Weekend Buzz: 22-23 August 2026

Zhongji Innolight Profit Jumps Despite Share Slump

Zhongji Innolight, the world's largest supplier of optical transceivers used in AI data centers, reported another quarter of explosive growth even as its shares remain about a third below their June peak. Second-quarter net profit surged 228 percent from a year earlier to 7.9 billion yuan (US$1.2 billion) on a 175 percent surge in revenue to 22.3 billion yuan. For the first half, revenue jumped 182.5 percent to 41.8 billion yuan, while net profit surged 242 percent to 13.7 billion yuan.

The company attributed the growth to strong demand from AI companies, including Nvidia, for high-speed optical modules used in AI computing infrastructure. Spending on research and development in the first half nearly doubled to 1.2 billion yuan, and the gross margin for optical modules rose 6.6 percentage points to 46.6 percent.

The interim earnings come after a sharp valuation reset. Zhongji's shares on the Shenzhen stock market declined about 36 percent by the end of July from an intraday peak in June. The company listed on the Hong Kong exchange on July 30 in one of the few large tech IPOs to drop below its offer price on its trading debut. The selloff came amid concerns about high levels of spending on AI, pricing for next-generation 1.6 terabit-per-second modules and questions about whether unusually high industry margins can be sustained. Zhongji shares have recovered somewhat in August.

Severe El Niño Forecast, With Global Weather Repercussions

The El Niño event developing over the Pacific Ocean is likely to be the strongest in living memory, the UK Met Office warned. Coupled with global warming, the two phenomena are expected to drive up temperatures and raise the risk of extreme weather like drought and flooding. The meteorologists said 2027 is shaping up to become the hottest year on record. Changing weather patterns are already beginning to appear, including below-average monsoon rains in India, higher typhoon activity in the Asia Pacific and tamer hurricane activity in the Atlantic. Panama Canal authorities said they will reduce ship transit beginning next month because drought caused by El Niño has reduced water levels in two artificial lakes that feed the canal. "We should be clear that this is an unprecedented event," Adam Scaife, head of long-range forecasting at the Met Office told the BBC. "I have never seen an El Niño signal this intense in our forecasts." El Niño is a naturally occurring weather pattern that happens every 2-7 years and lasts for about a year.

Iran Warns of 'Devastating' Response to Any New US Sanctions

Iran said on Friday that its response to any new US threats would be "devastating" after Washington pledged to impose the toughest financial penalties in history on the country, with the aim of toppling the Iranian leadership. US Treasury Secretary Scott ‌Bessent said on Monday he will detail new sanctions in what US President Donald Trump earlier called "economic D-Day" against Iran. The sanctions are expected to include economic consequences for any country that provides any support to Iran. Oil prices have been steadily creeping up toward US$100 a barrel again as the six-month war in Iran lingers in stalemate. Benchmark Brent crude futures ended New York trading at US$94.39.

Top Business

Han's CNC Profit Surges 3.6-Fold on Printed Circuit Board Demand

Han's CNC Technology, a leading Chinese maker of printed circuit boards, reported first half profit surged 3.6 times to 956.9 million yuan (US$142.3 million) on a 109 percent increase in operating revenue to 5 billion yuan. Founded in 2002, the Shenzhen-based company designs, produces and sells specialized computer-controlled equipment used to make the electric circuit boards used in AI servers, high-speed switches and optical modules, next-generation wireless technology and aerospace. Spending on research and development in the first six months rose 70 percent to 269.5 million yuan. The company listed in Hong Kong this year, becoming the first in its industry to achieve a dual listing in both Chinese mainland and Hong Kong markets. In the first half of 2026, the company said it continued to expand production capacity at its two major production bases in Shenzhen and Xinfeng. It cited figures showing that the global market for printed circuit boards will grow 19 percent this year to a value exceeding US$100 billion.

Brilliance China Profit Falls as BMW Venture Sales Weaken

Brilliance China Automotive reported first-half net profit fell 54 percent from a year earlier as earnings from its BMW joint venture declined amid fierce market competition. Profit attributable to equity holders fell to 778.5 million yuan (US$115.8 million). Revenue rose 20 percent to 675.8 million yuan, driven by higher minibus and multipurpose vehicle sales from its Jinbei subsidiary, which delivered 2,815 units, compared with 277 units in the previous period. The earnings drop was primarily caused by a 52.5 percent decline to 974 million yuan in the share of results from associates, reflecting reduced profitability at BMW Brilliance Automotive. Vehicle sales at the unit dropped 19 percent to 212,782 units. The company said it is accelerating production of its next-generation Neue Klasse electric vehicles in the second half of 2026.

Dajin Heavy First-Half Profit Rises, Q2 Earnings Drop

Dajin Heavy Industry, a Chinese manufacturer of wind power equipment, said first-half net profit increased as record exports offset a sharp second-quarter contraction. Profit in the three months to June 30 plunged 47 percent from a year earlier to 166 million yuan (US$24.7 million), and revenue tumbled 21 percent to 1.35 billion yuan. First-half net profit attributable to shareholders increased about 10 percent to 601 million yuan on revenue growth of 14.5 percent to 3.3 billion yuan. The company shipped a record volume of offshore wind monopile foundations and towers to the European market. Dajin Heavy said its new Caofeidian manufacturing site commenced production as part of expansion of integrated services across wind equipment and shipbuilding.

Baosteel Profit Slips Despite Revenue Growth

Baosteel, China's largest steelmaker, reported higher revenue but weaker profits in the first half amid industry pressure from weak demand, trade tensions and rising global uncertainty. Baosteel said revenue rose 6.2 percent from a year earlier to 160.7 billion yuan (US$23.9 billion), while net profit fell 6.3 percent to 4.6 billion yuan. Operating cash flow declined 11 percent to 14.8 billion yuan. Second-quarter revenue increased 6.6 percent to 83.7 billion yuan, but quarterly net profit dropped 4 percent to 2.35 billion yuan.

The company said it has maintained competitiveness by focusing on high-value steel products, technological innovation and integrated production, research and sales operations. Baosteel highlighted continued development in advanced materials to meet demand from emerging industries. The company also warned that the steel sector remains under pressure from geopolitical conflicts and trade protectionism. It said it will accelerate a transition to green manufacturing practices and smart factory initiatives to improve efficiency and adapt to changing market conditions.

SK Hynix Eyes Japan Chip Plant as Orders Surge

South Korean chip giant SK Hynix is considering building a large memory chip plant in Japan, according to local media reports, with potential investment in the billions of US dollars. It would mark the company's first major manufacturing base in Japan. SK Hynix said no final decision has been made. SK Hynix and rival Samsung Electronics are accelerating investment to meet growing demand for AI-related chips. Major equipment suppliers report order backlogs nearly doubled by the end of the first half from late 2025 levels.

Economy & Markets

China to Adopt Policies to Boost Economic Growth, Domestic Demand

China will roll out additional fiscal policy measures "in a timely way" in response to economic developments, Vice Finance Minister Liao Min said on Friday. His comments come as the nation's growth slows. Liao noted that this year's budget expenditure exceeds 30 trillion yuan (US$4.5 trillion) for the first time. He told a press briefing that any new measures will tilt a greater share of spending toward households and consumer demand. The government will step up coordination of fiscal, monetary and industrial policies, and also deepen tax reforms, he said.

Separately, China's finance authorities announced on Friday that interest subsidies for small businesses and consumer loans will be expanded as part of efforts to boost domestic demand and support private-sector growth. The central government will provide interest support equivalent to 1 percentage point annually, with a maximum subsidy period of two years. The policy also raises the lending cap eligible for subsidies. The maximum loan amount will increase to 75 million yuan a year from 50 million yuan. The government will also expand consumer loan support by including credit card installment plans, consumer financing and cash advance installments.

TikTok to Pay US$400 Million in US Settlement

TikTok and its Chinese parent company ByteDance agreed to a US$400-million settlement to resolve the US Justice Department's allegations that the short-video app violated ‌children's online privacy and a law requiring online services aimed at children to obtain parental consent to collect personal information from users under age 13. In January, ByteDance agreed to establish a majority American-owned joint venture to avoid a US ban and secure information from more than 200 million Americans.

Guotai Haitong Draws US$7.8 Million Fine

An asset-management arm of leading Chinese brokerage Guotai Haitong Securities was ordered to pay 52.5 million yuan (US$7.8 million) in fines and penalties for activities undertaken by its offshore investment business. The charges alleged failure to properly report cross-border transactions under China's Qualified Domestic Institutional Investor program, which allows approved Chinese financial institutions to raise domestic funds and invest them in overseas securities within quotas granted by regulators. The allegations cover products offered between 2019-22.

Chery Affiliate AiMOGA Eyes Stock Market Listing

AiMOGA Robotics, an affiliate of Chery Auto, China's biggest car exporter, said it's in talks over potential listing venues amid plans to sharply increase humanoid robot deliveries, Reuters reported. The company hasn't released any details of its IPO plans. Chery owns 77 percent of the company.

A listing would try to capture investor enthusiasm for China's robotics industry. Shares in Unitree, a leading Chinese humanoid robot maker, soared nearly sixfold in their Shanghai trading debut on Wednesday.

Fidelity Said to Be Closing China Fund in Shanghai

Fidelity International plans to exit its wholly owned China fund unit in Shanghai, Reuters reported, citing two people familiar with the matter. The decision would mark one of the biggest retreats by a global asset manager ‌from the Chinese mainland. Fidelity International manages about US$1.2 trillion in client assets globally. It launched the onshore Shanghai fund three years ago. A combination of fierce local competition, frequent leadership turnover and chronic struggles to build scale are behind the decision, the report said.

Bitcoin Rallies on Bond Market Concerns

Bitcoin has risen about 22 percent this week after the US Treasury revealed plans to double bond buybacks to rein in rising long-term debt yields. The cryptocurrency was priced at US$77,793 in late New York on Friday. The bond buyback plan announcement sent yields down for a day, before the effect quickly fizzled as concerns focused again on the US national debt surpassing the US$40 trillion mark and record corporate debt issuance tied to surging spending on AI development. The bond market is bigger in value than stock markets. James Sullivan, JPMorgan's co-head of global fundamental research, told CNBC on Friday that government attempts to address high yields with buybacks are "a little bit like paying your mortgage with your credit card. It can work for a while, but eventually the mismatch starts to become more obvious."

Is Anthropic Hoping to Top SpaceX Record IPO?

US AI giant Anthropic expects its initial public offering to be at least as large as SpaceX's world-record IPO and could file its application in New York as early as the end of this month, Bloomberg News reported. Other reports have speculated the company could seek to raise US$100 billion. Anthropic hasn't commented on the reports. SpaceX raised US$75 billion in its June IPO, but the final size of the offering rose to US$86.2 billion after underwriters exercised an over-allotment option. Anthropic, developer of the flagship Claude large language model, secured US$65 billion in fundraising in May, valuing the company at US$965 billion.

Deep Dive

New China Standards on Smart Driving Focus on Safety, Liability

Tighter restrictions force carmakers to incorporate safety into initial vehicle designs and refine motorist perceptions about what autonomous driving entails.

Corporate

Zijin Mining Profit Surges as Metal-Price Rally Lifts Margins

Zijin Mining, a Chinese multinational mining group, said first-half net profit jumped 68 percent from a year earlier to 39.2 billion yuan (US$5.8 billion) as higher prices for gold, copper and lithium boosted margins. Revenue rose 15.8 percent to 194.2 billion yuan. The company said a rally in global metals prices helped push net operating cash flow up 92 percent to 55.5 billion yuan and reduced the company's asset-to-liability ratio to below 50 percent. Looking ahead, the company said it expects geopolitical tensions, gold purchases by central banks and demand for copper in the AI boom to underpin earnings this year. Future production volume is expected to grow as expansion at its Julong copper mine and the new Zhunuo copper mine come online by the end of the year.

Northern Rare Earth Profit More Than Doubles

China Northern Rare Earth said net profit for the first half of 2026 more than doubled from a year earlier on record production. Net profit jumped 121 percent to 2.1 billion yuan (US$312 million), and revenue rose 37 percent to 25.8 billion yuan. For the second quarter alone, profit surged 127 percent to 1.1 billion yuan on a revenue increase of 46 percent to 13.9 billion yuan. China is the world's largest miner and refiner of rare earth minerals and magnets vital in production of electronics. Northern said demand remains high.

Tesla, Geely, 7 Other Automakers Recall 4.3 Million Cars in China

Nine automakers, including Tesla, Geely, Xiaomi and Leapmotor, are recalling nearly 4.3 million vehicles in China over door handle safety risks, marking a record single-issue recall in China. According to the State Administration for Market Regulation, emergency door handles inside affected vehicles match interior colors too closely, making them hard to locate during severe crashes accompanied by low-voltage power failures. This risk can delay emergency escape from vehicles or access by outside rescuers. The automakers will issue online software updates to automatically lower windows in collisions.

ZTE Profit Falls, Shifting Product Mix Weighs on Record Revenue

Telecommunications equipment and systems provider ZTE Corporation said first-half net profit dropped 46 percent from a year earlier to 2.8 billion yuan (US$409 million) even as revenue reached a record high of 78 billion yuan, up 9 percent. The company attributed the profit squeeze to a shift in industry cycles and adjustments in its business structure, though both revenue and profit improved sequentially in the second quarter. Top-line expansion was driven by double-digit growth across the company's computing power, personal terminal and international market segments, offsetting declines in communications infrastructure investments from China telecoms.

Sinopharm Profit Falls on Procurement Margin Squeeze

Drug distributor Sinopharm said first-half net profit declined 7.3 percent to 880 million yuan (US$130 million) as centralized government drug procurement policies compressed margins and a subsidiary posted heavy losses. Revenue in the period rose 4.3 percent to 26.7 billion yuan. The company recorded a net operating cash outflow of 2.6 billion yuan, representing a decrease of 1.1 billion yuan from the same period last year. Gross margin fell 0.16 percentage point to 5.98 percent. The company also noted substantial losses and asset impairments at its subsidiary Guorui Pharmaceutical.

China Nonferrous Mining Profit Surges

China Nonferrous Mining, a vertically integrated copper producer operating primarily in Zambia and the Democratic Republic of Congo, said first-half net profit jumped 65 percent from a year earlier to US$433.6 million as higher global metal prices widened its margins. Revenue rose 29 percent to US$2.3 billion. Gross profit margin expanded to 42.4 percent. The company attributed its strong financial performance to elevated international prices for copper and sulfuric acid. Looking ahead, the company said it expects copper prices to remain high on strong demand from AI computing and new energy sectors.

China Coal Earnings Rise, Higher Prices Offset Lower Output

China Coal Energy, one of China's largest coal producers, reported a stronger second quarter as improved pricing and downstream businesses helped offset weaker coal production. Revenue reached 39 billion yuan (US$5.8 billion), up 8.1 percent from a year earlier, with net profit rising 15 percent to 4.3 billion yuan. For the first half, revenue slipped 1.8 percent to 73 billion yuan, while net profit rose 5.8 percent to 8.2 billion yuan. Coal production fell 8 percent in the first half, offset by higher coal prices. The company's coal-chemical business also improved as production and sales of polyethylene and polypropylene increased.

AMEC to Invest US$520 Million in Plant Expansion

Advanced Micro-Fabrication Equipment (AMEC), a leading supplier of semiconductor etch equipment, said this week that it plans to spend 3.5 billion yuan (US$520 million) to expand production capacity at its Shanghai factory in the Lingang area. The second phase of the plant there will integrate research and development, manufacturing and sales of core products, including etch gear, metrology and inspection systems, and thin-film deposition equipment, Yicai reported.

Baidu Unveils Upgrade of Its Free Ernie Chatbot

Chinese tech giant Baidu unveiled an upgrade to its free Task Engine 2.0 for its Ernie Bot AI chatbot, Yicai reported. Task Engine 2.0 continues the move beyond one-on-one questions, offering a full closed-loop workflow covering information collection, data processing, content creation and deliverable output with zero manual intervention required. In June, daily active users of Ernie Bot surged 83 percent from a year earlier.