Hong Kong stocks reversed early losses to close higher on Monday, with the Hang Seng Index and the Hang Seng Tech Index both turning positive in late trading. As of the close, the Hang Seng Index rose 0.05%, or 13.13 points, to 26,406.84, with a total turnover of HKD 288.491 billion. The Hang Seng China Enterprises Index fell 0.05% to 8,884.2 points, while the Hang Seng Tech Index gained 0.07% to 5,106.4 points.
Industrial Securities noted that structural opportunities in technology, high-growth sectors, and dividend-paying stocks should be prioritized. For technology, while AI remains a key theme, further valuation expansion may require stronger earnings support or more ample liquidity, as current valuations of leading tech firms largely reflect their fundamentals. In a weak recovery environment with diminished valuation appeal, high-growth strategies are expected to remain effective. Meanwhile, dividend stocks retain their appeal as defensive holdings amid low interest rates and companies' increased willingness to pay dividends and repurchase shares.
Among blue-chip stocks, Lenovo Group (00992) hit a new high, closing up 6.94% at HKD 13.41, contributing 9.34 points to the Hang Seng Index. Citi Research previously estimated that Lenovo's adjusted net profit for the fourth fiscal quarter ending March would exceed market expectations by 20%, driven by a turnaround in its server business amid strong demand and improved supply of memory and CPUs, while PC shipments are expected to grow 8.7% year-on-year with stable gross margins.
Other blue-chip performers included Longfor Group (00960), which rose 8.42% to HKD 9.92, contributing 3.11 points; Li Auto-W (02015), up 5.42% to HKD 73.85, contributing 8.45 points. On the downside, New Oriental-S (09901) fell 4.97% to HKD 41.26, dragging the index down by 2.63 points, and Alibaba-W (09988) dropped 3.67% to HKD 133.9, weighing on the index by 78.05 points.
In terms of sectors, most large-cap tech stocks faced pressure, with Alibaba down 3.67% and Tencent falling 1.48%. The semiconductor and computing hardware supply chain surged, led by memory, PCB, and optical communication concepts. Property stocks continued to rise as supportive policies helped sustain momentum in the housing market. Construction machinery stocks also performed well, supported by strong domestic and export sales growth in April. Commercial aerospace, green power concepts, and select pharmaceutical stocks were active. Conversely, gold and airline stocks declined amid renewed geopolitical tensions between the U.S. and Iran, which pushed oil prices higher.
1. Semiconductor stocks rallied sharply, with memory concepts leading gains. Samsung 2x Daily Leveraged (07709) surged 23.6% to HKD 97; Naxin Micro (02676) jumped 15.47% to HKD 196.3; Lanke Technology (06809) rose 11.45% to HKD 418.6; and GigaDevice (03986) gained 7.96% to HKD 529. The global chip stock rally continued, with SK Hynix up 11% in South Korea, bringing its year-to-date gain to 189%, and Samsung Electronics rising 6%, pushing its market cap above KRW 1,600 trillion, both hitting new highs. Last Friday, the Philadelphia Semiconductor Index surged over 5%, with SanDisk up over 16%, Micron Technology rising over 15%, and Seagate Technology gaining over 2%, all reaching record highs. Goldman Sachs views this as a "super supply shortage cycle" driven by unprecedented AI-driven demand, capacity constraints from complex HBM manufacturing, and limited supply elasticity for general DRAM/NAND.
2. Several PCB concept stocks hit new highs. Shenghong Technology (02476) climbed 13.67% to HKD 392.6; Kingboard Holdings (00148) advanced 7.71% to HKD 55.85; Guanghe Technology (01989) rose 7.04% to HKD 209.8. On May 8, Shenghong Technology stated in an investor relations update that it has a full order book with smooth business progress. Citi raised its profit forecasts for Kingboard Holdings by 50-61% for 2026-2028, lifting the target price from HKD 48 to HKD 65, citing shortages in glass fiber, copper foil, and CCL amid the AI infrastructure investment boom. The bank views Kingboard Holdings as undervalued and a catch-up play, reiterating a "Buy" rating.
3. Property stocks extended gains. Sino-Ocean Group (03377) surged 11.43% to HKD 0.078; Longfor Group (00960) rose 8.42% to HKD 9.92; R&F Properties (02777) gained 8% to HKD 0.405. Recent policy support in multiple cities has boosted sentiment. Shenzhen eased purchase restrictions in certain districts, while Guangzhou raised the maximum公积金贷款 to HKD 3.6 million and introduced subsidies for "sell old, buy new" transactions. Tianjin plans to purchase existing homes for affordable housing and offer purchase subsidies. Wuhan adjusted first-home definitions by district and removed户籍 restrictions for公积金异地贷款, with subsidies of 1.5% for first homes and 1% for second homes in new urban areas. Guojin Securities noted that these policies should help sustain the "small spring" momentum in the housing market, as seen during the Labor Day holiday.
4. Construction machinery stocks outperformed. Zoomlion (01157) rose 6.31% to HKD 8.43; Sany Heavy Industry (06031) gained 5.55% to HKD 23.6; China Longgong (03339) added 3.3% to HKD 3.44. Data from the China Construction Machinery Association showed excavator sales in April rose 29.8% year-on-year to 28,745 units, with domestic sales up 34.9% and exports growing 23.2%. Cinda Securities noted the rapid growth in both domestic and export sales. Recently, major manufacturers have announced price hikes. Sany Heavy Machinery will raise excavator prices by 5% from May 15, while XCMG and LiuGong announced increases of 3-5% and 5%, respectively, effective from June 1 and May 20.
5. Gold stocks declined across the board. Tongguan Gold (00340) fell 10.65% to HKD 2.77; Chifeng Gold (06693) dropped 9.67% to HKD 41.28; Lingbao Gold (03330) slipped 8.71% to HKD 22.86. Renewed tensions between the U.S. and Iran weighed on sentiment, with Iran rejecting a U.S. proposal and Trump calling the response "completely unacceptable." International oil prices rose over 4%, while spot gold fell below USD 4,700. Notably, U.S. non-farm payrolls for April added 115,000 jobs, exceeding expectations. Bank of America now forecasts the Fed will delay rate cuts until the second half of 2027 due to elevated inflation and robust job growth.
Notable movers: 1. LeDong Robot (01236) surged on its debut, closing up 127.62% at HKD 60. The company is a leading full-stack intelligent robotics firm focused on perception intelligence. Its public offering was oversubscribed 6,707.66 times, making it the second-most oversubscribed main board IPO in Hong Kong this year.
2. Datang Power (00991) remained strong throughout the day, closing up 11.3% at HKD 3.35. Recent policy initiatives from four government departments proposed exploring direct power supply from nuclear and hydrogen energy to computing facilities and encouraging the配置 of grid-forming energy storage to enhance stability.
3. Changfei Optical Fiber & Cable (06869) hit a new high, rising 5.45% to HKD 259.4. Nvidia CEO Jensen Huang recently stated that next-gen AI infrastructure will require extensive optical connections as copper wires become insufficient for growing computing demands. Nvidia also announced a partnership with Corning, signaling a shift in "optical investment" from optical modules to backend transmission equipment like fiber optics.
4. Nuobi Kan (02635) fell sharply, closing down 14.42% at HKD 16.86. The stock was added to the Shanghai-Hong Kong and Shenzhen-Hong Kong Connect lists on April 20. Market observers noted that the stock had rallied ahead of the inclusion on positive expectations, leading to profit-taking after the official addition.
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