As informed by Futu Securities App, Hong Kong stocks opened low and rose high in the morning, with the Hang Seng Index and the Hengqiang Index both rising more than 1% at one point, but then fluctuating and falling back, with both indices turning green at the end of the day, only the Hengke Index rose slightly. At the close, the Hang Seng Index fell 0.03% or 5.66 points to 17,936.12 points, with a daily turnover of HKD 96.324 billion; the Hang Seng China Enterprises Index fell 0.02% to 6,373.48 points; the Hang Seng Technology Index rose 0.05% to 3,709.35 points.

CIC Securities pointed out that although policies are still expected to continue, 'strong stimulus' is not realistic, so the market may show more of a volatile consolidation trend in the short term. Among the three main drivers of the market, risk premiums have been mostly restored, the short-term space for risk-free interest rates to move is limited, and profits are the key to opening up greater space for the market, but this is highly dependent on the opening of the credit cycle. Therefore, the market may oscillate at the current level (Heng Seng 18,000 points) until more catalysts emerge.

Blue chip performance

BYD Electronic (00285) led blue chips with a rise of 6.32%, closing at HKD 39.55, with a turnover of HKD 853 million, adding 2.95 points to the Heng Seng Index. Huachuang Securities Research Report pointed out that the company envisions a major breakthrough in AI business revenue, while the main business of automotive electronics is backed by its parent company BYD Co., Ltd., with a forecasted net profit of RMB 5.069 billion, RMB 7.063 billion and RMB 8.231 billion from 2024 to 2026.

In other blue-chip stocks, Mengniu Dairy (02319) rose 2.98% to HKD 13.14, contributing 1.92 points to the Hang Seng Index; Semiconductor Manufacturing International Corporation (00981) rose 2.61% to HKD 18.08, contributing 3.09 points to the Hang Seng Index; ENN Energy (02688) fell 3.47% to HKD 66.75, dragging down the Hang Seng Index by 3.05 points; China Resources Beer (00291) fell 3.11% to HKD 29.55, dragging down the Hang Seng Index by 2.46 points.

Hot sectors

On the market, most of the large tech stocks turned higher, with Meituan rising nearly 2% and Kuaishou rising more than 1%. It was reported that Apple plans to develop a thinner model for the iPhone 17 series, with Apple supplier stocks leading the gains; Taiwan Semiconductor is said to be planning a price hike, and semiconductors rose across the board today. On the other hand, commodity residences in various cities continued to adjust in May, mainland real estate stocks collectively fell; the expected peak summer demand has not yet materialized, with coal industrial concept stocks falling sharply in the afternoon; gas stocks, electric power stocks, shipping stocks, petroleum stocks, etc. performed generally weak.

1. Apple supplier stocks led the gains. At the close, Cowell (01415) rose 8.3% to HKD 24.15; BYD Electronic (00285) rose 6.32% to HKD 39.55; Sun Art Optical (02382) rose 2.16% to HKD 49.75; Q Technology (01478) rose 0.24% to HKD 4.21.

Apple has announced its AI strategy, integrating its new 'Apple Intelligence' technology into a range of applications, including Siri, and working with OpenAI to introduce ChatGPT to devices such as iPhones. Apple is also pushing for other companies to join its large model product, which is expected to boost future sales of the iPhone, iPad, and Mac computers. In addition, according to Guosen Securities, there are rumors that Apple is developing a thinner iPhone model, in line with previous rumors of a new iPhone 17 Slim model. CIC pointed out that Apple Intelligence supports iPhone 15 Pro and above models for upgrades, and the demand for users to replace their devices is expected to increase significantly, driving up Apple's sales. The AI user experience is expected to further drive user device upgrades, and domestic Apple supply chains are expected to benefit deeply.

2. Semiconductor stocks generally rose. At the close, Semiconductor Manufacturing International Corporation (00981) rose 2.61% to HKD 18.08; Shanghai Fudan (01385) rose 2.58% to HKD 13.5; HG Semiconductor (06908) rose 1.23% to HKD 0.41; Hua Hong Semi (01347) rose 1.08% to HKD 23.5.

According to media reports, TSMC plans to raise prices. The price increase for 3nm OEM may be more than 5%, and the annual quote for advanced packaging is expected to increase by about 10%-20%. TSMC's 3nm has received full capacity allocation from seven major customers, including Apple and NVIDIA, and the demand exceeds supply, with expected orders full until 2026. In addition, some semiconductor industry practitioners have said that the wafer factory capacity of SMIC, Huahong, and other parties has been fully loaded for months and there is no longer a willingness to negotiate price reductions. Another insider said that while terminal demand has recovered this year, overall there is still no major fluctuation. However, since March, driven by AI computing power and urgent orders from many large factories, there has been a large and widespread demand for products, causing top wafer factory capacity to be tight.

Mainland real estate stocks fell across the board. At the close, Shimao Group (00813) fell 8.24% to HKD 0.78, Sino-Ocean Group (03377) fell 8.08% to HKD 0.455, Sunac China (01918) fell 6.35% to HKD 1.18, and China Vanke (02202) fell 4.15% to HKD 5.08.

According to data from the National Bureau of Statistics, in May, the sales prices of commodities residences in various cities in the seventy middle and large cities decreased month-on-month, and the decline was slightly widened year-on-year. In May, the sales prices of new commodity residences in first-tier cities fell by 0.7% on a monthly basis, and the decline was 0.1 percentage points greater than that of the previous month; the sales prices of new commodity residences and second-hand residences in first-tier cities fell by 3.2% and 9.3% year-on-year, respectively, widening by 0.7 and 0.8 percentage points compared with the previous month, respectively. Li Yujia, chief researcher of the Guangdong Housing Policy Research Center, believes that the larger price drop of new houses is largely due to factors such as the pressure on new home sales and the tight capital chain of developers. Real estate developers have to offer discounts to gain higher sales in return.

Coal industry concept stocks fell sharply in the afternoon. At the close, SouthGobi (01878) fell 9.39% to HKD 3.28, Yanzhou Coal (01171) fell 3.86% to HKD 17.42, China Coal Energy (01898) fell 3.67% to HKD 9.44, and Yancoal Aus (03668) fell 2.81% to HKD 31.15.

As of June 14, the market price of Shanxi-produced thermal coal (Q5500) at Qinhuangdao Port was RMB 872.0/tonne, a week-on-week decrease of RMB 3.0/tonne. The broker's analysis suggests that coal prices are still in a volatile state, and the peak summer season expectations have not yet been fulfilled. In mid-June, the southern, southwestern, and southwestern regions continued to be rainy, with cumulative precipitation 3-7% higher than the same period in previous years, and coastal power plants' daily consumption rising slowly. In the eve of the peak summer season, traders hold a positive outlook on the future, coupled with continuous backward shipping costs, traders are still raising prices. The bank predicts that coal prices will still be volatile in the short term, but with the rise in temperatures in most coastal cities in the future, terminal daily consumption may rebound at a low level, which is expected to drive coal prices to fluctuate upward.

Popular fluctuating stocks

Brilliance Chi was strong all day today. At the close, it rose 18.79% to HKD 8.47.

According to a research report from JP Morgan, the company announced the distribution of a special dividend of HKD 4.3 per share, exceeding market expectations and the bank's expectation of HKD 1.5 per share, with a total dividend for the year of HKD 5.8 per share, compared to the bank's previously expected total dividends of HKD 5.6 per share for 2024 and 2025. The bank maintains its "shareholding" rating with a target price of HKD 8.2.

ASCLETIS-B (06855) hit a new high in the stage. At the close, it rose 17.14% to HKD 27.

Ascletis issued 24.3073 million new shares to the independent third party Takeda International, equivalent to a 7.73% expansion of the enlarged share capital, with a one-year lock-up period; the total consideration is USD 75 million (approximately HKD 586 million), equivalent to a per share price of HKD 24.0985, a premium of 4.55% over the closing price on June 14. The net proceeds will be used for the development of core products and key candidates.