Hong Kong stocks pulled back after rising sharply today, with the three major indices turning negative in the afternoon, and only the Hang Seng TECH Index managed a slight increase, having risen over 1% at one point during the morning session.
According to Zhito Finance APP, Hong Kong stocks rose sharply today before retreating, with the three major indices turning negative in the afternoon. Ultimately, only the Hang Seng TECH Index achieved a slight increase, having at one point risen over 1% during the morning session. At the close, the Hang Seng Index fell 0.2% or 38.95 points, closing at 19240.89 points, with a total turnover of 129.069 billion Hong Kong dollars; the Hang Seng China Enterprises Index fell 0.17%, closing at 6978.97 points; the Hang Seng TECH Index rose 0.1%, closing at 4311.54 points.
Zhongtai International pointed out that recent economic data from the USA has outperformed expectations, providing upward momentum for the USD and US 10-year Treasury yields. However, the upward space for the Hong Kong Large Cap remains constrained by relatively weak profit expectations, uncertainties regarding future fiscal policy increments, and the prolonged high expectation of USD risk-free interest rates, which is expected to continue suppressing liquidity in Hong Kong stocks. Therefore, the short-term trend for the Hong Kong Large Cap will primarily be a volatile structural market.
Blue chip performance
TINGYI (00322) led the Blue Chip stocks. At the close, it rose 12.22%, closing at 11.2 Hong Kong dollars, with a turnover of 0.316 billion Hong Kong dollars, contributing 3.77 points to the Hang Seng Index. Goldman Sachs cited TINGYI's management indicating that sales last year might have been affected by price increases (instant noodle prices were raised starting from October last year), but it is estimated that last year's net income growth target (10% to 15%) has upward potential. Looking towards 2025, TINGYI hopes that revenue will grow steadily and the net profit margin will continue to improve.
In other Blue Chip stocks, CHINAHONGQIAO (01378) rose 5.29%, closing at 11.54 Hong Kong dollars, contributing 2.65 points to the Hang Seng Index; ANTA SPORTS (02020) rose 4.45%, closing at 78.6 Hong Kong dollars, contributing 7.47 points to the Hang Seng Index; LI AUTO-W (02015) fell 4.42%, closing at 87.5 Hong Kong dollars, dragging down the Hang Seng Index by 8.78 points; ZHONGSHENG HLDG (00881) fell 3.44%, closing at 12.34 Hong Kong dollars, dragging down the Hang Seng Index by 0.46 points.
Hot sectors
In the market, large technology stocks showed mixed performance. "Yanyun Sixteen Sounds" has launched on mobile today, with NetEase closing up over 2%; WeChat has been removed from the US's list of blacklisted markets, leading Tencent to rebound by 1%; Alibaba, on the other hand, decreased by 0.37%. Domestic substitution is welcomed, and the Semiconductors sector performed actively; the PCB industry has continued to improve, with KB Laminates rising over 6%; the turning point for alumina may be approaching, leading Aluminum stocks to rise today; Airlines, pharmaceuticals, and Building Materials stocks generally rose. On the other hand, shipping stocks fell, with COSCO Shipping Holdings down nearly 5%; Coal, Autos, and Pulp and Paper stocks also declined.
1. Semiconductor stocks performed actively. By the end of trading, Semiconductor Manufacturing International Corporation (00981) rose 2.95%, closing at 31.45 HKD; HUA HONG SEMI (01347) increased by 2.24%, closing at 20.55 HKD; SHANGHAI FUDAN (01385) rose 0.43%, closing at 14.04 HKD.
According to reports, the Biden administration in the USA plans to implement a new round of restrictions on AI chip exports to companies such as NVIDIA before leaving office. Insiders stated that the new regulations will impose three layers of restrictions on chip transactions, possibly being released as early as Friday. China Merchants believes that Semiconductors are an important area for technological competition, with policies continuously reinforcing and accelerating the domestic production process. Future competition in the technology sector may further intensify, with a pressing need for achieving high-level technological self-reliance and independence. Ping An Securities stated that the semiconductor industry is currently in a recovery phase, and the revival of Consumer Electronics will drive a new rise in the semiconductor cycle.
2. Aluminum stocks rose today. By the end of trading, CHINAHONGQIAO (01378) rose 5.29%, closing at 11.54 HKD; Aluminum Corporation Of China (02600) increased by 4.84%, closing at 4.55 HKD.
CITIC SEC's research reports pointed out that the supply and demand pattern has eased, and events have catalyzed a significant decline in alumina prices. Looking ahead to 2025, the bank believes that the price center of alumina is likely to decline; with supply constraints strengthening and an expected improvement in demand, Aluminum prices still have potential elasticity. The bank is bullish on the investment value of the Aluminum sector driven by expanded profits per ton of aluminum and dividend and valuation logic. Moreover, Goldman Sachs has raised the rating for Aluminum Corporation Of China A-shares to neutral, with a Target Price of 7.2 RMB, and upgraded the rating for Aluminum Corporation Of China H-shares to buy, with a Target Price of 6.8 HKD.
3. The PCB-related industry chain was strong. By the end of trading, KB Laminates (01888) rose 6.59%, closing at 7.12 HKD; KINGBOARD HLDG (00148) increased by 5.38%, closing at 18.82 HKD.
Amazon's cloud computing division, Amazon Web Services (AWS), plans to invest at least 11 billion USD in Georgia to expand its infrastructure and support various Cloud Computing and AI technologies. Previously, Microsoft stated that AI data center spending would reach 80 billion USD in the 2025 fiscal year, with a confirmed high growth trend in capital expenditure among North American cloud vendors for the 2025 fiscal year. China Merchants pointed out that driven by AI technology and applications, Servers will be the fastest-growing application area for PCB, with a compound annual growth rate expected to reach 11.6% to 14.2 billion USD from 2023 to 2028.
It is reported that KINGBOARD HLDG is a global leader in copper-clad laminates and has laid out the entire industry chain from upstream raw materials to downstream PCB. Additionally, Kaimeng Securities previously noted that KB Laminates is a leader in the copper-clad laminate industry, and with the anticipated rise in copper prices in 2024, coupled with a gradual recovery in downstream demand, copper-clad laminates possess flexible pricing space, enhanced by cost advantages from vertical integration and scale effects in the supply chain, likely driving the company’s revenue and profit back onto a growth path in 2024.
4. Coal Industrial Concept(coal Industry) continued to decline. By the close, China Shenhua Energy (01088) dropped 3.18%, closing at 30.45 HKD; China Coal Energy (01898) fell 1.69%, closing at 8.75 HKD; MONGOL MINING (00975) decreased by 0.87%, closing at 6.83 HKD.
Goldman Sachs downgraded the rating of China Shenhua Energy A shares to "Sell," with a Target Price of 33 CNY. Additionally, Bank of America Securities released a Research Report stating a Bearish outlook on the Coal industry and China Shenhua Energy this year, due to limited expected growth in coal demand, high inventory levels, and ongoing import threats. The firm estimates this year's thermal coal price to be 720 CNY per ton (a year-on-year decrease of 16%), with spot prices expected to be below contract prices from the second to third quarters, while coking coal prices are projected to be 1400 CNY per ton.
Popular stocks with abnormal movements
1. Lao Pu Gold (06181) broke a new record. By the close, it rose 11.07%, closing at 299 HKD.
According to reports, during the New Year's Day period in 2025, Lao Pu Gold's Shanghai Yuyuan store launched a "Spend 1000 Get 100 Off" promotion, attracting unprecedented queueing. Reports indicated that some consumers queued for 8 hours, spending over 0.1 million CNY; although the Lao Pu Gold store in Guangzhou did not have the "Spend 1000 Get 100 Off" promotion, brand staff stated, "There are queues every day, from the time people finish lunch until the afternoon."
2. J&T EXPRESS-W (01519) saw gains throughout the day. By the close, it rose 10.31%, closing at 6.42 HKD.
Recently, J&T EXPRESS announced its main Company Business Data for the fourth quarter and the entire year of 2024. In the fourth quarter of 2024, the company achieved a total parcel volume of 7.39 billion, a year-on-year increase of 32.5%, with an average daily parcel volume of 80.3 million. For the entire year of 2024, the company achieved a total parcel volume of 24.65 billion, a year-on-year increase of 31%, with an average daily parcel volume of 67.3 million, an increase of 30.7% year-on-year.
3. ZTE (00763) AH Stocks all rose. By the close, it increased by 9.98%, closing at 23.7 HKD.
SWHY pointed out that according to ZTE's annual report, ZTE Microelectronics achieved a revenue scale of 9.73 billion yuan and a net income of 0.846 billion yuan in 2021, with products covering the entire ICT industry in "computation power, network, and terminal". The value contribution of the company's chip capabilities cannot be ignored, currently possessing research and development capabilities for a full range of data communication chips, including switching network chips, lookup chips, and NP chips. The company's data communication products have also achieved a complete switch to self-researched core chips, which is one of the core drivers of stable profit growth and also has industrial scarcity.
4. CATHAY PAC AIR (00293) reached a new high during the phase. By the close, it rose 7.83% to 10.6 HKD.
CATHAY PAC AIR announced that it will resume direct flights from Hong Kong to Rome, Italy, on June 5, with the new route being a seasonal service with three flights a week. This is the second route connecting Hong Kong and Italy for CATHAY PAC AIR. In addition to Rome, CATHAY PAC AIR will also launch direct flights connecting Hong Kong to Hyderabad, India, Munich, Germany, and Brussels, Belgium this year. The group's low-cost airline Hong Kong Express will also open a route between Hong Kong and Sendai, Japan, in January. The total number of global passenger destinations for the two airlines is expected to exceed 100 within this year.
5. ANTA SPORTS (02020) significantly increased. By the close, it rose 4.45% to 78.6 HKD.
ANTA SPORTS announced that in the fourth quarter of 2024, the retail amount (calculated at retail value) for ANTA brand products achieved a high single-digit positive growth compared to the same period in 2023. In the fourth quarter of 2024, the retail amount (calculated at retail value) for FILA brand products also achieved a high single-digit positive growth compared to the same period in 2023.
New stock first listing.
1. CONCH MATERIALS TECHNOLOGY (02560) significantly plunged. By the close, it fell 47.67% to 1.57 HKD.
CONCH MATERIALS TECHNOLOGY priced its shares at 3 HKD each, issuing a total of 0.145 billion shares, with 1,000 shares per lot, netting approximately 0.396 billion HKD. It is reported that CONCH MATERIALS TECHNOLOGY is a supplier of fine chemical materials that produces and sells cement additives, concrete additives, and their relevant upstream materials, with main products including cement additives, concrete additives, and related upstream materials. Based on the sales of cement additives in 2023, the top five market participants in China accounted for approximately 41.2%, with the company ranked first in China with a market share of approximately 28.3%.
2. HUI GE ECO-FRIENDLY (02613) performed brilliantly. As of the close, it rose 6.29% to 33.8 Hong Kong dollars.
HUI GE ECO-FRIENDLY is priced at 31.8 Hong Kong dollars per share, with a total issue of 10 million shares, 100 shares per lot, and a net proceeds of approximately 0.2734 billion Hong Kong dollars. It is reported that HUI GE ECO-FRIENDLY is a provider of environmental protection equipment and systems for China CSSC. According to data from Frost & Sullivan, as of December 31, 2023, based on the total number of completed orders and cumulative orders on hand for ship exhaust purification systems in 2023, the company ranks third among ship exhaust purification system providers in China, and fourth among all ship exhaust purification system providers globally.
