During the Spring Festival holiday when A-shares were closed, which Hong Kong stocks saw gains? The Hong Kong market traded ahead of the holiday, with many individual stocks showing strong performance, providing important clues for the post-holiday market. As A-shares are about to resume trading, the performance of overseas assets and Hong Kong stocks during the break may serve as key indicators for predicting sector rotation. On February 23, Hong Kong stocks surged across the board, creating a positive atmosphere for A-shares' opening in the Year of the Horse. Throughout the holiday period, Hong Kong stocks first declined then rebounded, with several highlights amid fluctuations. Many heavily fund-weighted Hong Kong stocks posted significant gains, which are expected to boost related A-share sectors and contribute noticeably to the net asset value of public funds with substantial holdings. Some heavily fund-weighted Hong Kong stocks rose sharply. During the Spring Festival break, while A-shares were closed, overseas stock markets generally showed little volatility, with only a few assets experiencing significant price swings. Specifically, the gold price index recorded four consecutive days of gains, Hong Kong stock indices first fell then rose, and U.S. stock indices saw slight increases. Driven by risk aversion sentiment, international gold and silver prices continued to climb, with gold futures marking four consecutive days of gains. On February 23, Hong Kong-listed nonferrous metal concept stocks strengthened, with Tongguan Gold rising over 11%, Datang Gold and Chifeng Gold gaining over 8%, while Zijin Gold International, Lingbao Gold, Zijin Mining, Zhaojin Mining, and Shandong Gold all advanced more than 5%. The Hong Kong market displayed structural trends, with technology, internet, consumer electronics, and lithium battery sectors leading the gains. Tech and internet stocks such as Meituan, Tencent Holdings, and Alibaba performed strongly. Optical communication concept stocks like Changfei Optical Fiber & Cable, HuiJu Technology, and Cambridge Technology saw significant rises, while some AI large model sectors declined against the trend. Pharmaceutical and real estate sectors weakened slightly. During the A-share market closure, heavily fund-held stocks such as Changfei Optical Fiber & Cable, International Gold Group, China Railway Group, Chifeng Gold, Laikai Pharmaceutical-B, and COSCO Shipping Energy surged over 10%, primarily concentrated in AI hardware upstream, gold, innovative drugs, and oil shipping sectors. Changfei Optical Fiber & Cable is a global leader in optical fibers and cables, with leading market shares in preforms, optical fibers, and cables. AI data center construction has become a core driver, spurring demand for high-fiber-count cables. The company saw increased positions from public funds in the fourth quarter of last year. Its stock has performed strongly since the start of the year, with year-to-date gains already doubling. Amid geopolitical tensions, Hong Kong shipping and port concept stocks rose, with COSCO Shipping Energy gaining nearly 90% year-to-date. Guotai Haitong Securities previously released a report stating that geopolitical tensions since 2026 have heightened shipowner sentiment, with overseas shipowners increasing chartering to control the market, keeping oil shipping rates high recently. Some Hong Kong-listed innovative pharmaceutical companies continued their upward trend, with indices like the Hang Seng Biotechnology and Hang Seng Healthcare both rising over 10% year-to-date. Among the top Hong Kong stocks by fund-held market value, companies such as CNOOC, Sinobiopharma, Zijin Mining, CSPC Pharmaceutical Group, and Shandong Gold led gains during the Spring Festival holiday. However, heavily fund-weighted Hong Kong stocks like China Tourism Group Duty Free, China Literature, Maoyan Entertainment, and Kingsoft Cloud performed poorly during the break. A-share structural trends are expected to continue. Looking ahead to the start of the Year of the Horse, institutions generally believe that structural opportunities in A-shares will continue to develop, with resources and AI sectors remaining the main themes attracting capital. Geopolitical risk aversion demand, combined with earnings realization in high-growth industries, may jointly drive leading stocks in related sectors to new highs. According to Zhang Jiawang, a fund manager at Dacheng Fund, gold serves as an anchor for all metals, and the two main drivers for its rise remain intact: first, from the perspective of asset diversification, the trend of de-dollarization persists; second, the expansion of U.S. government debt, with interest payments now exceeding military spending. Unless an AI technological revolution boosts labor productivity, there is no short-term solution to the U.S. fiscal deficit issue. Based on cycle research, Wang Yunpeng, a fund manager at Penghua Fund's Equity Investment Department II, believes the current cycle phase is typical of a "Kondratiev wave depression," characterized by a gold bull market due to declining stability in the dominant currency system and the emergence of the next technological revolution as overall productivity hits bottlenecks. Gold is the most evident manifestation of this major asset cycle. He suggests the gold bull market may not be over yet, with potential for another 2-3 years of gains, and time may hold greater significance for stock investments. Despite significant gold price increases since last year, Zhang Jiawang notes that some precious metal stocks have not kept pace with gold prices. Considering the expected production growth of precious metal companies, related stocks offer good investment value. Sun Huicheng, a fund manager at CITIC Prudential Fund, believes fluctuating liquidity expectations have increased volatility in nonferrous metals, but competition for resources amid deglobalization and AI capital expenditure driving demand for industrial products may sustain interest. Cyclical sectors like nonferrous metals and chemicals warrant attention. For the chemical industry, trends may follow two lines: supply-side shifts from market share focus to profitability-oriented collective strategy adjustments, and demand-side opportunities from high-end export substitution due to decline in European, Japanese, and Korean chemical industries, plus growth in basic material exports from emerging economies. Although the innovative drug sector has not seen major gains since the start of the year, some leading companies have already begun independent rallies. Looking ahead to 2026 innovative drug trends, Zhou Sicong, a fund manager at Ping An Fund, expects the sector's overall beta to remain, especially in the second half of 2026 when China's first overseas Phase III clinical results will be read out. Success could lead to China's first truly global innovative drug, with more companies entering a "dollar-earning" era by 2027, prompting a comprehensive valuation reshuffle for the sector. In terms of investment direction, Chen Zhenyu, deputy general manager of Anxin Fund, analyzes that both emerging tech growth and traditional industries offer bottom-up stock selection opportunities. First, high-growth sectors like AI hardware, AI applications, commercial aerospace, robotics, and smart driving, focusing on companies with technical barriers and earnings capabilities aligned with industrial upgrades. Second, relatively undervalued segments, such as food and beverage, building materials, chemicals, medical aesthetics, real estate, and new energy, which have seen significant adjustments since 2021, may present Davis Double Play opportunities from fundamental improvements and valuation repairs. Third, policy-driven areas like consumer services, healthcare, and critical mineral resources, where quality companies align with domestic demand stimulation and offer earnings certainty.
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