On May 18, the Hang Seng Index opened 0.48% lower, while the Hang Seng Tech Index fell by 0.88%. In terms of sector performance, the memory concept was notably active, with GIGADEVICE surging over 10%. Most technology and internet stocks were weaker, with JD.com and Kuaishou declining more than 2%.
Regarding the Hong Kong market outlook, Industrial Securities believes that for the Hong Kong stock market to form a truly sustainable index rally, it still requires the convergence of more favorable conditions. In the second half of the year, there may be an opportunity for a beta-driven market movement at the index level. As investors increasingly recognize the stability of the Chinese economy, particularly with the gradual clarification of the nominal GDP recovery trend, and with expectations for a Federal Reserve rate cut after the mid-year appointment of a new chair, these factors are expected to catalyze a new round of upward momentum for the Hong Kong stock index.
China Securities Co., Ltd. stated that as model parameters continue to expand, performance improves, ARR skyrockets, and large model companies successively go public, the list of finalists in the large model arena is essentially taking shape. The ARR of large models possesses strong explosive potential and significant room for growth. The firm believes it is highly likely that by 2026, large model companies with ARR reaching around $200 billion will emerge.
Industrial Securities also noted that recently, the domestic computing power chain has been catching up relative to the North American computing power chain, with the AI theme spreading within the computing power sector. Hong Kong-listed internet companies, due to their inherent trading attributes related to domestic computing power, show high positive correlation with the former. This indicates that within the AI sector, besides the diffusion from North American computing power to domestic computing power, the Hang Seng Tech Index is also one of the important main themes of this diffusion. Furthermore, from the perspective of overseas mapping, cloud service providers represented by Hong Kong-listed internet companies are expected to be a subsequent direction for the domestic AI theme to play catch-up.
