Goldman Sachs' Positive Outlook: Goldman Sachs has a favorable view on the shift of capital expenditure by Chinese telecoms towards AI computing infrastructure and new business expansion.

Downgrade of Telecom Stocks: The firm downgraded CHINA TELECOM and CHINA UNICOM from Buy to Neutral due to stagnant growth in telecom services and the need for time to accelerate innovative business growth.

Target Price Adjustments: Goldman Sachs reduced the target prices for CHINA TELECOM from $7.9 to $6 and for CHINA UNICOM from $11.5 to $8.8.

Earnings Forecast Revision: The broker also lowered its earnings forecasts for both companies for 2026 and 2027 by 6-7%.

Market Performance: The Hang Seng Index (HSI) rose by 707 points (2.8%) to close at 26,338, with significant gains also seen in the HSTI and HSCEI, which increased by 220 points (4.0%) and 255 points (2.9%) respectively, and a market turnover of $140.86 billion.

Top Gainers: Notable heavyweights included Alibaba (BABA) and Tencent (TENCENT), which rose by 4.3% and 4.0% respectively, while other significant movers like Baidu (BIDU-SW) surged by 9.4%, reaching a new high.

Short Selling Activity: The short selling ratios for several stocks were high, with Xiaomi and Ping An showing ratios of 26.85% and 21.29% respectively, indicating significant market speculation.

Sector Highlights: Stocks like DL Holdings GP and Skyworth saw substantial increases of 11.8% and 10.4%, while 361 Degrees experienced a notable decline of 11.2%, reflecting varied performance across sectors.

Market Performance on New Year's Eve: The Hong Kong bourse closed early on December 31, with the HSI down 224 points (0.9%) at 25,630, while the HSCEI and HSTECH also saw declines. December recorded a 0.9% drop for the HSI, with a quarterly decline of 4.6%, but a yearly rise of 27.8%.

Resource Stocks Show Strength: Despite the overall market downturn, resource stocks like ZIJIN MINING and JIANGXI COPPER performed well, with ZIJIN MINING closing up 0.8% and JIANGXI COPPER rising 5.4%, both benefiting from positive profit forecasts.

Weakness in Tech Stocks: Major technology stocks experienced significant declines, with NTES-S and TRIP.COM-S dropping over 3%, while other tech giants like JD-SW and BABA-W also saw losses, indicating a broader weakness in the tech sector.

Telecom Stocks Decline: Major Chinese telecom companies, including CHINA MOBILE and CHINA UNICOM, closed lower, with CHINA UNICOM hitting a ten-month low after six consecutive days of decline.

Financing Overview: DEEP Robotics has completed a Series C financing round led by CMBI and China Asset Management, raising over RMB500 million with strategic investments from CHINA TELECOM and CHINA UNICOM.

Investment Details: Co-investors include V Fund, China Fortune-Tech Capital, and SHOUCHENG, while existing shareholders like Qianhai Ark and Meridian Capital have also increased their stakes.

Use of Proceeds: The funds will be allocated towards technology research and development, production, and market expansion, particularly focusing on quadruped and humanoid robots.

Market Context: The article notes short selling activity in related stocks, indicating market interest and potential volatility in the telecommunications sector.

FCC's Actions Against Chinese Telecoms: The US Federal Communications Commission (FCC) may prohibit CHINA MOBILE, CHINA TELECOM, and CHINA UNICOM from accessing US networks due to unresolved certification issues related to robocalls.

National Security Concerns: The FCC has raised national security concerns, stating that telecom companies must provide evidence that they do not pose a threat to national security to remain in the FCC's robocall database.