[Market Dissection]
Ray Dalio, founder of Bridgewater Associates, stated that the Federal Reserve is in a difficult position and should not lower interest rates, warning of the consequences of &#34;inappropriate rate cuts.&#34; U.S. stocks showed stagnation, while Hong Kong stocks continued to rise, with the Hang Seng Index closing up 0.62%.
The benefits of yesterday's rate cut continue to ferment in the market, and China's foreign expansion is also progressing smoothly. On May 21, the Ministry of Commerce's website announced that on May 20, the China-ASEAN Economic and Trade Ministers' Special Meeting was held online, where both sides' economic and trade ministers jointly announced the comprehensive completion of the negotiations for the China-ASEAN Free Trade Area version 3.0. Version 3.0 includes nine new chapters on digital economy, green economy, supply chain connectivity, standard technical regulations and conformity assessment procedures, customs procedures and trade facilitation, sanitary and phytosanitary measures, competition and consumer protection, small and medium-sized enterprises, and economic and technological cooperation, which is conducive to promoting deeper regional economic integration in a wider range of fields under the new circumstances. Managing ASEAN well and reducing dependence on the United States is gradually forming a global consensus, which explains the strong performance of companies like Orient Overseas International (00316), COSCO Shipping Holdings (01919), and China Merchants Port (00144).
The major sectors discussed yesterday continued to gain momentum today, such as Alibaba Pictures (01060), which received good news at noon: it plans to change its Chinese secondary name from &#34;Alibaba Pictures Group Limited&#34; to &#34;Damai Entertainment Holdings Limited.&#34; The board believes that the proposed name change will benefit the company in further enhancing its brand market awareness and reshaping its brand strategy in the entire entertainment ecosystem, especially in the offline entertainment market, while providing a more relevant and unique corporate image and identity; it will also benefit the group's future diversified business development. The potential of the company's IP products has not yet been fully released, with &#34;Chiikawa&#34; and &#34;Crayon Shin-chan&#34; expected to bring new contributions in the fiscal year 2026. Today, it rose nearly 23% again.
The gaming sector was also mentioned yesterday, with CMGE (00302) planning to release a total of 18 new games this year. As of May 2025, CMGE has launched six new games in mainland China, Hong Kong, Macau, Taiwan, and overseas. Another game, &#34;Daily Life of Chat Groups,&#34; is scheduled to go live on May 27. Today, it surged over 24%; Bilibili (09626): Q1 revenue increased by 24% year-on-year, with gaming business up 76% year-on-year, net profit of 362 million yuan, and cash doubled. Bilibili CEO Chen Rui stated that daily active users reached 106.7 million, monthly active users hit a record high of 368 million, and monthly paying users reached 32 million, also a record high, with usage time rising to 108 minutes, driving total revenue to grow 24% year-on-year to 7 billion yuan. Today, it rose over 4%.
The recent enthusiasm for the pharmaceutical sector going overseas remains strong, with 3SBio (01530) rising over 8% again, and CanSino Biologics (06185): the inhaled tuberculosis vaccine has received approval for clinical trials in Indonesia, also rising over 8% today. Innovative drugs and CXO sectors are catching up, with Kelun Pharmaceutical (06821) rising over 13%, Junshi Biosciences (01877) rising over 8%, and Zai Lab (06127) rising nearly 7%
BYD (01211) rose over 4%, reaching a new historical high, with a record premium compared to A-shares. Its overseas strategy has achieved great success, with monthly sales exceeding 8,000 units in Europe and Brazil, over 5,000 in Turkey, and more than 3,000 in Indonesia, Australia, and Thailand. Considering markets like Mexico, Southeast Asia, and the Middle East, BYD's overseas retail volume is expected to stabilize above 40,000 units. Additionally, the Hang Seng Tech Index will include BYD shares, with the change effective from June 9. According to CICC's estimates, the newly included BYD shares are expected to attract about $2 billion in passive fund inflows.
Customs data shows that China's total gold imports last month reached 127.5 metric tons, a new high in 11 months, with a month-on-month increase of 73%. Meanwhile, platinum imports also hit a one-year high, with 11.5 tons imported in April. International gold prices have rebounded strongly again, having risen back above the 3,300 mark overnight. Regarding today's rise in gold prices, it was mentioned yesterday that interest rate cuts will stimulate investors to buy gold for value preservation and appreciation. Goldman Sachs FICC analyst Adam Gillard also believes that there is a clear logical support behind this trend: China's buying power is returning.
Another reason that cannot be ignored is that gold buying in the domestic market during the night trading session of the Shanghai Futures Exchange triggered a follow-up rise in the New York Commodity Exchange (COMEX) market, while the arbitrage space between the two major markets, SHFE/CMX, has significantly expanded. The scale of gold holdings in China remains stable at a high level, indicating a different behavior pattern from the usual momentum traders who chase highs and sell lows. The recent drop in gold prices has not triggered a large-scale sell-off. Currently, the number of open contracts for gold futures on the Shanghai Futures Exchange has returned to a high level, reaching the highest level since the fourth quarter of 2019. Indeed, the influence of the Chinese gold market is continuously increasing, and many market participants in the international gold market have noticed China's leading role in the gold bull market. It was mentioned yesterday that Laopu Gold (06181) rose over 7%, leading company Chifeng Jilong Gold (06693) surged nearly 14%, and other companies like Zijin Mining (02899) and Shandong Gold (01787) also rose by over 7%.
The era of all-solid-state batteries is approaching. On May 20, BMW's first batch of all-solid-state electric vehicles officially hit the road for testing, equipped with solid-state sulfide electrolyte prismatic batteries developed by Solid Power, compatible with the existing fifth-generation electric drive platform. In February this year, Mercedes-Benz's first vehicle equipped with lithium-metal solid-state batteries, developed in collaboration with American Factorial, has already entered road testing. Domestic progress is also rapid; on May 16, Guoxuan High-Tech held a &#34;Global Technology Conference,&#34; where all-solid-state batteries were successfully installed in vehicles, specifically the Xingjiyuan ET model. On May 20, Jinlongyu New Energy (Shenzhen) Co., Ltd. celebrated a significant moment by successfully signing a procurement order for high-energy-density solid-state battery cells for drones with customers. The cells procured in this order are the EC01 series super energy solid-state cells, with an energy density of up to 500Wh/kg. It is evident that both automobiles and drones are accelerating the adoption of solid-state batteries
The Ministry of Industry and Information Technology project is expected to undergo a mid-term review before the end of 2025. Currently, the battery material system has been finalized, and the performance of raw materials has met mass production requirements. The core challenge lies in the battery manufacturing process, with the key period for entering the pilot line expected between the second half of 2025 and the first half of 2026. The first wave of equipment is gradually being installed and optimized, while the second wave of equipment is expected to be upgraded by the end of the year. Solid-state batteries are likely to enter a critical period for testing and equipment iteration. CATL (03750), which has the highest barriers in the battery segment, rose over 10% today, as solid-state batteries are set to gain momentum. Longpan Technology (02465) also surged over 12%, while related lithium salt companies Ganfeng Lithium (01772) and Tianqi Lithium (09696) rose over 3% today.
Meitu Company (01357) announced that on May 20, 2025, the company entered into a subscription agreement with Alibaba Network China Limited (subscriber) to issue convertible bonds with a principal amount of USD 250 million, with an annual interest rate of 1% and an initial conversion price of HKD 6.00 per share (at the agreed exchange rate). This cooperation will create synergies in multiple areas, including promoting global e-commerce cooperation, developing AI models and technologies, computing power and cloud services, as well as other innovative projects. Riding on the fast track of the giants, the stock surged nearly 19% today.
【Sector Focus】
According to media reports on May 20, citing informed sources, due to difficulties in resolving massive debt issues, the world's largest silicon carbide (SiC) company, Wolfspeed, is preparing to file for bankruptcy in the coming weeks.
Wolfspeed is a globally renowned manufacturer of silicon carbide semiconductors, with products widely used in electric vehicles, energy grids, communications, and other fields. In the silicon carbide substrate market, Wolfspeed has long held a leading position.
Wolfspeed's application for bankruptcy protection is undoubtedly a significant event for the global silicon carbide industry, with far-reaching implications. In the long term, Wolfspeed's bankruptcy also presents new development opportunities for Chinese silicon carbide companies. On one hand, as Wolfspeed's market share shrinks, there will be a certain gap in the global silicon carbide market, allowing Chinese silicon carbide companies to leverage their technological and cost advantages to capture this market demand and further increase their market share. On the other hand, after Wolfspeed's bankruptcy, some of its technologies and talents may flow into the market, allowing Chinese companies to integrate and absorb them in reasonable ways, further enhancing their technological level and innovation capabilities.
Related Hong Kong stocks include: Shanghai Fudan (01385), Times Electric (03898); upstream silicon material company GCL-Poly Energy (03800).
【Stock Picking】
Weichai Power (02338): Natural gas heavy truck penetration rate will continue to rise, high demand for high-end diesel generators
In the first quarter of 2025, domestic sales of the natural gas heavy truck industry reached 47,000 units, with a penetration rate of 31%. In 2024, Weichai Power delivered 400 units of large-bore high-speed engines for data centers, with 60% sold overseas. In the first quarter of 2025, Weichai Power's M-series large-bore engine sales reached nearly 2,500 units, with significant year-on-year growth in data center product sales
Commentary: The penetration rate of natural gas heavy trucks will continue to rise. The company has research and development capabilities and technological accumulation, driving the market share of its natural gas heavy truck engines to lead the industry. The company stated that it will continue to promote further increases in market share. Benefiting from the sustained high prosperity of domestic AIDC and data center construction, the demand for high-end diesel generators is experiencing significant growth. In recent years, the company has been fully committed to expanding the high-end market for data centers both domestically and internationally, achieving positive progress, with sales in the data center application field increasing year by year. Weichai Power, leveraging the technology of Baudouin (a French company acquired by Weichai Power over a decade ago), has continuously upgraded its technology and developed large-bore high-speed engines that can be applied to various applications, including data centers. The company's advanced driver-assistance technology has been successfully integrated into heavy truck products in bulk, and the company stated that it will continue to promote the application of related technologies such as advanced driving assistance and autonomous driving. The company has fully laid out hydrogen internal combustion engine technology, achieving breakthroughs in key core technologies and commercial applications.
The company has proactively planned and constructed the Weichai (Yantai) New Energy Industrial Park, which is divided into two parts: first, focusing on creating a production base for 50GWh power batteries and energy storage system cells and supporting components; second, laying out a manufacturing base for core components of new energy vehicles such as 50GWh battery PCK. On March 28, 2025, the first battery product of this industrial park will roll off the production line, marking the official production of the project. Disaster recovery power sources are essential for data centers, with a market space exceeding 5 billion yuan in 2024, and expected to reach 8.3 billion yuan in 2025, a year-on-year growth of 49%

00302

01060

U.S. stocks stagnate, while Hong Kong stocks continue to rise, with the Hang Seng Index closing up 0.62%. Ray Dalio warns that the Federal Reserve should not cut interest rates. China and ASEAN have completed negotiations for the 3.0 version of the free trade area, promoting regional economic integration. Alibaba Pictures has been renamed to Damai Entertainment Holdings, aiming to enhance brand awareness. CMGE plans to release 18 new games, having already launched 6

- Ray Dalio, founder of Bridgewater Associates, warns against inappropriate interest rate cuts by the Federal Reserve, citing potential negative consequences.  
- The U.S. stock market shows stagnation while Hong Kong stocks rise, with the Hang Seng Index closing up 0.62%.  
- China's recent trade agreements with ASEAN aim to enhance regional economic integration, reducing reliance on the U.S. and creating opportunities for local companies amid a shifting global consensus.

Zhitong

CMGE

DAMAI ENT

WEICHAI POWER

OOIL

CHIFENG GOLD

Asymchem

GANFENGLITHIUM

MEITU

JLY Group

SD GOLD

3SBIO

BYD COMPANY

Goldman Sachs

CATL

Huatai-PB CSOP Hang Seng Technology ETF(QDII)

COSCO SHIP HOLD

TIMES ELECTRIC

HSTECH ETF

LAOPU GOLD

Semiconductor

CHINA MER PORT

GREEN ECONOMY

SHANGHAI FUDAN

LOPAL

LOPAL TECH

JUNSHI BIO

JOINN

Hang Seng TECH Index

CANSINOBIO

ZIJIN MINING

CSOP HS TECH

TIANQI LITHIUM

GOTION

BILIBILI-W

Zhitong Hong Kong Stock Analysis | The Era of Solid-State Batteries Has Arrived, Bankruptcy of Silicon Carbide Giants Brings New Opportunities