Pre-Market Briefing | Japanese and South Korean stock markets open lower across the board; AI supply chain companies cluster with positive earnings pre-announcements

【Financial Calendar】

State Council Information Office holds press conference on national economic performance for the first three quarters

2026 Financial Street Forum Annual Conference (Beijing, 10/19-10/22)

2026 China Automotive Supply Chain Conference (Kaifeng, 10/19-10/21)

Trading notice: Hong Kong stock market closed

New share subscription: Crown New Materials

►►Premier Li Qiang of the State Council chaired a State Council executive meeting on October 16. The meeting noted that artificial intelligence is a key variable affecting future development, and that starting from China's realities—a complete industrial system, rich application scenarios, and strong engineering capabilities—emphasis should be placed on driving technological innovation through implementation and application, and on continuously deepening and expanding the "AI+" initiative. The development foundation should be consolidated, technological breakthroughs and algorithm innovation strengthened, computing-power and electricity coordination promoted, high-quality data supply increased, and efforts focused on shoring up weaknesses and forging strengths. Application empowerment should be highlighted, supply-demand alignment strengthened with a focus on the real economy, joint research and development encouraged, pilot-scale testing and verification advanced, and scenario cultivation intensified, so that AI technology can be better transformed into real productivity. Development and security should be coordinated, policies implemented by industry in a graded and classified manner, risk assessment and evaluation strengthened, and the bottom line of AI security firmly upheld.

►►In accordance with the Foreign Trade Law of the People's Republic of China and the Regulations of the People's Republic of China on the Administration of Technology Import and Export, the Ministry of Commerce and the Ministry of Science and Technology plan to revise the Catalogue of Technologies Prohibited or Restricted from Export in China, adding certain artificial intelligence, biopharmaceutical, and photovoltaic technologies. With approval, the draft is now open for public comment, and pre-export registration management will be implemented for the relevant technologies at the same time.

This public consultation covers 40 technologies in three fields: artificial intelligence, biopharmaceuticals, and photovoltaics. The artificial intelligence field includes 23 technologies related to large models, intelligent agents, computing power clusters, and information processing; technologies that have already entered the public domain through open source, published academic papers, or other means are not included in the scope of management. The biopharmaceutical field includes 5 technologies related to cell and gene therapy, small nucleic acid drugs, and pathogenic microorganisms; for outbound licensing models that do not involve transfer of ownership, facilitation measures such as automatic licensing apply. The photovoltaic field includes 12 technologies related to polysilicon manufacturing, wafer manufacturing, and cell manufacturing; the scope of technology management also includes the key and core equipment that carries the relevant technologies.

►►To standardize bond issuance in the interbank bond market, maintain market order, and promote high-quality development of the bond market, the People's Bank of China has formulated the Rules for the Administration of Bond Issuance in the Interbank Bond Market, which is now open for public comment. The rules state that bond issuance should follow the principles of market orientation, the rule of law, fairness and impartiality, and good faith. The issuance price, interest rate, and commissions and fees involved in the issuance process should be determined in a market-based manner. No entity or individual may affect the fair pricing of bonds, nor engage in acts that violate fair competition, transfer benefits, seek improper gains, harm investors' rights and interests, or disrupt market order. The People's Bank of China supervises and administers bond issuance in the interbank bond market in accordance with the law. the National Association of Financial Market Institutional Investors performs self-regulatory duties for bond issuance in the interbank bond market.

►►The State Administration for Market Regulation has approved and released the mandatory national standard Safety Requirements for Lithium-ion Batteries for Electric Motorcycles and Electric Mopeds, which will take effect on July 1, 2027. After this revision, the original recommended standard will be upgraded to a mandatory standard. The release and implementation of this standard will further enhance the safety performance of lithium-ion battery products for electric motorcycles and electric mopeds, effectively safeguard consumers' travel safety and lawful rights and interests, and build a solid safety barrier for the public's short-distance travel.

►►The Ministry of Industry and Information Technology, the Ministry of Public Security, the Ministry of Ecology and Environment, and the State Administration for Market Regulation organized a symposium with more than 30 key automobile manufacturers to strengthen innovative design and R&D testing and verification management of automotive products. It is understood that automobile manufacturers should implement the requirements of the special action on quality improvement, resolutely resist irrational competition, strengthen innovative design and R&D testing and verification management of automotive products, and firmly uphold the bottom line of product safety. Key points include comprehensively strengthening testing and verification, enhancing R&D testing and verification capabilities, fully carrying out safety assessments for innovative product design and R&D testing and verification, and promptly eliminating safety hazards. Manufacturers should truthfully publicize the applicable boundaries, limiting conditions, and R&D testing and verification of innovative product designs; they must not make false, exaggerated, or misleading publicity, must not use scenarios that violate road traffic regulations to promote product functions, and must not induce drivers to neglect safe driving responsibilities.

The Ministry of Industry and Information Technology stated that next it will accelerate the revision of relevant standards, further raise baseline safety requirements, continue supervision and inspection of key automobile manufacturers, seriously deal with manufacturers with problems in accordance with laws and regulations, and publicly expose them, urge automobile manufacturers to strengthen automotive product testing and verification, resolutely uphold the bottom line of product safety, and promote high-quality development of the automotive industry.

►►The Ministry of Industry and Information Technology, the Ministry of Finance, and the National Development and Reform Commission issued a notice agreeing that five city clusters including Beijing-Tianjin-Hebei may carry out comprehensive hydrogen energy application pilots. The notice states that, in accordance with the requirements of the Notice of the Ministry of Industry and Information Technology, the Ministry of Finance, and the National Development and Reform Commission on Carrying Out Comprehensive Hydrogen Energy Application Pilots (MIIT Joint Conservation [2026] No. 59, hereinafter referred to as the Notice), and after formal review, expert evaluation, on-site defense, and other procedures, the pilot work plans of five city clusters—Beijing-Tianjin-Hebei, the Greater Bay Area, Northeast China (including eastern Inner Mongolia)–Yangtze River Delta, Xinjiang–Chengdu-Chongqing Economic Circle, and the Yellow River Jizi Bend–Central Plains—are approved in principle, and comprehensive hydrogen energy application pilot work will be carried out for a pilot period of four years. The Ministry of Industry and Information Technology, the Ministry of Finance, and the National Development and Reform Commission (hereinafter collectively referred to as the three departments) will track and guide the pilot work and conduct assessment and evaluation, and the evaluation results will serve as the basis for central government financial reward funds allocated to the pilot city clusters.

►►The China Film Administration and the General Administration of Sport issued the Notice on Carrying Out the "Follow Movies to Sports" Action to Promote Two-Way Empowerment of Film and Sports. It mentions promoting organic linkage between film consumption and sports consumption. Support cinemas, sports venues, sports event organizers, internet platform enterprises, commercial banks, payment and settlement institutions, and others in jointly carrying out "film + sports" consumption promotion activities, setting up special activity sections and columns, launching discounted packages for moviegoing and fitness, linked movie ticket stubs and event tickets with two-way points redemption rewards, and spending threshold discounts and other consumption promotion preferential measures, so as to achieve linked consumption. Encourage the creation of distinctive hiking, cycling, self-driving, and other outdoor sports routes based on film scenes. Support co-branded cooperation between film and sports derivative products. Support the creation of film and sports markets that integrate sports and film elements in both directions. Encourage cinemas to set up sports-themed screening halls, create "second venues" for watching events, and use idle cinema time slots to broadcast major sports events live. Support mutual benefit linkage between moviegoing consumption and sports lottery purchases, and support setting up sports lottery sales points in cinemas to enrich entertainment experience, brand promotion, and public welfare display functions. Encourage the use of virtual reality film technology to provide immersive sports experience programs. Support bringing sports into cinemas, and explore carrying out suitable sports programs in qualified cinemas.

►►According to CCTV Finance, the National Healthcare Security Administration's "15th Five-Year Plan for National Medical Security" proposes actively incorporating the application of new technologies, new drugs, and new devices into the scope of commercial health insurance coverage. The reporter recently learned through visits that many places including Beijing, Shanghai, Jiangsu, and Zhejiang have already included the "medical exoskeleton rehabilitation training" program in medical insurance or long-term care insurance pilots. Medical exoskeletons are wearable intelligent rehabilitation robots that can provide patients with standardized, repetitive gait training, targeting motion control of the hip, knee, and ankle joints, trunk balance, and gait control, helping patients re-establish the ability to stand, step, and walk. In the past, rehabilitation training reimbursed by medical insurance was mostly completed manually with the assistance of rehabilitation therapists. After the medical exoskeleton rehabilitation training program was included in medical insurance, patients have more choices. Data from the professional institution IDC shows that in 2025, the market size of China's medical rehabilitation exoskeleton robots was about 1.42 billion yuan. Experts say that low-cost, highly practical rehabilitation medical exoskeleton robots will become the focus of future development.

►►On October 16, the Ministry of Industry and Information Technology published for public comment the Announcement of Road Motor Vehicle Manufacturing Enterprises and Products (Batch 412). The announcement shows that Anhui Zhijie New Energy Automobile Co., Ltd. is listed in the "proposed new access vehicle manufacturing enterprises to be released" list, with the public comment period running until October 23. Subsequently, news that "Zhijie has obtained independent vehicle manufacturing qualification" spread rapidly. On October 17, an insider at Zhijie Auto confirmed to Yicai reporters that after the public comment period ends and approval is granted, Zhijie Auto will obtain independent vehicle manufacturing qualification, and that "it is Chery's factory that has been given to Zhijie." The person also confirmed information that Zhijie Auto plans to list independently in the future.

►►On October 16, Vishal Khanduja, head of fixed income at Morgan Stanley Investment Management, said at the Global Wealth Management Forum · 2026 Shanghai Suhewan Conference that global investment related to AI data centers is expected to reach about $5 trillion by 2030, and the scale is still rising. Khanduja said that in the current AI investment boom, there are obvious differences in market views. It is expected that over the next five years, at least 50% of industry participants may fail to generate returns above the cost of capital, and what investors truly need to manage is high uncertainty.

►►Local time last Friday, the three major U.S. stock indexes fell across the board. As of the close, the Dow fell 0.34%, the Nasdaq fell 2.15%, and the S&P 500 fell 1.09%.

Leading technology stocks generally declined. Meta closed down 3.72%, Netflix fell 2.86%, Google fell 2.47%, Tesla fell 2.13%, Microsoft fell 1.93%, Amazon fell 1.87%, SpaceX fell 1.74%, and Nvidia fell 1.43%; Apple rose against the trend by 0.43%.

Chip stocks suffered heavy losses. The VanEck Semiconductor ETF (SMH) fell 3.41% and was down 9.70% for the week, the largest weekly decline since April 2025. SanDisk fell 6.85%, SK Hynix fell 6.58%, AMD fell 5.95%, Micron Technology fell 5.63%, Teradyne fell 5.31%, KLA fell 5.00%, and Applied Materials fell 4.82%.

Popular Chinese concept stocks generally fell, with the Nasdaq Golden Dragon China Index closing down 1.30%. UP Fintech fell 6.03%, XPeng fell 4.15%, Futu Holdings fell 3.93%, iQIYI fell 3.19%, Zhihu fell 3.14%, Baidu fell 2.93%, Bilibili fell 2.49%, NIO fell 2.00%, Alibaba fell 1.82%, PDD fell 1.76%, Tencent Holdings fell 1.59%, JD.com fell 1.39%, Li Auto fell 1.05%, Weibo fell 0.92%, and NetEase fell 0.83%; New Oriental rose against the trend by 0.88%.

►►Japanese and South Korean stock markets opened collectively lower, with South Korea's KOSPI index down 3.17%, SK Hynix down more than 4%, and Samsung Electronics down more than 3%. The Nikkei 225 index fell 0.77%.

Shenghe Resources: Plans to transfer 51% equity in four rare earth smelting and separation subsidiaries to China Rare Earth Development

Tianfu Communication: Supply conditions for key bottleneck materials for active optical devices have improved compared with the first half of the year, and the positive impact on operating performance is expected to be gradually released over the next few quarters

Fangda Special Steel: Plans to exit Nanchang Huxu and acquire 100% equity in Jiangxi Fangda Steel Group Enterprise Investment Company

Qingxin Environment: Company director Wei Yuan is suspected of serious violations of discipline and law and is under disciplinary review and supervisory investigation

Lakala: Plans to acquire a controlling stake in Gaofu Information; shares to resume trading

Huayin Electric Power: Thermal power generation space is expected to improve in the second half of the year, but profitability will still be affected by external factors such as coal prices

ST Jiayuan: Receives administrative penalty decision from the CSRC

Shenhao Technology: Subsidiary signs RMB 881 million computing power equipment procurement contract

Victory Precision: Composite copper foil project has achieved small-batch supply, but has not yet obtained large-volume orders

CICC: Share swap absorption merger of Dongxing Securities and Xinda Securities enters implementation stage

Shanjin International: Subsidiary pays supplementary taxes and late fees of RMB 287 million

Changxin Technology: Previews profit of RMB 131.0 billion-132.5 billion for the first three quarters, turning a year-on-year loss into a profit; DRAM products are in short supply and prices have risen sharply

Demingli: Expects net profit of RMB 8.65 billion-8.95 billion for the first three quarters, turning a year-on-year loss into a profit; enterprise-level storage business revenue scale and proportion further increased

Sihui Fuji: Third-quarter net profit up 217% year on year; orders in industrial control, automotive electronics, and communications grew

JLC: First three quarters net profit expected to rise 79%-118% year on year; AI accelerates hardware innovation as global hardware R&D demand continues to grow

Weiergao: Third-quarter net profit up 462% year on year; orders for AC-DC products for AI server power supplies grew rapidly

Xinrui Shares: Expects net profit for the first three quarters of 2026 to rise 318%-355% year on year

Jinhong Gas: Expects net profit for the first three quarters to fall 84.27%-86.84% year on year

Hengtong Optic-Electric: First three quarters net profit expected to rise 151%-168% year on year; optical communications market demand grew and prices rose

Shengyi Technology: First three quarters net profit expected to rise 164%-181% year on year; copper-clad laminate sales increased, and product operating revenue and gross profit increased

Yongtai Technology: First three quarters net profit up 1,222% year on year; lithium battery-related sales grew substantially

Huajin Securities: A-shares may bottom out in the short term; buy on dips in technology growth and domestic demand-related industries.

CSC Financial: Continued net subscriptions to broad-based ETFs are expected to support the stabilization and recovery of core market indexes.

Zheshang Securities: Although the market trend is "accelerating toward the bottom," the reconstruction of the bottom has already seen the dawn.

Around 7:30 before the market opens each trading day, we will capture key information for you first + assess thematic opportunities + uncover potential targets.

Click the image below to go directly: