Hong Kong stocks opened higher but closed lower on Monday, with the three major indices turning negative collectively in the afternoon session. The Hang Seng Tech Index at one point fell nearly 1%. At the close, the Hang Seng Index fell 0.22% or 58.93 points to 26,347.91, with a full-day turnover of HKD 262.647 billion. The Hang Seng China Enterprises Index edged down 0.02% to 8,882.37, while the Hang Seng Tech Index declined 0.7% to 5,070.61. Dongwu Securities believes the fundamentals of the Hong Kong market are expected to continue improving. Recently, market consensus expectations have shown some recovery, with EPS forecasts for the Hang Seng Index beginning to be revised upwards, indicating a marginal improvement in fundamental expectations. If subsequent profit recovery materializes gradually, it will help support further valuation repair for Hong Kong stocks and boost confidence in medium to long-term capital inflows.
Among blue-chip stocks, KUAISHOU-W (01024) rose against the broader market trend. It closed up 1.94% at HKD 52.6, with a turnover of HKD 8.289 billion, contributing 4.81 points to the Hang Seng Index. At noon on May 12th, Kuaishou issued an announcement in response to rumors of a spin-off for its AI unit Kling, stating that its board is evaluating a proposed restructuring plan involving the relevant assets and businesses of Kling AI, which may involve external financing. The proposed plan is currently in its preliminary stages, and no definitive agreements have been signed. Other blue-chip performers included Xinyi Glass (00868), which rose 4.53% to HKD 11.31, contributing 1.67 points; PetroChina (00857), up 3.95% at HKD 11.06, contributing 14.07 points. On the downside, Wharf REIC (01997) fell 2.77% to HKD 25.28, dragging the index down by 1.9 points, and China Life Insurance (02628) dropped 2.55% to HKD 30.58, weighing on the index by 9.42 points.
In terms of market sectors, large-cap tech stocks were mixed, with Tencent falling over 1%. Kuaishou gained on news related to its Kling AI spin-off. Oil prices remained elevated due to a stalemate in US-Iran negotiations, drawing investor attention to oil stocks. Some high-speed rail lines of the Beijing-Shanghai route announced a 20% fare increase, boosting related high-speed rail concept stocks. Non-ferrous metals stocks also advanced. Conversely, memory chip concept stocks retreated from recent highs, triggered by a morning drop of over 5% in South Korea's KOSPI index which led to a collective slump in related ETFs. Meanwhile, some AI application and semiconductor stocks saw profit-taking.
1. Most oil stocks rose. At the close, PetroChina (00857) was up 3.95% at HKD 11.06; Kunlun Energy (00135) gained 1.85% to HKD 7.69; CNOOC (00883) added 1.2% to HKD 26.92. The stalemate in US-Iran ceasefire talks pushed Brent crude futures above $107 per barrel at one point. US President Trump stated on Monday that the ceasefire with Iran was "hanging by a thread," after rejecting Tehran's response to a US peace proposal, heightening concerns that conflict could reignite. JPMorgan noted in its latest report that even if the Strait of Hormuz reopens by June 2026, accelerated inventory drawdowns and logistical bottlenecks would keep the crude market tight, expecting Brent prices to remain in the low $100 range for most of the year.
2. High-speed rail concept stocks were active. At the close, CRRC (01766) surged 4.61% to HKD 5.45; Guangzhou-Shenzhen Railway (00525) rose 0.81% to HKD 2.48; Zhuzhou CRRC Times Electric (03898) gained 1.71% to HKD 37.96. Beijing-Shanghai High-Speed Railway announced an optimized adjustment to the published fares for its bullet train services on the Beijing-Shanghai and Hefei-Bengbu lines. Fares for trains with speeds of 300-350 km/h and 200-250 km/h and below will increase by 20%. The actual ticket prices for various station pairs will be subject to discounts based on the published fares as the upper limit. This adjustment aims to improve the market-based pricing mechanism and enhance passenger service quality, but its impact on the company's performance remains uncertain. Industrial Securities pointed out that the trend of rising high-speed rail fare levels is established, and core stocks are expected to achieve a Davis double play.
3. Non-ferrous metals stocks advanced against the market. At the close, JIANGXI COPPER (00358) rose 2.8% to HKD 39.7; China Molybdenum (03993) gained 1.97% to HKD 20.14; China Nonferrous Mining (01258) added 1.8% to HKD 14.68. Reports indicate that Peru, the world's third-largest silver producer and ninth-largest gold producer, has issued an energy crisis emergency decree. The core of the plan prioritizes residential electricity use, while industrial/mining electricity use is given the lowest priority. Fu Xiaoyan, Senior Director at Nanhua Futures, analyzed that Peru is a major global mining country. The potential risks of this decree for mineral resources may include: possible production cuts or shutdowns at small and medium-sized mines (with weaker risk resilience); possible impact on copper as a by-product; greater difficulties for high-cost operating projects; and potential impact on silver concentrate import supply.
4. Memory chip concept stocks retreated from highs. At the close, CSOP 2X LONG SK HYNIX (07709) fell 5.18% to HKD 91.98; CSOP 2X LONG SAMSUNG ELEC (07747) dropped 4.69% to HKD 140.2; GigaDevice (03986) declined 4.54% to HKD 505. South Korea's KOSPI index fell over 5% at one point on Tuesday, leading to a collective morning plunge in South Korean ETFs. Recently, South Korea's Financial Supervisory Service Vice Chairman Hwang Sun-oh expressed concerns about signs of overheating in the stock market and the expansion of margin trading balances, stating that "preemptive measures will be taken if necessary to ensure market stability," emphasizing the need to be vigilant about excessive leveraged investment. Additionally, on May 11th, Kim Yong-bum, head of the Presidential Policy Office, proposed considering the establishment of a so-called "citizen dividend," funded by excess profits generated by the artificial intelligence (AI) industry.
Notable Movers: 1. HENGRUI PHARMA (01276) surged rapidly in the afternoon session. It closed up 4.84% at HKD 69.25. The company announced at noon that it has entered into a global strategic collaboration and licensing agreement with Bristol-Myers Squibb (BMS) to jointly advance 13 early-stage projects covering oncology, hematology, and immunology. Under the agreement, BMS will make payments to Hengrui totaling up to $950 million, including a $600 million upfront payment, a first anniversary payment of $175 million, and a second conditional anniversary payment in 2028 of $175 million. The potential total deal value could reach approximately $15.2 billion.
2. Tianyue Advanced (02631) remained strong throughout the day, closing up 9.77% at HKD 97.2. Data shows that in 2025, Tianyue Advanced's market share for conductive silicon carbide substrates reached 27.6%, surpassing Wolfspeed to become the global leader. Notably, the company's market share for 8-inch silicon carbide substrates reached 51.3%, far ahead of competitors. Huayuan Securities believes that given the company's capability for mass production of 8-inch SiC substrates, it is poised to benefit from the recovery in the SiC substrate industry and see demand growth.
3. Yangtze Optical Fibre and Cable (06869) hit a new high, closing up 4.55% at HKD 271.2. Overnight, US optical communication concept stocks rallied collectively. Lumentum surged 16.52% to a record high, and Corning gained nearly 11%. NVIDIA CEO Jensen Huang stated that the next generation of AI infrastructure will require massive optical connectivity because computing demand is growing so rapidly that copper wires can no longer meet the needs. Previously, CEOs of NVIDIA and Corning confirmed that, in addition to the previously disclosed equity investment, NVIDIA is providing an additional multi-billion dollar investment to support Corning's construction of new factories.
4. Wai Kee Holdings (01729) fell significantly, closing down 9.96% at HKD 21.88. The company announced a proposed placing of 138 million new shares, representing approximately 6.19% of the enlarged share capital, at a price of HKD 21 per share, a discount of about 13.58% to the previous closing price of HKD 24.3. The estimated net proceeds are approximately HKD 2.885 billion, with about 50% intended for developing global business and expanding overseas operations, 20% for strengthening the balance sheet and repaying bank loans, 20% for strategic investments and acquisitions, and 10% for working capital and general corporate purposes.
Comments