Key market developments and strategic insights for the Hong Kong stock market are highlighted today.
Top Story: Micron Technology (MU.US) Reports Explosive Earnings, Shares Surge 16% After-Hours as Memory Chip Sector Booms
After the market close on Wednesday Eastern Time, leading AI memory chip maker Micron Technology released its fiscal third-quarter (March-May) results. The report showed that Micron continues to benefit from robust demand driven by the AI boom. Revenue for the quarter surged by a staggering 346%, with a gross margin reaching an impressive 84.9%, significantly exceeding market expectations. In after-hours trading, its stock price jumped over 16%.
Morningstar analyst Li Xuyang noted in a report that capital expenditure from leading memory chip manufacturers is likely to increase further this year and next. This expansion in capex is driven by newly negotiated long-term supply agreements with customers, which Morningstar views as having favorable terms supporting stable margins and significant financial commitments from clients. The analyst pointed out that consequently, growth in memory chip capacity could be extremely rapid, especially for DRAM and HBM. He also indicated that high prices for consumer-grade DRAM could potentially re-accelerate capital expenditure for Chinese memory chip makers.
Caitong Securities believes that against the backdrop of a global semiconductor industry upturn, overseas AI capacity crowding out supply, mature process orders returning, and domestic wafer fab capacity expansion, the wafer foundry segment is expected to continue benefiting. Morgan Stanley Fund equity investment fund manager Chen Xiuzhu stated that AI remains the era's most significant investment theme, but the ways to profit within AI are shifting gears. She believes that value is migrating up the supply chain, and the marginal value increments for 2026-2027 in memory, optical modules, PCBs, and their upstream materials could be the source of alpha in AI investments this year.
Market Outlook: Overnight US Stock Indices Mixed
Overnight, the three major US stock indices closed mixed. The Dow Jones Industrial Average rose 182.06 points, or 0.35%, to close at a record high of 51,848.9. The S&P 500 index fell 7.24 points, or 0.1%, to 7,358.22. The Nasdaq Composite Index dropped 110.4 points, or 0.43%, to 25,476.64.
Chip stocks continued their correction, with Western Digital and Seagate Technology falling over 4%, and Qualcomm down over 3%. Micron Technology surged over 16% after-hours following its better-than-expected results, leading to a broad after-hours rally in US chip stocks. The Nasdaq Golden Dragon China Index fell 1.77%, with popular Chinese concept stocks mixed. The Hang Seng Index ADRs rose, closing at 23,478.87 points on a pro-rata basis, up 66.69 points or 0.28% from the Hong Kong close.
NYMEX WTI crude oil futures for the front-month contract fell $3.34, or 4.56%, to settle at $69.87 per barrel. COMEX gold futures for the front-month contract dropped $133.00, or 3.21%, to $4016.4 per ounce.
Key Developments to Watch
Reports indicate that Apple will begin mass production of its first foldable iPhone in late July. Supply chain sources revealed that Apple has finalized key specifications for the foldable iPhone, including the display, casing, and mechanical components, and has entered the mass production preparation phase. Despite recent rumors of a potential delay due to hinge issues, it is understood that Apple still plans to launch the model in September as originally scheduled. This involves Hong Kong-listed Apple supply chain companies.
China's Academy of Information and Communications Technology reported that domestic mobile phone shipments in May reached 27.639 million units, a year-on-year increase of 16.5%. Of these, 5G phone shipments were 26.224 million units, up 23.8% year-on-year, accounting for 94.9% of total phone shipments for the period.
The Ministry of Commerce announced measures to improve the handling of reports on illegal exports of dual-use items for strategic minerals. This aims to leverage public supervision to combat violations of export control laws for such items, involving small metals and rare earth concept sectors.
Anhui Conch Cement Company Limited (00914) plans to acquire a 100% equity stake in Conch Design Institute for approximately RMB 561.6 million. Upon completion, the design institute will become a directly wholly-owned subsidiary. Conch Design Institute is a national high-tech enterprise with comprehensive engineering design and consulting qualifications.
Shell visited COSCO SHIPPING Energy Transportation Co., Ltd. (01138) for discussions on business synergy in areas like oil and gas transportation. Shell expressed high recognition for the recent efficient completion of an LNG carrier time-charter cooperation and looked forward to expanding collaboration in areas such as oil and gas transportation and marine fuel supply. Both parties agreed to deepen strategic synergy and explore cooperation opportunities across the industrial chain.
Karrie International Holdings Ltd (01050) reported record annual revenue in recent years for the fiscal year ending March 31, 2026. Revenue reached approximately HK$3.47 billion, up 7% year-on-year. Adjusted net profit rose 48.3% to HK$303 million. The full-year dividend per share is 6 HK cents. The record revenue was primarily driven by increased demand for AI-related server products, especially ASIC-related servers which began volume delivery in the second half of the fiscal year.
Bright Smart Securities & Commodities Group Limited (01428) announced annual results with revenue of HK$1.008 billion, up 3.7% year-on-year. Profit attributable to equity shareholders was HK$670 million, an increase of 8.52%. Earnings per share were 39.49 HK cents.
Trip.com Group Limited (09961) reported first-quarter 2026 net operating revenue of RMB 16.2 billion, a year-on-year increase of 17%, primarily benefiting from resilient travel demand. Net profit attributable to shareholders was RMB 2.5 billion. Diluted earnings per ordinary share and per ADS were RMB 3.67.
Stock in Focus: ILUVATAR COREX (09903)
Recent media reports suggest that ByteDance is in talks with domestic GPU manufacturer ILUVATAR COREX to purchase AI chips, with an expected delivery of at least 50,000 units this year, mainly to support inference computing for its AI chatbot Doubao. Reports also indicate that Alibaba is in contact with the company and could become its next customer.
Notably, the reported procurement volume from ByteDance exceeds ILUVATAR COREX's total GPU shipments for last year. According to Guosen Securities estimates, if the company's inference chips were priced at RMB 11,700 per unit in 2025, the potential order from ByteDance could bring in nearly RMB 600 million in revenue, equivalent to about 60% of the company's total revenue last year.
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