[Market Analysis]
The end-of-month curse is difficult to break; it tends to either go up or down. Yesterday was a decline, and today followed suit. The Hang Seng Index closed down 1.43%, breaking the 26,000-point mark.
The recent meeting between the Chinese and U.S. presidents suggests a temporary pause in the global tariff confrontation that began in early 2025. This should be seen as a positive development for both sides, as various additional disturbances have been removed. However, media feedback has been quite low-key, with both sides not overly promoting various achievements. This can also be understood as a realization of positive news. Perhaps we will have to wait for the specific agreements to be signed by both parties. U.S. Treasury Secretary Janet Yellen indicated that the China-U.S. trade agreement could be signed as early as next week.
On Thursday, all three major U.S. stock indices adjusted, with Meta's stock plummeting 11% due to its massive AI spending plan, raising widespread concerns in the market about the return on investment in AI. Oracle's five-year CDS costs have risen to their highest level since October 2023. Market attention is shifting towards the substantial debt required to sustain the AI bubble. It is crucial to closely monitor Oracle's CDS trends, as the performance of corporate bonds may become a key indicator of whether the entire AI investment frenzy can be sustained. There are still doubts about whether the massive investments in the AI sector can yield returns. The Nasdaq Composite Index fell over 1.7%, and the semiconductor index dropped over 1.5%.
Currently, there are differing views on the prospects of AI, but the reality is that AI giants continue to increase capital expenditures. For instance, NVIDIA has reached significant cooperation agreements with major South Korean companies like Samsung Electronics and SK Group, with Samsung Electronics, a storage chip giant, set to build an &#34;AI factory&#34; that will house over 50,000 NVIDIA chips. Meanwhile, Hyundai Motor has committed to using a similar number of processors based on NVIDIA's Blackwell architecture. This indicates that demand remains strong, and as mentioned yesterday, Dipu Technology (01384) surged over 15% again today.
However, other AI-related stocks generally saw declines, likely due to the China Securities Regulatory Commission's announcement that fund managers should monitor the deviation of actual fund investments from performance benchmarks to prevent style drift. As the end of the month approaches, funds that have experienced style drift will need to adjust their positions back. This has led to declines in stocks like Hua Hong Semiconductor (01347), which fell over 7%. The drop in copper prices is attributed to Goldman Sachs' bearish comments: Goldman warned that copper prices exceeding $11,200 per ton are unsustainable and represent an emotionally driven &#34;bull market trap.&#34; Jiangxi Copper (00358) fell nearly 6%. However, aluminum remains strong.
The U.S. implementation of tariffs has sparked domestic dissatisfaction, and the U.S. Senate has passed a resolution to terminate Trump's comprehensive tariff policy, but these resolutions still need to be voted on by the House of Representatives. However, House Republicans have previously blocked legislative actions to overturn tariffs multiple times, making it unlikely for these resolutions to gain a vote in the House. Even if the House passes them, Trump could veto them, requiring a two-thirds vote in Congress to override, making this route unfeasible. Perhaps there is still hope through judicial means, such as waiting for a ruling from the U.S. Supreme Court. However, Trump still has backup plans. It seems that canceling tariffs may not be feasible
Today, the on-site negotiations for the 2025 National Medical Insurance Catalog and the price negotiations for the Commercial Insurance Innovative Drug Catalog continued at the National People's Congress Conference Center in Beijing. This year, the national negotiations officially introduced the &#34;Commercial Insurance Innovative Drug Catalog&#34; mechanism for the first time, building on the regular adjustment mechanism of the medical insurance catalog. A large influx of funds into the global pharmaceutical industry chain has led to a more than 3% increase in the Hang Seng Pharmaceutical ETF (159892).
Following the completion of centralized negotiations for analgesics and psychiatric drugs yesterday, today's &#34;breakthrough&#34; varieties mainly focus on two core areas: oncology drugs and chronic disease medications. This includes several newly approved heavyweight innovative oncology drugs for 2025, as well as several urgently needed lipid-lowering drugs participating in the negotiations. The focus of negotiations is further tilted towards clinically high-value areas with a large patient base and urgent treatment needs. Junshi Biosciences-U (01877)'s Oncorhynchus monoclonal antibody injection has become an important representative of domestic innovative drugs striving for medical insurance access, rising more than 6% today; Roche's PD-L1 inhibitor Atezolizumab injection has passed the review in the form of the Commercial Insurance Innovative Drug Catalog. Although it did not appear on today's negotiation list, it is expected to participate in price negotiations in subsequent negotiation days, promoting diversified payment layouts. Related varieties include 3SBio (01530) and its partner Pfizer, which launched two global Phase III clinical trials for the PD-1/VEGF dual antibody, rising more than 11% today; Kelun-Biotech (06990)'s Lukanosatuzumab has been a &#34;focus player&#34; in this year's national negotiations. As the first domestically developed TROP2-targeted antibody-drug conjugate (ADC), this drug was approved in March 2025 for the treatment of locally advanced or metastatic triple-negative breast cancer in patients who have previously received at least two lines of chemotherapy, filling the gap for domestic TROP2 ADCs in this field. Its debut in the national negotiations is seen as a key battle for domestic ADC drugs striving for medical insurance access. Additionally, in this year's national negotiations, Kelun-Biotech's Cetuximab also passed the formal review, rising more than 6% today.
It is reported that Novo Nordisk's Semaglutide injection for diabetes indications has previously been included in the National Medical Insurance Catalog. This time, it is undergoing renewal negotiations as a catalog item. Novo Nordisk's Semaglutide tablets (oral formulation), as the latest launched product, have not yet been included in the National Medical Insurance Catalog but have passed the review in the form of the Commercial Insurance Innovative Drug Catalog. Related varieties include Fosun Pharma (02196), which rose nearly 7%.
Other rising medical and pharmaceutical stocks mainly follow performance lines. Spring Medical (01858) reported a revenue of 756 million yuan in the first three quarters, a year-on-year increase of 48.75%; the net profit attributable to shareholders of the listed company was 192 million yuan, a year-on-year increase of 213.21%. In the third quarter alone, the company achieved an operating income of 268 million yuan, a year-on-year increase of 109.51%; the net profit attributable to the parent company was 77.0619 million yuan, turning losses into profits year-on-year, directly surging over 14%; Innovent Biologics (01801) reported total product revenue exceeding 3.3 billion yuan in the third quarter, maintaining a strong year-on-year growth of about 40%, rising nearly 8%; Rongchang Biologics (09995) reduced its losses, with third-quarter operating revenue of 622 million yuan, a year-on-year increase of 33.13%, showing improving fundamentals, also rising over 6%
On October 30, the Ministry of Finance and four other departments issued a document to improve the duty-free shop policy, which will be implemented starting November 1. The content includes supporting duty-free shops to sell domestic products and expanding the range of operating categories. This forms a combined effort with the Hainan offshore duty-free optimization policy announced on October 17 and the imminent closure of Hainan's entire island on December 18. The industry is also recovering; according to Haikou Customs data, the sales of Hainan offshore duty-free shops in September 2025 increased by 3.4% year-on-year, marking the first positive growth in 18 months. China Duty Free Group (01880), as the industry leader, is expected to benefit from policy dividends and has recently announced a dividend plan of CNY 0.25 per share (including tax) for the first three quarters, rising nearly 6% today.
【Sector Focus】
On October 31, the Ningbo Shipping Exchange reported that the Ningbo Export Container Freight Index (NCFI) for the Maritime Silk Road stood at 1100.3 points this week, up 12.6% from last week. Among the 21 shipping routes, 16 saw an increase in freight index, 3 saw a decrease, and 2 remained stable. Among the major ports along the &#34;Maritime Silk Road,&#34; 14 ports saw an increase in freight index, while 2 saw a decrease. Additionally, VLCC freight rates have surpassed USD 120,000/day, and the TCE level for the VLCCTD3C route reached USD 125,000/day, setting a new ten-year high, excluding the sanctions in 2019 and the negative oil price period in 2020.
Main varieties: COSCO Shipping Energy (01138), Pacific Shipping (02343), COSCO Shipping Holdings (01919), China Ship Leasing (03877).
【Stock Picking】
Zoomlion Heavy Industry Science and Technology Co., Ltd. (01157): Strong Q3 performance plans to issue H-shares convertible bonds
Recently, national ministries and commissions have clearly listed the mining machinery industry as a core area for &#34;upgrading high-end equipment manufacturing&#34; in the 14th Five-Year Plan. In the first three quarters of 2025, the company achieved operating revenue of CNY 37.156 billion, an increase of 8.06% year-on-year; net profit attributable to shareholders of the listed company was CNY 3.92 billion, an increase of 24.89% year-on-year; basic earnings per share were CNY 0.45.
Comment: The company's performance in Q3 was impressive, with signs of a performance turning point gradually emerging. In the third quarter, the company's gross profit margin was 28.0%, a year-on-year decrease of 0.52 percentage points; the net profit margin was 9.8%, a year-on-year increase of 0.15 percentage points. The company continues to expand its mining machinery business layout. In H1 2025, the company's domestic mining machinery business grew against the trend, successfully entering the energy customer market of central state-owned enterprises; overseas business has fully entered the global high-end mining market. The company's overseas revenue accounts for nearly 60%, and the issuance of convertible bonds in the Hong Kong stock market will support globalization. Recently, Zoomlion announced plans to issue no more than CNY 6 billion in convertible bonds in the Hong Kong stock market, with all funds raised to be used for R&amp;D innovation and overseas system construction, which is expected to enhance its global competitiveness. The company's performance in overseas markets has also been outstanding, with overseas revenue reaching CNY 21.313 billion in the first three quarters, accounting for 57.36% of total revenue, a year-on-year increase of 20.80%. The company's overseas manufacturing bases have achieved full product coverage and continue to expand market outlets in Europe, Africa, Latin America, and Southeast Asia, with accelerated construction of the second phase in Germany and the Hungary factory. The competitiveness of core products continues to strengthen, and the layout of embodied intelligence opens up growth space
The company's crawler crane market share remains the highest in the industry, with high-value-added products such as super-large all-terrain cranes in short supply. Zoomlion is continuously expanding its layout in emerging fields such as humanoid robots and industrial internet, opening up new growth space for the company's future development

NVDA

The Hang Seng Index closed down 1.43%, breaking the 26,000-point mark, with the end-of-month curse reappearing. After the meeting between the Chinese and U.S. presidents, global tariff confrontations have temporarily come to a halt, and the market's reaction has been subdued. The three major U.S. stock indices adjusted, with Meta plummeting 11% due to AI spending. The market is skeptical about the return on AI investments, with the Nasdaq Technology Index falling over 1.7%. NVIDIA has reached cooperation agreements with Samsung and others, and demand remains strong, but the China Securities Regulatory Commission has warned of the risk of fund style drift

- The Hang Seng Index closed down 1.43%, falling below the 26,000-point mark, following a downward trend after a previous decline.  
- The upcoming signing of the US-China trade agreement is anticipated to stabilize global tariffs, although market reactions remain subdued, reflecting a cautious optimism.  
- In the AI sector, significant investments continue despite concerns over returns, with major companies like Nvidia and Samsung forming partnerships, while the semiconductor index also faced declines.

Zhitong

NVIDIA

Zhitong Hong Kong Stock Analysis | The end-of-month curse re-emerges as the Hang Seng Index falls below the threshold, with negotiations on the pharmaceutical catalog triggering a surge in funds