Hong Kong's three major stock indices closed in positive territory on Wednesday, with the Hang Seng Index rising 0.55%, or 141.14 points, to finish at 25,893.54. The Hang Seng China Enterprises Index gained 0.5% to 8,655.04, while the Hang Seng Tech Index advanced 0.8% to 4,860.26. Total market turnover for the day was HK$246.32 billion. For the week, the Hang Seng Index accumulated a gain of 3.09%, the HSCEI rose 2.34%, and the Hang Seng Tech Index climbed 3.87%.
CITIC SEC suggested that with signs of easing tensions in the Middle East, Hong Kong stocks could see a return of domestic and international capital. The current dynamic price-to-earnings ratios for the Hang Seng Index and Hang Seng Tech Index are 10.9 times and 17.8 times, respectively, placing them at the 57th and 31st percentiles historically. Investors may also be beginning to price in expectations for a potential visit by former U.S. President Donald Trump to China in mid-May. Following a full adjustment in fundamental expectations and coupled with potential policy catalysts from the "16th Five-Year Plan," the brokerage anticipates that Hong Kong stocks may experience a period of valuation expansion during April and May.
Among blue-chip stocks, BABA-W (09988) remained active throughout the session, closing up 2.12% at HK$125.5, contributing 39.76 points to the Hang Seng Index with a turnover of HK$9.89 billion. CATL (03750) rose 9.02% to HK$681.5, contributing 12.08 points, while Semiconductor Manufacturing International Corporation (00981) advanced 4.58% to HK$58.25, adding 16.98 points. Conversely, Tingyi (Cayman Islands) Holding Corp. (00322) fell 3.28% to HK$12.99, dragging the index down by 1.35 points, and China Resources Mixc Lifestyle Services Limited (01209) declined 1.94% to HK$47.48, subtracting 1 point.
Sector performance was mixed. Large-cap technology stocks saw divergent movements, with BABA-W rising over 2% while Tencent Holdings (00700) dipped 0.79%. Stablecoin-related concept stocks surged in the afternoon session ahead of the expected announcement of Hong Kong's first batch of stablecoin licenses, with GUOTAI JUNAN I (01788) soaring as much as 48% intraday. Chinese brokerages rallied broadly following a stronger-than-expected Q1 earnings report from CITIC SEC (06030). The lithium battery industry chain performed strongly after four government departments held a symposium signaling a strong stance against "internal competition." Semiconductor and automobile stocks also trended higher. On the downside, optical communication concept stocks adjusted, with Yangtze Optical Fibre and Cable Joint Stock Limited Co. (06869) retreating over 7% from recent highs. Paper, aluminum, and dairy product stocks faced selling pressure.
1. Stablecoin concept stocks surged in afternoon trading. At the close, GUOTAI JUNAN I (01788) was up 27.69% at HK$3.09. Yunfeng Financial Group Limited (00376) gained 8.39% to HK$3.1, Victory Securities Company Limited (08540) rose 6.72% to HK$4.92, and Lianlian DigiTech Co., Ltd. (02598) advanced 4.94% to HK$6.58. According to the National Business Daily, the Hong Kong Monetary Authority is scheduled to announce the first batch of stablecoin licenses at 5:00 PM on April 10, after which licensed issuers will meet the press. The HKMA reportedly completed the final review of the first batch of applications in mid-March and is now in the official announcement preparation stage. Out of 36 applications received, the authority plans to issue 2-3 licenses initially, adhering to strict regulatory standards.
2. The lithium battery industry chain performed strongly. CATL (03750) closed up 9.02% at HK$681.5. CALB Group Co., Ltd. (03931) rose 8.2% to HK$37.22, and REPT BATTERO Energy Co., Ltd (00666) gained 3.67% to HK$16.94. On April 9, relevant departments from the Ministry of Industry and Information Technology, the National Development and Reform Commission, the State Administration for Market Regulation, and the National Energy Administration jointly held a symposium with leading power and energy storage battery manufacturers, focusing on standardizing industry competition. The meeting emphasized the importance and urgency of curbing "internal competition" and resolutely opposing unreasonable and unfair competitive practices to maintain a healthy market order. Soochow Securities noted in a report that the battery sector is experiencing robust demand and continuous profit improvement, with its advantages becoming more prominent amid the global energy crisis.
3. Chinese brokerage stocks rallied across the board. CITIC SEC (06030) closed up 8.29% at HK$26.9. China International Capital Corporation Limited (03908) gained 4.98% to HK$18.97, China U-Times Financial Limited (01456) advanced 4.83% to HK$4.56, and GF Securities Co., Ltd. (01776) rose 3.34% to HK$15.46. On April 9, industry leader CITIC SEC released the brokerage sector's first Q1 2026 performance forecast. It reported revenue of RMB 23.16 billion, a year-on-year increase of 40.91%, and net profit attributable to shareholders of RMB 10.22 billion, up 54.60% year-on-year, marking a record high for quarterly profit exceeding RMB 10 billion. Kaiyuan Securities stated that CITIC SEC's Q1 results exceeded expectations, highlighting the stability of proprietary investment income at leading brokerages. The firm subsequently raised its overall performance forecast for listed brokerages and revised up the estimated growth rate for Q1 adjusted net profit to 43%.
4. Semiconductor stocks advanced. GIGADEVICE (03986) jumped 12.06% to close at HK$392.2. Semiconductor Manufacturing International Corporation (00981) rose 4.58% to HK$58.25, and Montage Technology Co., Ltd. (06809) gained 2.36% to HK$199.4. Dongguan Securities pointed out in a report that as the semiconductor industry enters the earnings season, disclosed results so far indicate strong overall industry prosperity. Memory companies are benefiting from price hikes, equipment and materials companies continue to see domestic substitution, and analog/power sectors are showing signs of bottoming out and recovering, with marginal improvements in sentiment.
Notable movers included: 1. Deep Technology (01384) surged sharply on heavy volume, closing up 48.77% at HK$44.6. Guotai Haitong Securities initiated coverage on the stock with an "Overweight" rating, citing benefits from cost-effective open-source foundational models and growing demand for intelligent solutions in various industries. The brokerage forecasts the company's revenue for 2026-2028 to be RMB 870 million, RMB 1.685 billion, and RMB 2.887 billion, respectively. Applying a price-to-sales (PS) valuation, it assigned a 2026 target PS ratio of 20 times, implying a valuation of RMB 17.404 billion and a target price of HK$61.10.
2. YOUZAN (08083) remained strong throughout the day, closing up 16.42% at HK$0.156. On April 9, the company announced that the Stock Exchange of Hong Kong had granted principle approval for its transfer of listing to the Main Board on April 8. The last day of trading on the GEM will be April 16, with trading on the Main Board expected to commence on April 17 under the stock code 6051.
3. Xunce (03317) hit another record high, closing up 7.64% at HK$310. The stock, known as the "first token stock," saw its market capitalization exceed HK$100 billion within 100 days of listing. Recently, leading institutions Guotai Haitong and GUOTAI JUNAN I published research reports assigning "Overweight" and "Buy" ratings, respectively, with the highest target price raised to HK$245, highlighting the long-term growth value of this AI data infrastructure leader.
4. Yangtze Optical Fibre and Cable Joint Stock Limited Co. (06869) retreated from recent highs, closing down 7.49% at HK$222.4. The company previously announced that shareholder Yangtze Optical Fibre and Cable Communications, due to its own operational needs, plans to reduce its holdings by no more than 1 million shares, representing 0.12% of the total share capital, through centralized bidding between April 10 and July 9.
Comments