Daily Investment Strategy
Daily focus：Midea Group（300）
2025 first half results show that the company achieved operating revenue of RMB 252.3 billion, a year-on-year increase of 15.7%, and net profit of RMB 26 billion, a year-on-year growth of 25.0%, exceeding market expectations. The gross margin slightly declined to 25.5%, mainly due to intensified product price competition and changes in the proportion of high-margin businesses, but operating profit steadily increased, with improvements in operating efficiency and cash flow indicators. Facing intensified domestic market competition and overseas uncertainties, the company will deepen DTC and OBM strategies while promoting business expansion targeting enterprise clients and upgrading global production layout. The focus in the second half will be on lowering costs, enhancing growth efficiency, and driving intelligent upgrades to ensure the achievement of annual targets and continuously create shareholder value.
The US manufacturing ISM index remains stuck in contraction territory
The August ISM manufacturing PMI came in at 48.7, marking the sixth consecutive month of contraction. The breakdown showed new orders rebounding to 51.4, but production fell to 47.8 and employment to just 43.8. The price index remained high at 63.7, revealing a mismatch between recovering demand, weak supply, and sticky costs. Against this backdrop, the S&P 500 closed down 0.69% on the first day of September, reflecting that the manufacturing sector continues to weigh on risk appetite and earnings prospects, with reflationary pressures limiting the scope for valuation reassessments. If "improving new orders and low customer inventories" can drive a subsequent production recovery without pushing up prices, the Federal Reserve will have a smoother window to cut interest rates. Otherwise, the combination of "weak production capacity and employment and high costs" could prolong the manufacturing slowdown and exacerbate corporate profit squeezes.
Hong Kong Stock Connect recorded a net inflow of HK$9.28bn on Tuesday, with Alibaba (9988) receiving the largest inflow of HK$3.44bn, followed by Tracker Fund of Hong Kong (2800). On the other hand, SMIC (0981) recorded the largest net outflow of HK$1.04bn, followed by Hua Hong Semiconductor (1347).
Leung Kai Tong is a SFC licensed person accredited to KGI Group to carry on regulated activities (for details, please refer to: https://apps.sfc.https://apps.sfc.hk/publicregWeb/indi/ADU276/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
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