02423 Overview

Market Performance: The Hang Seng Index (HSI) rose by 21 points (0.1%) to 25,981, while the Hang Seng Tech Index (HSTI) and the Hang Seng China Enterprises Index (HSCEI) also saw slight increases.

Active Heavyweights: Notable movements included Meituan down 2.7%, Tencent up 0.5%, and Alibaba up 0.3%, with significant short selling activity across these stocks.

Top Gainers: Geely Auto and CATL experienced substantial gains, rising 8.6% and 8.4% respectively, while several other stocks like XPeng and Xinyi Solar also saw notable increases.

Significant Movers: Stocks such as 51World and Seyond surged over 20%, while Breton faced a significant decline of 12.5%, highlighting a mix of strong performers and underperformers in the market.

Hong Kong Stock Performance: On February 16, Hong Kong stocks saw a positive half-day session, with the HSI closing up 138 points (0.5%) at 26,705, marking a strong overall performance in the Year of the Snake with a 32% gain.

HSI Quarterly Review Changes: The quarterly review of the HSI included the addition of CATL, CMOC, and LAOPU GOLD, which saw significant gains, while ZHONGSHENG HLDG was removed from the index.

Individual Stock Movements: Notable stock movements included SANDS CHINA LTD rising 2.7% despite a slight decline in property EBITDA, while ANTA SPORTS experienced a minor drop after shareholder approval for a significant acquisition.

US Department of War Update: The US Department of War's withdrawal of the "List of Chinese Military Companies" impacted stock prices, with BABA-W declining 0.5% and BIDU-SW increasing by 1.3%.

US Inflation and Stock Market Update: US inflation was below expectations while core inflation met them; the DJIA rose by 0.1% last Friday.

Hong Kong Stock Market Performance: The Hong Kong bourse opened lower, with the HSI down 0.2% and other indices also showing declines.

HSI Quarterly Review Changes: CATL, CMOC, and LAOPU GOLD were added to the HSI, while ZHONGSHENG HLDG was removed; CATL and CMOC saw slight increases in their stock prices.

Notable Stock Movements: Stocks like BABA-W and BIDU-SW dropped significantly after being listed as Chinese military companies, while ANTA SPORTS received approval for a stake acquisition in PUMA.

Index Review Announcement: Hang Seng Indexes Company announced the results of its quarterly review for the Hang Seng Family of Indexes, effective from March 9, 2026.

Additions and Deletions: BEKE-W and HORIZONROBOT-W will be added to the HSCEI, while CHINA RES BEER and MENGNIU DAIRY will be removed, keeping the total number of constituents at 50.

Short Selling Data: The short selling data indicates significant activity for the stocks involved, with BEKE-W showing a short selling ratio of 34.793%.

Market Impact: Changes will take effect after market close on March 6, 2026, potentially influencing trading strategies and market dynamics.

Chinese New Year Impact: JPMorgan highlights the Chinese New Year as a crucial release window for consumer tech in China, particularly for the new version of DeepSeek, which could enhance AI's economic viability in consumer products.

Potential Beneficiaries: TENCENT is expected to benefit the most from the new DeepSeek version, followed by companies like TRIP.COM, KUAISHOU, and BEKE, while the effects on BABA and BIDU are anticipated to be mixed.

Independent Model Manufacturers: Companies like KNOWLEDGE ATLAS and MINIMAX are expected to signal their capabilities and technology advancements rather than immediately capturing customers with their new models.

Market Dynamics: The report includes short selling data for various companies, indicating market sentiment and potential volatility surrounding these tech stocks.

Market Reaction: Chinese developers saw an average increase of 8% due to reports of a potential relaxation of the "Three Red Lines" policy and a recovery in second-hand home transactions, alongside stable home prices in major cities.

Caution on Stability: UBS cautioned that it is premature to declare the market stabilized, emphasizing the need for further observation of actual trading data post-Chinese New Year.

Sentiment vs. Reality: The recent uptick in second-hand property transactions is viewed as a reaction to policy shifts rather than a sign of genuine market recovery, supported by the People's Bank of China and the Ministry of Finance.

Weak New Home Sales: Despite the positive sentiment, new home sales remain weak, indicating ongoing challenges in the Chinese property market.