Hong Kong's three major indices closed lower collectively on March 11. At the close, the Hang Seng Index fell 0.24% to 25,898.76 points; the Hang Seng Tech Index declined 0.11%, and the Hang Seng China Enterprises Index dropped 0.07%. The total market turnover for the day was HK$254.5 billion, with southbound capital recording a net inflow of HK$3.448 billion.
Market sectors showed mixed performance. Internet and technology stocks were mostly lower, while lithium battery shares surged significantly, and coal stocks led the gains. The semiconductor sector opened higher but closed lower.
Following a rare sharp increase of 7% in the previous trading session, TENCENT opened higher on March 11 but closed down 0.27%. The turnover reached HK$26.8 billion, with the company's total market capitalization maintaining above HK$5 trillion, at HK$5,026.7 billion.
Bank of America Securities issued a research report stating that TENCENT's forward price-to-earnings ratio of 16 times for 2026 is not considered high. The bank maintained its "Buy" rating with a target price of HK$780 per share. The report suggested that the strong rise on March 10 was partly driven by the company's launch of several new autonomous AI agent products based on OpenClaw.
The investment bank further indicated that the rapid adoption of AI chatbots and AI agents could increase inference workloads, potentially leading to higher forecasted capital expenditure and AI-related spending for TENCENT during 2026-2027.
Lithium battery stocks experienced a substantial rise. Among them, CATL surged by 9%. This movement followed the company's release of its 2025 annual report, which showed full-year net profit attributable to shareholders reaching RMB 72.201 billion, a year-on-year increase of 42.28%.
A report from Bank of China Securities noted that CATL continues to demonstrate sustained profit growth, with overseas capacity being deployed in an orderly manner. The company's leading position in the industry remains solid, and its future performance is expected to maintain rapid growth. The report revealed that for the fourth quarter of 2025 alone, the company achieved operating revenue of RMB 140.63 billion, up 36.58% year-on-year, and net profit attributable to shareholders of RMB 23.167 billion, surging 57.13% year-on-year.
According to SNE Research, CATL's global market share in power battery usage increased by 1.2 percentage points to 39.2% in 2025, ranking first globally for the ninth consecutive year. The company also achieved a breakthrough in its overseas market share for power battery usage, which rose to 30.0%.
Coal stocks were among the top gainers. HuiLi Resources surged 28.14%, China Coal Energy rose 5.90%, and China Shenhua Energy increased by 4.61%.
Dongzheng Futures released a report stating that ongoing conflicts in the Middle East remain the primary uncertainty. Current overseas coal prices have factored in approximately one month of potential supply disruptions, and further developments are being monitored. The report suggested that medium-to-long-term coal price valuations still face upside risks, while short-term expectations point to market volatility.
Semiconductor stocks underwent a correction. Iluvatar Corex fell 9.23% after surging over 30% the previous day. Biren Technology declined 1.57% following a 9.28% gain yesterday. SMIC closed down 0.70% after a 5.51% increase in the prior session.
Huaxin Securities pointed out that the current recovery in industry sentiment is essentially driven by the explosive growth of AI computing infrastructure displacing traditional capacity, rather than a broad-based industry revival. This implies that the situation where nearly half of chip companies are still struggling on the brink of profitability may persist, testing market patience, particularly for domestic AI chip manufacturers. Short-term stock price increases reflect optimistic capital expectations, but building long-term competitiveness ultimately depends on progress in technology iteration, ecosystem adaptation, and commercial implementation.
Recently, Jianhui Pan, Senior Investment Manager for Chinese Equities at Pictet Asset Management, expressed views indicating that this year's National People's Congress sessions were largely in line with prior market expectations, with policies placing greater emphasis on long-term structural reforms and development. The medium-to-long-term direction is clear: continuously enhancing consumption capacity, alleviating short-term supply constraints on consumption, promoting the development of service consumption, and increasing the proportion of consumption in GDP, with clear policy guidance.
Long-term development opportunities encompass: the semiconductor self-sufficiency process, artificial intelligence, new infrastructure, aerospace, biomedicine, the low-altitude economy, quantum technology, future energy, and brain-computer interfaces.
Structural improvements in A-share market liquidity, combined with a low valuation environment and upward earnings revisions, are expected to support the overall market as participation and activity increase. From the perspectives of fundamentals, valuation levels, and the long-term development potential of various sectors, A-shares possess relatively clear driving factors, alongside improving market liquidity.
Medium to long term, fundamentals will remain the key factor influencing the direction of Chinese equities. Overall, Pictet Asset Management maintains an optimistic outlook on the Chinese market, primarily based on the following points: First, the beginning of a global interest rate cutting cycle is favorable for the performance of emerging markets overall. Within emerging markets, earnings per share (EPS) for the Chinese market have begun to be revised upwards starting from 2025, after several years of consecutive downgrades. The magnitude of EPS upgrades in China is more pronounced compared to other emerging markets. Fundamentally, EPS recovery is more evident, and with the start of the rate-cutting cycle, more capital inflows into emerging markets, particularly China, are anticipated. Second, the current overall valuation levels are not high. Third, there remains substantial long-term development potential in areas such as artificial intelligence and semiconductor self-sufficiency. Pictet Asset Management holds a positive attitude towards the Chinese stock market.
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