Golden Finance | The Hang Seng Index closed at 17511 on Tuesday (20th), down 58 points or 0.33%. The market turnover was 74.5 billion yuan for the day. The national index fell 0.49%, to 6195; the science and technology index fell 0.54%, to 3498. China is considering allowing special bond funds to purchase existing houses, but mainland real estate shares are under pressure. China Overseas Land & Investment (00688) fell 0.9%; China Resources Land (01109) fell 1.8%;

The Dow Jones closed at 40834 on Tuesday (20th), down 61 points or 0.15%. The S&P 500 fell 0.2% to 5597 points; the Nasdaq fell 0.33% to 17816 points, ending an eight-day streak of gains for the Nasdaq and S&P 500. The Jinlong Index, reflecting the performance of Chinese concept stocks, fell 3.95%. European stocks were under pressure, with the FTSE, CAC 40 and DAX down 1%, 0.22% and 0.35% respectively. Among heavyweight stocks, Nvidia's closing price fell 2.1%, and Tesla fell 0.7%; Netflix had risen 3.3% to $711.33, breaking the last record high of $700.99 in November 2021, and closing at $698.54, still up 1.5%. The Asia-Pacific stock market was mixed this morning (21st), with the Nikkei 225 index currently at 37820, down 242 points or 0.64%. South Korea's comprehensive index is currently at 2692, down 3 points or 0.15%. Investors are cautious about entering the market and are looking forward to the announcement of interest rate results by the central bank on Friday.

Market Focus: Baidu Group-SW (09888) Artificial intelligence (AI) is rapidly changing people's lives and work methods. The leading blue-chip AI stock, Baidu (9888), continues to benefit from the incremental demand brought by AI training, and the application ecosystem of the Wenxin model is gradually being established. "Carrot Run" (ApolloGo) is Baidu's self-driving travel service platform. ApolloGo has been operating in 10 cities in the first quarter of this year, with a quarterly single volume of 0.83 million and a good advantage in being the industry pioneer. News has it that in July 2024, ApolloGo's orders quickly surged in Wuhan, with peak daily orders exceeding 20 per car. Although the group's advertising performance has recently affected its profit performance, with AIGC promoting product experience and Robotaxi, intelligent cloud and other directions contributing more commercial prospects, the group has been maintaining its investment in cutting-edge technologies such as AI and self-driving cars. We believe that the positive effect of the AI business on the valuation is expected to be reflected in subsequent quarters.

Asia Vets (智能) are continuously changing people's lifestyles and work methods. Blue-chip AI leader Baidu (9888) is benefiting from the incremental demand brought by AI training, and the application ecosystem of the model is gradually being established. "Carrot Run" (ApolloGo) is Baidu's self-driving travel service platform. ApolloGo has already been working in 10 cities during the first quarter of this year, with a quarterly single volume of 0.83 million, giving it the advantage of industry pioneer. It has been reported that in July 2024, ApolloGo received a surge of orders in Wuhan, with peak daily orders exceeding 20 orders per car. Although the group's recent advertising performance has impacted its profit performance, we believe that the group's continued investment in cutting-edge technologies such as AI and self-driving cars is expected to have a positive impact on its valuation reflected in subsequent quarters. Baidu's concept (中国概念股) relies on AI and has been persistent in contributing to the development of AI technology.

Target price is $99 and stop loss price is $79.

(The author is a licensed person of the China Securities Regulatory Commission and does not hold any of the above stocks.)

Author: Dr. Tang Shengxing, Chairman of the Hong Kong Stock Analysts Association.