Daily Buzz: 19 August 2026

Baidu Profit Drops Despite Surge in AI Revenue

Beijing-based Baidu, China's largest search engine and a heavyweight in AI development, reported less-than-forecast revenue of 31.3 billion yuan (US$4.6 billion) in the second-quarter, down 4 percent from a year earlier, as AI business growth wasn't strong enough to offset a contraction in traditional advertising. Profit fell 68 percent to 2.3 billion yuan, reflecting high one-time investment gains in the year earlier period. Excluding extraordinary items, profit fell 46 percent.

AI, which Baidu defines as its core business, has become the company's new growth engine. Revenue increased 25 percent to 12.5 billion yuan, compromising about half of general business revenue. AI cloud infrastructure revenue jumped 50 percent to 7.3 billion yuan. However, on a quarterly basis, AI revenue declined from 13.6 billion yuan in the first quarter, while the company's spending on the infrastructure behind its AI transition surged. Capital expenditure nearly triple from a year earlier to reach 11.4 billion yuan, and doubled that of the first quarter. Yet, research and development expenses fell 10 percent to 4.6 billion yuan. CFO He Haijian said the company remained "firmly committed" to investing in AI as its core long-term growth driver.

Xiaomi Profit Slips 20 Percent as Smartphone Sales Slow

Xiaomi, the electric vehicle and smartphone maker, reported second-quarter profit fell 20.3 percent from a year earlier 9.5 billion yuan (US$1.4 billion), with revenue down 6.1 percent to 108.9 billion yuan. The results largely reflected the needed company's smartphone segment, where revenue dropped 7.5 percent to 42.1 billion yuan as global smartphone shipments decreased 26.5 percent to 31.2 million. Xiaomi has been shifting its product line toward higher-tier phone models. Its average phone price hit a record 1,351 yuan per unit. Meanwhile, Internet of Things and lifestyle product revenue fell 19 percent to 31.3 billion yuan.

Xiaomi's electric vehicle and AI business segment was the company's growth engine in the latest quarter, generating revenue of 25 billion yuan, up 17 percent from a year earlier. The carmaking segment had revenue of 24 billion yuan. Total vehicle deliveries rose 28 percent from a year earlier to 104,199 vehicles, with the average selling price falling 9.6 percent to 229,312 yuan. The segment had an operating loss of 2.6 billion yuan. Xiaomi has aggressively expanded into AI intelligence and advanced technologies, with second-quarter research and development spending rising 19 percent to 9.2 billion yuan.

Global Bond Markets Send a Warning Signal

Global bond yields climbed this week to their highest level in decades as the 60-day Iran-US truce expired, President Donald Trump said he has no interest in reviving it and Tehran threatened to adopt a "fully offensive" military posture, Reuters reported. Global benchmark Brent crude futures rose above US$91 a barrel. The yield on the US 30-year Treasury rose intraday on Tuesday to a 19-year high of 5.33 percent. The yield on the 10-year Japanese government bond rose to 2.94 percent, a three-decade high. Bond yields have also surged in France, Germany and the UK, raising borrowing costs for governments, companies and consumers.

In addition to the stalemate in the six-month Iran war, bond investors are also concerned about sticky high inflation caused by higher energy prices, rising government debt and the flood of debt issues from big tech companies to finance costly AI development. Technology companies in the US have issued about US$192 billion in bonds in the first seven months of this year.

Unitree Updates First-Half Earnings Ahead of Trading Debut

Leading humanoid robot maker Unitree, whose shares begin trading today on Shanghai's STAR Market, updated its first-half results in an exchange filing on Tuesday, showing net profit of 274 million yuan (US$41 million), turning from a 32-million-yuan loss a year earlier. However, profit excluding one-time items fell 19 percent to 244 million yuan on higher costs of research, development and marketing. Revenue surged 49 percent to 1.2 billion yuan on strong demand and expansion of downstream applications. Unitree raised 6.1 billion yuan in a heavily oversubscribed IPO, becoming the first humanoid robot maker to list in Chinese mainland. Its trading debut has drawn intense interest.

Major Lawsuit Challenges Meta's Social Media Practices

The biggest trial to date against the business practices of social media giant Meta began in a California court, with plaintiffs arguing that the company deliberately designed its platforms to be additive to young people and exposed them to harmful content. Twenty-nine US states filed the action, seeking billions of dollars from Meta. On the first day, a whistleblower testified that the number of teens exposed to graphic content was at least 100 times higher than Meta reported. The owner of Facebook and Instagram denies the charges. If the verdict goes against Meta, it could force the company to overhaul its social media platforms, legal analysts said. The trial is expected to last six to eight weeks.

Top Business

China Unicom Cites Tax Change for Profit Decline

China Unicom, the nation's second-largest telecom, posted first-half revenue of 201.4 billion yuan (US$30 billion) in the first half, up 0.6 percent from a year earlier. However, net profit dropped 34.6 percent to 9.5 billion yuan, which the carrier attributed to labor costs and changes in government tax policy. The value-added tax rate for telecom services in China was raised to 9 percent from 6 percent this year, putting pressure on some operators.

Poni.ai Reports Wider Loss Despite Revenue Surge

Chinese autonomous driving company Pony.ai reported its net loss in the first half widened to US$98.9 million from US$90.6 million in the same period last year. However, the company's net loss margin showed improvement, dropping to 140.3 percent from 255.8 percent. Revenue climbed about 99 percent to US$70.5 million, with robotaxi services jumping 534 percent to US$12.1 million and fare-charging revenues rising by 849.3 percent. On the expansion front, Pony.ai deepened its Uber partnership in August to deploy over 2,000 robotaxis across five European cities. By the end of the year, Pony.ai aims to grow its active fleet to 4,000 vehicles and establish operations in more than 20 global cities.

Huaneng Power Profit Falls Amid Clean Energy Transition

Huaneng Power International, one of China's largest independent power producers, reported a 28.9 percent drop in first-half net profit to 6.59 billion yuan (US$978 million), with revenue declining 4.6 percent from a year earlier to 106.9 billion yuan. Earnings worsened in Q2, plunging 53 percent sequentially to 2.1 billion yuan. The slump was driven by lower market electricity tariffs and reduced thermal power output as new renewable capacity crowded the grid. While cheaper coal costs provided some relief, foreign-exchange losses and shrinking margins across its coal, wind, and solar divisions offset gains. Despite adding 3,040 megawatts of renewable capacity to raise its clean energy mix to 42 percent, green energy profits have not yet countered the thermal power contraction. The company's core challenge remains balancing rapid renewable expansion against the declining profitability of its traditional fossil fuel assets.

German Luxury Carmakers Drop Chinese Mainland Prices

German luxury car giants Mercedes-Benz, BMW and Audi lowered the prices of some models in China amid declining sales due to the accelerated adoption of new energy vehicles in the Chinese mainland market, Yicai reported. The three companies reported sales declines of about 20 percent in the first half. The discounted price for the BMW 525Li is about 280,000 yuan (US$41,517). Prices for the Mercedes-Benz E-Class and Audi A6L have dropped by more than 100,000 yuan, with discounts on more premium models as high as 200,000 yuan.

Economy & Markets

China Pivots to Rural Consumers as Urban Demand Cools

Facing a broad economic slowdown, China unveiled an 18-point economic stimulus package targeting consumers in smaller cities and rural areas. The move follows a sluggish July, where retail sales growth slowed to 0.6 percent and industrial output growth cooled to 4.5 percent. The plan includes initiatives like expanding rural electric-vehicle charging networks, promoting green and smart appliance sales and modernizing aging retail outlets to integrate tourism trade. The shift reflects untapped purchasing power in less populated areas. Rural retail sales expanded 2.4 percent through July, capturing 39 percent of national sales and outperforming urban markets. Consulting firm McKinsey projects that geographic segment will drive 66 percent of China's consumer-spending growth by 2030.

Guotai Haitong Profit, Revenue Surge on Active Stock Trading

Guotai Haitong Securities, China's biggest brokerage firm, reported a 168 percent net profit surge in the first half to 19.5 billion yuan (US$2.9 billion), as revenues jumped 97 percent to 47.2 billion yuan. Net commission income from brokerage services more than tripled to 22.1 billion yuan, contributing almost half to the overall income, fueled by active Chinese mainland stock markets. Proceeds from asset management doubled to 14.6 billion yuan. The firm was created in April last year in the merger of Guotai Junan Securities and Haitong Securities.

Shein Pares Valuation Goal, May Seek US$2 Billion in HK IPO

Chinese discount fashion online seller Shein is seeking to raise about US$2 billion in its expected Hong Kong initial public offering that could begin this week, with existing shareholders potentially subscribing to about half of the shares, Bloomberg reported. The company aims to list at a valuation of about US$26 billion, down from the US$30 billion-US$40 billion range earlier reported, and far from its peak valuation of US$100 billion in 2022. The company has faced stiffer competition globally, new duties on its small parcel deliveries in Europe and the US, and crackdowns on its business practices by EU regulators. Trading in Shein shares could begin at the end of this month. Shein, which was founded in China but is now headquartered in Singapore, previously attempted to list in New York and London but was thwarted by regulatory scrutiny.

Chinese Banks Show Slight Improvement in Net Interest Margins

Chinese commercial banks enjoyed a slight uptick in net interest margins in the second quarter after quarters of decline, even as underlying loan demand remains weak, the South China Morning Post reported. Net interest margins edged up 1 basis point to 1.41 per cent in the June quarter, from 1.40 per cent in the first quarter, according to the National Financial Regulatory Administration. Net interest margins are a key indicator of banking profitability, measuring the interest banks pay depositors against interest earned from lending to customers. The slight improvement comes as new yuan loans contracted by 340 billion yuan (US$50.4 billion) in July, according to the People's Bank of China, placing pressure on banks' balance sheets.

Eight Chinese Banks Added as E-Yuan Operators

The People's Bank of China announced it is adding eight more banks, including Ping An Bank and Bank of Shanghai, to its list of official e-yuan operators, bringing the total to 30. In April, the central bank added 12 lenders to the digital yuan network after a designation of an initial 10 major banks.

Corporate

Vnet Loss Widens, Revenue Rises on Wholesale Data Center Demand

Beijing-based Vnet Group, a carrier-neutral data center provider and exclusive local operator of Microsoft Azure and Microsoft 365 in China, reported a second-quarter net loss of 135.6 million yuan (US$20 million), widening from 11.9 million yuan a year earlier, primarily reflecting changes in fair value of financial instruments. Revenue increased 14 percent to 2.8 billion yuan (US$410 million). Growth was driven by a 29 percent surge in wholesale data center revenue to 1.1 billion yuan, with capacity surpassing 1 gigawatt. Backed by solid wholesale demand, Vnet reaffirmed its full-year revenue guidance of 11.5 billion yuan to 11.8 billion yuan.

GigaDevice First-Half Profit Jumps 11-Fold

GigaDevice Semiconductor, a leading Chinese designer of flash memory chips, reported an 11-fold increase in first-half profit to 6.9 billion yuan (US$1 billion). Revenue surged 179 percent from a year earlier to 11.6 billion yuan. The growth comes from rising prices amid a global shortage of memory chips.

H World Hotel Group Posts 11 Percent Revenue Increase

H World Group, one of China's largest hotel operators, which runs brands including HanTing, JI Hotel and Orange Hotel, reported second-quarter revenue of 7.1 billion yuan (US$1 billion), up 11 percent from a year earlier. Net profit rose 2.1 percent to 1.6 billion yuan. Revenue from franchised and managed hotels jumped 25 percent to 3.6 billion yuan, outpacing its leased and owned hotels, Revenue per available room, an industry metric combining room rates and occupancy, rose 1.1 percent to 238 yuan at its China hotels. H World raised its 2026 revenue growth forecast to between 4 percent and 8 percent. The group also operates and franchises international brands including Mercure, Ibis and Ibis Styles in China. As of June 30, it operated 13,539 hotels with 1.3 million rooms across 21 countries, 95 percent of them in China.

Smartphone Maker Transsion Post Stronger Revenue

China's Transsion, whose smartphones are the best-selling brand in Africa, reported revenue of 35.4 billion yuan (US$5.3 billion) in the first half of 2026, up 22 percent from a year earlier. Net profit rose 46 percent to 1.8 billion yuan. The company said existing inventory lessened the impact of higher phone prices driven by rising costs for memory chips.

Fuyao Glass Profit Tumbles on Modest Revenue Gain

Fuyao Glass Industry Group, a Chinese company that gained notoriety in a documentary produced by former US president Barack Obama, reported first-half revenue rose 2.4 percent to 22 billion yuan (US$3.3 billion) but profit tumbled 17 percent to 4 billion yuan. Analysts noted intensifying price competition in the global automotive industry, volatility in raw material and energy costs, and increased depreciation and amortization from newly commissioned projects. Fuyao, which operates facilities in the US, supplies glass to major carmakers including Ford, General Motors and Volkswagen. In 2014, the company took over a former GM factory to establish its first glass plant in the US. The facility later drew attention as it was featured in the 2019 documentary "American Factory."

Ant Health Acquires Windstone Medical Insurance Services Provider

Service Ant Health, a unit of China's Ant Group, announced the acquisition of Windstone, a domestic medical and healthcare insurance service provider, to enhance its "one-stop" direct insurance payment system. The acquisition feeds into Ant Health's insurance services for patients seeking treatment at public hospitals. Windstone has a network spanning 1,500 medical services departments of public hospitals, as well as high-end private medical institutions, providing patients with facial recognition and QR code-based direct insurance payments.

Alibaba Launches AI Music-Generation Model

Alibaba launched HappyShrimp 1.0, an AI music-generation model. The company said it can turn language descriptions of emotions, stories or memories into musical pieces with the user not required to play an instrument or understand music composition. Separately, Alibaba also released the Qwen3.8-27B AI model that it says can run on consumer laptops. It said the model has "outstanding" capabilities in coding, professional work, research and long-horizon agent tasks.