Following the adjustment in October, opportunities in November are likely to increase, as a decline serves as the best litmus test, helping us identify which assets have stood the test of scrutiny. Therefore, the strategy need not be overly complex; regardless of market volatility, simply put: focus on resilient asset classes.
The performance of Hong Kong stocks in October was unexpectedly weak, with gains only at the beginning of the month before the Hang Seng Index dropped to its 60-day moving average. Fortunately, this line stabilized, with the index fluctuating between 25,145.14 and 27,381.84 points.
There was an error in last month's forecast; while other issues were within expectations, the underestimation lay in Trump’s so-called 'art of the deal.' Surprisingly, despite the current situation, old tactics are still being used to solve problems. The U.S. continues to engage in 'creating leverage' through escalating tariffs, including introducing穿透式制裁 (penetrating sanctions) and even imposing port fees on Chinese vessels. This has had severe consequences, prompting China to respond firmly with reciprocal countermeasures, leveraging rare earths for penetrating controls. Both the U.S. and Europe now feel the pressure, leading them to proactively seek negotiations. Ultimately, the leaders of both countries reached a consensus at the APEC meeting.
Under this backdrop, Hong Kong stocks spent most of the time retreating to defend the 60-day moving average. In the interim, events such as the Netherlands’ forced acquisition of Nexperia added complexity, reflecting major power rivalry. Additionally, two U.S. regional banks (Zions Bancorp and Western Alliance Bancorp) experienced sharp declines due to loan fraud, raising concerns about the fragility of the U.S. credit market and financial system. The resilience of the Hong Kong stock market can largely be attributed to the introduction of the '15th Five-Year Plan,' which boosted investor confidence.
The rise in gold stocks at the beginning of the month was not a positive signal, as this sector typically moves inversely to the broader market, indicating heightened risk aversion.
Thus, throughout October, there were very few strong performers in the market. New listings stood out relatively, as the Hong Kong IPO market was quite active, with 11 out of 12 new stocks recording gains on their first day of trading. Among them, Kingleaf International Group (08549) saw the highest first-day surge of up to 330%, while Changfeng Pharmaceutical (02652) offered the most lucrative return, with a one-lot return of approximately HKD 12,000. However, these stocks generally opened high and closed low. The most aggressive upward trend came from DeepTech (01384), hailed as the first enterprise-level large model AI application stock, which rose from its IPO price of HKD 26.66 to as high as HKD 128.2 in three consecutive days, nearly a fivefold increase. Such extreme situations often occur during weak market conditions when rallies in non-mainstream sectors tend to attract capital attention. Excluding new stocks, the sectors showing positive feedback included aluminum from the non-ferrous metals sector, such as Chalco (02600); venture capital-related stocks like Shanghai Public Utilities (01635); shipping, particularly oil transportation leader COSCO Energy (01138); airlines where China Eastern Airlines (00670) improved fundamentals and captured European passenger markets; uranium price increases driven by energy crises benefiting CGN Mining (01164); and intelligent driving stocks like Black Sesame Technologies (02533). It is possible that some of these stocks will continue to strengthen going forward, supported by solid underlying logic.
Given that the October rally did not continue upwards, the November trend for Hong Kong stocks faces a choice: whether to push higher, decline from this level, or consolidate through sideways movement. Considering the strength of the A-share market, the latter scenario appears more likely.
First, consider disruptive factors. Trump's imposition of tariffs has drawn criticism from Democrats. Although senators have passed a resolution to terminate Trump’s tariffs, this approach is unlikely to succeed. A more reliable option would be legal channels. According to Xinhua News Agency, the U.S. Supreme Court previously announced it would expedite the review of the legality of most tariffs imposed by the Trump administration, with oral arguments scheduled for November 5. President Trump stated he might personally attend the Supreme Court hearing on tariff legality. U.S. Treasury Secretary Bessent and other officials repeatedly emphasized that if the Supreme Court rules against the government, by June next year, the Trump administration may need to refund up to USD 1 trillion in tariff revenues—a catastrophic outcome. An adverse ruling would also impact trade agreements already reached and ongoing trade negotiations. Even if the Supreme Court intervenes, Trump will likely resort to other tactics.
The U.S. government shutdown has exceeded one month, significantly impacting the economy. According to a report released by the Congressional Budget Office (CBO) on October 29, 2025, the one-month shutdown caused approximately USD 18 billion in economic losses, directly reducing the fourth-quarter GDP annualized growth rate by an estimated 1 to 2 percentage points. Of this, USD 7 to 14 billion in economic output represents permanent, irrecoverable losses. The latest developments include the suspension of Supplemental Nutrition Assistance Program (SNAP) benefits as of November 1, affecting up to 42 million Americans. A military pay crisis looms as funds for soldier compensation are nearly exhausted. The U.S. Senate’s next vote on advancing appropriations bills to end the government shutdown is expected to begin as early as November 3. If normal operations cannot resume soon, continued disruptions in employment, social security, and public services could follow. Should small banks experience another sharp decline, vigilance will be required.
Whether the Federal Reserve will cut interest rates in December is also a significant variable. Powell’s latest statement leaned hawkish, indicating that a rate cut in December is not guaranteed and will depend on the labor market and inflation conditions. Some analysts suggest that the longer the U.S. government shutdown lasts, the lower the probability of a rate cut. The rationale is that the absence of data due to the shutdown could make the Federal Reserve more cautious in its actions. While this argument is reasonable, common sense suggests that a prolonged shutdown would have a greater negative impact on the economy, warranting a rate cut to offset such effects.
In terms of geopolitics, markets remain desensitized to ongoing conflicts, such as those between Russia and Ukraine and in Gaza. The key focus is whether the U.S. escalates its actions against Venezuela. Ground troop involvement seems unlikely, with limited airstrikes or targeted operations like decapitation strikes being more probable. Given the escalating internal contradictions within the U.S., the possibility of launching external offensives to divert attention cannot be ruled out. If such actions occur, they could negatively impact capital markets.
On the positive side, on October 30, China and the U.S. announced the results of their economic and trade consultations, agreeing to a one-year “ceasefire.” The U.S. reduced the fentanyl tax by 10%, postponed reciprocal tariffs of 24% for another year, paused export controls, and suspended port fees for a year. In response, China also delayed corresponding countermeasures. The easing of tensions between China and the U.S. benefits efforts to boost asset values, resolve debt issues, stimulate domestic demand, and support fiscal transformation toward an anti-internal competition unified market. From the U.S. perspective, lowering tariffs alleviates inflation concerns and supports the Fed’s ability to continue cutting interest rates.
More importantly, the recent negotiations with the U.S. have sent significant shockwaves through other nations. Trade relations with the EU, Canada, India, South Korea, and others are likely to take a more positive turn. However, this is not a simple linear relationship; the influence of the U.S. remains unavoidable.
The upcoming “15th Five-Year Plan” outlines a new blueprint, aiming for per capita GDP to reach the level of moderately developed countries by 2035, implying a compound annual growth rate exceeding 4.7% over the next decade. This ensures the long-term upward trend of economic development remains intact. The Federal Reserve has already cut interest rates twice this year, while the October Loan Prime Rate (LPR) remained unchanged. However, November appears to be a favorable window for a potential adjustment.
Going long on Hong Kong stocks has become a consensus among foreign investors. Recently, international capital is reassessing and reallocating investments in Hong Kong equities. The Fed's rate cuts have weakened the U.S. dollar, creating a “rebalancing” demand for global funds. Hong Kong stocks, trading at a valuation “discount,” have emerged as a popular destination. Foreign investors are not only aggressively purchasing high-quality assets on the secondary market but are also actively participating in cornerstone investments for Hong Kong IPOs and leveraging ETFs for strategic positioning.
Overall, the key level to watch for Hong Kong stocks in November is 25,000 points. More optimistically, the focus will be on whether the index can break through 27,381 points. It is expected that the market will mostly fluctuate within this range.
November 2025 Investment Strategy: Embrace Resilient Assets
Zhitong Finance's top 10 stock picks for October slightly outperformed the broader market. During the same period, the Hang Seng Index’s maximum gain was 2%, while the average maximum gain of the top 10 stock picks was 6.1%. Specifically, the maximum gains for the top 10 stock picks were as follows: China Metallurgical Group (01618) up 17%, Bilibili-W (09626) up 11.4%, CRRC Times Electric (03898) up 9.5%, Shanghai Fudan Microelectronics (01385) up 8.1%, Ubtech Robotics (09880) up 4.5%, Sany Heavy Industry International (00631) up 4.3%, XPeng Motors-W (09868) up 2.8%, Galaxy Entertainment (00027) up 1.5%, Sunny Optical (02382) up 1.1%, and Fourth Paradigm (06682) up 1%.
The market underwent nearly a month-long adjustment, making October challenging to navigate. Opportunities were concentrated in the first few days of the month, after which prices fell. There were no standout sectors in the market.
Following the adjustment in October, opportunities in November are likely to increase, as a decline serves as the best litmus test, helping us identify which assets have stood the test of scrutiny. Therefore, the strategy need not be overly complex; regardless of market volatility, simply put: focus on resilient asset classes.
Following this line of thinking, the pharmaceutical sector is the top choice. It has already undergone significant adjustments, and many stocks possess strong potential for a rebound from their current lows. The recent negotiations over the updated pharmaceutical catalog and the Hong Kong Exchange's plan to launch the Hang Seng Biotechnology Index futures on November 28 have drawn substantial capital into this sector. Stocks with stable performance and solid fundamentals are preferred.
The AI sector, as a focal point in the competition between China and the US, is expected to remain highly active. Both Google and Meta have raised their 2025 capital expenditure guidance, with further 'significant' increases forecasted for 2026. Google has raised its 2025 capital expenditure guidance to $91-93 billion, while Meta has increased it to $70-72 billion. Microsoft’s capital expenditure in the recently concluded quarter reached a record $34.9 billion, far exceeding market expectations of $30 billion. Among the various sub-sectors, the PCB industry stands out due to its high level of activity.
In light of the 15th Five-Year Plan, newly highlighted areas warrant close attention. For instance, nuclear fusion, regarded as the ultimate future energy source, offers vast development potential, and core players in this field are expected to continue gaining momentum.
Significant progress in countering domestic competition has been achieved in the lithium battery and photovoltaic sectors. Fundamentally, lithium batteries benefit from enormous demand driven by energy storage applications, while the focus on polysilicon in photovoltaics is due to its substantial cost advantages. As long as prices remain favorable, these sectors can deliver strong returns.
Overseas exports continue to represent a major growth area. Companies with a large share of machinery exports and textile and apparel firms with factories in Southeast Asia are key beneficiaries. The shipping sector remains robust, with rising freight rates. However, given the significant gains in core stocks, the focus has shifted to ship leasing. Additionally, coal remains a notable player within the dividend-focused strategy.
Specific stocks:
Pharmaceuticals: Hansoh Pharma (03692), WuXi AppTec (03759)
Polysilicon: GCL Technology (03800)
PCB: Kingboard Laminates (01888)
Leasing: CSSC Shipping (03877)
Machinery: Zoomlion Heavy Industry (01157)
Special Steel: Tiangong International (00826)
Coal: Powerlong Development (01277)
Lithium Mine: Tianqi Lithium (09696)
Textiles: Shenzhou International (02313)
The detailed list is as follows:
1. Hansoh Pharma (03692)
In the first half of 2025, the company's total revenue was RMB 7.434 billion, representing a year-on-year increase of 14.3%; net profit attributable to shareholders was RMB 3.135 billion, up 15.02% year-on-year.
Revenue from innovative drug products amounted to RMB 6.145 billion, increasing by 22.1% year-on-year, raising its share in total revenue to 82.7%. In the first half of 2025, the product portfolio in the oncology field, including Ameitinib and Flumatinib, generated revenue of RMB 4.531 billion, remaining roughly flat year-on-year; the product portfolio in the anti-infective field, including Emtricitabine Tenofovir tablets and Morinidazole, achieved revenue of RMB 735 million, up 4.9% year-on-year; the product portfolio in the central nervous system disease field, including Inebilizumab, brought in revenue of RMB 768 million, increasing by 4.8% year-on-year; the product portfolio for metabolic and other diseases, including Losenatide and Pegmocept, generated revenue of approximately RMB 1.4 billion, surging 134.5% year-on-year. Additionally,
In H1 2025, Hansoh Pharmaceutical will receive an upfront payment of USD 112 million as a BD licensing fee from MSD under the agreement for HS-10535 (oral small-molecule GLP-1RA). Almonertinib, as the first domestically produced third-generation EGFR-TKI in China, has experienced rapid sales growth and continuous expansion of indications. Sales data from sampled hospitals show that it grew from CNY 18.41 million in 2020 to CNY 1.784 billion in 2024, with an annual compound growth rate of 214%. In 2024, it accounted for approximately 28% of total third-generation EGFR-TKI sales, ranking first among domestic drugs. Almonertinib is actively expanding indications related to NSCLC, with a total of four approved NSCLC-related indications currently. In 2025, two additional indications were approved: adjuvant treatment post-surgery and treatment for patients who progress after radical platinum-based chemoradiotherapy. The NDA for first-line treatment of NSCLC in combination with chemotherapy is still under review. In June 2025, almonertinib received approval from the UK MHRA for marketing, becoming the first innovative drug of Hansoh Pharmaceutical to enter overseas markets. The company will continue its efforts to obtain regulatory recognition from EMA. As of H1 2025, the company has conducted over 70 clinical trials for more than 40 innovative drug candidates. In H1 2025, eight new innovative drugs entered clinical trials, including HS-20122 (EGFR/c-Met ADC) and HS-10510 (PCSK9). Three new Phase III clinical trials were added: a psoriasis trial for HS-20137 (IL-23p19) introduced from Quanxin Biotechnology, and global Phase III clinical trials for HS-20093 (B7-H3 ADC) in bone and soft tissue sarcoma and HS-20089 (B7-H4 ADC) in ovarian cancer; the overseas rights of these two ADCs have been granted to GSK. Additionally, the Phase III clinical trial for psoriasis using Hansoh’s TYK2 inhibitor HS-10374 is proceeding steadily, with data showing a low risk of skin toxicity. Based on the above, the institution maintains a “Buy” rating.
2. WuXi AppTec (03759)
The company announced its 3Q25 results, with revenue at CNY 3.65 billion, a year-over-year increase of 13.4% and a quarter-over-quarter increase of 9.1%. Adjusted Non-IFRS net profit was CNY 471 million, up 12.88% year-over-year and 16.0% quarter-over-quarter, reflecting gradual quarterly improvements in profitability and operational efficiency. The performance slightly exceeded expectations, primarily due to strong order demand and margin improvement driven by economies of scale. The company raised its 2025 revenue growth target to 12-16%. Laboratory services revenue in 3Q25 was CNY 2.11 billion, up 14.3% year-over-year and 3.7% quarter-over-quarter. Revenue from laboratory chemistry and biological sciences services achieved rapid year-over-year growth, with a gross margin of 45.0%, remaining relatively stable. New orders for laboratory services from January to September 2025 increased by over 12%, accelerating compared to 1H25. CMC (small molecule CDMO) revenue in 3Q25 was CNY 903 million, up 12.7% year-over-year and 29.6% quarter-over-quarter, with a gross margin of 34.6%, increasing by 4.0ppt quarter-over-quarter as gross margins improved with revenue scale. New orders in the CMC segment from January to September 2025 increased by approximately 20% year-over-year. In September 2025, the company announced that its Shaoxing API plant successfully passed the FDA inspection, further validating the company’s quality system and production capabilities, which will help secure more late-stage clinical and commercial orders. The company plans to acquire 82.54% equity in Bai Ao De for CNY 1.346 billion. Bai Ao De has established significant technical advantages in complex drug-target protein preparation, extensive X-ray protein crystallization, and advanced cryo-electron microscopy structure analysis. This acquisition will enhance the company’s technical platforms and service capabilities, completing its end-to-end integrated platform. Based on recent upward shifts in pharmaceutical valuation benchmarks, institutions raised the H-share target price by 15.4% to HKD 30.00, implying a potential upside of 20.2%.
Single-quarter growth exceeded 12%, accelerating compared to 1H25. In 3Q25, CMC (small molecule CDMO) revenue reached RMB 903 million, up 12.7% year-over-year and 29.6% quarter-over-quarter, with a gross margin of 34.6%, increasing by 4.0 percentage points quarter-over-quarter as the margin improved alongside revenue scale growth. New orders signed in the CMC segment from January to September 2025 grew by approximately 20% year-over-year. In September 2025, the company announced that its Shaoxing API plant successfully passed the US FDA on-site inspection, reaffirming the company’s quality system and production capabilities, which will help secure more late-stage clinical and commercial orders. The company plans to acquire 82.54% equity in BioRay for RMB 1.346 billion. BioRay has established significant technological advantages in complex drug target protein preparation, extensive X-ray protein crystallization, and advanced cryo-electron microscopy structural analysis. This acquisition will enhance the company’s technology platform and service capabilities, further completing its end-to-end integrated platform. Overall, due to the recent upward shift in pharmaceutical valuation benchmarks, institutional analysts have raised the H-share target price by 15.4% to HKD 30.00, implying a 20.2% upside potential.
3. GCL Technology (03800)
In a recent announcement, the company projected its photovoltaic division’s profit for Q3 2025 at approximately RMB 960 million (including RMB 640 million in profits from the sale of an associate company), marking a turnaround to profitability. Thanks to the ongoing implementation of anti-internal competition policies in the photovoltaic industry, polysilicon prices rebounded from their bottom, coupled with the company’s continuous efforts to improve efficiency and reduce costs, resulting in its first profitable quarter. As a global leader in granular polysilicon production, the company has long been committed to improving efficiency and reducing costs. In Q3 2025, the average cash production cost of granular polysilicon (including R&D) was RMB 24.2/kg, down RMB 1.2/kg quarter-over-quarter. Additionally, since July, under the progress of anti-internal competition measures in the photovoltaic sector, polysilicon prices have continued to rise, with the company’s average selling price reaching RMB 37.3/kg (excluding tax) in Q3 2025, up RMB 8.1/kg quarter-over-quarter. The company’s average cash production profit in Q3 2025 was RMB 13.1/kg, expanding by RMB 9.3/kg quarter-over-quarter, reflecting a significant improvement in profitability. After a deep adjustment in 2024, polysilicon prices fell below the cash cost line for most companies, leading to the suspension or exit of a large amount of high-cost and outdated capacity. As an industry leader, the company’s market share of polysilicon surged from 14.58% in 2024 to 24.32% by the first half of 2025. Entering the second half of 2025, in July, the National Development and Reform Commission and the State Administration for Market Regulation drafted the 'Amendment to the Price Law (Draft for Public Comment),' which provides guidance for regulating price order in the photovoltaic industry. Polysilicon prices have stabilized at the bottom and shown moderate recovery. As the anti-internal competition process advances in the photovoltaic sector, the polysilicon industry may reshape the market landscape through market-based measures such as energy efficiency standards and technical specifications, accelerating the elimination of inefficient capacity and potentially further increasing the company’s market share. Furthermore, on September 16, the company announced a strategic financing agreement with InfiniCapital, raisingtargeted share placementsapproximately HKD 5.446 billion (equivalent to RMB 4.98 billion). The primary use of the funds will focus on capital reserves for structural adjustments in industry capacity, advancing silane gas production capacity, and optimizing the capital structure, demonstrating the company’s resolve to make counter-cyclical investments and consolidate industry resources amid the market downturn. The remaining funds will be allocated to replenishing working capital and repaying loans, further enhancing the company’s financial stability. In summary, the company’s granular polysilicon technology offers long-term cost and low-carbon advantages. Considering the sustained improvement in supply-demand dynamics driven by the anti-internal competition policy in the photovoltaic sector, the company’s profitability is expected to reach an inflection point.
4. Kingboard Laminates (01888)
As a traditional integrated leader in copper-clad laminate (CCL), the company is moving towards high-end development. Its progress in specialized electronic cloth materials is particularly notable, with its first low-dielectric electronic yarn furnace having been commissioned. Technically, the single-step process is relatively advanced domestically. Alongside downstream customer certifications, the company has announced that its second-generation low-dielectric, low-expansion fiber cloth and quartz cloth capacities are expected to gradually come online in 2H25 and 2026. Specialty electronic cloth is experiencing a tight supply-demand phase amidst the upgrading of CCL. The company also leads in traditional electronic cloth capacity, with 200,000 tons of electronic yarn capacity, estimated to correspond to 700-800 million meters/year of traditional electronic cloth capacity. The pricing trend for traditional electronic cloth is also in an upward cycle. Integration represents differentiated positioning, with upgrades in copper foil and CCL underway. Long-term, the company’s core advantage lies in material stability through industry integration. In copper foil, the company’s HVLP-3 copper foil has entered the verification phase, with further upgrades in progress. Electronic cloth and copper foil advancements lead the way, and M6-level and higher CCL products and capacities are expected to gradually roll out. In the high-end progression of PCBs, the stability of material supply becomes increasingly critical for ensuring terminal product performance. While the company’s high-end progress may not be the earliest in the industry, its integrated advantages are distinctive. Material integration advantages offer certain benefits for CCL material tension and processing stability. Historically, in cycles where copper prices and glass fiber cloth trend upwards, the price cycle for traditional CCL has also been optimistic. In 2H25, the industry attempted a new round of price increases. From the perspective of supply-demand dynamics, overall demand for CCL is expected to grow well alongside AI-driven demand improvements. Major companies’ expansion plans are primarily focused on high-end boards, with some mid-tier capacities transitioning to high-end production, resulting in a favorable supply-demand balance for traditional mid-tier CCL. Since hitting profitability lows in 2023, mid-tier capacity expansion has been relatively limited, while global demand can be assumed to rise modestly. Therefore, the outlook for traditional CCL remains optimistic in terms of both market conditions and price trends. In summary, the company is one of the leading CCL companies, with upstream material integration building a differentiated barrier. Upgrades in electronic cloth, copper foil, and CCL are synchronized, with a positive supply-demand balance and new price trends for traditional CCL. Product upgrades and CCL price increases are expected to contribute to the company’s earnings growth momentum.
5. CSSC Shipping (03877)
In the first half of the year, the company achieved revenue of HKD 2.018 billion, a year-over-year increase of 2.7%; operating profit reached HKD 1.167 billion, up 5.61% year-over-year; net profit attributable to shareholders was HKD 1.106 billion, down 16.7% year-over-year; the interim dividend payout ratio was 28.03%, up year-over-year.
14.1 percentage points. In the first half of 2025, affected by frequent changes in U.S. tariff policies and the Iran-Israel conflict, the overall rates in the international shipping market showed a rebounding upward trend, but with increased volatility. The average value of the Clarkson Shipping Index in the first half of the year was USD 24,191 per day, representing a year-on-year and quarter-on-quarter decline of 4.9% and 1.1%, respectively. The company's revenue for the first half of 2025 experienced slight growth, but profitability faced pressure. In the first half of 2025, the company reported attributable net profit of HKD 1.106 billion, a year-on-year decrease of 16.7%, primarily due to changes in taxation methods and reduced rental income from joint ventures. Starting from January 1, 2025, the company retrospectively applied the OECD Pillar Two Model Rules, resulting in a tax provision of HKD 1.377 billion, an increase of HKD 118 million year-on-year. Additionally, the company’s share of joint venture performance decreased by 50.2% in the first half of 2025, with a year-on-year reduction of HKD 133 million, due to the sale of two chemical MR tankers in the second half of 2024 and a decline in daily charter rates for refined oil and chemical transport vessels compared to the same period last year. In the second half of 2025, global shipping environmental policies are expected to be further implemented, accelerating the phase-out of older vessels. On one hand, the aging fleet and environmental controls have tightened capacity, compounded by high costs for green newbuilds and operations, putting pressure on shipowners' own funds, potentially expanding leasing demand, and creating a notable supply-demand gap for clean energy equipment vessels. On the other hand, the U.S. may enter a new round of interest rate cuts in the second half of the year, which is expected to stimulate shipowners’ willingness to finance, benefiting the company's new projects. Furthermore, the company maintains a diversified fleet structure to mitigate risks associated with shipping cycles, and has been deploying in the clean energy sector since 2015. The advantages of its fleet structure, combined with the results of its green initiatives, have driven up the net asset value of its fleet. With its 'shipping expertise,' the company is better at grasping industry cycles and can flexibly adjust operational strategies in response to market changes, potentially benefiting the company’s profitability over the long term. In summary, given the company’s good earnings growth potential and high dividend yield, institutions maintain a 'buy' rating.
6. Zoomlion Heavy Industry Science & Technology Co., Ltd. (01157)
In Q3 2025, the company achieved revenue of RMB 12.3 billion, a year-on-year increase of 24.9%; and attributable net profit of RMB 1.16 billion, a year-on-year increase of 35.8%. In terms of profitability, the company's gross margin in Q3 2025 was 28%, basically flat compared to the same period last year, with a slight increase from Q2 2025; the net profit margin in Q3 2025 was 9.8%, increasing by 0.25 percentage points year-on-year, possibly mainly due to the increase in the proportion of overseas income and product mix optimization. In terms of specific products, the company's strong performing segments in the first half of 2025 were earthmoving machinery and concrete machinery, achieving revenues of RMB 4.29 billion and RMB 4.87 billion, growing by 22.1% and 15.7% respectively. Specifically, 1) significant international achievements: according to the company’s mid-2025 report, the company achieved overseas revenue of RMB 13.81 billion, a year-on-year increase of 14.78%, and overseas revenue accounted for 55.6%, reaching a historical high. The company continues to improve its overseas business system characterized by 'end-to-end, digitalization, localization.' By leveraging end-to-end direct sales models to expand its business territory, relying on big data platforms to enhance operational efficiency, and empowering sales growth through aviation port resources, the company is committed to creating a new pattern of global market expansion. The company is optimistic about its long-term overseas development, expecting multi-category offerings to drive savings income growth in emerging markets. 2) Positive outlook for domestic market recovery: the company's product line is relatively balanced, including earthmoving machinery, cranes, concrete machinery, aerial machinery, agricultural machinery, etc. The non-excavation machinery demand is expected to bottom out, and as a balanced engineering machinery leader, the company's performance is expected to rebound rapidly. 3) Accelerated progress in new businesses: according to the company's interim report, the company has newly developed three humanoid robots, including one wheeled humanoid robot and two bipedal humanoid robots, with dozens already deployed in factory operations. By developing tools for data collection, data annotation, and model training, the company has initially formed a data flywheel to promote the evolution of Zhonglian's humanoid robot embodied intelligence large model. Additionally, according to recent announcements, the company plans to propose issuing H-share convertible bonds worth no more than RMB 6 billion, with an initial conversion price of HKD 9.75 per share, a 30% premium over the closing price of HKD 7.50 per share on October 31, 2025, demonstrating the company’s confidence in its development. Fifty percent of the proceeds will be used to support the company's globalization strategy, including establishing overseas production bases, warehousing and logistics systems, research and development centers, marketing systems, and after-sales service systems in Europe, West Asia, Southeast Asia, Africa, the Americas, and Oceania. The remaining fifty percent will support the company’s innovation-driven high-quality development strategy, focusing on the research and application of cutting-edge technologies such as robotics, new energy, and intelligent systems, specifically developing new energy agricultural machinery, new energy mining machinery, and embodied intelligent robots, along with related core component investments. In summary, the company's Q3 2025 performance grew significantly, with steady improvement in profitability; significant international achievements and accelerated progress in new businesses; issuance of H-share convertible bonds demonstrates development confidence. Institutions maintain a 'buy' rating.
7. Tiangong International (00826)
The company was founded in 1981 and, after more than four decades of development, has successfully transformed from a cutting tool manufacturer into a leading international high-end materials enterprise covering four major sectors: high-speed steel, mold steel, cutting tools, and titanium alloys. The equity structure is concentrated and stable, with the Zhu family as the actual controlling party, ensuring continuity in strategic execution. Financially, the company exhibits robust profitability and good cost control. The company's gross margin and net margin have remained at commendable levels over the long term, and it consistently invests heavily in R&D, injecting sustained momentum for long-term development. The company is a global leader in the tool and mold steel sector, with the largest global market share in mold steel nationwide and holding the top position worldwide in high-speed steel. Its core business layout of 'mold steel (the mother of industry)' and 'high-speed steel (the teeth of industry)' forms a highly synergistic integrated industrial chain, with significant technical barriers and economies of scale, providing the company with a steady cash flow and strong risk resistance, serving as a solid ballast for performance growth. As the company advances import substitution in the high-end materials field, the tool and mold steel business is expected to enter a new upward cycle. Through its controlling subsidiary, Tiangong Co., Ltd., the company has deeply laid out the entire titanium alloy industry chain, precisely targeting the blue ocean market of consumer electronics. As China's titanium material consumption structure accelerates its transition from traditional chemicals to high-value-added fields such as aerospace and 3C electronics, the company’s titanium alloy business is expected to fully benefit from the continuous expansion of the downstream market, becoming the core engine driving future performance growth. Consumption by electronics clients is expected to recover in 2026, boosting the company’s performance growth. Additionally, powder metallurgy technology will become the foundational capability platform for the company to enter the strategic new materials and high-end manufacturing sectors, potentially bringing dual improvements in performance and valuation. Firstly, high-nitrogen alloy materials possess characteristics such as high strength, corrosion resistance, and fatigue resistance, making them key 'bottleneck' materials for national priority industries such as aerospace and robotics. Powder metallurgy is a crucial pathway to achieve their performance, and the company has successfully broken through this technology, poised to realize domestic substitution first. Secondly, fusion structural and functional materials require extremely high temperatures and radiation resistance, relying on powder metallurgy systems for production. As global fusion technology accelerates commercialization, the company is expected to become a core node in the supply chain, with its growth ceiling rising alongside industry developments. Thirdly, in the fields of large-scale die-casting and additive manufacturing, powder metallurgy achieves near-net-shape processes, improving material yield and lifespan, enhancing mold integration, and potentially driving a leap in the value chain from 'material end' to 'product end.' Overall, with the company extending its powder metallurgy platform in three directions, the proportion of high-value-added businesses is expected to continue increasing, and the valuation system could be reshaped.
8. Powerlong Development (01277)
The company previously announced its interim results for 2025. During the reporting period, the domestic coal market experienced downward pressure. Under the circumstance of continuously bottoming-out market coal prices, the group relied on its product advantages to flexibly lock in higher sales prices, striving to mitigate the erosion of performance by the market downturn. During the reporting period, the group's total revenue was approximately RMB 2.51 billion, with a gross margin of 46.9%; net profit was approximately RMB 558 million, and the net profit margin was 22.2%. Basic earnings per share were recorded at 6.68 cents, and diluted earnings per share at 6.66 cents. The board declared an interim dividend of 5.0 Hong Kong cents per share to shareholders. During the reporting period, market coal prices faced downward pressure and adjusted. The group adopted a bidding-based sales model to lock in higher sales prices, achieving an average selling price above market levels in the first half of the year. During the reporting period, the average selling price per tonne of the group’s 5,000 kcal low-sulfur eco-friendly thermal coal was approximately RMB 604.6; the average selling price per tonne of Ningxia coking coal was approximately RMB 850.5. Affected by the decline in coal prices, the group's revenue from its core coal business fell by 7.1% year-on-year to approximately RMB 2.33 billion, accounting for 92.9% of the group's total revenue. In recent years, while consolidating the core competitive advantages of its coal business, the group has ventured into promising ancillary businesses such as agriculture and animal husbandry, real estate, property management services, and cigar tobacco, aiming to create more profit growth opportunities for shareholders. Looking ahead to the second half of 2025, PowerChina Resources will continue to adhere to the principle of high-quality development, implement a mine development philosophy that emphasizes safety, profitability, and green environmental protection, fully leverage its resource, product, and transportation capacity advantages, employ flexible procurement and sales models, and further deepen its operations across the entire coal industry chain. Additionally, the group will make full use of its strong profitability and capital advantages to actively expand into high-quality projects, seeking breakthroughs while maintaining stability, and deliver excellent performance in return to society and shareholders. Furthermore, from an industry perspective, against the backdrop of a bull market characterized by 'loose monetary policy, low interest rates, and improved risk appetite,' market sentiment shifts between different styles.sector rotationAmid expectations of capacity contraction catalyzed by the implementation of 'anti-involution' policies, the coal industry is gradually moving towards high-quality development, with the coal sector poised to enter a new upward cycle. There remains a time lag between policy anticipation and actual implementation, potentially triggering sector rotation at any moment. Therefore, it is recommended to 'put away the magnifying glass' to reduce excessive focus on short-term profit reporting, while prioritizing the certainty of valuation improvement driven by continued enhancements in liquidity and risk appetite. Seize investment opportunities spurred by dual catalysts of coal valuation recovery and earnings elasticity, and prepare for a new upward phase in the coal market.
9. Tianqi Lithium Corporation (09696)
The company achieved revenue of RMB 2.565 billion (yoy -29.66%, qoq +14.06%) in Q3, with attributable net profit of RMB 95.4855 million (yoy +119.26%, qoq +580.70%). For the first three quarters of 2025, the company achieved revenue of RMB 7.397 billion (yoy -26.50%), with attributable net profit of RMB 180 million (yoy +103.16%) and non-GAAP net profit of RMB 71.2758 million (yoy +101.24%). The company’s gross margin in Q3 2025 was
37.57%, up 3.11 percentage points quarter-on-quarter and down 6.56 percentage points year-on-year, with the quarter-on-quarter recovery mainly benefiting from the push of rising lithium prices. According to SMM data, the average price of lithium carbonate in Q3 was RMB 73,000 per ton, up 11.91% quarter-on-quarter; the average price of lithium concentrate (CIF) was USD 813.3 per ton, up 13.97% quarter-on-quarter. The price of lithium carbonate in Q3 rose significantly due to disturbances on the mining side, and it is expected that without the resumption of production at CATL’s Jianxiawo mine, the supply side may remain tight. At the same time, storage demand growth continues to exceed market expectations, supporting the growth of lithium carbonate demand. According to SMM data, domestic lithium carbonate social inventory has declined from a high of 140,000 tons at the beginning of August to around 130,000 tons as of October 23, with the strong reality already manifesting in inventory levels. Looking ahead, according to a previous Huatai Securities report, considering the strong power demand background driven by AI, it is expected that storage demand in 2026 will likely maintain high growth, thus the lithium carbonate industry may present a dual-strong supply and demand scenario in 2026, where high demand growth is expected to sustain a continued rise in the bottom price range, potentially driving continuous performance recovery for the company. Additionally, regarding lithium resources, according to company announcements, the company has already established an annual lithium concentrate production capacity of 1.62 million tons. The CGP3 project at Greenbushes, with an annual production capacity of 520,000 tons of lithium concentrate, is expected to commence operations in December 2025. At that time, the total annual production capacity of Greenbushes lithium concentrate will increase to 2.14 million tons, and the company’s lithium resource supply capacity is expected to continue releasing, further promoting performance recovery. On the refining side, as of October 2025, the company’s newly built annual production capacity of 30,000 tons of lithium hydroxide located in Zhangjiagang, Jiangsu, officially produced qualified products on October 17. Regarding the solid-state battery business, the company has successfully completed the industrial preparation work for sulfurized lithium, a core raw material for solid-state batteries, and continues to advance product quality improvements and cost-reduction technological optimizations. The pilot project for the annual production of 50 tons of sulfurized lithium has substantially landed and commenced operations, positioning the company to deeply participate in the solid-state battery industry chain. In summary, considering the company’s continuous recovery in net profit and its status as a leading player in the lithium resources industry, its future earnings potential is substantial.
10. Shenzhou International (02313)
In the first half of 2025, the company achieved revenue of RMB 14.966 billion, a year-on-year increase of 15.3%; net profit attributable to shareholders reached RMB 3.177 billion, a year-on-year increase of 8.39%. Revenue growth was primarily driven by sales volume, with unit prices (in USD) experiencing a slight decline. The combination of a decrease in gross margin and an increase in tax rates resulted in profit growth lagging behind revenue. By product category, revenue from sportswear/leisurewear/underwear/other knitted products increased year-on-year by 9.9%/37.4%/4.1%/6.0%. Leisurewear showed rapid growth, with its revenue share increasing by 4.0 percentage points to 25.3%, mainly due to rising demand in Japan, Europe, and other markets. By region, revenue from Europe/Japan/USA/China/other countries increased year-on-year by 19.9%/18.1%/35.8%/-2.1%/18.7%. Strong demand for sportswear in the USA led the growth. Orders from China declined, resulting in a slight drop in revenue. By customer, revenue from Customer A/B/C/D increased year-on-year by 27.4%/6.0%/28.2%/14.7%. The company’s order performance outpaced retail growth for customers, leading to market share gains. Revenue from the top four customers accounted for 82.1% of total revenue, up 2.7 percentage points year-on-year. In the first half of 2025, the company's gross margin was 27.1%, down 1.9 percentage points year-on-year, due to: 1) changes in product mix, with an increase in the proportion of leisurewear; 2) higher employee costs (up 8.0% year-on-year) and a general salary increase in the second half of 2024, resulting in employee costs as a percentage of revenue increasing by 0.9 percentage points to 29.4%. The operating expense ratio for the first half of 2025 was 9.1%, down 0.3 percentage points year-on-year, with the selling and distribution expense ratio/administrative expense ratio/financial expense ratio changing year-on-year by +0.07%/-0.04 percentage points/-0.30 percentage points. Income tax expenses increased by RMB 137 million year-on-year, with the effective tax rate rising by 2.7 percentage points to 12.5%, mainly due to an increase in Vietnam's minimum tax rate. The combination of a decrease in gross margin and an increase in the effective tax rate led to a year-on-year decline of 1.4 percentage points in net profit margin attributable to shareholders, to 21.2%. Additionally, during this period, progress on the second fabric plant in Vietnam was smooth, with gradual production expected to commence before the end of the year. Planned capacity is 200 tons per day, which will enable faster response to customer demands. The garment factory in Cambodia commenced operations in March 2025 and has currently hired approximately 4,000 employees. Domestically, the Ningbo base completed construction of a new fabric plant with a built-up area of approximately 167,000 square meters. The Ningbo garment factory underwent maintenance and renovation and has reserved a 7-hectare plot for the upgrade and redevelopment of the Anhui garment base. In summary, the company is optimistic about subsequent efficiency improvements and gross margin recovery. Institutional analysts have maintained a 'Buy' rating.
By Yongqiang Wan (Director of Zhitong Finance Research Center)
