Daily Investment Strategy
Daily focus：Xiaomi Corporation (1810)
announced its results for the second quarter and the first half of the fiscal year ending June 30, 2025, showing continued strong performance. In Q2 2025, the company achieved revenue of approximately RMB 116 billion, a year-on-year increase of 30.5%, setting a record high. Adjusted net profit was about RMB 10.8 billion, up 75.4% year-on-year, surpassing market expectations of RMB 10.2 billion. Market focus, smart electric vehicles and AI-related innovative businesses, generated revenue of RMB 21.3 billion, with over 81,000 vehicles delivered in the quarter. The gross margin further improved to 26.4%, up 3.2 percentage points from the previous quarter. The segment’s operating loss narrowed to RMB 300 million, with management targeting a single-quarter profit in the automotive business in the second half of the year.
Significant profit-taking in tech stocks and a correction in AI stocks
The S&P 500 index closed down 37 points, or 0.6%, today, reflecting market concerns about profit-taking among tech leaders and expectations that the Jackson Hole meeting might signal a delay in future interest rate cuts. Palantir's sharp drop, due to a short-selling attack by Citron Research, underscores market concerns about overvaluation of AI-related stocks. Meanwhile, Intel's investment in SoftBank suggests continued capital flow into the tech sector. Overall, this correction in tech stocks not only impacted the index but also suggests growing market caution regarding risk in highly valued growth stocks. Investors may be rebalancing their asset allocations toward a more conservative, defensive strategy.
Hong Kong Stock Connect saw a net inflow of HK$18.57bn on Monday, with the Tracker Fund of Hong Kong (2800) receiving the largest inflow, HK$7.07bn, followed by Hang Seng China Enterprises (2828). Meanwhile, Oriental Select (1797) saw the largest net outflow, HK$510mn, followed by SMIC (0981).
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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