Markets are awaiting the release of US July CPI data tonight, adding pressure to Hong Kong's three major indices, with the Hang Seng Tech Index falling nearly 1%. At the close, the Hang Seng Index dropped 0.83% or 212.65 points to 25,440.17, with total turnover reaching HKD 216.79 billion. The Hang Seng China Enterprises Index fell 0.96% to 8,446.27, while the Hang Seng Tech Index declined 0.99% to 4,776.44. China Galaxy Securities noted that as interim report season peaks, the market's pricing logic is shifting from sentiment recovery and capital rotation to fundamental verification and structural rebalancing. They suggest focusing on the tech sector, where global AI pricing trends are moving from hardware infrastructure to application monetization, as well as high-dividend/yield assets and sectors with confirmed interim earnings.
TINGYI (00322) rose after its earnings release, gaining 7.43% to HKD 12.29, contributing 2.48 points to the index. The company reported its interim results for the first half of 2026, with revenue of RMB 40.545 billion, up 1.1% year-on-year, and net profit attributable to shareholders of RMB 2.433 billion, up 7.1%, while adjusted net profit rose 15.2%. Other blue-chip stocks saw mixed performance, with YUEXIU PROPERTY (00123) surging 8.78% to HKD 6.94, contributing 2.03 points, and China Resources Land (01109) rising 6.97% to HKD 35, adding 11.26 points. On the downside, New Oriental-S (09901) fell 3.26% to HKD 42.68, dragging the index down 1.67 points, and Alibaba-W (09988) dropped 3.01% to HKD 122.6, weighing on the index by 60.46 points.
Where to begin
Tech and internet stocks generally weakened, with Alibaba falling over 3% and Tencent down 1.95% ahead of its results. Mainland real estate stocks saw a collective surge, with Longfor Group rising nearly 9%. The AI industry chain received validation of its景气度, leading to a rebound in optical communication and AI hardware, with ZJ INNOLIGHT (03308) gaining over 8%. Aluminum stocks advanced due to overseas supply disruptions, and gold stocks broadly recovered as markets await US July inflation data. In contrast, some coal and sporting goods stocks softened.
Optical communication and other AI hardware stocks strengthened. By the close, ZJ INNOLIGHT (03308) rose 8.83% to HKD 1,109, Yangtze Optical Fibre (06869) gained 7.53% to HKD 131.4, and Hua Hong Semiconductor (01347) increased 7.13% to HKD 142.8. After US markets closed on August 11, Lumentum reported fiscal 2026 fourth-quarter revenue of USD 10.1 billion, up 109% year-on-year, with adjusted earnings per share of USD 3.23, both exceeding expectations. AI cloud service provider CoreWeave also disclosed second-quarter revenue of USD 25.8 billion, up 112% year-on-year. During the conference call, Michael Hurlston noted that Lumentum is at the center of a long-term industry transformation, with a severe imbalance in supply and demand for core optical components. According to TrendForce's AI server industry report, the annual growth rate for AI server shipments from the world's top nine cloud service providers in 2026 has been revised upward from 28% to nearly 31%, with total capital expenditure expected to increase by approximately 90% year-on-year, exceeding USD 886.7 billion.
Mainland real estate stocks led the gains. By the close, YUEXIU PROPERTY (00123) rose 9.99% to HKD 3.91, Longfor Group (00960) gained 8.78% to HKD 6.94, and China Resources Land (01109) increased 6.97% to HKD 35. Beijing recently introduced policies to optimize purchase restrictions and公积金 loan policies, boosting market expectations and residents' purchasing power during the off-season. Kaiyuan Securities noted that Beijing's move to shorten the social security payment period for non-Beijing residents and increase the loan limit for housing provident funds carries a clear signal, with Shanghai and Shenzhen expected to follow with similar policy loosening. Guojin Securities believes that the new Beijing real estate policy, implemented after the Politburo meeting proposed "increasing counter-cyclical adjustment efforts" and just before the traditional "Golden September and Silver October" peak season, has strong policy signaling significance. Incremental real estate policies are likely to become a key lever for macroeconomic policy tightening in the second half of the year.
Aluminum stocks performed strongly. By the close, CHUANGXIN IND (02788) rose 6.63% to HKD 19.14, Aluminum Corporation of China (02600) gained 2.69% to HKD 8.78, and China Hongqiao (01378) increased 1.66% to HKD 24.44. Overseas supply disruptions pushed London aluminum to a seven-week high, with Norsk Hydro announcing that its Alunorte plant in Brazil has reduced alumina production to 50% of capacity due to "natural gas supply" issues. Public data shows that the Alunorte plant has a designed annual capacity of 6.3 million tons, making it the largest alumina refinery outside of China. Alumina is a key raw material for aluminum smelters. Notably, the stalled US-Iran negotiations and the dim prospects for reopening the Strait of Hormuz continue to fuel supply concerns in the aluminum market.
Gold stocks generally rose. By the close, Zhumulangma Gold (01815) surged 9.51% to HKD 1.785, Chifeng Jilong Gold Mining (06693) gained 3.74% to HKD 38.3, and Shandong Gold Mining (01787) rose 2.49% to HKD 23.04. At 8:30 PM tonight, the US July CPI data will serve as a key test for whether the Federal Reserve will raise interest rates in September. Given the unexpectedly weak non-farm payroll report last week, a weaker CPI could further prompt financial markets to reduce bets on a rate hike this year. Gold futures have risen about 8% this month, including a 7.1% gain last week, their best weekly performance since January. CITIC Futures believes that if the July CPI significantly misses expectations, it will drive gold prices higher. However, a sharp rebound above expectations could reignite inflation concerns, capping gold's rally.
Notable movers
CHINA LIT (00772) surged after its earnings release, closing up 10.13% to HKD 22.84. The company reported first-half revenue of RMB 3.53 billion, up 10.7% year-on-year. Revenue from short dramas and AI comic dramas reached RMB 430 million, a 2.3-fold increase year-on-year, with the proportion of hit short dramas being four times the market average. Its IP derivatives business also maintained strong growth, with first-half GMV reaching RMB 780 million, up over 60% year-on-year.
MINIMAX-W (00100) received positive reports from major banks, closing up 8.96% to HKD 357.4. Daiwa noted that the company's focus on competitive model capabilities and cost efficiency makes it one of the few pure-play AI large model listed companies benefiting from China's AI commercialization trend. The recent weakness, relative to the company's fundamentals and growth prospects, offers an attractive entry point, with catalysts over the next 12 months expected to support a valuation re-rating.
CGN New Energy (01811) came under pressure after a profit warning, closing down 8.65% to HKD 2.06. The company expects net profit attributable to shareholders for the first half of the year to decline by approximately 49.8% year-on-year, primarily due to lower on-grid electricity prices and power generation from wind power projects, as well as a decrease in other income and gains. Excluding the impact of one-time disposal gains, profit attributable to equity holders is expected to decline by about 41.3% year-on-year.
China Tower (00788) fell after its earnings release, closing down 4.17% to HKD 9.315. The company reported first-half operating revenue of RMB 48.693 billion, down 1.8% year-on-year, and net profit attributable to shareholders of RMB 7.489 billion, up 30.1%. However, operating cash flow was RMB 7.135 billion, a decrease of RMB 21.544 billion year-on-year. UBS cut its target price by 14% to HKD 10, citing a decline in tower revenue due to telecom operators optimizing mobile networks.
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