In today’s briefing:
- Alibaba’s AI Chip Leap: A Threat To Nvidia’s China Dominance?
- [Xiaomi Inc. (1810 HK, BUY, TP HK$61) TP Change]: C2Q25 Review: Getting into the Brand Expansion Era
- Hong Kong Single Stock Options Weekly (Sep 01–05): Option Activity Eases, Speculation In Focus
- [Alibaba (BABA US, BUY, TP US$181) Target Price Change]: C2Q25 Review: Who Will Rescue Meituan?
- [IO Technicals 2025/36] Overextended Rally Faces Reality Check
Alibaba’s AI Chip Leap: A Threat To Nvidia’s China Dominance?
- As geopolitical pressures and regulatory hurdles continue to stifle Nvidia’s ability to deliver its most powerful AI processors to Chinese buyers, Alibaba Group Holding Ltd. is rapidly stepping in to fill the void.
- The Chinese tech conglomerate has developed a new AI chip that is both more versatile and domestically manufactured—breaking its prior dependency on Taiwan Semiconductor Manufacturing.
- This new chip, tailored for a broad range of AI inference tasks, is currently in testing and could offer Chinese enterprises a viable alternative to Nvidia’s downgraded H20 processor, which was specifically built for the Chinese market under export restrictions.
[Xiaomi Inc. (1810 HK, BUY, TP HK$61) TP Change]: C2Q25 Review: Getting into the Brand Expansion Era
- Xiaomi reported C2Q25 top line, non-IFRS operating profit and IFRS net income (2.3%), (0.5%) and 41% vs. our estimates, and in-line, (14%) and 31% vs. consensus.
- Xiaomi’s growth strategy is to replicate its brand success from smartphones to appliances and EV’s and from China to the rest of the world.
- We raise TP from HK$56 to 61 and place Xiaomi into TOP BUY list.
Hong Kong Single Stock Options Weekly (Sep 01–05): Option Activity Eases, Speculation In Focus
- Market breadth remained weak as option activity slowed and speculation concerns lingered around speculative trading.
- Option demand cooled, led by waning interest in Calls, while heavyweights in Consumer Discretionary kept overall volumes supported.
- Trading momentum slowed, but sector heavyweights maintained dominance, with implied vols drifting lower across much of the market.
[Alibaba (BABA US, BUY, TP US$181) Target Price Change]: C2Q25 Review: Who Will Rescue Meituan?
- Alibaba (BABA) reported C2Q25 top line, non-GAAP op. profit and GAAP net income (4.3%), (10%) and 7.7% vs. our est. and (2.2%), 20% and 9.5% vs. cons..
- As stated in our previous reports, we believe O2O e-commerce will constitute ~20% of China’s e-commerce and BABA will capture ~50%.
- We maintain BABA’s TOP BUY classification and raise TP to US$181
[IO Technicals 2025/36] Overextended Rally Faces Reality Check
- Chinese mills eye production restart, boosting iron ore demand, but bloated construction steel inventories threaten to cap price gains.
- Managed money participants increased net long exposure to 134.9k lots last week, with overall futures and options open interest slipping by 11.2%.
- Bullish MA crossover drove prices above short-term averages. However, prices pressing the upper Bollinger band suggest overextension and heightened risk of a near-term pullback.
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