On June 22nd in the Hong Kong stock market, mainland capital through the Stock Connect recorded a net outflow of HK$5.82 billion. Specifically, the Shanghai-Hong Kong Stock Connect saw a net inflow of HK$1.626 billion, while the Shenzhen-Hong Kong Stock Connect recorded a net outflow of HK$7.445 billion.
The stocks receiving the highest net purchases from mainland capital were Kingboard Holdings Ltd (HKG: 00148), KB Laminates (HKG: 01888), and SMIC (HKG: 00981). Conversely, the stocks with the largest net sell-offs were Yangtze Optical Fibre And Cable Joint Stock Limited Company (HKG: 06869), Alibaba Group Holding Ltd (HKG: 09988), and Tencent Holdings Ltd (HKG: 00700).
Active Trading Highlights
Mainland capital continued its aggressive buying of Kingboard-affiliated stocks. Kingboard Holdings Ltd (HKG: 00148) and KB Laminates (HKG: 01888) attracted net purchases of HK$3.332 billion and HK$1.43 billion, respectively. Analysts at Citigroup noted they have frequently raised profit forecasts for KB Laminates, a 62%-owned subsidiary of Kingboard. The primary reason is higher-than-expected average selling price assumptions for copper-clad laminate (CCL) and electronic glass fiber cloth, which is expected to fully offset the recent impact of Kingboard's reduced stake from 67% to 62% following a share placement. Citigroup anticipates that Kingboard will structurally evolve into an almost pure-play PCB and CCL concept stock in the AI era. The contribution of these two businesses to its projected total net profit for 2028 is expected to surge dramatically from 63% in 2025 to 87%.
SMIC (HKG: 00981) and Huahong Grace Semiconductor Manufacturing Corporation (HKG: 01347) received net inflows of HK$820 million and HK$542 million, respectively. According to reports, supply chain sources indicated that the monthly wafer input at TSMC's primary 28nm production base, Fab 15A, has decreased from 200,000 wafers at the beginning of the year to 150,000 wafers, a reduction of over 25%. TSMC is reportedly planning to allocate more 28nm capacity to support interposer layers and gradually phase out low-margin orders.
Tracker Fund of Hong Kong (HKG: 02800) experienced a net sell-off of HK$841 million. Huatai Securities pointed out that for the broader Hong Kong market, a fundamental reversal still hinges on catalysts from major tech firms' AI progress and consumption recovery, suggesting the timing is not yet ripe. However, the short-term technical rebound previously anticipated by Huatai has been suppressed by persistently high short-selling pressure, resulting in a "one-day rally" pattern. Looking ahead, the focus in the short term may be on sectors with high short interest and those showing marginal improvements in earnings expectations, such as media and innovative pharmaceuticals.
Tencent Holdings Ltd (HKG: 00700) and Alibaba Group Holding Ltd (HKG: 09988) faced net outflows of HK$1.153 billion and HK$1.181 billion, respectively. A UBS research report noted that the Golden Dragon China Internet Index ETF has corrected by 18% year-to-date, primarily due to weak macroeconomics, increased AI investments, and impacts from AI on verticals like online music. The bank believes the Chinese internet sector will remain volatile in the near term, although signs of stabilization are beginning to emerge in the market.
Yangtze Optical Fibre And Cable Joint Stock Limited Company (HKG: 06869) surged by 33% to hit a record high. Some mainland capital seized the opportunity to take profits, resulting in a net sell-off of HK$2.475 billion for the day. The surge is attributed to a spike in demand from North American AI data centers. Fiber supplier Fujikura, facing slow capacity expansion, decided to raise prices for DCI interconnect cables by 30% and significantly upgraded its performance guidance, leading to a sharp rise in its stock price. Corning is also facing delivery pressures and plans to expand its fiber production capacity dedicated to Nvidia. Additionally, Cambridge Industries (HKG: 06166) saw a net outflow of HK$214 million.
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