The three major Hong Kong stock indices diverged, with the Hang Seng Tech Index dragged lower by semiconductor and other hardware stocks. As of the close, the Hang Seng Index rose 0.54% or 132.42 points to 24,642.51 points, with total turnover of HK$177.482 billion; the Hang Seng China Enterprises Index rose 0.63% to 8,216.84 points; the Hang Seng Tech Index fell 0.37% to 4,296 points.
Huatai Securities noted that from a medium-term perspective, the valuation recovery space for Hong Kong stocks may still be constrained by aggregate global liquidity, and therefore continues to recommend dividend stocks as a core holding, but exposure should be controlled in sectors where the dividend yield advantage relative to A-shares is narrowing and where raising payout ratios is difficult, such as banks and coal, while increasing allocation to more cost-effective directions like oil and gas. From a short-term perspective, innovative drug and CXO leaders have recovered somewhat in the trading following the Federal Reserve's rate hike landing, and can continue to be held, but beta elasticity is limited, requiring stock selection and setting profit-taking targets.
Blue Chip Performance
NetEase (09999) led blue chip gains, rising 4.86% as of the close to HK$189.7, with turnover of HK$1.912 billion. Goldman Sachs pointed out that it assessed NetEase's major game pipeline for 2027, believing the pipeline will boost the company's revenue after a lackluster 2026. If executed properly, the bank expects next year's game pipeline to bring more than 10% incremental revenue contribution. Among other blue chips, China Overseas Land & Investment (00688) rose 3.78% to HK$12.89; PetroChina (00857) rose 3.08% to HK$9.7; Hua Hong Semiconductor (01347) fell 4.62% to HK$105.3; SMIC (00981) fell 3.63% to HK$61.05.
Hot Sectors
On the board, tech internet stocks showed mixed performance, with NetEase up nearly 5%, Tencent up 0.73%, and Alibaba down 0.65%. Energy stocks rose collectively, with oil and gas, coal, and power stocks all leading gains; mainland property and mainland banking stocks mostly recovered; multiple negative factors disturbed market sentiment, with AI concept stocks led by optical communications declining; rising U.S. Treasury yields weighed on precious metals valuations, and gold stocks retreated across the board.
Optical communications and other AI hardware stocks plunged. As of the close, YOFC (06869) fell 16.62% to HK$155.5; ZJ INNOLIGHT (03308) fell 12.21% to HK$1,028; CIG Cambridge Technology (06166) fell 11.93% to HK$101.9. U.S. bipartisan lawmakers proposed a bill to ban Chinese optical modules from federal sensitive systems and listed ZJ INNOLIGHT and Eoptolink as restricted suppliers; Hengtong Optic-Electric plans to issue shares to raise no more than RMB 6.636 billion, intended for 9 projects including optical communications, with the market concerned about overcapacity triggered by the expansion wave. Notably, OpenAI stated it has paused training of its latest generation AI model. It is reported that this is OpenAI's second pause in model development within three months, further raising concerns about AI slowing down.
Gold stocks fell across the board. As of the close, LINGBAO GOLD (03330) fell 10% to HK$19.08; Shandong Gold (01787) fell 9.35% to HK$18.13; Chifeng Gold (06693) fell 5.22% to HK$33.8. Rising U.S. Treasury yields pressured precious metals valuations, and as of press time, spot gold fell below $4,150 per ounce. Last Friday, the 30-year U.S. Treasury yield briefly touched 5.53% intraday, refreshing its highest record since 2004, and today U.S. Treasury yields continued to jump, with 10-year and 30-year yields rising above 5.20% and 5.50% respectively. Notably, the current Strait of Hormuz standoff is keeping rate hike expectations elevated. The latest news shows that U.S. President Trump said in an interview that he "expects negotiations with Iran to continue this week." However, a day earlier, Trump rejected Iran's proposal to end the war.
Power stocks rose collectively. As of the close, Huaneng Power International (00902) rose 5.97% to HK$5.95; CGN Power (01816) rose 3.74% to HK$3.05; Huadian Power International (01071) rose 3.53% to HK$4.11; China Resources Power (00836) rose 3.58% to HK$19.67. Jiangsu and Guangdong October monthly contract electricity price results were published. Jiangsu's October centralized trading weighted average price reached 395.32 yuan/MWh, up 50.8 yuan/MWh month-on-month and up 54.6 yuan/MWh year-on-year; Guangdong's monthly comprehensive trading average price reached 456.78 yuan/MWh, up 53.5 yuan/MWh month-on-month and up 84.4 yuan/MWh year-on-year. Guosheng Securities noted that Jiangsu and Guangdong October electricity prices rose both year-on-year and month-on-month, strengthening the signal of electricity price stabilization and upward movement, and continued attention should be paid to changes in market expectations for the year-end 2027 annual long-term contract electricity price negotiations.
Some mainland property stocks recovered. As of the close, China Jinmao (00817) rose 6.69% to HK$1.275; C&D International Group (01908) rose 5.89% to HK$12.77; Greentown China (03900) rose 4.18% to HK$6.105; China Vanke (02202) rose 3.27% to HK$2.525. On September 24, four Beijing departments jointly issued implementation rules for the commercial housing sales system, and Guotou Securities noted that Beijing is the first city to implement the rules, with a strong demonstration effect. Higher pre-sale thresholds and closed-loop fund supervision lengthen the capital recovery cycle, favoring developers with ample capital and strong delivery capabilities, accelerating industry differentiation; homebuyer delivery risk decreases, which is expected to restore market entry confidence. According to monitoring data from the China Index Academy, as of September 24, more than 870 real estate-related policies have been introduced nationwide.
Oil and coal stocks rose. As of the close, PetroChina (00857) rose 3.08% to HK$9.7; China Shenhua (01088) rose 3.02% to HK$45.08; China Coal Energy (01898) rose 2.21% to HK$10.66; Sinopec (00386) rose 1.69% to HK$4.5. U.S. President Trump said on the 27th that he expects the U.S. and Iran to restart negotiations within the next week. However, he also said he has "been considering" whether to resume military strikes against Iran. Iranian Foreign Minister Araghchi said Iran is prepared to restart war with the U.S. but has not given up diplomatic engagement. In addition, as of September 24, according to China Coal Market Network, Qinhuangdao port Q4500, Q5000, and Q5500 thermal coal spot prices closed at 807, 888, and 988 yuan/ton, up 14 yuan/ton, 15 yuan/ton, and 17 yuan/ton respectively from last week.
Hot Moving Stocks
Litemi (01936) surged upon resumption of trading. As of the close, it rose 116.09% to HK$1.88. Litemi announced that the offeror Innovation Forge Holdings Limited acquired a total of approximately 363.8 million shares from the seller, representing approximately 77.94% of the enlarged share capital, for a total consideration of HK$224 million. The cash offer price is HK$0.617 per share, a discount of approximately 29.08% to the pre-suspension closing price of HK$0.87. The company also stated it will consider paying a special dividend of HK$0.29 per share.
Goodbaby International (01086) surged on heavy volume. As of the close, it rose 24.54% to HK$1.345. Goodbaby International announced that the offeror intends to privatize the company by way of a scheme of arrangement, with a cancellation price of HK$1.5 per scheme share, a premium of 38.89% over the September 25 closing price of HK$1.08, and the maximum cash consideration payable by the offeror is approximately HK$1.322 billion. The offeror is wholly owned by Song Zhenghuan, chairman and executive director of the company.
Zhonghuan New Energy (01735) continued its strong performance. As of the close, it rose 13.26% to HK$11.7. In the first half of this year, Zhonghuan New Energy achieved revenue of approximately HK$6.33 billion, up 56.3% year-on-year; gross profit of approximately RMB 130 million, up 50.0% year-on-year. The revenue structure underwent a qualitative change, with AI computing power business as the second growth curve, with revenue during the period soaring to RMB 1.047 billion, accounting for nearly 20%, marking that the company is opening new growth dimensions beyond its traditional renewable energy business.
RoboSense (02498) performed impressively. As of the close, it rose 4.31% to HK$16.7. RoboSense announced that its second-generation high-precision ultra-wide-angle all-solid-state digital LiDAR E2 and "thousand-line" ultra-long-range automotive-grade digital LiDAR EM4 have officially connected to NVIDIA Holoscan Sensor Bridge (HSB). As a result, RoboSense has become the world's first LiDAR solution partner in the NVIDIA HSB ecosystem to achieve mass production delivery.
Muyuan Foods (02714) pulled up during intraday trading. As of the close, it rose 3.57% to HK$37.12. According to Zhuochuang Information, in July-August, some large-scale farms began accelerating production cuts due to policy restrictions, and the market entered a second wave of concentrated production cuts, with a cumulative decline of 2.50% over two consecutive months, and September production cuts are still ongoing, with sow culling beginning to decrease in mid-to-late September. Kaiyuan Securities believes that short-term supply and inventory pressure continues, and accelerated sow destocking strengthens mid-term improvement expectations.
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