Zhitong Hong Kong Stock Exchange Unravels | Insurance capital has become the main force behind the decline in technology and hardware, and there is a phased dawn in the direction of China and Europe

[Anatomy Dashboard]

Due to differences in internal structures, there is a big difference in market trends between the two places today. A shares weakened again due to a sharp drop in technology and no large capital to continue to weaken, while Hong Kong stocks jumped higher. Later, after filling up the gap, they eased and closed up 0.29%.

The Middle East continues to be in a state of conflict. Saudi Riyadh and Dammam airports have been attacked one after another, and the Yemeni Houthis have acknowledged the attacks; Trump said the US “may” join the attack against the Houthis because some Americans were bombed. But it's likely they won't do anything.

Trump has begun to change his mind: reaching an agreement with Putin, Russia will release millions of tons of diesel to the global market. Russia partially lifted the ban on diesel exports on Saturday in accordance with an agreement between the two sides, allowing 500,000 tons of diesel to enter the international market. Trump demanded that Ukraine not attack Russian refineries, saying that Russia and Ukraine have entered an “energy cease-fire,” and both sides agreed. Crude oil fell for a while, and Iran warned that the scope of severe punishment for illegal ships was no longer limited to the Strait of Hormuz. Crude oil, which had fallen by nearly 2% in the intraday period, turned up and hit a new high of more than a week.

This is a big change. Europe and Ukraine are directly stunned. After fighting for so long, the US and Russia actually joined forces, and sanctions against Belarus have been in place for so long. The core demands behind America's move are first to lower oil prices and lower inflation, then win over Russia, ease Iran's side, and more importantly, gradually get out of the Russian-Ukrainian conflict. Trump even said that he wants Ukraine to have a different president, which is what he meant. What kind of reaction Europe will make in the future is critical; it is worth watching whether it continues to hold back its voice or find a way to survive. The attitude of Hong Kong stock capital is relatively positive.

The weekend seemed to be unleashing benefits. The Securities Regulatory Commission held a symposium to develop and expand patient capital, promote increased dividend repurchase efforts, and optimize the issuance and listing system. The China Securities Regulatory Commission overhauls public fund regulations: the threshold for establishing equity funds is to be lowered to 50 million yuan. China's Ministry of Finance: Plan and introduce pragmatic and effective incremental policies in a timely manner to increase domestic demand and optimize supply. The Ministry of Finance arranged for the use of 550 billion yuan of local government debt balance limits. However, the quickest way to reach this point is to see if large funds continue to enter the market. It was obvious last Friday. If you let go of their own way today, it will be difficult for A-shares to continue to weaken.

Only bank stocks continue to strengthen. The core logic for the banking sector to continue to strengthen is “dividend defense+fundamental revaluation” two-wheel drive. Up to now, 21 A-share banks have disclosed their 2026 mid-term dividend plans, totaling over 260 billion yuan. Of these, 15 have increased their dividend ratio compared to last year. The cash dividend ratio of the six major banks was raised uniformly from 30% to 31%. The total proposed dividend payments exceeded 220 billion yuan, accounting for more than 80%. Agricultural Bank (01288), Bank of China (03988), and China CITIC Bank (00998) rose more than 2%, continuing to reach record highs. Also following the dividend line is Dongfang Overseas International (00316), which has performed well, according to operating data of October 9, 2026, with route revenue of US$3.285 billion in the third quarter; total cargo volume increased by 9%, carrying rate increased 4.2%, average line revenue per box increased by 33.1%, route revenue in the first three quarters increased by 18.9%, up more than 4%, and the highway's Suning-Shanghai Expressway (00177) rose more than 3%.

Regarding the sharp drop in technology stocks, the 10 billion private equity boss Liang Hong explained the reason: some insurance asset management giants bought a lot of technology stocks at a high level in July, but they drastically cut their positions and stopped losses in late September. This kind of operation of large institutions chasing gains and losses is really puzzling. Looking at it now, the collapse in insurance capital has not been cleared; otherwise, guidance from the window would not have been sent last Friday. Hong Kong technology stocks were also a blunder. Cambridge Technology (06166) fell more than 11% and Changfei (06869) fell more than 7%. In addition, there is another downside. The US ITC initiated the 337 investigation, and several companies were involved in this investigation. Among them, Chinese companies, including Lixun Precision (02475) and IFF (601138.SH), all know that corporate behavior had little impact, yet both fell by more than 2% and 7%, respectively.

According to the latest Epoch AI research report, as of September 2026, the total AI-related revenue of the six companies Alibaba, ByteDance, Smart Spectrum, Dark Side of the Moon, DeepSeek, and MiniMax was about 10% of the sum of OpenAI and Anthropic. Extremely low payment rates and low subscription unit prices drag down C-side gross profit, while open source weight weakens API pricing power. Compared to pure model companies, it is easier for large manufacturers to achieve indirect monetization through main businesses such as cloud services and advertising. As can be seen, the strengthening of US technology stocks is indeed underpinned by profits. Relatively speaking, this kind of profitable AI software direction is still OK. For example, Kingdee International (00268) and Jinshan Software (03888) both rose more than 3%.

China and Europe have seen a phased dawn. The outcome of the negotiations: no new taxation will be initiated, export quotas will be allowed to grow upward from the 2025 base, and they promise to be non-discriminatory, comply with WTO rules, and reserve China's right to appeal. Ministry of Commerce: The hybrid vehicle trade arrangement will not specifically target Chinese products, and China's quota is not lower than any other European import source. Two departments: Starting from April 1, 2027, the value-added tax export rebate rate for new energy vehicles was lowered from 13% to 9%, objectively weakening the EU's accusatory evidence of “high government subsidies.” In fact, these four losses can be completely transmitted. Because overseas do not fight price wars, consumers are not as sensitive to prices at home.

Zero Run (09863) relies on Stellantis's Spanish factory. The Zero Run B10 model will be locally launched this week, marking that Zero Run has officially moved from product exports to the localized manufacturing stage. According to reports, in 2026, 9,000 Zeros B10s are expected to be produced, covering sales demand in Spain, France, Italy and other regions. The Zeros Lafa5 is scheduled to be introduced to the Zaragoza factory in the first quarter of 2027. Localized production will account for more than 40% in the future, up more than 4% today; another Cyrus (09927) has deepened strategic cooperation with Ningde Era (03750), and Wenjie Auto plans to enter the European market in 2027. Currently, WVTA has fully started model certification work across the European Union. Over 1.2 million vehicles have been delivered to Quanjie. Another point is that the car interface has recently faced a wave of “rapid car construction”. Rumors suggest that the super luxury SUV was made for Cyrus, and Zunjie abandoned the SUV plan. Today, Celis surged by more than 15%.

Sentiment about wind energy is also improving. Last Friday, a short essay “EU launches a double anti-investigation into China's wind power towers”, triggered a sharp drop in wind energy. After verification by various parties, this rumor is probably false information created by splicing up the old measures after being misinterpreted. The companies involved were clearly mistaken. Leading company Daikin Heavy Industries (01081) rebounded more than 3% today.

Other models, MOMENTA-W (06880) and Citroen Motor Technology signed a global strategic cooperation agreement to jointly develop advanced intelligent driving systems based on the R7 world model and launch them in the global market with new mass-produced models from Peugeot and Jeep. In addition, SAIC Volkswagen announced a full upgrade of ID.ERA9X smart driving support, and the company's R7 world model was officially launched for OTA promotion, an increase of more than 5%. ByteDance replicated the Hongguo free skit model overseas. Its independent skit app PinedRama surpassed 100 million downloads in less than a year, with daily activity of 7 million. Thanks to TikTok's traffic advantage and original local content, it has made a strong breakthrough in Indonesia and Brazil. The free model has proven its ability to acquire users and watch time, but ad monetization hasn't fully caught up. WeChat's “Green Bubble Skit” was launched at the end of September, and the 2026Q4 Green Bubble Skit Joint Distribution Incentives Campaign was released. Reading Group (00772) was once again stimulated to rise by nearly 3%.

The newly introduced Yunji (02670) robot mentioned on Friday completed a total of 19785 million services, an increase of 25.2% over the previous year; the cumulative walking distance was 1.689,000 kilometers, which is about the equivalent of 42 laps around the Earth's equator. In a scenario where passenger traffic is highly concentrated during the holidays, robots undertook high-frequency repetitive tasks such as delivery, delivery, and cleaning, saving partner hotels about 1.887 million manpower hours, effectively relieving the general pressure of “tight employment and difficult scheduling” during the holidays. It rose again by more than 18%.

The latest price of PP mentioned on October 12 was 10,566.67 yuan/ton. It has risen 6.38% in the last 5 days and 17.49% in 60 days. Guoen Technology (02768) rose another 4%.

[Section Focus]

Power grid: During the “15th Five-Year Plan” period, China will invest more than 5 trillion yuan to build a new power grid. By 2030, it will initially build a new grid, which can efficiently support the consumption of more than 2.8 billion kilowatts of new energy. UBS provides the next main line of AI transactions: electricity, data centers, and critical resources.

The main varieties of Hong Kong stocks: Weisheng Holdings (03393), Harbin Electric (01133), Weichai Power (02338).

[Individual Stock Mining]

Daikin Heavy Industries (01081): The share of European orders continues to increase due to the rising sea landscape

Recently, the KING Series No. 3 large deck carrier, KING THREE, which was independently designed and fully built by Daikin Heavy Industries, was officially delivered at Daikin Heavy Industries' Panjin base. The company and Ulstein, a well-known Norwegian ship design company, officially signed a new generation Ulstein HX122 with U-STERN® offshore foundation installation ship design contract. Revenue for the first half of 2026 was 3.253 billion yuan, +14.48% year on year; net profit to mother was 601 million yuan, +9.89% year over year, making it the best half-year profit for the same period in history.

Comment: The European sea landscape continues to improve. The company is the leading European export among domestic sea breeze manufacturers. Centralized European Sea Breeze delivery brought about a performance explosion. Net profit in the first half of the year reached a record high during the same period. The gross profit margin increased sharply. The gross profit margin of wind power equipment was 35.90%, an increase of 10.37 percentage points over the previous year. The core is that the share of high-margin European orders continues to increase, with an overall gross profit margin of 37.53%. Cash flow improved significantly, with net operating cash flow of 1,533 billion yuan, a year-on-year increase of 544.06%.

Core highlights: 1) The gross margin of overseas orders is much higher than that of domestic tower peers. 2) The whole chain is closed loop (manufacture+own transport ship+European home port), the cost is controllable, and the delivery is highly competitive. 3) Shipbuilding's second growth curve has been implemented, and 10 billion ship orders will lock in revenue for the next few years and open up a new track. 4) Cash flow has been significantly restored, and the share of high-margin overseas business continues to rise. The company is full of orders, offshore wind power equipment orders: Overseas sea wind orders are concentrated in Europe (UK, Germany, France), and large long-term orders are mainly delivered from 2026 to 2027. The agency estimates that about 250,000 tons of sea breeze will be delivered in 2026. Shipbuilding orders are the company's second growth curve, with a cumulative total of 24 ship orders, with a total amount of about 12 billion yuan. The delivery period is 2027-2030, and 3+1 bulk carriers from Greek shipowners, totaling 2.1 billion dollars; 4 bulk carriers from Norwegian shipowners. The shipping business has a large order volume, but the delivery cycle is long, and the performance will gradually be realized after 2027.

The company built its own King/Emperor series heavy-duty carriers and no longer rent high-priced ships to control ocean transportation costs and ensure delivery timelines. We have 4 European home ports in Germany, Spain, and Denmark, covering the North Sea and the Baltic Sea. Overseas terminal assembly, warehousing, operation and maintenance, and one-stop delivery solutions for overseas customers. The company's gross margin of European Sea Breeze orders was significantly higher than that of domestic projects, accounting for 82.25% of overseas revenue. The company benefits from Europe's profound ocean wind trend; it also enters high-value-added ships such as special ships, and is not limited to ordinary bulk carriers. The shipbuilding sector entered leading international shipowners, opening a second growth curve. The company's European Seabreeze order expectations and the progress of ship construction boosted confidence.