Hong Kong stocks showed resilience on Wednesday, dipping in early trading before recovering to close 0.45% higher despite worrying inflation signals from the US. Core CPI rose 0.3% month-on-month, exceeding market expectations of 0.2%, leading traders to price in roughly a 90% probability of a Fed rate hike. Yet the market's calm reaction suggests many view the news as an expected outcome, though opinions remain divided on whether this will be a one-off move or the start of a tightening cycle. Notably, gold prices held steady, indicating limited panic across the broader market.

The worst-hit sector was technology, which weakened following an unusual joint statement from Anthropic, OpenAI, and SpaceX calling for a slowdown in AI development due to safety concerns about frontier models. However, market watchers point to more pragmatic motivations behind this appeal. With Anthropic selecting Nasdaq for its IPO, targeting a raise at least as large as SpaceX's and potentially launching as early as October, capital constraints are tight. The second reason appears to be an attempt by US tech giants to establish regulatory standards and raise barriers to entry, effectively creating monopolistic advantages. The market is currently reacting to the first narrative, as reduced AI investment spending directly impacts Chinese tech companies that supply components to these giants. Cambridge Industries (06166) and Zhongji Innolight (03308) both fell over 8%. While this logic holds short-term destructive power, AI development cannot pause indefinitely, and domestic Chinese AI players remain insulated from these dynamics.

Meanwhile, attention continues to focus on Physical AI opportunities, with Southbound capital actively hunting for newly included targets. Haiqing Zhiyuan (01392), dubbed the first Physical AI stock, surged nearly 30% today. The company collects infrared thermal radiation from overheating equipment and ultraviolet arcs from faulty discharges, translating hidden industrial risks into AI-parseable data — essentially giving machines eyes beyond human capability. Its UV+visible+infrared three-channel spectral fusion, combined with massive arc/faint discharge labeled datasets and a dedicated multispectral large model, forms its core competitive moat, particularly in IDC, energy storage, and electrical hazard early warning verticals. The company's multispectral AI large-model service revenue soared to RMB 320 million, up 382.5% year-on-year, with revenue share jumping from 29.8% to 78%. A new growth vector comes from collaboration with Unitree Robotics' robot dogs for mobile inspection in energy storage and substations, creating a solid second growth curve.

Another persistent performer, Yingxing Holdings (01440), rose nearly 14% today. The company achieved first-half profitability through book gains from its AI joint ventures and IP licensing business, securing global brand licenses to sell merchandise. It has opened a pop-up store at a Hong Kong shopping mall, with the current flagship IP being Stranger Things. Future upside depends on securing additional top-tier IPs.

The World Lung Cancer Conference (WCLC), held September 12-15 in Seoul, became a major catalyst for Chinese innovative drug companies. Akeso (09926), Hansoh Pharma (03692), Yilian Biotech, and Baili Tianheng (688506.SH) all presented core pipeline data. Chinese drugs achieved record recognition with 19 Oral presentations and 45 Mini Oral sessions selected. Notable highlights include Hansoh's B7-H3 ADC Phase III study for small cell lung cancer and Yilian Biotech's B7-H3 ADC Phase III trial, both selected for the Presidential Symposium — the highest honor at the conference. Institutions believe IO2.0 and ADC will remain the protagonists at WCLC 2026, with the standard treatment paradigm for first-line non-small cell lung cancer on the verge of transformation. Baili Tianheng's EGFR/Her3 ADC partnered with BMS, and Yinfeng Bio's (09606) IO2.0+ADC collaboration with BioNTech, are set to reveal their first global data. Yinfeng Bio surged over 10%. ADC is now expanding into front-line pan-tumor indications, with Kelun Biotech's (06990) TROP2 ADC combined with Keytruda demonstrating certainty for ADC+IO in first-line lung cancer. Akeso's latest AK112 data versus Keytruda showed median overall survival of 30.8 months at 36-month follow-up versus 22.6 months for the control arm, representing approximately 27% reduction in mortality risk, with more pronounced benefits in squamous and high PD-L1 expression patients.

Beyond the conference, BeiGene's (06160) zanubrutinib global sales reached RMB 16.1 billion (+28.7%), while Innovent Biologics' (01801) product revenue exceeded RMB 8.2 billion (+55%). CXO order strength validates the sector's momentum, with WuXi AppTec's (02359) on-hand orders at RMB 66.4 billion (+25%) and Asymchem's (06821) orders up 54% year-on-year. Milestone payments and commercialization royalties from licensed programs are becoming the second value-creation curve for innovative drug companies. Asymchem surged over 14%. Additionally, Innocare (09969) announced its first bispecific ADC, ICP-B381, targeting PSMA and STEAP1, received NMPA approval for clinical trials in prostate cancer and other solid tumors — the company's third ADC candidate to enter clinical development, driving its shares up over 14%.

The long-dormant auto sector also received restructuring catalysts. Reports indicate FAW Group is advancing plans to take an equity stake in GAC Group (02238), potentially through asset transfers under regulatory guidance, forming a joint venture relationship. Meanwhile, nine government departments jointly issued the 15th Five-Year Plan for intelligent connected new energy vehicles, targeting 70% and 40% new energy passenger and commercial vehicle sales proportions respectively by 2030, alongside scaled autonomous driving deployment. Leapmotor (09863) announced overseas exports of 132,118 units from January to August 2026, leading Chinese EV startups in foreign markets. The B10 model drove momentum with nearly 12,000 units exported in August alone, pushing shares up over 4%. Xiaomi Group (01810) delivered its first 30 vehicles to Shanghai owners with CEO Lei Jun personally handling handovers, rising over 3%. Geely Auto (00175), Li Auto (02015), and Great Wall Motor (02333) all gained over 2%.

Sector watch: European natural gas prices continue climbing alongside oil, driven by concerns over prolonged Middle East supply disruptions. Benchmark futures surged as much as 5.9% to their highest level since December 2022, extending gains after a brief pullback. Year-to-date, European gas prices have nearly tripled. With winter approaching and little time to rebuild exceptionally low inventories, Europe faces intense competition for supply during the heating season. This tightness is expected to persist, benefiting Hong Kong-listed gas majors including Kunlun Energy (00135), China Resources Gas (01193), and ENN Energy (02688).

Stock spotlight: Haier Smart Home (06690) has repurchased approximately 1.076% of its shares, deploying around RMB 2.1 billion. First-half 2026 revenue reached RMB 152.1 billion with net profit attributable to shareholders of RMB 10.3 billion. Q2 revenue hit RMB 78.4 billion, up 1.36% year-on-year, while net profit of RMB 5.67 billion grew 21.78% quarter-over-quarter. Gross margin improved slightly to 27.23%, up 0.36 percentage points. The substantial buyback signals management confidence while reinforcing the company's position as China's premium white goods benchmark. Casarte commands over 40% share in refrigerators above RMB 10,000 and dominates the high-end washing machine segment. Domestic orders are at full capacity during peak season, with premium orders prioritized. Casarte terminal shipments grew double digits, with bundled product mix reaching 75%, up 26.5 percentage points year-on-year. The Seeker mid-range and Mailang premium series posted 44% retail growth in 2026, with premium products lifting overall margins against industry price wars. Haier ranks first globally in smart home sales with over 130 million registered users, 13 million+ monthly active app users, and 20 million+ overseas smart users. The SanYiNiao scene brand exceeds 10 million daily actives, integrating home renovation with appliances at much higher unit prices and margins — bundled orders run 8-12 percentage points higher gross margin than single appliances. Emerging markets are accelerating, with full-capacity factories in Southeast Asia, India, Egypt, and Middle East/Africa. The company will add 2-2.5 million units of annual overseas production capacity in 2026, with new full-category premium smart home operations launching in Brazil to unlock Latin America. Level 4 autonomous smart appliances using AI Eye 2.0 technology, including unmanned home appliances, smart washing/drying and kitchen robots, are rolling out — with 2026 retail sales of AI hardware up 500%, establishing a second growth engine. The company maintains strong momentum domestically with premium Casarte orders accounting for 45%+ of production scheduling. Air conditioning remains the peak-season core with fully-loaded factories. Overseas regional orders show divergence, with local plants absorbing incremental volume — expanded Egypt refrigerator capacity of 300,000 units in Q4 2026 secures Middle East/Africa autumn-winter orders ahead of time. Between 2026-2027, new plants across Southeast Asia, India, and the Middle East will further raise overseas self-manufacturing ratios, mitigating global trade barriers, with overseas revenue expected to surpass 52% and emerging markets becoming a second growth engine. With sustained share buybacks planned for future equity incentives, and dividend payout ratio rising to 55% in 2025 (versus 48% in 2024), targeting 60% over the next three years, Haier Smart Home demonstrates clear conviction in its intrinsic value and growth trajectory.