China Merchants Securities has released a research report indicating that as of September 1, 2025, 2,244 out of 2,276 companies listed on Hong Kong's main board have disclosed their interim results, achieving a disclosure rate of 98.6%.

By sector analysis for the first half of 2025: AI and internet sectors recorded their highest revenue growth in three years; high-end manufacturing showed accelerated profitability with strong expansion appetite; the innovative pharmaceutical sector maintained positive momentum, entering an "active inventory building" cycle with favorable supply-demand dynamics and promising upward trajectory, though commercialization success depends on bottom-up stock selection; new consumer sector posted profit growth but remains in a "passive inventory building" phase.

The firm recommends focusing on investment opportunities in AI, internet, and high-end manufacturing sectors that demonstrate solid fundamentals and favorable supply-demand conditions.

**AI and Internet Sectors Show High Growth Momentum with Strong Strategic Expansion Intent**

In H1 2025, AI and internet-related companies achieved 11.7% year-over-year revenue growth, marking the highest semi-annual growth rate since 2022. Net profit surged 33.9% year-over-year, outperforming the same period last year. Gross margin reached 36.8% and net margin hit 12.0%, with all profitability metrics improving year-over-year to historically high levels.

The capital expenditure-to-revenue ratio rose significantly to 12.3%, maintaining expansion levels since H1 2023, representing growth-oriented capital investment that fuels future development. ROE (TTM) and ROIC (TTM) reached 13.4% and 11.5% respectively, showing both year-over-year and quarter-over-quarter improvements.

The sector operates in an "active inventory building" cycle with healthy supply-demand dynamics. Despite short-term pressure on food delivery platforms' net profits from "delivery subsidy wars," Alibaba's cloud computing division achieved 91.2% net profit growth, while Tencent Music and NetEase Cloud Music both recorded over 100% profit growth, indicating sustained industry prosperity and growth potential.

**New Consumer Sector Delivers Strong Performance Amid Intensifying Competition**

The new consumer sector recorded 49% revenue growth and 131% net profit growth year-over-year, both reaching historical highs. Pop Mart and Chow Tai Seng both exceeded 200% revenue growth, with "self-indulgent" consumer products showing significant penetration rate increases.

Net margin hit a record high of 17.0%, while ROE maintained an elevated 13.7%, progressing toward a healthy business model characterized by "light assets, high turnover, and strong cash flow." However, inventory turnover rates declined to historically low levels, with the sector entering a "passive inventory building" cycle, suggesting potential supply-demand deterioration.

This trend may relate to intensified competition in new-style tea beverages and chain stores, requiring close attention to competitive dynamics among related companies.

**Innovative Pharmaceutical Sector Shows Substantial Profitability Improvement, Transitioning from Investment to Realization Phase**

The innovative pharmaceutical sector's net profit soared 69% year-over-year, with gross margin rebounding to 66.3%. Operating margin and net margin jumped to 16.7%, significantly improving from the industry downturn period of 2021-2023.

R&D expense ratio increased to 16.9% while sales expense ratio decreased to 19.7%, reflecting a strategic shift from sales-heavy to R&D-focused operations. As of June 30, Chinese innovative drug companies completed over 50 overseas business development deals with total collaboration value reaching $48.4 billion.

Hansoh Pharma's innovative drug revenue grew 22.1% year-over-year, while Innovent Biologics achieved 37.3% product revenue growth and returned to profitability. ROE and ROIC reached 7.7% and 6.7% respectively, establishing a clear recovery trajectory after hitting historical lows of 2.9% in H2 2022.

The sector operates in an "active inventory building" cycle with favorable supply-demand conditions, with upward momentum expected to continue.

**High-End Manufacturing Shows Operating Leverage with Strong Expansion Appetite and Sustainable Growth**

High-end manufacturing companies achieved 11.5% revenue growth and 29.9% net profit growth year-over-year, both representing recent peak levels. BYD, Lenovo, and Xiaomi all recorded over 20% growth rates, while autonomous driving companies like Horizon Robotics (+67%) and Black Sesame Technologies (+40%) demonstrated rapid expansion.

Net margin of 5.8% improved both year-over-year and quarter-over-quarter, with ROE and ROIC reaching 9.4% and 7.6% respectively. The capital expenditure-to-revenue TTM ratio hit 10.0%, reaching historical highs with continuous expansion since 2023.

The sector operates in an "active inventory building" cycle with relatively stable inventory turnover rates and improved capacity utilization. While CAPEX expansion pressures free cash flow, equity free cash flow has turned positive and financial leverage ratios have actually declined, indicating reasonable alignment between expansion and asset allocation.

**Growth Strategy Summary**

Comprehensive assessment indicates that AI, internet, and high-end manufacturing sectors show positive fundamental trends with strong sustainability; innovative pharmaceuticals maintain high growth momentum but require attention to individual stock risks; new consumer sectors deliver impressive results but warrant monitoring of competitive landscape changes.

The firm recommends focusing on investment opportunities in AI, internet, and high-end manufacturing sectors with solid fundamentals and favorable supply-demand dynamics.