On July 24th, Hong Kong's three major stock indexes all closed in negative territory. The Hang Seng Index fell 0.98% to 24,963.23, the Hang Seng Tech Index dropped 1.47%, and the State-owned Enterprises Index declined 0.98%. In terms of sectors, internet stocks broadly declined, with Alibaba Group Holding Ltd (NYSE: BABA) dropping over 4%, while Kuaishou Technology (SEHK: 1024), Tencent Holdings Ltd (SEHK: 700), Bilibili Inc (NASDAQ: BILI), and Baidu Inc (NASDAQ: BIDU) all fell more than 2%. PCB concept shares slumped, with Kingboard Laminates Holdings Ltd (SEHK: 1888) declining over 7%. Gold stocks were broadly lower, with Zijin Gold International (SEHK: 1818) dropping over 3%. Real estate stocks in mainland China were among the worst performers, with Greentown China Holdings Ltd (SEHK: 3900) falling over 6%.
PCB concept shares plunged, led by Kingboard Laminates Holdings Ltd (SEHK: 1888), which fell over 7%. Market concerns are centered on multiple long-term headwinds that continue to weigh on valuations, with the primary fear being the risk of future overcapacity. Data analysis reveals that over the past two years, leading companies such as Pegatron Corp (TPE: 4938), Wus Printed Circuit Co Ltd (SZSE: 002463), and Shennan Circuits Co Ltd (SZSE: 000916) have been investing tens of billions into high-end AI PCB production lines. These new capacities are expected to come online between the second half of 2026 and 2028. Meanwhile, the upstream copper foil sector faces a structural oversupply, with total domestic copper capacity reaching 1.8 million tons per year, but actual annual demand is only 1.15 million tons, resulting in a capacity utilization rate below 65%. Low-end copper foil manufacturers have been aggressively cutting prices to secure orders, which is squeezing profit margins for midstream PCB companies from top to bottom.
Gold stocks saw broad declines, with Zijin Gold International (SEHK: 1818) dropping over 3%. Rising oil prices, driven by the threat of escalating conflict between the US and Iran in the Middle East, pushed US Treasury yields to their highest levels this year. Market expectations are growing that the Federal Reserve may raise interest rates as early as next week. The 10-year Treasury yield rose to around 4.7%, its highest since January last year. Additionally, the 30-year US Treasury yield briefly climbed to 5.19% overnight, nearing the highest level since 2007. According to reports, Wall Street traders currently estimate a roughly 30% probability of a 25-basis-point rate hike by the Fed at its July 29th meeting, while the probability of holding rates steady is approximately 70%.
Mainland Chinese real estate stocks were among the biggest laggards, with Greentown China Holdings Ltd (SEHK: 3900) falling over 6%. Analysts at Zhongtai Securities believe that the property market from January to June 2026 remains in a bottoming-out and repair phase, and recovery will take time. Under the policy tone of "striving to stabilize the real estate market," various regions continue to optimize their support policies for the sector, with core cities maintaining a certain degree of transaction resilience. It is expected that as the effects of these policies are further released and market confidence gradually recovers, the industry is likely to continue its trend of bottoming out and repairing, with the foundation for market stabilization gradually being strengthened. We continue to see medium- to long-term allocation opportunities in the real estate sector and recommend focusing on property developers with a presence in first- and second-tier cities, sound fundamentals, and high safety margins. These include Binjiang Group Co Ltd (SZSE: 002244), City Development Holding Co Ltd (SSE: 600649), and China Merchants Shekou (SZSE: 001979). In the Hong Kong market, investors can consider Greentown China Holdings Ltd (SEHK: 3900), Yuexiu Property Co Ltd (SEHK: 123), and China Resources Land Ltd (SEHK: 1109) as leading companies with valuation advantages and flexibility.
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