Hong Kong Stock Market Closing (03.20) | Hang Seng Index closed down 2.23%, some automotive stocks rose against the trend, while technology and domestic insurance stocks were significantly pressured

According to Zhitong Finance APP, the Federal Reserve has maintained interest rates, with expectations of two rate cuts this year. The three major indices of the Hong Kong stock market collectively declined today, with the Hang Seng Index and the National Index dropping over 2%, and the Hang Seng Tech Index falling over 3%. By the close, the Hang Seng Index fell 2.23% or 551.19 points, closing at 24,219.95 points, with a total turnover of HKD 294.855 billion; the Hang Seng National Enterprises Index fell 2.33%, closing at 8,950.18 points; the Hang Seng Technology Index fell 3.39%, closing at 5,836.28 points.

Founder Securities believes that the logic behind the current rise in Hong Kong stocks has not been broken. The overall valuation of the Hong Kong stock market is currently close to historical average levels, and valuations have not reached extreme levels. Looking ahead, the firm believes that with the support of the recovery of the Chinese economy, the bottoming out and recovery of listed company profits, a generally friendly liquidity environment, and the catalytic logic of the technology industry, the attractiveness of Chinese assets is expected to continue to improve, driving the Hong Kong stock market to move forward positively.

Blue Chip Performance

Tencent Holdings (00700) fell after its earnings report. By the close, it was down 3.8%, closing at HKD 519.5, with a turnover of HKD 26.157 billion, dragging the Hang Seng Index down by 76.64 points. Tencent released its 2024 earnings report, showing revenue of RMB 172.45 billion in the fourth quarter of last year, a year-on-year increase of 11%; net profit was RMB 55.3 billion, a year-on-year increase of 30%. Tencent President Liu Chiping revealed plans to further increase capital expenditure in 2025, expecting capital expenditure to account for a low double-digit percentage of revenue. This means that Tencent's capital expenditure this year could reach a level of hundreds of billions.

In other blue chip stocks, CSPC Pharmaceutical Group (01093) rose 2.57%, closing at HKD 5.18, contributing 1.79 points to the Hang Seng Index; Orient Overseas International (00316) rose 1.74%, closing at HKD 117.2, contributing 0.43 points to the Hang Seng Index; Alibaba Health (00241) fell 6.44%, closing at HKD 5.23, dragging the Hang Seng Index down by 3.83 points; China Life Insurance (02628) fell 5.89%, closing at HKD 15.98, dragging the Hang Seng Index down by 12.4 points.

Popular Sectors

On the market, large technology stocks were under pressure across the board, with Alibaba down nearly 4% and Tencent down 3.8% after earnings. Domestic insurance stocks saw significant declines, with New China Life Insurance falling over 6%; sports goods stocks, DeepSeek concept stocks, domestic real estate stocks, and catering stocks all fell; on the other hand, some automotive stocks rose against the trend, with Leapmotor and BYD continuing to hit new highs; shipping stocks mostly rose, with China Merchants Energy rising over 5% and China Merchants Industry Holdings rising over 2%; water stocks and oil stocks performed actively; most biopharmaceutical stocks showed strong performance, with Qiming Medical soaring over 48%.

1. Some automotive stocks rose against the trend. By the close, Leapmotor (09863) rose 6.24%, closing at HKD 52.8; Great Wall Motors (02333) rose 3.3%, closing at HKD 16.26; BYD Company (01211) rose 1.73%, closing at HKD 424.2; Geely Automobile (00175) rose 1.45%, closing at HKD 18.24.

Guotai Junan pointed out that the 2025 government work report mentioned the automotive industry from multiple perspectives, and automotive consumption is expected to continue to recover, with the development of smart driving, humanoid robots, and low-altitude economy expected to accelerate The bank pointed out that in terms of automotive consumption promotion policies, the 2025 vehicle scrapping and replacement policy will further include some National IV emission standard fuel passenger vehicles and more new energy passenger vehicles into the scope of old vehicles eligible for scrapping and replacement subsidies, based on the support range of 2024. The single vehicle subsidy for "two new" vehicles will basically remain consistent with that of 2024, and it is expected that promoting automotive consumption will still be one of the government's work priorities in 2025.

It is worth mentioning that Geely Automobile released its 2024 annual performance at noon, with group revenue of RMB 240.194 billion, a year-on-year increase of 34%, setting a historical record; profit attributable to shareholders was RMB 16.632 billion, a year-on-year increase of 213%; it proposed a final dividend of HKD 0.33 per share, compared to HKD 0.22 in the same period last year. In 2024, the group's total sales of new energy vehicles reached 888,200 units, a year-on-year increase of 92%, with a sales proportion of 41%. The group has set a sales target of 2.71 million units for 2025, an increase of about 25% compared to the total sales achieved last year.

2. Domestic insurance stocks fell across the board. By the close, New China Life Insurance (01336) fell 6.59% to HKD 29.05; China Life Insurance (02628) fell 5.89% to HKD 15.98; China Pacific Insurance (02601) fell 5.7% to HKD 24.8; China People's Insurance (01339) fell 5.29% to HKD 4.3.

Government bond futures rose sharply in the afternoon, corresponding to a rapid decline in government bond yields, with the 30-year main contract rising over 1%, marking the largest increase since December last year, and the 10-year main contract rising 0.33%. Dongxing Securities previously pointed out that the rise in interest rates directly benefits insurance companies' new fixed-income asset allocation returns while alleviating the pressure of existing interest spread losses. Currently, the bond allocation ratio of life insurance companies exceeds 50%. During the period of rising interest rates, the decline in the book value of assets is smaller than the decline in liabilities, showing a net asset enhancement effect.

Huachuang Securities previously pointed out that the market's risk appetite has recently marginally increased, with significant beta effects in the insurance sector, and elastic stocks performing well. Looking ahead to the first quarter of 2025, the performance on the liability side may show significant differentiation, reflecting the strategic differences among insurance companies in the first year of product transformation; on the asset side, resonance occurs, with rising long-term interest rates bringing short-term performance pressure, which is expected to alleviate long-term interest spread loss risks.

3. The Cheung Kong Group is under collective pressure. By the close, CK Infrastructure Holdings (01038) fell 5.72% to HKD 47.8; Power Assets Holdings (00006) fell 3.42% to HKD 48.05; Cheung Kong Holdings (00001) fell 2.07% to HKD 44.85; CK Asset Holdings (01113) fell 1.9% to HKD 33.65.

On March 19, CK Infrastructure Holdings and Power Assets Holdings, under Li Ka-shing, released their 2024 performance. Among them, CK Infrastructure Holdings achieved a turnover of HKD 38.985 billion in 2024, an increase of 1.04% year-on-year; the net profit attributable to shareholders was HKD 8.115 billion, an increase of 1.1% year-on-year. It proposed a final dividend of HKD 1.86, compared to HKD 1.85 in the same period last year. Power Assets Holdings reported revenue of HKD 919 million in 2024, a year-on-year decrease of 28.87%; net profit was HKD 6.119 billion, a year-on-year increase of 1.93%; it proposed a final dividend of HKD 2.04 per share, unchanged from the same period last year In addition, CK Hutchison Holdings and Cheung Kong Property will release their 2024 results today. According to Dushi Online, both companies have stated that they will not hold a press conference related to their performance this year. Cheung Kong Property indicated that it will not hold an additional analyst meeting. CK Hutchison Holdings will also not hold an analyst meeting when announcing its results for this fiscal year. Analysts pointed out that it is rare for blue-chip companies in Hong Kong to completely cancel performance communications, and this move may be related to the controversy arising from the sale of port assets.

Popular Active Stocks

1. Youjia Innovation (02431) continues to rise. As of closing, up 22.94%, reported at HKD 34.3.

Youjia Innovation recently announced that it has received multiple fixed-point notices to provide DMS and OMS smart cockpit solutions for a joint venture brand and luxury brand under a globally renowned automotive company. Industry insiders revealed that these two automotive companies are Volkswagen and Audi. In addition, Youjia Innovation recently established a wholly-owned robotics subsidiary—Shenzhen Xiaozhu Robotics Technology Co., Ltd., with a registered capital of 20 million RMB, focusing on artificial intelligence, smart robotics research and development, application, and sales.

2. InnoCare Pharma (02577) was strong throughout the day. As of closing, up 12.93%, reported at HKD 59.4.

InnoCare Pharma announced that it has achieved a decisive victory in the patent infringement case initiated against it by EPC in the United States. On March 18, 2025, the U.S. Patent Office made a final ruling on the patent involved in the EPC case (US’294 patent), declaring that all claims of the patent are invalid and should be revoked. This ruling fundamentally denies the basis of EPC's accusations against InnoCare Pharma, marking a complete victory for InnoCare Pharma in this two-year patent battle initiated by EPC.

3. Hutchison China MediTech (00013) rose after earnings. As of closing, up 7.95%, reported at HKD 25.8.

UBS pointed out that Hutchison China MediTech's revenue fell 43% year-on-year last year, slightly below expectations; net profit reached USD 38.2 million, surpassing the bank's and market's expectations of a net loss of USD 37.2 million and USD 18.5 million, respectively. As for the second half of 2024, the group's revenue is expected to grow by 6.3% year-on-year, with a net profit of USD 11.9 million, exceeding expectations, compared to a loss of USD 67.8 million in the same period of 2023. The bank expressed its pleasure in seeing Hutchison China MediTech achieve sustainable balance in income and expenditure a year earlier, driven by sales growth and efficiency improvements.

4. Evergrande Auto (00708) stock price plummeted. As of closing, down 16.07%, reported at HKD 0.141.

Evergrande Auto announced that it will hold a board meeting on March 31 to approve the announcement of the company's and its subsidiaries' annual results for the year ending December 31, 2024, which will be postponed until after that date. According to the Hong Kong Stock Exchange Listing Rules Section 13.49(1), this is the deadline for such results. In light of the provisions of Section 13.50 of the listing rules, the company will apply to the Stock Exchange for the suspension of trading of its shares from April 1, 2025, pending the publication of its 2024 annual results 5. Xinchengyue Service (01755) issues profit warning. As of the close, down 11.64%, reported HKD 2.96.

Xinchengyue Service issued a profit warning, expecting a net loss of approximately RMB 700 million to 900 million for the year. This is mainly due to the group's cautious consideration of market factors, the recovery of receivables, and other factors leading to an increase in credit impairment losses recognized this year; as well as the impairment of goodwill and other intangible assets caused by intensified industry competition under the macroeconomic environment