Weekly | Is the HK Stock Market Bull Run Over?

This week, the Hong Kong stock market continued to slide, with the $HSI(HSI)$ dropping 1%, hitting its lowest level since September 26th.

Weak Earnings

A number of internet companies released their third-quarter results this week, and the market reaction was far from positive. Stocks of $XPENG-W(09868)$ fell 3%, $KUAISHOU-W(01024)$ dropped 11.7%, $BIDU-SW(09888)$ slid 8.6%, and $PDD Holdings Inc(PDD)$ lost 10.6%.

These internet giants are a key weight in the Hang Seng Index, making up over 30% of its total market cap. Their poor performance has significantly dampened market sentiment.

Globally, concerns are growing as Trump’s return to power gets closer, fueling fears of a trade war 2.0. On top of that, the ongoing Russia-Ukraine conflict and rising tensions on the Korean Peninsula have spooked international investors, leading to a surge in risk-off sentiment and capital outflows.

Southbound Funds

Contrasting with the retreat of foreign capital, Southbound funds (mainland investors buying Hong Kong stocks) continued to pour in, with a net inflow of HK$28.3 billion this week.

Across the board, all sectors saw declines. The only potential silver lining could be that with US markets closed for Thanksgiving next week, and most major earnings reports in Hong Kong already out, we might see a brief period of calm.

Major Events in Hong Kong Stocks This Week

1. $BABA-W(09988)$ plans to issue both USD and RMB-denominated bonds to repay debt and buy back shares.

2. $XIAOMI-W(01810)$ reported its Q3 revenue hit 92.51 billion CNY, a 30.5% YoY increase — a historic high.

3.The China Securities Regulatory Commission is speeding up its efforts to deepen capital market reforms.

4. $XPENG-W(09868)$ posted Q3 revenue of 10.1 billion CNY, up 18.4% YoY.

5. $SF HOLDING(06936)$ went public in Hong Kong, becoming the first company with both "A" and "H" shares in the logistics sector.

6.The AI application sector in Hong Kong stocks had a big surge this week.

7. $KUAISHOU-W(01024)$ ’s Q3 revenue grew 11.4% YoY to 31.13 billion CNY.

8. $NIO-SW(09866)$ posted Q3 revenue of 18.67 billion CNY, down 2.1% YoY.

9.The Ministry of Commerce is planning next year’s car trade-in policy.

10.Bitcoin hit nearly $100,000, hitting another historic high.

11. $POP MART(09992)$ continued its rally, hitting a three-year high.

12. $BIDU-SW(09888)$ ’s Q3 core net profit grew 17%, beating expectations.

Four Stocks Worth Attention Among Top Trading HK Stocks This Week

Top 1: $XIAOMI-W(01810)$ . The company reported its highest-ever revenue at 92.51 billion CNY, up 30.5% YoY.

Top 5: $KUAISHOU-W(01024)$ . Despite reporting revenue growth of 11.4%, stock plummeted due to slower e-commerce growth.

Top 7: $BIDU-SW(09888)$ . Q3 revenue came in below expectations, with core online marketing struggling.

Top 8: $MOBVISTA(01860)$ . The AI application sector soared, with the company benefiting from a jump in AI stock interest.

Next Week's Hong Kong Stock Market Events

1.Next Wednesday, China will release its industrial profits for October. Last time, profits fell 3.5%, so any sign of improvement will be closely watched.

2.US Markets will be closed for Thanksgiving on Thursday, and will have an early close on Friday.

3. $ANTA SPORTS(02020)$ $LI NING(02331)$ and $MNSO(09896)$ will release their earnings reports next week.