Market sentiment was dampened by renewed geopolitical friction. Following reports of a U.S. strike near Iran's Bandar Abbas airport, Iran retaliated against a U.S. airbase, escalating tensions. Concurrently, reports emerged of U.S. military preparations for potential action against Cuba. This confluence of events contributed to a 1.27% gap-down opening for the Hong Kong market today, highlighting its sensitivity to external shocks. In contrast, the A-share market demonstrated resilience, recovering after an initial dip.
Within the tech sector, semiconductor stocks found support. Taiwan Semiconductor Manufacturing Company (TSMC) is reportedly planning another price increase for its 3-nanometer process in the second half of the year, with hikes of up to 15%. United Microelectronics Corporation's CFO also indicated selective price adjustments would begin in the latter half of the year, signaling tightness in advanced node capacity. This buoyed stocks like Hua Hong Semiconductor (01347), which surged over 11%, and SMIC (00981), a May top pick, which gained over 3%.
A significant catalyst was market speculation that ByteDance may enter or acquire a stake in a smartphone manufacturer. The concept of the AI phone, positioned as the central hub for all app traffic and data, gained traction. The likely product is rumored to be the "Doubao" phone, potentially manufactured by ZTE (00763), which itself rallied over 13% following a significant share buyback announcement. This trend stimulated the broader AI smartphone supply chain, with FIT Hon Teng (06088) rising nearly 7%, and BYD Electronic (00285) and Lens Technology (06613) both advancing over 2%.
The AI theme extended beyond hardware. Lenovo Group (00992) rose over 3% following the launch of its Baiying AI 3.0 platform and a new enterprise-level computing power subscription service designed to lower the AI adoption barrier for SMEs. Its parent company, Lenovo Holdings (03396), saw a more substantial gain of nearly 10%.
In the materials sector, Kingboard Laminates Holdings (01888) issued its fourth price hike this year, increasing board material prices by 10% and PP by 20%, citing high copper prices and tight glass fabric supply. Its shares rose 3%, while parent company Kingboard Holdings (00148) gained over 6%.
The AI large language model space remains hot. DeepSeek is reportedly raising a new funding round at a pre-money valuation of $45 billion, with state-backed investors leading. This underscores the "national team leading, market capital following" phase in AI development. Knowledge Atlas (02513), a leading model provider, surged over 13%, further buoyed by its upcoming inclusion in the Hang Seng Tech Index.
Chemical giant Chemours announced a $2 billion investment to expand its electronic fluorides plant in South Korea, with Daikin Industries also advancing next-generation refrigerant technology. This strong industry backing, coupled with demand from sectors like next-gen Tesla batteries and SpaceX, propelled shares of Dongyue Group, which soared nearly 18%.
Automakers with new model launches were active. NIO (09866) rose over 6% after launching its ES9 flagship SUV. XPeng (09868) gained over 5% following the successful launch of its GX SUV, which garnered over 24,000 orders within 12 hours, and amid its ambitious plans for L4 autonomous driving and humanoid robot production.
Financing activities also drew investor interest. Cambridge Technology (06166) announced a share placement to raise approximately HK$1.967 billion, with proceeds earmarked for expanding production capacity for high-speed optical modules, including its 1.6T product which has begun small-batch shipments. Its shares jumped over 11%. CATL (03750), which recently completed a large placement, announced plans to issue a new green bond, rising over 2%.
In a notable move, investor Duan Yongping and H&H International Investment, LLC each increased their stakes in POP MART (09992) significantly, becoming the company's second-largest shareholder with a combined 5.69% stake. Duan's public bullishness on the company and its founder was backed by this substantial investment, sending shares up nearly 5%. The company's performance is seen as tied to a broader consumer recovery.
The power sector remains a focus due to robust demand. Southern China's power grid load hit a record high for three consecutive days, driven by air conditioning, data centers, and new nighttime charging demand for EVs. Key players like Huaneng Power (00902), China Power (02380), Longyuan Power (00916), and Huadian Power (01071) are in focus.
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