The Hong Kong market's three major indexes showed mixed performance by the midday break. At the close of the morning session, the Hang Seng Index was down 0.37% at 24,403.70 points. The Hang Seng Tech Index gained 0.17%, while the Hang Seng China Enterprises Index declined by 0.74%.
Across the market sectors, technology and internet stocks were mixed. Lenovo Group Ltd rose over 2%, while Kuaishou Technology surged more than 5%. Semiconductor shares demonstrated strength, with Montage Technology Co Ltd advancing over 6%. Conversely, automobile stocks were among the leading decliners, with Seres Group Co Ltd falling more than 4%. Oil and gas stocks continued their weakness, as Shandong Molong Petroleum Machinery Co Ltd dropped over 7%. SENASIC Ltd made its trading debut today, soaring more than 118% on its first day.
Semiconductor Shares Show Strength
Semiconductor stocks traded higher, with Montage Technology Co Ltd gaining over 6%. Analysis suggests domestic AI chips are entering a price increase phase, driven by rising upstream costs and a supply-demand imbalance in local computing power. It is believed that under the backdrop of the necessity for self-reliance and shifting pricing power, domestic AI chip companies still possess the ability to pass on costs, with profit elasticity potentially becoming evident due to economies of scale. The drivers are twofold: firstly, cost transmission due to comprehensive price increases across upstream components like HBM, substrates, packaging, and foundry services; and secondly, a supply-demand gap driven by the rapid development of multimodal large models and AI agents, which is fueling fast-growing demand for inference-side computing power, creating a significant supply shortfall for domestic AI chips in the coming years. Potential future catalysts for the domestic computing power sector include the release of next-generation products and test adaptation results, as well as the successful implementation of price hikes.
Automobile Stocks Among Top Decliners
Automobile stocks were notable decliners, with Seres Group Co Ltd down over 4%. Consumption data released yesterday showed a significant decline in automobile consumption. Retail sales of automobiles in May alone fell 16.1% year-on-year, and the cumulative figure for January to May dropped 11.8%. Competition in the domestic auto market has intensified, with "adding features while lowering prices" becoming the norm, continuously compressing automakers' profit margins. Following the penetration rate of new energy passenger vehicles surpassing 60%, industry growth has significantly slowed. Several foreign investment banks, including Citigroup and JPMorgan, have recently collectively lowered target prices for multiple automakers.
Oil and Gas Sector Continues Weakness
Oil and gas stocks extended their losses, with Shandong Molong Petroleum Machinery Co Ltd declining more than 7%. On June 15th local time, the US Vice President stated that a memorandum of understanding between the US and Iran had been electronically signed, with the agreement's terms essentially finalized and set to take effect. He added that many "crucial" details would need to be finalized in subsequent 60-day negotiations. Iran's Foreign Minister concurrently indicated that delegation heads from both sides are expected to meet in Switzerland on the 19th to sign the Iran-US memorandum of understanding in person, followed by the commencement of the first round of in-depth negotiations.
SENASIC Debuts with Strong Gains
SENASIC Ltd listed today, surging more than 118% on its first trading day. During its public offering phase, the stock was oversubscribed by approximately 5,144.97 times. The final number of shares allocated for the public offering was 5.3408 million, representing about 10% of the total shares offered. The company received approximately 237,900 valid applications in total, with about 26,704 applications accepted. The probability of being allocated one board lot of shares was approximately 2%.
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