**Market Overview**

A-shares surged dramatically once again, with the STAR Market leading the charge with a substantial 3.36% gain. The Shanghai Composite Index decisively broke through the 3,800-point threshold, recording total trading volume of 2.55 trillion yuan. This marks the eighth consecutive trading day with volume exceeding 2 trillion yuan, setting a new record for sustained high-volume trading and highlighting the prevailing bull market sentiment. Hong Kong stocks maintained steady upward momentum, opening higher and trending upward throughout the session to close 0.93% higher.

As previously discussed, U.S. capital has been withdrawing from technology stocks, while Chinese tech sector continues to flourish. A significant factor is that the U.S. advantage in AI is becoming less pronounced. Initially, American companies attempted to monetize through closed-source models, but under pressure from DeepSeek's open-source impact, many enterprises globally, including those in the U.S., are now utilizing free Chinese large language models. If technological leadership cannot be sustained, even charging fees becomes problematic.

On the hardware front, China is making rapid progress. Reports indicate that NVIDIA has requested some component suppliers to halt production of H20 chips. The reason is that we are no longer willing to pay premium prices for these downgraded and insecure chips, as domestic alternatives have narrowed the performance gap significantly.

The U.S. is exerting tremendous effort in high-tech chip manufacturing, hoping to reshore semiconductor production while continuing extraction practices. According to reports on August 21st, President Trump is targeting Samsung Electronics to consolidate U.S. semiconductor dominance, with his administration formally establishing policies requiring semiconductor companies building facilities in the U.S. to provide equity stakes in exchange for government subsidies. Samsung finds itself in a difficult position, having originally planned to build facilities in the U.S. while receiving modest subsidies, only to find their equity stakes being demanded. This demonstrates the importance of national strength and technological self-reliance.

**DeepSeek-V3.1 Breakthrough**

The explosive news today is the release of DeepSeek-V3.1 yesterday (August 21st). DeepSeek-V3.1 utilizes UE8M0FP8Scale parameter precision, with DeepSeek stating that this new precision format is designed specifically for upcoming next-generation domestic chips. This indicates that future training and inference based on DeepSeek models will increasingly utilize domestic AI chips, accelerating the construction of domestic computing power ecosystems. This represents mutual advancement between software and hardware: model developers are willing to sacrifice some precision details in exchange for stable operation on domestic chips, while chip manufacturers gradually establish their own FP8 ecosystems through such cooperation.

When training large language models, the primary bottleneck isn't algorithms but computing power and memory. NVIDIA's official blog indicates that FP8 can double throughput while halving memory usage without significantly sacrificing model performance - an extremely attractive advantage when training GPT-level large models. Simply put, we've found our optimal pathway to improve training efficiency, completely achievable using domestic chips, resolving bottleneck issues decisively.

This development ignited semiconductor stocks. A-share Cambricon (688256.SH) hit the 20% daily limit, while in Hong Kong, HUA HONG SEMI (01347) surged nearly 18%. This stock was previously viewed negatively following its acquisition of Shanghai Huali Microelectronics, which is now recognized as tremendously positive news. SMIC (00981), possessing China's most advanced process technology foundry capabilities, will see continuous order flow with capacity being the only constraint. Even domestic demand alone exceeds supply capacity, with the stock gaining over 10% today. Other beneficiaries include Fudan Microelectronics (01385) and ASM Pacific Technology (00522).

Simultaneously, computing power sectors will follow suit. Technology significantly drives market sentiment, and improving emotions inevitably attract continuous capital inflows, activating securities stocks. Today, H-share Everbright Securities (06178) rose nearly 6% following its A-share counterpart's daily limit, with other securities expected to follow.

**Individual Stock Highlights**

Previously mentioned Hanson Robotics (00370) partnered with Guangdong Tiantai Robotics, Shandong Future Robotics, and Shandong Future Data Technology to sign the world's first 10,000-unit embodied intelligent humanoid robot order agreement. This news is quite explosive given the substantial scale of 10,000 units, though other robot concept stocks showed no movement yesterday. However, they all activated today because DeepSeek-V3.1 enables software-hardware coordination, dramatically improving efficiency and potentially accelerating breakthroughs in robots' "brain" limitations. Once brain challenges are overcome, consumer-facing robots become feasible, strengthening UBTECH Robotics (09880)'s investment thesis, which gained over 6% today.

The biggest beneficiary is RoboSense (02498): interim revenue reached approximately 783 million yuan, up 7.72% year-over-year; gross profit approximately 203 million yuan, up 106.12% year-over-year; gross margin significantly improved from 13.6% in the same period of 2024 to 25.9%. Overall gross margin growth primarily resulted from substantial improvements in LiDAR products for ADAS applications and robotics/other LiDAR products. First-half sales of LiDAR products for robotics and other applications increased 420.2%, with second-quarter growth reaching an impressive 631.9% year-over-year. If leading robotics companies subsequently report strong earnings, supplier RoboSense will further enhance performance expectations, surging over 13% today.

Changes emerged among the three major new energy vehicle manufacturers. Previously leading Li Auto (02015) appears to be falling behind, while NIO (09866) currently holds the spotlight with an 80% gain over the past two months. Yesterday evening, the all-new third-generation NIO ES8 officially launched pre-sales, introducing three variants: 6-seat Executive Luxury Edition, 6-seat Executive Signature Edition, and 7-seat Executive Luxury Edition. Pricing represents a significant reduction compared to the second-generation ES8's launch price range of 528,000-638,000 yuan, with the new generation's starting price dropping by 111,200 yuan, and further reductions possible when official pricing is announced at late September delivery launch. This pricing offers excellent value proposition. According to Chairman William Li on August 22nd: "If NIO continues with high pricing, it will struggle to compete in the market." Survival is paramount. Li believes NIO's fourth-quarter overall sales will exceed 50,000 units with gross margins reaching 17-18%, making profitability achievable. Mass production of this model has already commenced. NIO (09866) surged over 11% today.

XPENG-W (09868) also performed well: the company announced that Mr. He Xiaopeng purchased a total of 3.1 million Class A ordinary shares on the open market through his wholly-owned Galaxy Dynasty Limited from August 20-21, 2025, at an average price of HK$80.49 per Class A ordinary share. While share purchases served as a catalyst, strong fundamentals remain key. Second-quarter revenue increased 125.3% year-over-year to 18.27 billion yuan, with net losses significantly narrowing 62.8% year-over-year to 480 million yuan. Third-quarter guidance appears promising, with projected deliveries of 113,000-118,000 units corresponding to revenue guidance of 19.6-21.0 billion yuan. International exports remain robust, and the company maintains 47.57 billion yuan in cash reserves, ensuring future development security. The stock gained over 13% today.

In other sectors, Li Ning (02331)'s partnership with the Chinese Olympic Committee will generate substantial revenue and profit opportunities, helping Li Ning restructure its product portfolio. Continuous increases in dividends and share buyback programs also add value, with the stock rising nearly 9% today.

Previously mentioned pharmaceutical "pickaxe seller" XTALPI (02228) announced today signing a memorandum of understanding (MOU) with leading South Korean pharmaceutical company Dong-A ST. Both parties will leverage XTALPI's AI + robotics R&D platform, combining respective strengths to jointly develop innovative therapies for immune and inflammatory diseases. The stock gained over 10% today.

The Jackson Hole Global Central Bank Symposium commenced on August 21st in Wyoming, USA. Fed Chairman Powell will deliver a keynote speech at 10 PM Beijing time tonight. For Chinese stock markets, impact appears limited as market momentum has already built.

**Sector Focus**

The 2025 China Computing Power Conference will open on August 23rd in Datong, Shanxi Province. At the "From Cloud to Intelligence, Computing Leads the Future" forum on August 22nd, Deputy Director Zhao Ce of the Information and Communication Development Department of the Ministry of Industry and Information Technology stated that as of June 2025, China's computing power centers have 10.85 million standard racks in use, with intelligent computing power scale reaching 788 EFLOPS. Zhao indicated continued optimization of national computing power layout, orderly guidance for intelligent computing infrastructure to be moderately ahead and dynamically balanced, and strengthened approval oversight for new projects in regions with relatively low overall computing power utilization.

Under DeepSeek-V3.1's latest version catalyst, overall AI activity will increase again, with synchronized growth in computing power demand. Key stocks include: SENSETIME-W (00020), ZTE (00763), Hard Egg Innovation (00400), Yangtze Optical Fibre (06869), and Shan Gao Holdings (00412).

**Individual Stock Analysis**

SENSETIME-W (00020): Focus on Large Language Model Industry Chain with Leading Global Technology Stack Competitiveness

SenseTime Technology holds 22.8% market share, ranking first in China's computer vision application market for nine consecutive years. Recently, SenseTime's "SenseChat" large model interactive platform has integrated with AI glasses, serving as users' "second brain."

Commentary: The company ranks second globally and first domestically in technology stack innovation index, particularly leading Alibaba Cloud and Baidu AI Cloud in resource utilization optimization and model compression. Its "SenseChat" large model matches GPT-4 in multimodal capabilities, with Q2 2025 model API calls increasing 300% year-over-year and customer payment willingness in finance and government sectors improving sixfold. The company's intelligent cockpit visual AI software has maintained global market leadership for five consecutive years (Q1 2025: 38% market share). SenseAuto ranks third in urban NOA market share (7.2%), with end-to-end solution UniAD completing challenging real-vehicle tests and over 2.6 million units delivered.

The company holds over 1,200 patents, with self-developed AI chip "SenseCore" achieving energy efficiency comparable to international mainstream levels. Solid-state battery R&D has entered pilot testing (energy density 350Wh/kg) with planned mass production in 2027. Global expansion: overseas revenue proportion increased from 18% in 2023 to 27% in 2024, though Q1 2025 growth slowed to 15%, requiring attention to geopolitical risks including U.S.-Europe AI regulatory policies.

The company collaborates with Chinese Academy of Sciences on semi-solid-state battery development and holds stakes in SinoHytec (hydrogen fuel cell stacks). In 2024, it participated in establishing Shanghai AI Ecosystem Fund (10 billion yuan scale), focusing on large language model industry chain investments. We remain optimistic about catalysts from major tech companies' intensive AI+AR glasses launches and large language model multimodal iterations enhancing AI+AR glasses interaction capabilities.