Hong Kong's three major indices fell collectively on the first trading day after the resumption of northbound capital flows, with the Hang Seng Index dropping below the 27,000-point mark again and the Hang Seng Tech Index declining over 2%. At the close, the Hang Seng Index was down 1.82%, or 491.59 points, to 26,590.32, with a total daily turnover of HK$250.992 billion. The Hang Seng China Enterprises Index fell 2.06% to 9,007.86 points, while the Hang Seng Tech Index dropped 2.13% to 5,270.70 points.
Galaxy Securities noted that the technology sector remains a key medium to long-term investment theme. Following recent pullbacks, valuation pressures have eased. Against the backdrop of accelerated updates to large AI models and the rapid advancement of AI applications, related sectors are expected to rebound. Additionally, rising geopolitical risks in the Middle East and adjustments to U.S. tariff policies have heightened risk aversion, potentially supporting volatile gains in the precious metals and energy sectors. The consumer sector, currently undervalued, holds further upside potential as policies to boost consumption take effect and consumer activity gradually recovers.
Among blue-chip stocks, WH Group led the gains. Its shares closed up 4.42% at HK$10.39, with a turnover of HK$326 million, contributing 5.87 points to the Hang Seng Index. UBS released a report stating that WH Group is entering a phase of lower profit volatility, benefiting from more stable U.S. hog price prospects and a strategic shift toward higher-margin packaged meat products, which should enhance profit and shareholder return visibility.
Other blue-chip movers included Henderson Land, which rose 2.08% to HK$35.32, contributing 1.69 index points; China Resources Beer, up 2.02% to HK$27.28, adding 1.42 points; Sino Biopharmaceutical, which fell 6.58% to HK$6.39, weighing down the index by 7.48 points; and Hansoh Pharmaceutical, down 6.43% to HK$34.62, dragging the index down by 5.75 points.
On the sectoral front, most large-cap tech stocks faced pressure, with Tencent down over 3% and Alibaba falling more than 2%. Memory chip concepts led gains after SK Hynix forecast continued price increases; the two leading AI model firms rallied again, with Knowledge Atlas surging over 12%; oil and gas stocks advanced against the market trend on concerns over escalating tensions in Iran; agriculture and shipping stocks were also active. Conversely, AI-related application software concepts broadly declined; film concept stocks remained under pressure throughout the session as the 2026 Spring Festival box office revenue fell approximately 40% year-over-year; tourism, innovative drug, insurance, and brokerage stocks also trended lower.
1. Memory chip concepts were among the top gainers. GigaDevice closed up 11.91% at HK$432.20, while Montage Technology rose 4.92% to HK$206.80. SK Hynix stated in a recent conference call that it cannot meet all client demand, driven by strong AI customer needs and limited supply growth. It expects memory prices to continue rising this year, with DRAM and NAND inventories at only about four weeks, and anticipates this level to decline further throughout the year. The company is discussing multi-year long-term contracts with major clients. Separately, reports indicated that Samsung is negotiating prices for its latest-generation AI memory chip HBM4, which could be 20% to 30% higher than the previous generation, with an estimated price of around $700.
2. Oil and gas stocks rose against the market trend. Shandong Molong closed up 11.41% at HK$4.59; Sinopec Oilfield Service gained 5.21% to HK$1.01; and China Oilfield Services advanced 4.74% to HK$10.61. Reports cited former U.S. intelligence officials suggesting the U.S. might launch military strikes against Iran on February 23 or 24. Analysts noted that current U.S.-Iran tensions are raising geopolitical risk premiums in the crude oil market, with Brent crude prices rising from $66 to $72 per barrel. Net long positions have rebounded to a two-year high, and January call option volumes reached a record peak. Market concerns that U.S.-Iran conflicts could escalate into full-scale war, potentially affecting crude supplies through the Strait of Hormuz, are driving short-term oil price spikes.
3. The two leading AI model firms advanced together. Knowledge Atlas closed up 12.14% at HK$628, while MINIMAX rose 4.7% to HK$880. Latest weekly data from OpenRouter showed that the top ten models on the platform processed approximately 8.7 trillion tokens, with Chinese models accounting for 5.3 trillion tokens, or 61%. MiniMax M2.5 led with 2.45 trillion tokens, followed by Kimi K2.5 with 1.21 trillion tokens. Knowledge Atlas GLM 5 and DeepSeek V3.2 ranked third and fifth, respectively. Guolian Minsheng Securities believes the AI industry trend remains intact this year. Long-term, as reasoning and multimodal large models continue to iterate, major tech ecosystems integrate, and industry penetration rates rise, token usage is expected to maintain rapid growth, paving the way for scalable commercial applications and industrial implementation.
4. Film concept stocks were under pressure throughout the session. Maoyan Entertainment closed down 8.18% at HK$6.29, while Huanxi Media fell 5.26% to HK$0.27. The 2026 Spring Festival box office totaled 5.752 billion yuan, down about 40% year-over-year. Cinema attendance fell 36.2% compared to 2025, and the average ticket price dropped nearly 3 yuan from last year's Spring Festival average of 50.8 yuan. Huaxin Securities noted that aside from "Pegasus 3" and "Biao Ren: Desert Storm," other films during the 2026 Spring Festival period underperformed pre-release media expectations. Content quality remains a critical factor in audience choice, indicating the industry needs to refine product quality, enhance control, and improve industrialization standards.
5. Application software stocks broadly declined. Newlink Technology closed down 9.52% at HK$0.285; JST Group fell 8.95% to HK$19.63; and Inspur Digital Enterprise dropped 7.9% to HK$3.73. Overnight, most large U.S. tech stocks closed lower, with software stocks facing heavy selling pressure. U.S. AI startup Anthropic announced that its "Claude Code" tool now supports COBOL language systems, automating complex code analysis, logic梳理, and migration planning during legacy system modernization, significantly reducing manual intervention costs and timelines. Additionally, a hypothetical report on AI economic risks by research firm Citrini Research recently garnered widespread market attention and discussion.
Notable movers included: 1. The Kingboard group continued to rise. Kingboard Laminates closed up 12.37% at HK$22.90, while Kingboard Holdings advanced 7.28% to HK$39.50. Kingboard Holdings' profit alert indicated that the group expects net profit for the year ending December 31, 2025, to rise over 165% compared to the same period in 2024, exceeding HK$4.32 billion. Kingboard Laminates projected 2025 net profit to exceed HK$2.39 billion, a year-over-year increase of over 80%.
2. Weichai Power surged in the afternoon session, closing up 7.29% at HK$34.14. Goldman Sachs noted that U.S. permit documents for OpenAI's "Stargate" data center in Texas showed the use of emergency generators from Weichai's wholly-owned subsidiary "Baudouin," marking a significant milestone in Baudouin's recognition by hyperscale data center companies. This breakthrough reinforces Goldman's positive view on Weichai.
3. CSSC Offshore & Marine Engineering hit a new periodic high, closing up 5.37% at HK$17.08. China's Ministry of Commerce announced the inclusion of 20 Japanese entities, including Mitsubishi Heavy Industries' shipbuilding division, involved in enhancing Japan's military strength, on an export control list. Reports indicated that CSSC Offshore's subsidiary Huangpu Wenchong recently signed significant shipbuilding contracts totaling between $736 million and $896 million, with deliveries scheduled for 2028-2030 or earlier, expected to positively impact the company's cash flow and future operational performance.
4. Standard Chartered was active after earnings, closing up 3.07% at HK$197.90. At midday, Standard Chartered released its full-year 2025 results, reporting operating income of $20.9 billion on a constant currency basis, up 6% year-over-year, or 8% excluding significant items. Underlying pre-tax profit rose 18% to $7.9 billion, while statutory pre-tax profit increased 18% to $7 billion. The group proposed a final dividend of 49 cents per share, up from 28 cents a year earlier. Additionally, Standard Chartered announced a new $1.5 billion share buyback.
5. CTG Duty-Free faced renewed heavy selling, closing down 10.51% at HK$82.20. Market rumors suggested that bidding results for duty-free projects at Beijing and Shanghai's major international air hubs had been released, negatively impacting CTG Duty-Free. In response, the company's securities department staff stated that stock prices are influenced by multiple factors. Regarding the duty-free operating rights at Beijing and Shanghai airports, the company confirmed it lost partial rights at Shanghai Airport, as previously disclosed. For Spring Festival sales data, the company only has daily sales figures for certain areas like Sanya, which do not yet meet disclosure standards; official data should be referenced.
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