Zhitong Hong Kong Stock Exchange Unravels | Domestic Industry Reforms Results Greater Bay Area Hong Kong Stocks Welcome Back to A-Share Profits

Judging from today's market performance, yesterday's intraday slump was indeed a false alarm. The Hang Seng Index opened high and rose 0.84%.

Read the press release of the talks. On June 10, local time, Li Chenggang, the international trade negotiator and vice-minister of the Ministry of Commerce, said in London about the first meeting of the Sino-US economic and trade negotiation mechanism that China and the US had professional, rational, in-depth, and honest communication. In principle, the two sides have reached a framework for implementing the June 5 call agreement between the two heads of state and the agreement on the Geneva talks. Although there was no joint statement, the results were clear.

There is unconfirmed news: the Chinese side agreed to issue a temporary rare earth export license valid for 6 months to US car companies, etc., focusing on expanding the supply to civilian fields such as prosium and scandium, while establishing a rare earth flow tracking system; the US side plans to ease export restrictions on non-high-end technologies such as chip equipment, jet engine components, and ethane, which are at the same time retaining the ban on AI chips and advanced lithography machines. The tariff freeze period has been extended. The two sides plan to extend the 90-day tariff freeze period in the Geneva agreement and add an exemption list for products such as new energy vehicles and photovoltaic modules. However, the US side requested the establishment of a “trigger mechanism” to resume tax increases if China fails to comply with the agreement; prepare for a high-level meeting before August 12, and strive to reach a comprehensive agreement. Alleviate the urgent problem and talk about it slowly later. This is already great. The rise in the capital market shows the attitude.

With regard to the gradual relaxation of rare earths and the successive issuance of licenses, overseas rare earth prices have soared, and domestic manufacturers are hopeful to accept dividends, and China's rare earths (00769) has once again risen by more than 18%. Jinli Permanent Magnet (06680) stated on the interactive platform that after the introduction of export control measures for medium and heavy rare earth-related items, the company carried out export declarations in accordance with relevant national regulations, and has successively obtained export licenses issued by competent national authorities. Export regions include the United States, Europe and Southeast Asia. The company exports magnetic materials, components and motor rotors according to law and regulations.

The intensive restructuring of the automobile industry has paid off. A number of automobile manufacturers recently announced that they will unify supplier payment periods within 60 days. Defaulting payments to suppliers and then investing in other car companies is itself an unfair competition. If the chaos is fixed, the industry will become healthy. In particular, downstream auto parts companies will naturally be a major benefit. As car companies' payment times are shortened, the number of accounts receivable and bill turnover days for parts companies is expected to decrease, the use of capital will decrease, and the efficiency of capital utilization is expected to improve. In the past, many companies calculated bad debt preparations to a certain extent based on the amount of accounts receivable, which affected apparent profits. It is expected that the scale of bad debt preparation for auto parts companies will decline as the payment cycle decreases. BOE Precision Electronics (00710), an individual auto parts stock, rose more than 5%.

Photovoltaics is also a popular industry; I mentioned this sector the day before yesterday. The 2025 SNEC PV & ES International Photovoltaic & Energy Storage Exhibition will be held as scheduled. The market expects the exhibition to bring excitement. In addition, the industry itself is also changing. Xinte Energy (01799) rose more than 9%, GCL Technology (03800) rose nearly 6%, Follett Glass (06865) and Xinyi Solar (00968) all rose.

The General Office of the CPC Central Committee and the General Office of the State Council issued opinions on further advancing Shenzhen's comprehensive reform pilot, deepening reform, innovation, and expanding opening-up. Among them, it is proposed that Guangdong-Hong Kong-Macao Greater Bay Area enterprises listed on the Hong Kong Stock Exchange be allowed to be listed on the Shenzhen Stock Exchange in accordance with policy regulations. This news is quite impressive. If we can go back to the A-share listing, then the financing will go to the next level, and the valuation will also increase a lot.

Today, capital is attacking Youchao Innovation (02431). The company is one of the few companies in China that can implement a full stack of autonomous driving solutions. Starting with an L0 level assisted driving system, it gradually built a product matrix covering L0 to L2+ solutions, and delivered L4 autonomous driving solutions in 2025. The main customers include SAIC, Chery, Dongfeng, Geely, Changan and BYD. As a high-tech enterprise listed on Hong Kong stocks in the Greater Bay Area, it is expected to achieve a “H+A” dual listing, which surged more than 21% today.

Although there are many individual stocks in the Greater Bay Area, it is estimated that they will all be listed. They should be standard; they must be high-tech or have a high level of technology such as innovative drugs. From this perspective, Yuejiang (02432), Kingdee International (00268), and Jingtai Holdings (02228) are also in line with expectations. The same is true for Big Mac Tencent (00700), but considering its huge size and the majority shareholders are foreign investors, it may not necessarily return A.

The indirect benefit is that brokerage firms that do underwriting business, such as Guangfa Securities (01776), has a home market advantage in the Guangdong-Hong Kong-Macao Greater Bay Area. The Guangzhou headquarters and Shenzhen business center are deeply tied to local technology companies, and are in the top ten Hong Kong stock IPO underwriters. They are expected to enjoy dividends, rising more than 6% today. There is also Everbright Securities (06178): Combined with the Huijin Holdings concept, there are expectations of restructuring, and it also rose by more than 6%.

Today, 17 departments including the Zhejiang Provincial Department of Commerce issued “Certain Measures to Support Gaming Going Overseas”. Among them, it is mentioned to actively cultivate players in the overseas game market. Implement a digital culture enterprise gradient cultivation plan, reserve one batch, cultivate one batch, and upgrade one batch of game companies to support the expansion, strengthening and international development of game companies. According to the “China Game Industry Report” recently released by Gamma Data, the actual sales revenue of games independently developed by China in the overseas market from January to April this year was about 6.4 billion US dollars, an increase of more than 15% over the previous year (revenue of 5.493 billion US dollars from January to April 2024). Bilibili-W (09626) rose nearly 10%, while NetDragon (00777) and Dream World (01119) both increased by more than 7%.

Tesla's stock price rose for three consecutive trading days, recovering almost all of last Thursday's negative decline. In addition to Musk admitting mistakes to Trump, there are also good expectations that the company will launch an autonomous taxi service (Robotaxi) in Austin, Texas. Weekly Robotaxi orders have risen to 250,000 orders at the beginning of May this year, +400% over the same period, and commercialization has accelerated; Tesla plans to start Robotaxi operations in Austin in June this year, etc. The relevant individual stock Zhixing Technology (01274) increased its intraday volume by more than 5%, and Youchao Innovation (02431) also superimposed the autonomous driving theme.

Bubble Mart (09992) products have become related to the auction house again. On June 10, at Yongle 2025 Spring Auction, Bubble Mart's core IP, “LABUBU” created by Hong Kong artist Long Jiasheng, made a stunning appearance. Among them, the world's only original collection-grade mint-colored LABUBU was sold at a high price of 1.08 million yuan, and the buyer's identity was not disclosed. At the same time, a brown LABUBU, limited to 15 editions worldwide, was also sold for RMB 820,000. Under continuous catalysis, the stock price of Bubble Mart (09992) continued to rise, and today it has once again risen by more than 4%.

The pig industry mentioned yesterday is once again beneficial. China Storage Network issued a notice on June 9. On June 11, the Central Reserve rotates 10,000 tons of frozen pork. This is the first round of storage in 2025; high temperatures in summer affect the growth rate of pigs. Some farmers are concerned about the risk of “heat stress” and actively delay release. At the same time, the phenomenon of secondary fattening increased, leading to a decrease in the supply of short-term standard pigs, and pig prices continued to be strong. Dekang Agriculture and Animal Husbandry (02419) mentioned yesterday once again surged more than 15%. COFCO Jiajiakang (01610) also rose more than 4%.

[Section Focus]

On June 10, Ningde Times (03750) held the 2025 587 Energy Storage Technology Day in Shanghai to announce mass production and delivery of 587Ah high-capacity special batteries for energy storage. The “true performance, real safety, and real reliability” emphasized by Ningde Era 587Ah batteries directly hit these pain points in the industry.

In terms of performance, it achieved an energy density of 434Wh/L for the first time in the industry, and is the highest energy density among the next-generation large batteries currently being mass-produced. The initial value of energy efficiency (RTE) in the charge/discharge cycle reached 96.5%, while achieving slow attenuation of RTE throughout the life cycle.

In terms of safety, through a “three-dimensional defense system” composed of a safe electrolyte, a nonproliferation anode, and a heat-resistant isolation film, the 587Ah battery has achieved high safety. Not only does it not fire or explode under conditions such as overcharging, heat loss of control, acupuncture, etc., but it has also passed tests such as GB/T36276 and GB44240 (national mandatory standard), proving to the industry with real and visible results that high-capacity batteries can also be very safe.

The launch of this product will strengthen the performance expectations of the Ningde era (03750) and promote the rapid development of the energy storage industry. As Zimbabwe bans lithium exports in 2027, the material side will also become tight, such as Ganfeng Lithium (01772) and Tianqi Lithium (09696).

[Individual Stock Mining]

Tongcheng Travel (00780): First-quarter results exceeded expectations, tourism surged after college entrance examination to boost business volume

Recently, Travel Intelligence Technology, a subsidiary of Tongcheng Travel, reached a strategic cooperation with Baiwang Co., Ltd. The company's total revenue in 1Q25 increased 13.2% year over year to 4.4 billion yuan, core OTA business revenue increased 18.4% year over year to 3.8 billion yuan; adjusted net profit increased 7% year over year to 788.2 million yuan, and profit margin was 18%.

Comment: TravelSmart Technology is a one-stop digital intelligence solution service provider for the lodging industry. It has four major PMS brand matrices of Travelzhiyun, Zhe, Golden Swan, and Cloud Treasurer to empower users in the lodging industry in one stop. By the end of 2024, its service network had covered more than 80,000 users in the lodging industry, with chain brand service exceeding 5,000 stores. Tongcheng Travel's first-quarter results exceeded expectations. Revenue and net profit both achieved significant growth, and the brand effect was unleashed. Despite the 11.8% year-on-year decline in tourism revenue, domestic demand is strong and international business is growing rapidly.

By business: core OTA business: revenue increased 18.4% year on year, exceeding market expectations by 1%; international business: international air tickets and hotel night volume increased by more than 40% and 50% year on year, respectively. It is expected to increase user consumption frequency and ARPU and improve profit margins in the future. The company's airline ticket business maintained a strong growth momentum and a steady increase in market share. Mainland China ticket volume grew by low single digits, and international ticket volume increased by 40% +, contributing a single digit in transportation revenue.

After the college entrance examination, “1+1" family tours became popular, and Tongcheng Travel published the “2025 College Entrance Examination Graduation Popular Travel Guide”. Starting on the evening of June 9, the number of searches and reservations for products such as “flight+hotel” and “railway+hotel” on the Tongcheng travel platform began to surge.

As an OTA leader in the sinking market, Tongcheng Travel relies on Tencent and Ctrip's outstanding competitive advantages in traffic and inventory resources, and the competitiveness of domestic business continues to improve; actively arranging the international market, it is expected to drive the release of medium- to long-term revenue and performance gains.