Hong Kong stocks started April on a positive note, with the Hang Seng Index closing up 2.04%. The standout performer was KNOWLEDGE ATLAS, often referred to as the world's first major large language model stock, which surged 31.94%.
The Hang Seng Index opened sharply higher on April 1, gaining 2.3% to start at 25,357.23 points, reclaiming the 25,000-point level. By the close, it settled at 25,294.03 points. The Hang Seng Tech Index rose 2.29% to 4,756.45 points, while the Hang Seng China Enterprises Index advanced 1.56% to 8,504.81 points. The total market turnover for the day was HK$291.4 billion. Southbound capital recorded a net outflow of HK$12.693 billion. Since the beginning of the year, cumulative net inflows from southbound capital into Hong Kong stocks have totaled HK$208.252 billion.
Innovative drug stocks continued to attract market attention. On April 1, Lepu Bio recorded a gain of 14.42%, CStone Pharma rose 5.29%, and Rongchang Pharmaceutical surged 15.24%.
In related news, the American Association for Cancer Research Annual Meeting is scheduled to take place from April 17 to 22, 2026, in San Diego, California. Over 100 Chinese pharmaceutical companies are expected to present more than 250 innovative drugs. The total value of business development transactions in the innovative drug sector has already surpassed $60 billion this year, highlighting the global recognition of their value. For the full year 2025, the total value of BD deals reached $138.8 billion, a 135% increase year-over-year. Exchange-traded funds tracking the Hong Kong innovative drug index saw significant gains; for instance, the Yinhua HK Innovative Drug ETF rose 7.30%, the Invesco HK Innovative Drug ETF climbed 7.06%, and the Ping An HK Healthcare ETF advanced 6.37%.
Internet and technology stocks rebounded, buoyed by positive developments in Middle Eastern tensions, leading to a welcome rise for the Hang Seng Tech Index. Alibaba Group saw its shares increase by 3.11%, Tencent Holdings rose 2.60%, and Xiaomi Corporation gained 0.82%, marking a collective rebound for major tech leaders.
Regarding the outlook for the Hong Kong stock market in 2026, many institutions believe artificial intelligence will be the core theme. Several major international investment banks have expressed optimism about the AI sector in Hong Kong. The reasons are twofold: first, technological innovation, with internet services, new consumer trends, and innovative drugs forming crucial pillars of the new economy; and second, a shift in fundamental drivers, expecting the market to transition from "valuation repair" to being driven by "improving fundamentals" in 2026. However, many institutions also caution that high volatility is likely to remain a characteristic of the Hong Kong market. Based on target points previously set by several foreign banks, the Hang Seng Index is projected to have significant upside potential for the year.
On April 1, KNOWLEDGE ATLAS surged 31.94%, with its market capitalization exceeding HK$400 billion. MINIMAX also saw a strong increase of 14.04%, pushing its market value above HK$300 billion. In contrast, Haizhi Technology Group closed down 4.10%, with a total market capitalization of HK$20.2 billion.
The surge followed the release of KNOWLEDGE ATLAS's first annual results announcement since its listing on the evening of March 31. The report indicated that for the full year 2025, the company achieved total revenue of 724 million yuan, representing a year-on-year increase of 131.9%. However, its net profit attributable to shareholders was a loss of 4.698 billion yuan, which widened by 58.91% compared to the previous year.
An analysis from Guosheng Securities pointed out that the demand for computing power in the domestic large model sector is clearly transmitting upstream to optical modules, servers, and AI chips. They noted that large model stocks listed in Hong Kong may exhibit greater price elasticity due to their relatively lower valuations compared to their A-share counterparts.
In other developments, Hong Kong's Secretary for Commerce and Economic Development, Algernon Yau, stated in a response to legislators on April 1 that a dedicated task force for supporting mainland Chinese companies expanding overseas will leverage Hong Kong's unique advantages under the "one country, two systems" framework. The goal is to contribute to national needs by developing overseas services into a new growth driver for Hong Kong's economy, while also promoting the robust development of various professional and commercial services in the city.
Against the backdrop of evolving global trade patterns and geopolitical shifts, an increasing number of mainland enterprises are planning overseas expansion to diversify business risks and grow their international presence. To better support the orderly overseas expansion of mainland companies via Hong Kong, a cross-bureau, cross-departmental, and cross-agency task force was established in October of last year. This task force serves as a one-stop platform to proactively attract mainland companies to use Hong Kong as a base for their global ventures.
The task force is supervised by the Secretary for Commerce and Economic Development and will coordinate efforts across various policy bureaus, departments, and agencies to develop diverse support packages for companies going global. Members include, besides the Commerce and Economic Development Bureau, the Department of Justice, the Constitutional and Mainland Affairs Bureau, the Financial Services and the Treasury Bureau, the Innovation, Technology and Industry Bureau, Invest Hong Kong, the Hong Kong Trade Development Council, the Hong Kong Monetary Authority, Hong Kong Exchanges and Clearing Limited, the Hong Kong Productivity Council, and the Hong Kong Export Credit Insurance Corporation. By pooling the expertise of these members, the task force aims to provide comprehensive support for mainland enterprises. A preliminary work plan has been established, focusing on attracting key mainland enterprises or those with clear strategic value to expand overseas in an orderly manner through Hong Kong.
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