HSI Declines by 319 Points at Close; BIDU-SW Rises Over 3%; POP MART Falls 8%
Market Overview: The HSI closed at 25,765, down 319 points (1.2%), ending a two-day winning streak, while the HSCEI and HSTECH also saw declines, with total market turnover at HK$206.23 billion.
BIDU-SW Performance: BIDU-SW's share price rose 3.5% after announcing it is evaluating a spin-off of Kunlunxin, making it the best-performing blue-chip stock of the day.
Tech Stock Movements: Major tech stocks like BABA-W and TENCENT experienced declines, with BABA-W down 1% and TENCENT down 0.8%, while MEITUAN-W gained 0.5% after releasing a new image generation model.
Individual Stock Highlights: POP MART saw the largest drop, falling 8.5% due to a decline in market premium, while INNOVENT BIO, despite a strong opening, dropped nearly 7% on its first day in the blue-chip category.
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<Full-day Summary> HSI Falls 580 Points; HSTI Declines 122 Points; CCB and XIAOMI Drop Over 3%; NEW ORIENTAL, SHK PPT, HUABAO INTL, ZOOMLION, and HANG LUNG GROUP Reach New Peaks; Market Turnover Increases
Market Performance: The Hang Seng Index (HSI) fell by 580 points (2.1%) to 27,387, with significant declines in other indices, including HSTI and HSCEI, and a market turnover of $301.61 billion.
Active Heavyweights: Major stocks like CCB, Xiaomi, Tencent, and Alibaba experienced notable declines, with short selling ratios indicating increased market activity against these stocks.
Significant Declines: CSPC Pharma, Chinahongqiao, and Zijin Mining saw substantial drops of over 9%, reflecting a broader trend of falling stock prices among HSI and HSCEI constituents.
Gainers and New Highs: New Oriental and Huabao International were among the few gainers, with New Oriental hitting a new high, while several other stocks, including SD Gold and Jiangxi Copper, faced significant losses.
Citi Supports BYD COMPANY/ PONY-W, Outlines 5 Advantages and Obstacles for China's Automotive Sector
Citi's Outlook on Chinese Carmakers: Citi has a neutral outlook for Chinese carmakers in 1Q26, predicting that BYD, Geely, and Leapmotor may outperform the market due to model updates and strong export growth, while others like Seres and Li Auto may struggle with profit margins and weak sales.
Industry Challenges and Tailwinds: The Chinese auto industry is expected to face five major tailwinds, including increased EV market share and export growth, but also five challenges such as rising costs and cautious retail growth for EVs, leading to a potential decline in wholesale and retail forecasts for FY26.
Stock Recommendations: Citi has recommended several stocks, including BYD, Pony, WeRide, Hesai, Minth Group, and Weichai Power, amidst a backdrop of short selling activity and varying market performance.
Market Conditions: The report highlights a potential end to the price war in passenger vehicles and a favorable phase for commercial vehicle demand, while also noting high inventory levels of fuel vehicles as a concern for the market.
