The Hong Kong stock market wrapped up 2025 on a stable note, with the Hang Seng Index climbing back above the 26,000-point mark on the first trading day of the new year, buoyed by a stronger currency and positive tech sentiment, finally closing the week in positive territory. However, a sudden weekend development occurred; according to reports, in the early hours of January 3rd local time, the United States launched a large-scale military operation against Venezuela, resulting in the capture and removal from the country of President Maduro and his wife. Former US President Trump later confirmed the action at Mar-a-Lago. During a press conference, Trump also singled out Cuba, Colombia, and Mexico, hinting at potential future actions against these nations. Geopolitical tensions are once again unsettling the markets. This event negatively impacts stability in South America and could affect our business interests in Venezuela. The capital markets are expected to adopt a wait-and-see approach regarding subsequent developments. This Friday, the US will release its December non-farm payrolls report, while China is set to announce its December CPI and PPI data. It remains to be seen whether this data will provide a market boost. In sector highlights, the US "Starlink" project plans to lower the orbital altitude of approximately 4,400 satellites. Chinese authorities have stated that "Starlink" now has over 10,000 satellites in orbit, which have twice forced the Chinese space station to perform emergency collision avoidance maneuvers; a recent satellite breakup generated over 100 fragments, posing a serious threat to spacecraft from developing nations lacking orbit control capabilities. Official sources have indicated that the first year of the 15th Five-Year Plan will see the maiden flights of multiple new rocket models attempting recovery technologies, and the Chang'e-7 mission will head to the lunar south pole. The competition among major powers is already intensifying in the space domain. In the AI sector, Zhipu has initiated its IPO process and is scheduled to list on the Hong Kong Exchange on January 8th, while MiniMax has also started its offering and is expected to debut on January 9th. The National Integrated Circuit Industry Investment Fund has increased its stake in SMIC's H-shares from 4.79% to 9.25%. In autonomous driving, a Tesla owner has reportedly achieved the first "full self-driving cross-country trip across the United States." Elsewhere, the "tech春晚" CES exhibition will be held in Las Vegas from January 4th to 9th. Numerous tech giants, including NVIDIA's CEO Jensen Huang and AMD's CEO Lisa Su, are scheduled to attend. It will be interesting to observe which product categories generate breakout hits.
This week's featured stock is WL DELICIOUS (09985). Channel checks for WL DELICIOUS in December indicated approximately 14% offline growth, with spicy strips seeing a high-single-digit decline while konjac products maintained a robust 35% growth rate; these figures remain impressive given the high base from the previous year. The company's konjac business is expected to maintain relatively rapid growth in 2026, primarily due to: 1) Sesame paste flavor monthly sales are already nearing around 100 million yuan, yet store coverage still has over 50%空白网点待铺 (compared to the spicy flavor baseline), suggesting continued growth potential; 2) Dai-style pounded chicken feet and porcini mushroom flavors are gradually rolling out offline, with plans to enter snack discount channels in January and gain further traction throughout 2026. Since the SKU adjustment in Q2 2025, flour-based products have gradually stabilized, and some institutions believe they could stop declining in 2026, potentially flat or slightly up, mainly benefiting from improved in-store displays and channel expansion. The company continues to refine channel management with a focus on ROI and display optimization, exploring more collaboration opportunities in membership supermarket channels. It is prioritizing expansion into discount channels, with the proportion of sales from these channels expected to rise further (potentially exceeding 30%). Overseas channels are projected to double in 2026, largely driven by expansion into Southeast Asian markets via the Charoen Pokphand Group. The konjac segment shows strong growth potential, and optimized costs are expected to further boost net profit margins. Institutions forecast net profits attributable to parents of 1.4/1.68 billion yuan for 2025/2026, implying a 2026 P/E of around 14x, which appears attractive, alongside a dividend yield of approximately 5%.
The annual Consumer Electronics Show (CES) is set to take place in Las Vegas from January 6th to 8th, with smart glasses being a major focus this year. Meta previously launched its first smart glasses with built-in displays, and it is believed their participation might emphasize new software or iterative features rather than hardware updates. Furthermore, emerging smart glasses brands like XREAL, Rokid, Yingmu Technology, and Even Realities will showcase their products at CES, while Alibaba will also exhibit its first self-developed AI glasses, Quark AI Glasses. Tech giants like ByteDance, Google, and Apple are poised to launch new glasses products. Specifically, ByteDance plans to release its first AI glasses in Q1 2026; Google partnered with Xreal in December 2025 to launch Project Aura and has reportedly restarted its independent AI glasses project, targeting a launch by the end of 2026; Apple's first smart glasses, Apple Glasses, are also anticipated in 2026, potentially at the WWDC. Citing Wellsenn XR data, Guotai Junan Securities noted that global smart glasses sales reached 1.52 million units in 2024 (with Ray-Ban Meta accounting for 1.42 million), and are forecast to hit 3.5 million units in 2025, a 230% year-on-year increase. Growth is primarily driven by sustained sales of Ray-Ban Meta, the launch of multiple new AI smart glasses models, and major players entering the market. Global sales are projected to reach 60 million units by 2029, with a CAGR of 109% from 2025 to 2029, with China holding a significant share. In Hong Kong stocks, focus is on SUNNY OPTICAL (02382) and upstream silicon carbide substrate supplier TankeBlue (02631).
Data from the Hong Kong Exchange shows the total open interest for Hang Seng Index Futures (December) was 112,962 contracts, with a net open interest of 42,879 contracts. The settlement date for these futures is January 29, 2026. With the Hang Seng Index at 26,338 points, the concentrated bear warrant zone is near the pivot, suggesting underlying upward momentum for the index. Investor risk appetite has improved due to optimism about AI-driven markets and positive corporate earnings prospects, leading to a bullish outlook for the Hang Seng Index this week.
This issue marks the first of the new year. The Hong Kong stock market exhibits strong upward potential in 2026, starting with a tech-driven rally that saw significant gains in both the Hang Seng Index and the Hang Seng Tech Index. The core drivers are multifaceted: on liquidity, simultaneous monetary and fiscal easing in many countries globally, expectations of Fed rate cuts, and returning southbound funds are improving the capital environment. Fundamentally, corporate profits in Hong Kong are undergoing structural repair, with Hang Seng Index earnings growth expected to rebound to 10.8%, as key sectors shift from traditional cyclicals to hard tech like AI applications and semiconductors. Furthermore, RMB revaluation, the asset substitution effect, and capital migration driven by leading A-share companies seeking financing in Hong Kong further strengthen the bullish thesis. For allocation, the tech chain (AI, semiconductors), stable value plays (high-dividend assets), and economic cyclicals (chemicals, copper/aluminum) all present investment opportunities. In summary, the Hong Kong market in 2026 is transforming from a "sentiment clearinghouse" into a focal point for global capital, with multiple factors converging to open up significant upside potential. Its structural transformation is particularly crucial; the explosion in hard tech and AI applications is helping it shed traditional dependencies, while its unique "USD-denominated, RMB-earnings" structure offers scarcity value. However, risks such as geopolitical conflicts and policy disappointments require vigilance. Skillfully navigating sector rotation and valuation cycles will be key to fully capturing this phase of recovery and growth opportunities.
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