Northbound Capital Trends | Northbound capital net purchases of 5.508 billion, Alibaba receives further domestic capital increase, chip stocks continue to be sold off

According to Zhitong Finance APP, on September 3rd, in the Hong Kong stock market, northbound capital had a net purchase of HKD 5.508 billion, of which the Shanghai-Hong Kong Stock Connect had a net purchase of HKD 3.202 billion, and the Shenzhen-Hong Kong Stock Connect had a net purchase of HKD 2.307 billion.

The stocks with the highest net purchases from northbound capital were Alibaba-W (09988), Xiaomi Corporation-W (01810), and Meituan-W (03690). The stocks with the highest net sales were Tencent (00700), Hua Hong Semiconductor (01347), and ZTE Corporation (00763).

Active trading stocks in the Shanghai-Hong Kong Stock Connect

Active trading stocks in the Shenzhen-Hong Kong Stock Connect

Alibaba-W (09988) received a net purchase of HKD 2.488 billion. On the news front, Jianyin International released a research report stating that Alibaba's first fiscal quarter performance slightly exceeded expectations. In the conference call, management expressed a positive outlook for the core business. This indicates that the company's investment strategies in AI cloud and fast commerce are being executed well, supporting faster revenue and profit growth in the medium to long term, although increased investment in fast e-commerce may pressure short-term profits. Notably, northbound capital has accumulated over HKD 10.8 billion in Alibaba over the past three trading days.

Xiaomi Corporation-W (01810) received a net purchase of HKD 698 million. On the news front, Xiaomi announced that its delivery volume in August exceeded 30,000 units. This is the second time since July that Xiaomi's automotive deliveries have exceeded 30,000 units in a month. First Shanghai recently pointed out in a research report that the company's order scale has far exceeded its current delivery capacity, with a significant supply-demand gap. To match market demand, the second-phase factory has officially started production, and current capacity is in the ramp-up stage. As capacity is gradually released, it is expected to effectively alleviate the current supply-demand imbalance.

YOFC (06869) received a net purchase of HKD 364 million. On the news front, Zhongtai Securities recently pointed out that hollow-core optical fibers are still in the early stages of commercialization, with a compound annual growth rate expected to reach 56.52% over the next six years. The first commercial use of hollow-core optical fiber by China Mobile in July 2025 may mark an acceleration in the commercialization process, with YOFC being the sole bidder, and the actual winning bid price being approximately HKD 36,000 per core kilometer. The company stated that the hollow-core optical fiber-related business has not yet had a significant impact on the company's financial data Stone Pharmaceutical Group (01093) received a net purchase of HKD 358 million. On the news front, Haitong International believes that Stone Pharmaceutical Group faces price reduction pressures from centralized procurement and medical insurance negotiations in the second quarter. The firm believes that channel inventory has basically been cleared. In the second half of the year, the institution is optimistic about the volume growth of innovative drugs including Mingfule, Omaguzumab, Enlansumab (PD-1), and Iritankin liposome. The firm expects the second quarter to be the performance bottom for this year, with a potential increase in the second half compared to the first half.

UBTECH (09880) received a net purchase of HKD 89.25 million. On the news front, JP Morgan pointed out that the commercialization and scaling of humanoid robots is unprecedented. UBTECH's monthly production capacity of humanoid robots has currently increased to 300 units, with a target of delivering over 500 units this year, which is ten times the delivery volume in the first half of the year. The firm is optimistic that Chinese companies have stronger pricing power, stricter cost control, and faster market share expansion, expecting that regulatory and anti-involution policies are creating a sustainable competitive environment.

SMIC (00981) and Hua Hong Semiconductor (01347) faced net sales of HKD 110 million and HKD 405 million, respectively. On the news front, Minsheng Securities believes that SMIC's acquisition of SMIC North may significantly enhance the net profit attributable to the parent company. This move will also meet the exit demands of shareholders represented by the first phase of the National Integrated Circuit Industry Investment Fund. The first phase of the fund is a single major shareholder with a 32% stake, and it has been nearly 11 years since its establishment, with the 24-year recovery period having passed, currently in the "extension period," creating strong exit demands. Similarly, other shareholders have similar demands. In addition, the U.S. plans to revoke TSMC (Nanjing) VEU authorization.

ZTE Corporation (00763) faced a net sale of HKD 203 million. On the news front, Jefferies released a research report stating that ZTE's stock price has risen about 52% over the past three months, driven by expectations of growth in artificial intelligence and ASIC chips, but the second quarter's performance fell short of expectations, indicating that the market was overly optimistic. Currently, its net profit forecasts for ZTE over the next two years are 26% and 31% lower than market forecasts, respectively, and a 22x price-to-earnings ratio valuation is unattractive compared to negative net profit growth over the next three years, with the rating downgraded from "Hold" to "Underperform."

In addition, Meituan-W (03690) and Jingtai Holdings (02228) received net purchases of HKD 570 million and HKD 43.34 million, respectively. Tencent (00700) faced a net sale of HKD 471 million