Daily Investment Strategy
Daily focus：Xinyi Solar（968）
Xinyi Solar has announced a profit warning for the first half of the year, expecting 1H25 net profit to range between RMB 615 million and 796 million, representing a 56%-66% decline compared to 1H24, but showing a significant improvement from the net loss of RMB 802 million in the second half of last year. During the first half, although sales volume grew due to a surge in solar installations, solar glass products remained in a stage of oversupply. Even with declining raw material costs, this was insufficient to offset the impact of a sharp drop in average product prices. China's solar industry is facing pressures from "involution," with excessive competition leading to price declines and overcapacity. The announcement notes that after the peak installation period, demand has weakened, prompting leading companies to undertake capacity maintenance and delay expansion plans. This move aids supply-side reforms and alleviates involution.
Uncertainty over US tariffs triggers market volatility, but S&P 500 hits new high
US stocks have shown mixed trends over the past 24 hours, with the S&P 500 index rising slightly by 0.06% to close at 6,309.6 points, setting a new 11th closing high since 2025. Although technology stocks dragged down the Nasdaq slightly, the strong performance of communications and consumer stocks supported the overall market. However, the most hotly debated topic is uncertainty over US tariffs. As Trump's allies refer Federal Reserve Chairman Powell to the Department of Justice for investigation and the possibility of imposing broader tariffs on the European Union, Japan and other countries has been reported, companies such as General Motors have said that tariffs have pushed up costs and affected second-quarter earnings expectations. This issue has exacerbated market volatility, industrial and energy sectors have come under pressure, and investors have turned to defensive assets such as government bonds and gold for safe havens. In the long run, this uncertainty may inhibit global trade flows, weaken corporate profit growth, prompt the Federal Reserve to maintain high interest rates for longer, and thus suppress the expansion of stock market valuations, but if the US-India trade agreement is finalized in September or October, it may provide some buffer.
On Tuesday, the Hong Kong Stock Connect recorded a net inflow of HK$2.72bn, of which China Life Insurance (2628) recorded the largest net inflow of HK$880mn, followed by China Construction Bank (939). Guotai Junan Securities (1788) recorded the largest net outflow of HK$160mn, followed by Tencent (0700).
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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