HSI Rises by 359 Points; Surge in Chip, Solar, Pharmaceutical, and Metal Stocks
Market Performance: The Hong Kong bourse saw significant gains, with the HSI rising 359 points (1.4%) to close at 25,417, driven by expectations of new policy measures to boost service consumption in mainland China.
Sector Highlights: Key stocks in the tech sector, including Tencent and Alibaba, experienced increases, while chip makers like SMIC and Hua Hong Semi also saw notable gains, reflecting positive sentiment in the technology and manufacturing sectors.
Automotive Developments: Xiaomi's plans to export cars by 2027 contributed to a 1.4% stock increase, while autonomous driving chip company Horizon Robotics surged 9.1%, indicating growth in the automotive and tech industries.
Lithium and Battery Stocks: Lithium stocks, including Ganfeng Lithium and Tianqi Lithium, soared by over 12%, alongside battery manufacturer CATL, which rose by 2.9%, highlighting strong performance in the energy sector.
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HKD1.4 Billion Net Inflow from Southbound Trading into TENCENT
Southbound Trading Inflows: TENCENT (00700.HK) saw a significant net inflow of HKD1.4 billion, while MEITUAN-W (03690.HK) also had a notable inflow of HKD314.6 million in Southbound Trading.
Southbound Trading Outflows: POP MART (09992.HK) experienced a net outflow of HKD301.1 million, with ZIJIN MINING (02899.HK) and WUXI BIO (02269.HK) also recording substantial outflows.
Short Selling Activity: TENCENT had short selling of $1.61 billion with a ratio of 7.556%, while MEITUAN-W faced $1.88 billion in short selling at a ratio of 24.332%.
Market Overview: Overall, Southbound Trading net outflow totaled HKD0, accounting for 39.70% of the total transaction amount of HKD94.78 billion.
Short Selling Activity Reaches $33.6B, Representing 16.5% of Eligible Securities Turnover at Market Close
Short Selling Turnover: The short selling turnover in the Hong Kong market reached $33.6 billion, accounting for 16.5% of the eligible securities turnover, a decrease from 18% on the previous trading day.
Top Short Selling Stocks: The top five stocks with the highest short selling amounts include Meituan-W, Zijin Mining, Tencent, Xiaomi-W, and Alibaba-W, with short selling ratios ranging from 7.6% to 35.5%.
Meituan-W Performance: Meituan-W had a short selling turnover of $1.88 billion, with a significant short selling ratio of 24.3%, reflecting a decline of 4.5% in its stock price.
Zijin Mining Highlights: Zijin Mining led with the highest short selling ratio at 35.5%, with a turnover of $1.77 billion, while its stock price increased by 3.4%.
HSI Closes with a 233-Point Decline; BUD APAC Drops Over 5%; KNOWLEDGE ATLAS Soars Nearly 30%
Market Performance: The HSI closed at 27,032, down 233 points (0.9%), with significant declines in the HSCEI and HSTECH, while total market turnover reached HKD238.705 billion.
Company Earnings: BUD APAC was the worst-performing blue-chip stock, down 5.2% after reporting a 32.6% drop in net profit. Other companies like Lenovo and NetEase also saw declines despite some reporting increased profits.
Regulatory Actions: The Beijing Municipal Market Supervision Bureau engaged with 12 online ticket sales platforms, resulting in declines for companies like Trip.com and Meituan, which fell 3.9% and 4.5%, respectively.
AI Sector Growth: Following Premier Li Qiang's call for AI innovation, AI stocks like SenseTime and Knowledge Atlas saw significant gains, with Knowledge Atlas soaring 28.7% after launching a new product.
<Research>CMSI: Acceleration of Domestic Model Iteration Supports Valuation Recovery in Hong Kong Tech Sector; Preferred Stocks Include BABA, TENCENT, and More
Chinese Internet Companies' AI Models: Leading Chinese internet firms, including ByteDance and Kuaishou, have made significant advancements in AI models, enhancing video generation capabilities as noted in a CMSI research report.
Investment and Valuation Recovery: The focus on AI has strengthened investment logic for these companies, contributing to the recovery of Hong Kong's tech sector valuations.
Upcoming AI Models: Major upcoming AI models such as DeepSeek-V4 and Alibaba's Qwen 3.5 are anticipated to act as catalysts for further growth in the sector.
Broker Recommendations: CMSI's top stock picks include Alibaba, Tencent, and Kuaishou, reflecting confidence in their potential amidst market concerns over regulatory and tax policies.
<Daily Summary> HSI Ends at 27,032, Dropping 233 Points; HSTI Finishes at 5,408, Decreasing by 91 Points; MEITUAN Falls More Than 4%; WUXI APPTEC, SHK PPT, SINOPEC CORP, CHINA RES MIXC, HK & CHINA GAS Reach New Peaks; Market Turnover Increases
Market Performance: The Hang Seng Index (HSI) fell by 233 points (0.9%) to close at 27,032, while the Hang Seng Tech Index (HSTI) and the Hang Seng China Enterprises Index (HSCEI) also experienced declines.
Active Heavyweights: Major stocks like Meituan, Tencent, and Xiaomi saw significant drops, with Meituan down 4.5% and Tencent down 2.3%, amidst high short selling activity.
Notable Movers: Bud APAC and Lenovo Group faced substantial losses, with Bud APAC down 5.2%, while Zijin Mining and PICC P&C were among the few gainers, with Zijin Mining up 3.4%.
High Performers: Unisound and Guofuhee experienced remarkable gains, with Unisound rising by 16.8%, indicating strong market interest in these stocks.
Bernstein: TENCENT's Valuation Strained Amid Concerns Over Delayed Chatbot Development
Chinese Internet Sector Performance: The Chinese internet sector had a lackluster start in 2026, with KWEB remaining flat year-to-date, while BABA-W outperformed due to its AI agent service, and TENCENT lagged behind amid significant short selling.
AI Chatbot Competition: The competition in the AI chatbot space is intensifying, with major platforms offering subsidies to encourage adoption, although the effectiveness of such strategies is questioned compared to past promotional methods.
Regulatory Concerns: The regulatory environment remains challenging, with investigations into companies like Pinduoduo and TRIP.COM-S contributing to market volatility, alongside rumors of a VAT increase that were later debunked.
TENCENT's AI Development: TENCENT's stock performance reflects investor concerns over its AI capabilities, with a recent valuation downgrade. The company is working on improving its chatbot business and aims to accelerate AI model development following a team restructuring.
HKD1.4 Billion Net Inflow from Southbound Trading into TENCENT
Southbound Trading Inflows: TENCENT (00700.HK) saw a significant net inflow of HKD1.4 billion, while MEITUAN-W (03690.HK) also had a notable inflow of HKD314.6 million in Southbound Trading.
Southbound Trading Outflows: POP MART (09992.HK) experienced a net outflow of HKD301.1 million, with ZIJIN MINING (02899.HK) and WUXI BIO (02269.HK) also recording substantial outflows.
Short Selling Activity: TENCENT had short selling of $1.61 billion with a ratio of 7.556%, while MEITUAN-W faced $1.88 billion in short selling at a ratio of 24.332%.
Market Overview: Overall, Southbound Trading net outflow totaled HKD0, accounting for 39.70% of the total transaction amount of HKD94.78 billion.
Short Selling Activity Reaches $33.6B, Representing 16.5% of Eligible Securities Turnover at Market Close
Short Selling Turnover: The short selling turnover in the Hong Kong market reached $33.6 billion, accounting for 16.5% of the eligible securities turnover, a decrease from 18% on the previous trading day.
Top Short Selling Stocks: The top five stocks with the highest short selling amounts include Meituan-W, Zijin Mining, Tencent, Xiaomi-W, and Alibaba-W, with short selling ratios ranging from 7.6% to 35.5%.
Meituan-W Performance: Meituan-W had a short selling turnover of $1.88 billion, with a significant short selling ratio of 24.3%, reflecting a decline of 4.5% in its stock price.
Zijin Mining Highlights: Zijin Mining led with the highest short selling ratio at 35.5%, with a turnover of $1.77 billion, while its stock price increased by 3.4%.
HSI Closes with a 233-Point Decline; BUD APAC Drops Over 5%; KNOWLEDGE ATLAS Soars Nearly 30%
Market Performance: The HSI closed at 27,032, down 233 points (0.9%), with significant declines in the HSCEI and HSTECH, while total market turnover reached HKD238.705 billion.
Company Earnings: BUD APAC was the worst-performing blue-chip stock, down 5.2% after reporting a 32.6% drop in net profit. Other companies like Lenovo and NetEase also saw declines despite some reporting increased profits.
Regulatory Actions: The Beijing Municipal Market Supervision Bureau engaged with 12 online ticket sales platforms, resulting in declines for companies like Trip.com and Meituan, which fell 3.9% and 4.5%, respectively.
AI Sector Growth: Following Premier Li Qiang's call for AI innovation, AI stocks like SenseTime and Knowledge Atlas saw significant gains, with Knowledge Atlas soaring 28.7% after launching a new product.
<Research>CMSI: Acceleration of Domestic Model Iteration Supports Valuation Recovery in Hong Kong Tech Sector; Preferred Stocks Include BABA, TENCENT, and More
Chinese Internet Companies' AI Models: Leading Chinese internet firms, including ByteDance and Kuaishou, have made significant advancements in AI models, enhancing video generation capabilities as noted in a CMSI research report.
Investment and Valuation Recovery: The focus on AI has strengthened investment logic for these companies, contributing to the recovery of Hong Kong's tech sector valuations.
Upcoming AI Models: Major upcoming AI models such as DeepSeek-V4 and Alibaba's Qwen 3.5 are anticipated to act as catalysts for further growth in the sector.
Broker Recommendations: CMSI's top stock picks include Alibaba, Tencent, and Kuaishou, reflecting confidence in their potential amidst market concerns over regulatory and tax policies.
<Daily Summary> HSI Ends at 27,032, Dropping 233 Points; HSTI Finishes at 5,408, Decreasing by 91 Points; MEITUAN Falls More Than 4%; WUXI APPTEC, SHK PPT, SINOPEC CORP, CHINA RES MIXC, HK & CHINA GAS Reach New Peaks; Market Turnover Increases
Market Performance: The Hang Seng Index (HSI) fell by 233 points (0.9%) to close at 27,032, while the Hang Seng Tech Index (HSTI) and the Hang Seng China Enterprises Index (HSCEI) also experienced declines.
Active Heavyweights: Major stocks like Meituan, Tencent, and Xiaomi saw significant drops, with Meituan down 4.5% and Tencent down 2.3%, amidst high short selling activity.
Notable Movers: Bud APAC and Lenovo Group faced substantial losses, with Bud APAC down 5.2%, while Zijin Mining and PICC P&C were among the few gainers, with Zijin Mining up 3.4%.
High Performers: Unisound and Guofuhee experienced remarkable gains, with Unisound rising by 16.8%, indicating strong market interest in these stocks.
Bernstein: TENCENT's Valuation Strained Amid Concerns Over Delayed Chatbot Development
Chinese Internet Sector Performance: The Chinese internet sector had a lackluster start in 2026, with KWEB remaining flat year-to-date, while BABA-W outperformed due to its AI agent service, and TENCENT lagged behind amid significant short selling.
AI Chatbot Competition: The competition in the AI chatbot space is intensifying, with major platforms offering subsidies to encourage adoption, although the effectiveness of such strategies is questioned compared to past promotional methods.
Regulatory Concerns: The regulatory environment remains challenging, with investigations into companies like Pinduoduo and TRIP.COM-S contributing to market volatility, alongside rumors of a VAT increase that were later debunked.
TENCENT's AI Development: TENCENT's stock performance reflects investor concerns over its AI capabilities, with a recent valuation downgrade. The company is working on improving its chatbot business and aims to accelerate AI model development following a team restructuring.
