Market adjustments were expected due to pre-holiday effects and fading hopes for U.S.-Iran talks, coupled with weaker technology stocks and rising oil prices. The Hang Seng Index fell 0.95% today. According to reports from CCTV News, a U.S. official stated that President Trump expressed dissatisfaction with Iran's latest proposal, believing it failed to address the core issue of Iran's nuclear program. This indicates the foundation for further negotiations has collapsed, leaving Trump without a pretext for dialogue. Even U.S. Secretary of State Rubio complained that Iran is stalling for time. In reality, both sides are preparing for the next phase of confrontation.
New challenges have emerged: following the U.S. blockade of the Strait of Hormuz, Iran's oil exports have stalled. Analysis suggests Iran's onshore oil storage facilities may reach capacity by April 29, with unused storage space sufficient for only 12 to 22 days of crude production. Iran has been forced to reactivate 30-year-old tankers to sustain output, but significant production cuts are likely imminent. Since the conflict began on February 28, Iran has already reduced output by up to 2.5 million barrels per day. If forced to cut an additional 1.5 million barrels per day, the productivity of its oil fields could suffer irreversible damage, exacerbating supply-side constraints.
Brent crude prices continued to rise, lifting shares of PetroChina (00857) and CNOOC (00883). The energy sector's momentum was highlighted yesterday with a focus on coal stocks, including L&L Energy (01277) and China Coal Energy (01898), which both rose over 7% today.
As stock prices climb, negative factors emerge. Examples include: 1) Fundraising: On April 28, CATL (03750) announced plans to place 62.385 million new H shares, representing approximately 28.58% of the enlarged H share capital and 1.36% of total shares. The placement price of HK$628.2 per share represents a 7% discount to the April 27 closing price of HK$675.5, raising approximately HK$39.19 billion. Although CATL is not short on funds, taking advantage of the rally to raise additional capital is reasonable. Its shares fell nearly 7% today, but medium-term prospects remain strong given its industry leadership. 361 Degrees (01361) announced a top-up placement of up to 100 million shares, representing 4.61% of enlarged share capital, at HK$6.18 per share—a 10.69% discount to Monday's close. The stock plunged over 20% on heavy volume, indicating a potentially prolonged recovery. 2) Share减持: Zhejiang Shibao (01057) disclosed plans for its controlling shareholder to reduce holdings by approximately HK$490 million, following cumulative减持 of HK$1.34 billion. Shares fell over 12%. 3) Lock-up expirations: Despite strong Q1 results announced after A-share trading, Cambridge Technology (06166) saw its H-share price surge nearly 5% before retreating. On April 28, cornerstone investor lock-ups expired, affecting about half of its H-share float. Selling pressure drove shares down over 16%, requiring time to absorb the supply.
The Politburo meeting on April 28 emphasized building a modern industrial system, maintaining a reasonable manufacturing share, advancing a unified national market, and curbing "involution-style" competition. It also called for comprehensive implementation of "AI+" initiatives and improving AI governance. The overall tone emphasized stability without significant new stimulus. Anti-involution measures highlighted pig farming, boosting stocks like Muyuan Foods (02714) and Dekon Agriculture (02419) by 3%. Other sectors, including real estate, showed no reaction.
Today's market highlight was WuXi AppTec (02359), April's top stock pick, which delivered explosive Q1 results. Revenue reached RMB12.44 billion, up 28.8% year-on-year, exceeding expectations and marking the first Q1 breach of the RMB10 billion revenue milestone. Net profit attributable to shareholders rose 26.7% to RMB4.65 billion, while adjusted net profit surged 83.6% to RMB4.28 billion, reflecting improved quality. As of end-March 2026, order backlog stood at RMB59.77 billion, up 23.6%, providing strong full-year visibility. Full-year 2026 guidance is robust, with expected revenue of RMB51.3–53 billion, representing 18–22% growth. Shares surged over 13%, dispelling sector concerns and underscoring solid fundamentals. The CXO sector rallied accordingly: Asymchem (06821) reported a 28% rise in adjusted Q1 net profit, with emerging business revenue up 70%. Although net profit declined due to forex impacts, the stock rose over 7%. Joinn Laboratories (06127) gained over 9% on rising experimental monkey prices and strong order backlog. Pharmaron (03759) advanced nearly 6% after reporting a 9.75% increase in Q1 net profit.
With mutual fund Q1 disclosures complete, data shows public funds' holdings in brokerages at historical lows. Current valuations and fundamentals present high risk-reward ratios. GF Securities (01776) rose 3% after reporting over 60% growth in Q1 revenue and profit, with total assets exceeding RMB1 trillion for the first time. CITIC Securities (06030) led the pack, with brokerage net revenue up 48%, investment banking revenue up 24%, asset management revenue up 37%, and total investment income up 32%. Shares gained nearly 3%.
The涨价 theme remained strong. Kingboard Laminates (01888) and Zhongxin Laminates (Macau) announced a 10% price hike for FR-4 copper-clad laminates and PP prepregs. This follows Citi's recent report predicting multiple涨价 this year. Shares rose over 7%.
The FIFA World Cup in early June is expected to boost beer consumption during summer. Historical trends show major sports events drive viewing and social gatherings, benefiting beer sales. The industry has entered an "premiumization 2.0" phase, shifting focus from channel expansion to scenario penetration, value creation, and cross-sector ecosystems. Tsingtao Brewery (00168) reported 3.5% growth in core brand volume for 2025, with mid-to-high-end products up 5.2%. Its classic series, white beer, and ultra-premium lines hit record highs, with white beer leading the category. Shares rose nearly 5%.
**Sector Focus**: Middle East geopolitical conflicts drove a 21-fold year-on-year increase in global VLCC new orders in Q1, initially favoring Chinese shipbuilders due to competitive pricing. Greek shipbroker Exclusive reported on the 27th that strait transit restrictions have reduced available tanker capacity, pushing up short-term charter rates. Shipowners are placing new orders amid improved earnings, with tanker orders accounting for 45% of global new orders. Additionally, 17 global shipowners have ordered 91 VLCCs totaling 27.991 million DWT this year. Chinese shipyards secured 83 orders (25.591 million DWT), representing 91.4% of the total. Key Hong Kong stocks: COMEC (00317), CIMC Enric (03899), CIMC (02039).
**Stock Spotlight**: SANY INT'L (00631): Mining Vehicle Exports Surge; Order Backlog Grows. The company reported 2025 revenue of RMB24.334 billion, up 11.06% year-on-year, with net profit soaring 61.47% to RMB1.779 billion. A final dividend of HK35 cents per share was declared. Strong excavator exports in January–February suggest solid Q1 performance. Excavator sales totaled 35,934 units in the first two months of 2026, up 13.1% year-on-year. Commentary: The comprehensive growth reflects enhanced core competitiveness and progress in diversification and internationalization. Overseas sales remain robust, with leading engineering machinery firms seeing overseas revenue nearing or exceeding 50%. The acquisition of lithium business in July 2024 added new revenue streams. Digitalization and cost-control measures improved profit margins. Products including large and small port machinery, mining trucks, shearers, and roadheaders are sold across Asia, Europe, Africa, and the Americas. Highlights: Mining vehicle exports are booming, with overseas mining truck order backlog rising from RMB3.6 billion in March to RMB4.5 billion by mid-April, including a single Indonesian project exceeding RMB1 billion. Sufficient orders and higher average selling prices will boost future margins. Port equipment demand is strong, with large port machinery orders饱满 and double-digit delivery growth accelerating in 2026. Small port machinery is electrifying rapidly. Overseas business accounts for over 50% of revenue, with margins 5–10 percentage points higher than domestic. Orders are concentrated in Indonesia, West Africa, and Australia. Overseas growth is sustainable, while domestic coal equipment demand is stabilizing. The company has clear overseas strategies for 2025, with competitive products like rigid mining trucks and telescopic handlers expected to expand market share. Strong cash flow and dividends, coupled with better-than-expected overseas mining truck orders, support rapid international growth.
Comments