Hong Kong's three major indices experienced volatile trading but ultimately closed higher. By the market close, the Hang Seng Index had risen 1.35% to 27,126.95 points, the Hang Seng Tech Index increased by 0.5%, and the HSCEI was up 1.07%. Across the board, technology stocks were mixed: Bilibili surged over 5%, Alibaba gained more than 2%, while Lenovo and Tencent each rose over 1%; conversely, JD.com fell more than 2%. The Zijin system boosted gold stocks, with Zijin Gold International jumping over 11%. Insurance stocks were active, as China Life Insurance climbed over 5%. Domestic bank stocks strengthened, with CITIC BANK advancing more than 3%. Some domestic property stocks declined, with Country Garden dropping over 7%.
The Zijin system provided a significant lift to gold stocks, with Zijin Gold International soaring over 11%. Zijin Gold International has entered into an Arrangement Agreement with Allied Gold Corporation, proposing a cash acquisition of all issued common shares of Allied Gold at C$44 per share, with the total transaction value amounting to approximately C$5.5 billion (roughly RMB 28 billion).
Insurance stocks showed notable activity, with China Life Insurance rising over 5%. Recently, several listed insurance companies have successively disclosed data related to their full-year 2025 premium income or net profit. Among them, New China Life Insurance reported cumulative original premium income of RMB 195.899 billion for 2025, a year-on-year increase of 15%; China Pacific Insurance's total premium income reached RMB 461.676 billion, up 4.43% year-on-year. Huachuang Securities anticipates that listed insurers will achieve steady premium growth in 2025. The firm noted that the insurance sector has been adjusting for two consecutive weeks, likely influenced by a slowdown in the strong start-of-year sales growth and high valuations. In the short term, performance pre-announcements from listed insurers for 2025 are expected to be promising, potentially driven mainly by investment performance. Looking ahead to the medium term, with relatively lower base pressure in the first half of 2026 and a combination of an active equity market and thriving liability-side business, there is potential for performance to exceed expectations.
Domestic bank stocks strengthened, with CITIC BANK gaining over 3%. Huatai Securities indicated that since December, the bank index has corrected by 8.4 percentage points due to concerns over property risks and a shift in market sentiment, but the underlying positive trend in the sector's core revenue remains unchanged. Eight banks have already disclosed their 2025 performance forecasts, with six showing improved revenue and five reporting better profits; the institution expects continued strong performance in 2026, supported by stabilizing net interest margins and contributions from wealth management fees. Although recent large sell orders in heavyweight stocks and ETF outflows have impacted liquidity, the strong year-on-year growth in insurance capital inflows at the start of the year suggests ongoing demand for high-dividend, low-volatility quality bank stocks from new premium income. Currently, the estimated dividend yield for some companies for 2025 is nearly 6%, presenting a high-value buying opportunity. For individual stocks, the advice is to focus on 1) high-quality banks with solid fundamentals and good profit elasticity, and 2) banks offering excellent dividend value.
Some domestic property stocks declined, with Country Garden falling over 7%. Guosen Securities stated that while the property sector's fundamentals saw a significant decline in the fourth quarter of 2025, over the past month from late 2025 to early 2026, housing prices have ended their sharp fall, fundamentals are steadily improving, and policy expectations are gradually rising. Although it is too early to call a bottom, based on the current volume-price dynamics, the probability of housing prices stabilizing in 2026 has increased from "impossible" to at least "possible." If a "volume-for-price" scenario does not recur after the Spring Festival, the likelihood of prices stabilizing could further increase to "probable." Furthermore, the adjustment in property stocks in December 2025 has been quite substantial, leading to a recommendation for a more optimistic stance towards the sector.
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