Hong Kong's major stock indices closed in negative territory on Wednesday. At the close, the Hang Seng Index was down 1.76% at 22,671.86 points, while the Hang Seng Tech Index dropped 3.41%, and the Hang Seng China Enterprises Index fell 1.94%. The market saw broad weakness in technology and internet stocks, with Alibaba shares declining over 5%. Baidu shares fell more than 4%, while Xiaomi and Kuaishou dropped over 3%. Semiconductor stocks also weakened.
Semiconductor Sector Performance
Shares of chipmaker Biren Technology plunged more than 16%. A recent report from Bank of America Securities offered a significant forecast, suggesting the current memory super-cycle could extend until 2027 or even 2030. The report highlighted five key takeaways from Micron's earnings, pointing to structural shifts in the industry. These include challenges in expanding wafer fabrication capacity on the supply side, HBM4 sales surpassing $10 billion, the accelerating adoption of long-term agreements to smooth out cyclical fluctuations, and the global memory market's annualized size targeting a trillion dollars. Both Samsung and SK Hynix have echoed this positive outlook, indicating a strong industry consensus on the sector's prospects.
Smartphone Supply Chain Weakness
Stocks in the smartphone supply chain also faced pressure, with shares of Sunny Optical Technology falling over 9%. This followed Apple's announcement of price increases for its MacBook and iPad lineups last Friday, which triggered significant declines across most Asian Apple supply chain stocks. The price hikes have heightened market concerns that soaring semiconductor costs may begin to impact consumer demand and overall technology spending. Apple's own shares fell more than 6% in U.S. trading, erasing approximately $250 billion in market value in a single session.
Lithium Battery Stocks Under Pressure
Lithium battery stocks were among the worst performers, with Contemporary Amperex Technology (CATL) shares dropping over 5%. On Friday, the main lithium carbonate futures contract on the Guangzhou Futures Exchange tumbled 5% to 147,440 yuan per ton. From its peak this year of 205,000 yuan per ton on May 12th, lithium carbonate has lost nearly 60,000 yuan per ton in just over a month. Adding to the sector's headwinds, CATL recently regained a land-use permit for its Jianxiawo lithium mine, a development industry insiders suggest could directly affect about 10% of China's domestic lithium salt supply.
New Listings Activity
Six new stocks debuted on the exchange today. Among them, China Science Publishing & Media Ltd. surged over 84%, Ketuo Co., Ltd. soared more than 203%, and Xinqi Microelectronics Equipment Co., Ltd. jumped over 103%. On the downside, Lingyi Intelligent Manufacturing Co., Ltd. fell more than 4%, while SG Micro Corp. gained over 47%. MERDEKAGOLD-DRS shares declined over 6%.
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