Daily Buzz: 1 September 2026

Huawei Profit Drops on Heavy Research-Development Spending

Huawei Technologies, a Chinese giant in telecommunications gear, consumer electronics and AI systems, reported first-half net profit fell 37 percent to 23.4 billion yuan (US$3.5 billion) on heavy research and development spending and higher supply-chain costs. Revenue rose almost 10 percent to 467.8 billion yuan. Huawei said spending on research and development surged 25 percent to 121.4 billion yuan, or a record 26 percent of total revenue. The privately owned, Shenzhen-based company is aggressively pursuing self-reliance in core technologies like memory chips across domains that include connectivity, cloud computing, cloud, mobile phones, smart driving and artificial intelligence. Huawei said it plans to integrate AI and security capabilities into every product and network layer it builds to create an industry ecosystem.

Zhipu AI Narrows Loss on Big Jump in Revenue

Z.ai, the Chinese large-language-model developer more commonly known as Zhipu AI, reported a first-half loss of 2.1 billion yuan (US$310 million), narrowing from 2.4 billion yuan a year earlier. The company, dubbed one of China's six "AI tigers" by investors, said revenue surged nearly fivefold to 953.9 million yuan. Revenue from its open-platform and programming interface (API) business skyrocketed 2,736 percent to 825.2 million yuan, accounting for nearly 87 percent of revenue from just 15 percent a year earlier. Gross margin in that segment turned to 25 percent from a negative 0.4 percent, helped by higher usage, price increases and lower inference costs. By contrast, general-model revenue, largely tied to private local company deployments, fell 55 percent to 67 million yuan. Overall gross margin fell to 26 percent from 50 percent as the lower-margin cloud business became the dominant revenue source. Zhipu said average API pricing doubled, while so-called MaaS token usage rose more than 40-fold from the start of the year. Paid daily active users increased 603 percent, and daily usage among its 10 largest customers by revenue rose 98-fold. Research and development spending surged a third to 2.1 billion yuan.

Oil Prices Rise, Stocks Mostly Drop As Iran, US Break One-Month Pause in Attacks

Global oil prices rose and major stock markets across the world fell after the US and Iran exchanged attacks for the first time in a month. US President Donald Trump ratcheted up the rhetoric against Iran, threatening to blow Kharg Island, Tehran's main oil base, into "smithereens." His comments came after a weekend flare-up in attacks after a one-month lull, with the US shifting to economic pressure from military warfare. The conflict is now entering its seventh month, two months ahead of crucial mid-term US elections that will determine who controls Congress, with polls showing a majority of Americans oppose the war and Trump's popularity ratings dropping. Global benchmark Brent crude futures rose above US$90 a barrel again, with major Wall Street markets dropping and exchanges in Asia trading mixed to lower.

Death Toll, Number of Missing Grow in China-Nepal Flood Disaster

The death toll in devastating flash floods along the China-Nepal border rose to nearly 1,000, with the estimate of people still missing surging to almost 4,500. The flooding was caused by a glacial collapse in the Himalayas, sending a wall of what has been described as "liquid cement" roaring through populated valleys below. The missing include hundreds of foreign trekkers and Hindu pilgrims. Search and rescue efforts are continuing as hope fades for finding survivors five days after the disaster occurred.

Top Business

Shein Shares Debut Today Amid Signs of Lackluster Start

Shares in Chinese global online discount fashion retailer Shein begin trading in Hong Kong today, testing investor sentiment toward a company carrying some heavy baggage. It raised US$1.7 billion in the initial public offering, valuing the company at US$26 billion, about a quarter of its value four years ago. The shares are priced at HK$48.56 (US$6.20) each. In so-called "gray market" pre-trading yesterday, Shein shares plunged as much as 17 percent. Shein reported a US$99 million loss in the first quarter of 2026.

The IPO was the company's third try to go public after failed attempts in London and New York, thwarted by allegations of poor working conditions at its suppliers, an opaque supply-chain and national security concerns. The company, which originated in China but moved its headquarters to Singapore in 2021, mainly sources the clothing, beauty items and home goods it sells on its platform from thousands of smaller factories in southern China.

Shein's business model of fast delivery of small duty-free parcels was undermined this year by the US and EU levying duties on such low-value e-commerce packages. Shein has also come under scrutiny by EU regulators for its business practices and sales of illicit goods, resulting in some fines. On Monday, France said it is imposing a fee on ultra-fast fashion items that will eventually reach almost 20 euros (US$22.4) per garment, targeting Shein and Chinese rivals Temu and AliExpress. US authorities are conducting a national security review of Shein Global's purchase of American clothing retailer Everlane in May for US$80 million. Still, Shein has remained popular with bargain-seeking consumers, especially in Europe, where it had 156 million average monthly users by the end of last year, making it one of the continent's biggest e-commerce platforms.

Shipbuilder CSSC Profit Jumps on Surge in Gross Margin

China's CSSC Holdings, the world's biggest shipbuilder, reported first-half net profit attributable to shareholders of 10 billion yuan (US$1.48 billion), up 164 percent from a year earlier. Revenue rose 26 percent to 91.5 billion yuan. The year-in-year comparison uses restated 2025 figures following CSSC's 2025 absorption of China Shipbuilding Industry Corp into the listed company. The merger required prior-period financials to be retrospectively adjusted. In the latest half, revenue from shipbuilding, repair and offshore engineering rose 30 percent to 81.5 billion yuan, while gross margin increased 7 percentage points to 17.2 percent. The company attributed its earnings improvement to delivery of more vessels, a bigger share of high-end vessels, higher average ship prices, tighter cost controls and shorter construction cycles. CSSC's Hong Kong-listed subsidiaries earlier reported strong first-half growth, driven by gains in the tanker market. Among them, CSSC Offshore & Marine Engineering profit rose 59 percent, and CSSC (Hong Kong) Shipping's was up 12 percent.

Economy & Markets

China Manufacturing Activity Improves But Remains in Contraction

China's manufacturing activity in August ticked up but remained in contraction, according to data released by the National Bureau of Statistics on Monday. The official purchasing managers' index reading for last month came in at 49.8, compared with 49.2 in July. Any figure below 50 marks contraction. Looking at subindexes, new export orders rebounded into expansion territory of 50.1 in August from 49.6 in the previous month, and new orders for electronic machinery and computer communications devices showed a reading of 53. However, raw materials inventory remained in contraction. Exports have been underpinning economic growth this year as consumer spending, investment in urban fixed assets and industrial profits remain weak. The Chinese government has pledged more economic stimulus measures as it seeks to reach its 2026 target of growth between 4.5 percent and 5 percent.

US Treasury Chief Urges Unified G20 Response to China-Led Trade Imbalances

US Treasury Secretary Scott Bessent said he is urging Group of 20 industrialized countries to develop a coordinated response to trade with China and press Beijing to rebalance its economy away from exports and toward domestic consumption. He made the remarks at a plenary session of G20 finance ministers ahead of the main group summit in the US in December. Bessent cited a current flood of Chinese exports for global imbalances and suggested that countries may need to adopt trade barriers. "The world cannot have a China with a US$1.2 trillion trade surplus," Bessent said. "In China, the economy is quite weak, and they are trying to export their way out of. They need to rebalance their economy."

China's Foreign Ministry spokesperson said on Monday that China never seeks trade surplus and opposes unilateral in all forms, while stressing that China remains committed to high-standard opening up. He also called on China and the United States to implement the two presidents' common understandings and properly resolve economic and trade issues "through consultation on the basis of equality, mutual respect and mutual benefit."

Separately, the inclusion of Russia in the finance ministers' meeting irked European members. German Finance Minister Lars Klingbeil said there should be no normalization of relations with Moscow while its war against Ukraine continues. European ministers and central ⁠bankers refused to appear in the perfunctory group photo until the Russian minister was excluded.

Japanese Bond Yields Rise Ahead of Debt Auctions

The yield on the two-year Japanese government bond yield rose to a 31-year high of 1.73 percent on Monday amid expectations that the Bank of Japan will raise interest rates to rein in inflation. The benchmark 10-year bond yield climbed 1 basis point to 2.94 percent. The increase comes as Japan's Ministry of Finance is due to auction 10-year bonds today and 30-year debt on Thursday, Reuters reported. The 30-year government bond yield rose 1.5 basis points to 4.14 percent.

A Word of Caution for Companies Piling into China's Robotics Sector

China's top economic planning agency has warned companies in the tearaway robotics sector not to succumb to herd mentality. The National Development and Reform Commission said it's important for the industry to develop in an orderly, sustainable way, avoiding blind imitation and leveraging their competitive strengths, Yicai reported. Investment and new companies have piled into the sector, which has grown 20 percent in five years. China, the world's biggest maker of robots, had more than 70 training centers for training embodied intelligence robots at the end of June.

China Summer Movie Season Surpasses Year-Earlier Box Office

China's summer box office exceeded 12.4 billion yuan (US$1.8 billion), surpassing last year's receipts, CCTV reported. "Kung Fu Soccer," "Once Upon a Time in the Middle East" and "All Wishes Come True" were the top three grossing films.

Corporate

Horizon Robotics Swings to Profit As Revenue Surges By a Third

Horizon Robotics, a smart driving chip and software provider, posted net profit of 3.8 billion yuan (US$566 million), swinging from a net loss of 5.2 billion yuan a year earlier, largely on a one-time gain in fair-value changes on convertible loans. Revenue rose a third to 2.16 billion yuan. Despite declining auto sales on the Chinese mainland, the transition to smart-vehicle technology benefitted the company. Smart assisted driving penetration into the passenger car market reached 76 percent in the first half, up 8.5 percentage points from 2025 levels. The company noted emerging growth opportunities in international markets and predicted revenue this year will surpass 5 billion yuan.

BOE Posts Profit Gain Despite Display Panel Sales Decline

BOE Technology, China's largest display panel maker, reported first-half revenue rose 1.8 percent from a year earlier to 103 billion yuan (US$15 billion), though sales of display devices fell 3.2 percent to 82 billion yuan. Net profit rose 62 percent to 5.2 billion yuan. Revenue from its Internet of Things business rose 5.8 percent, its smart healthcare and engineering business expanded 4.3 percent, the light-emitting diode segment surged 47 percent and its sensor business jumped 88 percent. The company said rising prices of memory chips weighed on its costs, compressing profit margins. BOE predicted the display panel industry will remain under strain in the second half.

Longsys Seeks to Raise US$800 Million in Hong Kong IPO

Shenzhen-based Longsys Electronics is seeking to raise up to HK$6.3 billion (US$800 million) through a Hong Kong listing, according to an exchange filing on Monday. The semiconductor maker plans to issue 26 million shares in an offering that requires a minimum investment of HK$12,151.30 for a lot of 50 shares, which are expected to begin trading on September 8. Longsys said in its prospectus that it had net profit of 6.29 billion yuan (US$936 million) for the first four months of 2026, turning from a loss of 28.4 million yuan a year earlier. Revenue surged 1.4 times to 14.7 billion yuan. The company is a supplier to Dell, Lenovo, Samsung and Xiaomi, among other companies, with about 70 percent of its revenue generated outside the Chinese mainland.

Momenta Revenue Jumps As Assisted-Driving Scales Up

Momenta, a Chinese autonomous driving software provider, reported first-half 2026 revenue of 1.6 billion yuan (US$236 million), up 76 percent from a year earlier. Its adjusted net loss narrowed to 14 million yuan from 416 million yuan. Installations of its technology in new vehicles rose 84 percent to about 321,000 cars, taking cumulative installations above 1 million. Momenta continued to invest heavily in driver-assisted technology, with research and development spending of 1.2 billion yuan, or 73 percent of revenue. The company is now expanding beyond passenger cars into trucks and robotaxis.

Traditional Chinese Medicine Maker Tong Ren Tang Posts Profit Drop

Beijing-based Tong Ren Tang, the Chinese traditional medicine maker founded in 1669 by an imperial court physician, reported first-half net profit attributable to shareholders fell 23 percent to 726.2 million yuan (US$107 million). Revenue fell 14 percent to 8.4 billion yuan. Revenue from its pharmaceutical manufacturing business declined 16 percent, while pharmaceutical retail and distribution revenue dropped 19 percent. Domestic sales were down 14 percent, and overseas revenue slumped 18 percent. The company attributed the revenue decline primarily to changes in the overall consumption environment and pressures on retail pharmaceuticals. It cut selling expenses by 16 percent and administrative expenses by 7.9 percent, but cost-cutting wasn't deep enough to offset falling sales.

BYD Teams Up With Humanoid Robot Maker PaXini

Chinese automaker BYD is teaming up with PaXini Tech, a local company specializing in tactile sensing and humanoid robotics, to bring humanoid robots into industrial manufacturing. Under the agreement, BYD will provide real-world factory environments and supply-chain resources, while PaXini will contribute tactile sensors, multidimensional perception and embodied-data collection technologies. The companies will use data from real manufacturing scenarios to train foundation models.

Fosun to Spin Off ClubMed Subsidiary

Shanghai-based conglomerate Fosun International plans to spin off its ClubMed Lifestyle subsidiary for a listing on the Hong Kong stock exchange. The company generated 12 billion yuan (US$1.8 billion) by divesting assets in the first half. Fosun businesses span healthcare, tourism, consumption and insurance.