Hong Kong's three major stock indices closed with mixed results. The Hang Seng TECH Index rose over 2% in the afternoon before paring gains, while the Hang Seng Index turned negative in late trading. At the close, the Hang Seng Index was down 0.03%, or 6.58 points, at 25,599.45, with a total turnover of HKD 359.48 billion. The Hang Seng China Enterprises Index rose 0.30% to 8,576.89, and the Hang Seng TECH Index gained 1.59% to close at 4,946.88.
Analysts at Huatai Securities noted that from a short-term perspective, market sentiment in Hong Kong has neared panic levels following recent adjustments, with downside risks partially released, enhancing the market's value proposition. The AI supply chain, particularly semiconductors, remains a key sector with strong fundamental momentum for allocation. Positive developments in domestic supply chains may trigger short-term rallies, but the firm suggests chasing these gains may not offer good value. Should high-risk capital shift internally, it could present accumulation opportunities in sectors with overseas market parallels.
Blue-chip stocks saw varied performance. LENOVO GROUP surged to a new all-time high, closing up 15.49% at HKD 18.19, contributing 26.58 points to the Hang Seng Index with a turnover of HKD 9.86 billion. A CLSA research report highlighted LENOVO GROUP's robust performance for the fourth fiscal quarter ending March, driven by improved operating margins in its Infrastructure Solutions Group (ISG) and stable PC business. The company aims to achieve total revenue of USD 100 billion within two years while pursuing continuous margin expansion. CLSA raised its target price for the stock from HKD 12.9 to HKD 21, reiterating an "Outperform" rating.
Among other blue chips, China Molybdenum gained 7.21% to HKD 19.77, contributing 7.94 index points. BYD Electronic rose 6.77% to HKD 28.08, adding 2.25 points. Conversely, WH Group fell 5.11% to HKD 8.72, dragging the index down by 6.29 points, and Contemporary Amperex Technology dropped 4.08% to HKD 658, subtracting 5.85 points.
Sector performance was diverse. Major technology stocks were mixed; besides LENOVO GROUP's surge, NetEase rose over 4%, while Tencent edged down 0.54%. Semiconductor stocks advanced, catalyzed by Huawei's release of the "Tao Law," with HUA HONG SEMI jumping over 10% and SMIC gaining over 5%. Non-ferrous metal stocks were among the top gainers, supported by expectations of export controls on bauxite from Guinea boosting alumina prices. The PCB sector remained strong, with VGT and Kingboard Laminates hitting new highs after analysis showed a 233% increase in PCB value within Nvidia's new Rubin architecture. AI application concepts, airline stocks, and coal stocks generally performed well. In contrast, cryptocurrency-related stocks and catering sectors faced downward pressure.
1. **Selected Chip Stocks Gained.** At the close, ASMPT was up 10.83% at HKD 204.6; HUA HONG SEMI rose 10.45% to HKD 143.7; SMIC increased 5.70% to HKD 84.4; and GigaDevice gained 6.04% to HKD 825. Huawei's "Tao (τ) Law" announcement on May 25th drew market attention. Commentary suggested this principle, focusing on logic folding and time efficiency rather than geometric size, opens a "second curve" beyond Moore's Law, enriching global semiconductor development paths. Following a National Development and Reform Commission press conference guiding domestic large models to increase adaptation efforts for domestic computing chips, analysts believe this elevates the coordinated adaptation of "domestic large models" and "domestic computing chips" to a clear policy guidance level. CITIC Securities views this as a potential opportunity for China's semiconductor industry to accelerate development via alternative pathways.
2. **PCB Concept Stocks Extended Gains.** VGT closed up 8.33% at HKD 437.2, and Kingboard Laminates rose 6.07% to HKD 54.2. A recent Morgan Stanley BOM analysis of Nvidia's next-generation Rubin rack indicated a ~95% increase in the NVL72 VR200 cabinet BOM to USD 7.803 million compared to GB300. Within this, PCB value surged 233% year-on-year, ranking first in growth among non-memory components, with per-cabinet PCB value jumping from USD 35,100 to USD 116,700. Notably, the PCB industry has entered a price hike cycle this year, characterized by rising volumes and prices, full order books, and extended delivery times, indicating high prosperity. Since May, the industry has seen a new round of collective price increases, driven by rising costs of upstream materials like copper-clad laminates, high-end copper foil, electronic cloth, and special resins, leading to synchronous increases in finished PCB prices.
3. **Non-Ferrous Metal Stocks Led Gains.** Aluminum Corporation of China (CHALCO) closed up 9.29% at HKD 11.88; China Molybdenum gained 7.21% to HKD 19.77; and Zhaojin Mining rose 6.01% to HKD 23.3. Earlier, positive signals from US-Iran negotiations eased inflation concerns in the US, leading to a pullback in US Treasury yields and a rebound in non-ferrous metals. Notably, Guinea plans to formally implement export control and reform measures for bauxite in June, with the core aim of curbing price declines and promoting recovery by controlling total export volume. Guinea's Minister of Mines and Geology, Bouna Sylla, recently emphasized the government's principle that "supply must not exceed demand," hoping to pull prices back to reasonable levels by regulating exports. Public data shows Guinea accounts for over one-third of global bauxite production.
4. **Coal Stocks Were Broadly Active.** Mongolian Mining Corporation closed up 9.59% at HKD 8.46; China Power Development gained 8.09% to HKD 1.87; and Yancoal Australia rose 5.68% to HKD 37.98. On May 22nd, a gas explosion occurred at the Liushenyu Coal Mine operated by Tongzhou Group in Qinyuan County, Changzhi City, Shanxi Province, resulting in 90 fatalities as of May 23rd. According to Mysteel statistics, the number of suspended coking coal mines in Shanxi has risen to 109, with a total capacity of 122 million tons, affecting daily raw coal production by 319,500 tons. Huatai Securities believes the preliminary investigation revealing issues like "concealed working faces" and "unclear number of underground workers" may trigger upgraded safety production supervision, impacting coal output. Coupled with an already tight coal supply-demand balance this year, this could accelerate coal price increases.
5. **Stocks Related to Hang Seng Index Quarterly Review Results Performed Well.** Edge Medical closed up 12.10% at HKD 59.75; J&T EXPRESS-W gained 6.60% to HKD 9.21; and Zhipu rose 4.91% to HKD 1,345. On May 22nd, Hang Seng Indexes Company announced the results of the quarterly review for the period ending March 31, 2026. The Hang Seng Index will include J&T EXPRESS, BeiGene, and CHALCO, increasing the number of constituents from 90 to 93. The Hang Seng TECH Index will include MINIMAX-W and Zhipu. Seven stocks, including Zhipu, MiniMax-W, Biren Technology, Tianshu Zhixin, Mingming Is Busy, Haizhi Technology Group, and Edge Medical, will be included in the Hang Seng Composite Index. The changes will take effect after market close on June 5, 2026, and from June 8, 2026. Goldman Sachs estimates that with the inclusion of the three blue chips—J&T EXPRESS, CHALCO, and BeiGene—the index's market capitalization is expected to rise to USD 2.15 trillion.
**Notable Movers:** * **51WORLD** hit a new high, closing up 27.55% at HKD 125.7. The "Physical AI Pioneer" officially launched its embodied intelligence data platform, Aperdata.ai. The platform addresses the pain point of missing training and validation data for embodied intelligence by constructing high-fidelity, physics-constrained simulation training environments and synthetic data, accelerating AI's move from the digital to the physical world. * **DONGYUE GROUP** continued its climb, closing up 15.51% at HKD 15.71. On May 21st, the US EPA formally signed and issued the final reconsideration rule for the AIM Act technology transition rule. This policy substantially extends the legal service life of third-generation refrigerants in the US by significantly relaxing GWP limits for several core sub-sectors. Additionally, the UK's Department for Environment, Food & Rural Affairs announced a delay to its proposed steps for phasing down fluorinated gases. * **Wuxi Biologics** traded higher throughout the day, closing up 5.07% at HKD 34.38. The company announced its decision to exercise the share repurchase mandate to buy back shares on the open market for a total consideration not exceeding USD 400 million. Pursuant to the repurchase mandate granted at the annual general meeting, the company is permitted to buy back up to 407 million shares. * **Lifetech Scientific** plunged, closing down 23.38% at HKD 1.77. The company proposed to acquire approximately 96.46% of the equity in domestic congenital heart defect occluder manufacturer Huayi Shengjie from AUT-VII, wholly owned by Hillhouse Capital, for a consideration of approximately RMB 1.8733 billion. The entire consideration will be settled by the issue of convertible bonds, and the parties have entered into a legally binding framework agreement. The announcement noted that the convertible bonds will bear interest at 3.5% per annum, payable quarterly in cash over three years, with an initial conversion price of HKD 2.50 per share.
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