On May 28th, the Hong Kong stock market saw a net inflow of HK$7.609 billion from northbound capital. Specifically, the Shanghai-Hong Kong Stock Connect recorded a net inflow of HK$7.561 billion, while the Shenzhen-Hong Kong Stock Connect registered a net outflow of HK$48 million. The stocks receiving the largest net purchases were Semiconductor Manufacturing International Corporation (SMIC) (00981), POP MART (09992), and HUA HONG SEMI (01347). The stocks with the largest net sales were Alibaba-W (09988), Yangtze Optical Fibre and Cable (06869), and Tencent (00700).
Northbound capital once again focused on semiconductor stocks. SMIC (00981) and HUA HONG SEMI (01347) received net purchases of HK$4.174 billion and HK$811 million, respectively. This buying activity follows a wave of price increases in the global foundry sector, which is accelerating. After TSMC announced price hikes of up to 15% for its 3nm process, United Microelectronics Corporation (UMC) indicated it would follow suit, planning selective price increases of about 10% starting in the second half of 2026, with a more comprehensive price negotiation expected in 2027. These consecutive signals from major foundries suggest a systemic upward shift in the industry's pricing cycle.
POP MART (09992) received a net purchase of HK$1.12 billion. According to disclosures on the HKEX, renowned investor Duan Yongping increased his stake in the company. His shareholding, held through H&H International Investment, rose from 4.96% to 5.69%, triggering a mandatory disclosure requirement. Following this transaction, Duan has become the second-largest shareholder of POP MART.
MEITUAN-W (03690) saw a net inflow of HK$672 million. The company has clarified that rumors of large-scale layoffs are false. Morgan Stanley released a research note stating that, following Alibaba's commitment to significantly narrow losses in its instant retail business, the path for Meituan's profitability has become much clearer. The investment bank noted that narrowing losses in the food delivery business faster than expected presents an upside risk.
CNOOC (00883) received a net purchase of HK$516 million. This comes as market concerns resurfaced over potential disruptions to commercial shipping in the Strait of Hormuz. The Islamic Revolutionary Guard Corps (IRGC) issued a statement on the 28th claiming to have struck a US Air Force base in response to a US airstrike on a location in the suburbs of Bandar Abbas port earlier that day.
DONGYUE GROUP (00189) garnered a net purchase of HK$451 million. The backdrop for this move involves potential delays in the phase-down schedule for HFC refrigerants in Europe and the US. The UK's largest refrigeration and air conditioning wholesaler announced a 60% price increase for R410A refrigerant. The UK's Department for Environment, Food & Rural Affairs (DEFRA) announced a postponement of its proposed steps for phasing down fluorinated gases. The US Environmental Protection Agency (EPA) finalized revisions to the "2023 Technology Transition Rule," extending the compliance period for third-generation refrigerants and easing related usage restrictions. Kaiyuan Securities pointed out that a global restocking cycle for refrigerants may be brewing.
Tencent (00700) and Alibaba-W (09988) saw net sales of HK$17.96 million and HK$1.303 billion, respectively. This activity comes as several companies are reportedly reassessing the return on investment for AI expenditures. For instance, Uber exhausted its annual AI budget within months, and Microsoft has discontinued the use of Claude Code, shifting to its internal Copilot CLI. It is noted that Tencent and Alibaba had previously signaled increased capital expenditure for AI. Guolian Minsheng Securities indicated that AI commercialization has entered a verification phase, with the competitive focus shifting from technology and computing power expansion to capital-intensive competition centered on capital expenditure efficiency.
Additionally, XPeng-W (09868) and 51World (06651) received net purchases of HK$393 million and HK$88.82 million, respectively. Conversely, Yangtze Optical Fibre and Cable (06869) experienced net sales of HK$212 million.
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