The market opens tomorrow, so let me summarize the important information from the past few days.
1. First and foremost, we can't ignore Wuliangye's belated annual report. In 2025, revenue was halved, and net profit plummeted by 70%. The more formal explanation is the correction of accounting errors, while the more colloquial term online is "financial bathing." The core difference here is that previously, revenue was only recognized when the liquor was delivered to distributors. Therefore, to boost performance figures, distributors were encouraged to order more, resulting in inventory buildup if sales were slow. Now, the new rule only recognizes revenue when distributors actually sell the liquor, thus deducting the revenue generated from previously unsold inventory.
As a result, revenue decreased by 30 billion yuan and net profit decreased by 15 billion yuan in 2025. Nominally, it's a financial adjustment within one year, but anyone with a little social awareness can guess that this is a way to resolve historical issues at the same time. The current chairman of Wuliangye was arrested in February and is still under investigation. He served as the top executive at Wuliangye for six or seven years, so you know what that means.
Based on January's data, Wuliangye's operations haven't improved, nor have they actually worsened; it's simply wiped out previously manipulated financial figures. To appease the market, the listed company announced an 8-10 billion yuan share buyback plan to offset negative news. We'll see how it performs on Monday.
2. Here's an update on the recent US-Iran situation: negotiations between the two sides have frozen. The US has been pushing forward with a freedom of navigation program, sending warships to the Strait of Hormuz to escort ships through Iran's blockade. Iranian media reports that they launched two missiles, repelling a US warship attempting to approach; the US military denies being hit.
The biggest breakthrough from the US side was the announcement that two Maersk merchant ships had successfully passed through the Strait of Hormuz, with warships and aircraft deployed to ensure their safety, and that 6-7 Iranian speedboats attempting to approach were sunk. Iran denies this, insisting that no ship could trespass into the Strait of Hormuz. I wasn't there to witness this firsthand, so I'm posting both sides' accounts here; you can choose which one to believe.
The ceasefire agreement is on the verge of collapse, and Brent crude oil prices have risen to $112. Fortunately, global capital markets have gradually become desensitized to the situation in Iran, and whether or not there is a war is not a big deal.
3. Of the seven major US stock exchanges that released their Q1 2026 earnings reports, all but Tesla met or exceeded expectations. Google's report was the most explosive, with Q1 revenue of $110 billion and net profit of $62.6 billion, including $37 billion in investment gains and $25.6 billion in non-GAAP earnings. Keep in mind this is only one quarter's data; these tech companies are incredibly profitable.
In contrast to the soaring US stock market, Berkshire Hathaway has reduced its holdings for 14 consecutive quarters, with a further reduction of $8.1 billion in the first quarter. Its latest holdings are valued at $288 billion, with $397.3 billion in cash. Excluding its real estate holdings, this equates to 42% of its portfolio in cash and 58% in assets. Buffett has missed out on the market rally for 10 months, underperforming by nearly 20%, but he shows no sign of surrendering and continues to hold cash, waiting for a US stock market crash.
Yesterday, many commentators ridiculed Buffett, saying he was outdated and obsolete. Buffett does indeed have certain limitations due to his time; aside from Apple, he has almost never bought stocks in new technologies. Berkshire Hathaway's investment philosophy is to avoid innovation and pursue stable business models and cash flow. This may cause them to miss some explosive growth opportunities, but it allows them to achieve sustained compound interest based on a stable model.
Some short-term traders reduced their positions after listening to Buffett's views, missed out on gains, and started complaining. This is wrong. Trading philosophy should be adapted to the trading cycle. If you want to get rich quickly and double your money, you can't follow Buffett's trading method that covers hundreds of billions. In the future, you should trade your own stocks and not blindly trust others.
4. Other countries and regions do not have holidays in May, and trading has already started for two days. The South Korean index surged 5.12%, hitting a record high; the Taiwan Weighted Index surged 4.6%, also hitting a record high.
Hong Kong stocks fluctuated in the two days following the holiday, with an overall slight increase. Based on this, it is likely that A-shares will open slightly higher after the holiday, and hopefully continue the upward trend.
5. Stock prices of storage manufacturers continued to soar. On May 4th alone, SK Hynix surged 12%, bringing its year-to-date increase to 122%, while Samsung rose 5.4%, bringing its year-to-date increase to 94%. SanDisk, the leading U.S. flash memory manufacturer, had its target price raised to $2,000 by institutions; this stock has already risen 460% by 2026.
Due to the high demand from AI, storage is currently in severe shortage, and manufacturers are not in a hurry to expand production capacity. This demand gap is expected to last until at least the end of 2027, and will likely continue into 2028-2030. You might wonder why, given how profitable this is, no other capital (like from China) is jumping on the bandwagon?
Because storage production lines have extremely high barriers to entry, costing tens of billions of US dollars, and involve complex technologies, China simply cannot handle them. Moreover, the construction cycle is long, approximately 18-24 months, which is insufficient to address immediate needs. This has allowed Samsung, SK Hynix, and Micron to reap huge profits. There are also three or four storage companies listed on the A-share market, and their stock prices have risen significantly this year.
6. Wingtech Technology was designated as a special treatment (ST) stock, but this was clearly expected more than ten days ago, and Wingtech convertible bonds fell below 90 as expected.
I think these are the key points. My biggest takeaway is the massive wealth transfer between old and new industries; this is an era of dramatic change. Nothing else to add. (Launching)
Original Article: View Chinese Version
