Futu reported on February 27 that Hong Kong stocks continued to fluctuate in the afternoon, with the three major indices closing collectively higher.$Hang Seng Index (800000.HK)$Up 0.95%,$Hang Seng TECH Index (800700.HK)$Up 0.56%,$Hang Seng China Enterprises Index (800100.HK)$ and climbed by 0.51%.
At the close, 1,232 stocks on the Hong Kong stock market rose, 1,059 fell, and 873 remained unchanged.
The specific industry performance is shown in the figure below:
In terms of sectors, most technology and internet stocks rose, with SenseTime-W increasing by 4.92%, NetEase-S rising by 2.40%, Kuaishou-W declining by 1.18%, Tencent Holdings gaining 1.17%, Meituan-W climbing 0.87%, and Baidu Group-SW edging up by 0.24%.
Coal stocks surged, with China Qinfa gaining 8.09%, China Coal Energy advancing 6.82%, Force Development jumping 5.10%, Yancoal Australia rising 4.46%, Yanzhou Coal Mining climbing 4.09%, China Shenhua increasing by 4.03%, and Shougang Resources adding 3.37%. MONGOL MINING dipped by 0.08%.
Real estate developer stocks performed well, with Country Garden surging 7.58%, Sun Hung Kai Properties climbing 7.12%, Cheung Kong Property Holdings gaining 3.58%, and Henderson Land Development rising 2.90%. China Overseas Land & Investment declined by 0.97%, Vanke Co., Ltd. fell by 0.79%, China Resources Land dropped by 0.31%, and Sino Land Company slipped by 0.08%.
Innovative pharmaceutical concept stocks rose across the board, with Wuxi XDC increasing by 8.23%, Wuxi Bio surging 5.07%, Akeso Inc. gaining 4.91%, Wuxi Apptec climbing 3.21%, RemeGen rising by 2.29%, XtalPi Holdings adding 1.97%, and Kelun-Biotech-B advancing by 1.68%.
Semiconductor stocks generally declined, with TianShu Chip gaining 8.39%, GigaDevice falling 7.89%, Montage Technology dropping 4.68%, Innoscience slipping by 1.73%, and Huahong Semiconductor declining by 1.12%. Omnivision Technologies gained 1.09%, Shanghai Fudan Microelectronics advanced by 0.65%, and SMIC increased by 0.59%.
Electric power stocks performed strongly, with Huaneng Power International rising 6.54%, Huaneng Power International gaining 4.93%, Datang International Power Generation climbing 6.43%, Huadian Power International advancing by 4.93%, and China Resources Power increasing by 2.30%.
Steel stocks performed strongly, with Asia Pacific Resources up 11.88%, Maanshan Iron & Steel up 6.61%, Angang Steel up 5.39%, and Chongqing Iron & Steel up 4.10%.
In terms of individual stocks,
$YOFC (06869.HK)$Surging over 10% to a new high, the stock will be included in the MSCI China Index after market close.
$COUNTRY GARDEN (02007.HK)$Up over 7%, the offshore debt restructuring plan is accelerating towards implementation.
$DRINDA (02865.HK)$ Soaring nearly 24%, institutions are optimistic about space-based solar power as a new growth driver.
$JLMAG (06680.HK)$ Up more than 7%, rare earths have continued to rise recently, with institutional analysts pointing to policy-driven price increases providing solid support.
$ILUVATAR COREX (09903.HK)$ Surging over 8% to a new peak, institutions indicate that the 'Tongyang' series edge products outperformed NVIDIA’s similar offerings in real-world tests.
$JOHNSON ELEC H (00179.HK)$Up 17%, Optimus V3 continues to gain momentum, with the company now entering the humanoid robot components sector.
$FULLSHARE (00607.HK)$Plunging over 15%, the company expects it may not release its annual results on time and could face suspension of trading starting April 1.
$XIMEI RESOURCES (09936.HK)$Surging over 10% to a new high, strategic metals may see revaluation; the company is a core producer of tantalum and niobium metallurgical products in China.
$NANHUA FUTURES (02691.HK)$Up over 10%, the company's overseas business enjoys a clear first-mover advantage.
$CEB WATER (01857.HK)$Dropping over 12% in the afternoon session, last year’s net profit fell by 17% year-on-year, with the final dividend reduced to 4.22 Hong Kong cents.
$CSTONE PHARMA-B (02616.HK)$Up over 7%, sugemalimab's new indication for Stage III non-small cell lung cancer has been approved by the UK MHRA.
$CHONGQING M&E (02722.HK)$Surging over 8% to a record high, the logic of North America's electricity shortage continues to deepen.
Top 10 turnover today
Hong Kong Stock Connect funds
In terms of Stock Connect, today’s southbound trading via Stock Connect resulted in a net inflow of 14.997 billion Hong Kong dollars.
Institutional Viewpoints
UBS Group: Investors’ low expectations for domestically produced power equipment are a misconception; Dongfang Electric is the top pick.
UBS Group issued a research report stating that, conservatively estimating, every 1 GW of gas turbines sold by Dongfang Electric to the United States could increase its revenue by approximately 16% to 20%. The report noted that investors generally believe there is no power shortage in China and that the country’s power infrastructure is relatively new, leading to low expectations for domestic power equipment. The firm believes this view is incorrect.
The bank estimates that China's mid-term electricity demand growth will be 8-9%, twice the market consensus of 4-5%. In the bank's forecast, which is higher than the market consensus, approximately 2.5 percentage points are attributed to artificial intelligence, 1.5 percentage points to manufacturing, and 1 percentage point to electrification. Additionally, the bank observes significant replacement demand for coal-fired power plants, with about 420GW (10% of total capacity) needing replacement within the next 5-8 years. Although some of this demand may be met by renewable energy or nuclear power, the bank believes investors have overlooked this replacement requirement.
The bank assigns $DONGFANG ELEC (01072.HK)$ a target price of 53.5 yuan, reiterating its 'Buy' rating and considering it the top pick in China's energy sector.
JPMorgan: Hong Kong Exchange's Q4 net profit exceeded expectations, with average daily trading rebounding year-to-date and IPO pipeline accelerating.
JPMorgan issued a research report stating that $HKEX (00388.HK)$ The company announced a Q4 2025 net profit of HKD 4.3 billion, down 12% quarter-on-quarter but up 15% year-on-year, surpassing JPMorgan’s forecast by 19%. For the fiscal year 2025, profits reached HKD 17.8 billion, an increase of 36% year-on-year, exceeding market forecasts by 2%. The bank expects strong share price momentum and maintains its 'Overweight' rating on the Hong Kong Exchange with a target price of HKD 540.
The bank attributes the outperformance primarily to revenue drivers. Trading fees and clearing fees performed better than expected, declining by 14% and 16% quarter-on-quarter, respectively, despite seasonally weak trading volumes and a 21% quarter-on-quarter drop in average daily turnover for spot equities. These factors offset weaker-than-expected custody fees and market data fees.
Profitability also benefited from HKD 163 million in non-recurring gains from the valuation of non-listed equity investments and improved returns on corporate funds, sufficient to offset increased rebates provided to market participants. These factors drove robust net investment income, reaching HKD 1.2 billion, a 20% quarter-on-quarter increase, contributing to the earnings beat. Notably, even excluding the HKD 163 million gain, pre-tax profit was HKD 5 billion, still up 16% year-on-year and exceeding the bank’s forecast by 15%. Cost control aligned with expectations, with total expenses increasing by 7% year-on-year.
For the Hong Kong Exchange, this was a strong quarter despite weaker trading volumes in Q4, with profitability remaining resilient. Strong net investment income was a positive surprise and could become a source for upward revisions in 2026 earnings forecasts. Following seasonal weakness in December 2025, trading volumes have regained strength, with average daily turnover year-to-date averaging around HKD 260 billion, even accounting for last week’s weaker Lunar New Year period. Additionally, the Hong Kong Exchange entered 2026 with over 400 active initial public offering applications, a significant increase from 297 in Q3.
UBS Group remains optimistic about Baidu’s AI business sustaining robust growth and maintains its 'Buy' rating.
According to a UBS Group research report, $BIDU-SW (09888.HK)$ The company announced its fourth-quarter and full-year results as of the end of last year, with the fourth-quarter performance exceeding expectations. To better demonstrate its strategic direction to investors, the group has improved its financial disclosures starting from the third quarter and continued to share key metrics driven by its AI business in the fourth quarter. Relevant revenue reached RMB 11.3 billion, a year-on-year increase of 48%, accounting for 43% of Baidu's general business (i.e., core business) total revenue.
Looking ahead to fiscal year 2026, UBS Group stated that with the increasing adoption rate of AI applications, continuous product innovation, and expanded use cases, the group’s AI business is expected to maintain robust growth, with revenue contribution further increasing. Although the group's stock price has experienced fluctuations recently due to sector weakness, regulatory uncertainties, and concerns over AI competition, the Sum-of-the-Parts (SOTP) valuation framework remains solid. Given several upcoming favorable factors such as the IPO of Kunlun Chip and dividend announcements, the current stock price offers an attractive risk-return profile; maintaining $Baidu (BIDU.US)$ a US stock target price of $180, $BIDU-SW (09888.HK)$ and an H-share target price of HK$175, with both ratings at 'Buy'.
Editor/Jayden
