U.S. stocks have entered a perilous phase again, with the three major indices breaking below key support levels overnight. While a previous downturn was mitigated by interventions linked to former President Trump, the current market lacks a clear catalyst for recovery. Hopes are largely pinned on the trade consultations scheduled between China and the U.S. from March 14 to 17, though the outcome remains uncertain without tangible agreements. Hong Kong's market mirrored the weakness, declining 0.98% today.
Recent U.S. diplomatic maneuvers include a phone conversation with Russian President Vladimir Putin, suggesting potential linkage between Ukraine ceasefire talks and the Iran issue. Subsequent discussions with China will cover trade, but more critically, collaborative strategies for resolving Middle East conflicts. This indicates diminishing U.S.-Israel confidence in a military resolution, necessitating external mediation. Iran maintains a hardline stance; on March 12, Supreme Leader Mujtaba Khamenei issued his first statement since assuming office, vowing continued retaliation, permanent closure of the Strait of Hormuz, and opening new fronts if necessary. The Islamic Revolutionary Guard Corps claimed an attack rendered the USS Lincoln combat-ineffective, forcing its return to the U.S., whereas Washington acknowledged only a non-combat laundry room fire on the USS Ford causing two injuries. With conflicting narratives and no verification, oil prices surged aggressively until the U.S. tempered the rally by issuing a 30-day license permitting limited release of stranded Russian oil shipments, briefly pulling Brent crude down to $100.45/barrel. This measure offers partial relief, primarily benefitting India and Southeast Asia, as it applies only to already-loaded, stalled cargoes without new orders. Japan and South Korea gain little unless India resells at premiums—a plausible but limited scenario given India's own supply constraints. As long as the Strait of Hormuz remains closed, supply tightness persists, supporting further oil price gains. CNOOC (00883) rose over 2%, while SHANDONG MOLONG (00568) advanced more than 5%.
CHINA RISUN GP (01907), previously highlighted for benefiting from methanol shortages amid Middle East tensions, gained over 9% again. Regarding the Hong Kong ICAC's crackdown on suspected insider trading and corruption, GTHT (02611) disclosed that its subsidiary Guotai Junan International was visited by the SFC and ICAC with a search warrant on March 10; documents were seized and one employee was taken for questioning, though operations remain normal with no material impact. The stock stabilized somewhat, edging down 0.84%.
BRIGHT SMART (01428) surged nearly 34% today. The company had earlier announced an amended agreement with Ant Group, extending the takeover deadline to March 25, 2026. Ant has paid approximately HKD 164 million in deposits, and with SFC approval completed on September 23, only NDRC clearance is pending, suggesting progress—possibly linked to stablecoin licensing expectations.
China's NMPA has accelerated new drug approvals, and routine医保 negotiations enable rapid inclusion in reimbursement lists, driving sales and helping innovative drugmakers turn profitable. REMEGEN (09995) and Lupu Biologics (02157) have crossed the breakeven point, indicating commercial maturation of core products. REMEGEN gained over 3% on new indications for RC18, RC48, and RC28 entering医保, while Lupu Biologics rose over 4% as AstraZeneca initiated a Phase III trial for ADC candidate CMG901 (AZD0901) in gastric cancer, triggering a $45 million milestone payment.
Brain-computer interface (BCI) developments attracted attention after the NMPA approved Borui Kang Medical Technology's implantable BCI system for hand movement compensation, marking a global first for BCI medical devices. By 2026, non-invasive BCI technologies are expected to proliferate due to safety and cost advantages, while invasive/semi-invasive methods will target high-value medical applications. Stocks like Brainact (06681), MicroPort NeuroTech (02172), and Nanjing Panda (00553) posted gains.
SOE restructuring rumors intensified early in 2026, with strategic integrations among construction and oil companies. Speculation surrounds a potential merger between China Railway Group (00390) and China Railway Construction (01186) to reduce homogeneous competition, consolidate resources, and build internationally competitive "national champions." Their overlapping businesses often lead to price undercutting overseas, fueling merger talks. As infrastructure shifts from incremental to stock market dynamics, consolidation could yield net benefits. China Railway Construction rose nearly 2%, with other central SOEs also active.
Individual stocks dominated today's gains. Jay Chou's announcement of a global album press conference on March 24 sparked an 18% surge in STAR LEGEND (06683), which is deeply tied to the celebrity's IP. Mobvista (01860) jumped nearly 12% after reporting full-year revenue of $2.047 billion, up 35.7%, and adjusted EBITDA of $191 million, up 38.1%. Its programmatic ad platform Mintegral, contributing over 80% of gross billings, drove growth. The company also revised its equity incentive plan, granting performance-linked shares to the CEO with a five-year lock-up and clawback provisions to align long-term interests.
Sector focus centered on rumors that HSBC, Standard Chartered, and local virtual asset platform OSL will secure Hong Kong's first stablecoin licenses. Financial Secretary Paul Chan previously stated that the licensing regime for fiat-referenced stablecoin issuers would commence in March, with issuance now imminent. The HKMA received 36 applications, including from Ant Digital Technologies, Ant International, JD CoinChain Technology, and LianLian DigiTech, but only a single-digit number of licenses are expected initially, granting early winners a head start. Singapore and Hong Kong are the most active regions for stablecoin flows in payment scenarios, trailing only the U.S., according to Artemis data.
Stocks to watch: OSL (00863), HSBC (00005), Standard Chartered (02888), ZhongAn Online (06060), BRIGHT SMART (01428), and Yunfeng (00376).
Haitian Flavouring & Food (03288) reported robust Q1-Q3 2025 revenue of RMB 21.628 billion, up 6.02%, with net profit rising 10.54% to RMB 5.322 billion. A special dividend of RMB 1.754 billion was declared. February saw a rebound in essential consumer goods prices. The company has led the C-BPI seasoning ranking for 15 years, with soy sauce topping for 15 years, oyster sauce/condiments for six, and vinegar for two. It boasts the industry's largest capacity of over 4.5 million tons, equivalent to the sum of the next four competitors. Its Gaoming base is the sector's only Lighthouse Factory, utilizing AI-5G integrated smart manufacturing. Advantages include 180-day fermentation, 135°C sterilization, and zero-additive technology, with health-focused products growing over 30%. Procurement, production, and distribution costs are 15-20% lower than peers. With 6,700+ distributors covering 5 million+ terminals, it achieves full penetration into counties, towns, and villages. The catering channel accounts for 60% of sales, with 83% chef loyalty and high switching costs. Offline channels represent 94%+ of sales, complemented by rapid online growth (43.2% in Q1 2025). Product mix upgrading is a core strength, with zero-additive series exceeding 20% share, driving average selling price and margin expansion. Vinegar, cooking wine, and compound seasonings are growing rapidly. Catering recovery and channel deepening are boosting market share (soy sauce over 30%), while overseas expansion in Southeast Asia and North America aims to double revenue in three years. The company commits to an 80%+ dividend payout ratio, offering attractive yields. Cost improvements and catering rebound are fueling better-than-expected demand for essentials, directly benefiting the seasoning leader.
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