US and A-share markets, closing up 0.32%.

Although concerns persist over Fed independence amid legal challenges, market attention has shifted toward interest rate cuts. Fed Governor Waller intensified calls for reducing short-term borrowing costs, indicating support for a September rate cut and further reductions over the next three to six months to prevent labor market deterioration. As a prominent candidate for future Fed Chair, Waller's stance carries significant weight, essentially confirming that a September rate cut is now a foregone conclusion.

This signal triggered a sharp rally in the Chinese yuan, surging over 340 basis points to around 7.11. Overnight, gold broke above $3,400 per ounce, reaching a five-week high.

**Commodity Stocks Surge on Strong Earnings**

Gold stocks received direct catalysts from both price momentum and strong earnings. ZIJIN MINING (02899) reported first-half net profit attributable to shareholders of 23.292 billion yuan, up 54.41% year-over-year, gaining over 3% today. Chifeng Gold (06693) achieved first-half net profit of 1.107 billion yuan, surging 55.79% year-over-year, rising nearly 6% today. Zhaojin Mining (01818) posted first-half net profit of 1.44 billion yuan, jumping 160.44% year-over-year, up over 4% today. Leading player China Gold International (02099) soared over 8%.

Copper companies also delivered strong results. China Nonferrous Mining (01258) reported first-half net profit of $263 million, up 20.2% year-over-year, driven by higher international copper prices and increased production. JIANGXI COPPER (00358) achieved first-half net profit of 4.175 billion yuan, up 15.42% year-over-year. Both copper stocks gained over 8%.

**Pharmaceutical Sector Benefits from Rate Cut Expectations**

US rate cuts favor the innovative pharmaceutical sector due to its high capital intensity, long development cycles, and high-risk characteristics, making it highly sensitive to funding costs. Rate cuts directly reduce corporate financing costs. Additionally, rate cuts typically expand dollar liquidity, potentially driving global capital toward high-growth markets. Chinese companies have reached the global first tier in cutting-edge fields like ADC and bispecific antibodies, with innovations gaining recognition from international giants, significantly strengthening capital inflow expectations.

Related innovative pharmaceutical stocks surged over 6% today, including WuXi Biologics (02269), Innovent Biologics (01801), WuXi AppTec (02359), and Simcere Pharmaceutical (02096).

**AI Sector Cools Amid Regulatory Concerns**

Recently strong-performing AI stocks faced cooling pressure after regulatory comments about avoiding disorderly competition in "AI+" development. Leading AI chip company Cambricon issued its second stock trading risk warning this month. Eastsoft (688110.SH) announced trading suspension for volatility investigation.

SMIC (00981) reported solid interim results with net profit of approximately $320 million, up 35.6% year-over-year, showing strong performance with tight capacity supply. Despite minor adjustment today, the outlook remains positive.

**"Mao King" vs "Han King" Battle Continues**

Kweichow Moutai gained over 2% today, briefly overtaking Cambricon in stock price. However, the "premium liquor technology" theme is unlikely to sustain the highest valuation long-term, as the economic and policy environment that supported Moutai's rapid growth phase has changed. The company is entering a slower growth period, though it remains solid for defensive positioning given its deep moat. Moutai's rebound lifted Zhenjiu Lidu (06979) over 6%.

**"Ning King" Takes the Relay**

As "Han King" (Cambricon) adjusted, "Ning King" (CATL) gained favor. Battery equipment leaders Advanced Battery Equipment (300450.SH) and Hangke Technology (688006.SH) both hit daily limits after releasing better-than-expected interim reports. Advanced Battery's Q2 revenue reached 3.512 billion yuan, up 43.86% year-over-year, with net profit of 375 million yuan, surging 456.29% year-over-year.

As Advanced Battery's largest customer, CATL benefits from equipment strength indicating a new battery industry expansion cycle. Market speculation suggests CATL's annual production scheduling exceeds 700GWh, with expected actual output reaching 700GWh, up about 36% year-over-year. CATL (03750) rose over 4%, while CALB (03931) gained nearly 6%.

Tianneng Power (00819) surged over 10% despite reporting shareholder profit of 820 million yuan, down 11.68% year-over-year. The rally was driven by the company's decision to suspend unprofitable lithium battery operations and refocus on core lead-acid battery business, with catalysts including AI development and national standard policies boosting lead-acid battery demand.

Guotai Junan International (01788) announced the launch of cryptocurrency trading services for Hong Kong investors, offering Bitcoin, Ethereum, and other digital assets. The stock jumped over 15%.

**Sector Focus: Defense**

External tensions regarding US missile deployment plans in Japan may create opportunities in defense-related stocks ahead of the 80th anniversary commemorations of victory in the Chinese People's War of Resistance Against Japanese Aggression and World Anti-Fascist War. Key names include COMEC (00317) and AVICHINA (02357).

**Individual Stock Spotlight: BYD Electronic (00285)**

BYD Electronic has made significant progress in liquid cooling technology, benefiting from overall EV industry chain improvements. Apple plans major iPhone17 design changes starting September 2025 in a three-year renovation cycle, entering mass production in Q3. Parent company BYD's European EV registrations surged 225% year-over-year to 13,503 units in July, exceeding Tesla.

First-half 2025 revenue reached approximately 80.606 billion yuan, up 2.58% year-over-year, with shareholder profit rising 13.97% to 1.73 billion yuan. The company is well-positioned across automotive electronics, AI, and consumer electronics. In automotive electronics, it participates in intelligent driving systems and has begun mass production of smart suspension systems. In AI business, it collaborates with NVIDIA on server and liquid cooling technology, entering the data center market. The company has mastered immersion cooling technology and plans to launch corresponding server products.

With global competitiveness increasing and benefits from the overall positive EV trend, BYD Electronic is expected to achieve steady growth as automotive intelligence, AI, and consumer electronics continue developing.