Hong Kong stocks closed (06.26) | The Hang Seng Index fell 0.61%, ending a four-day rally, with brokerages and pharmaceutical stocks declining, GUOTAI JUNAN I experiencing significant volatility at high levels

According to Zhitong Finance APP, Hong Kong stocks failed to continue yesterday's upward trend, with all three major indices collectively softening today. The Hang Seng Index fell nearly 1% in the afternoon and ended a four-day winning streak. By the close, the Hang Seng Index was down 0.61% or 149.27 points, closing at 24,325.4 points, with a total turnover of HKD 261.729 billion; the Hang Seng China Enterprises Index fell 0.63%, closing at 8,803.83 points; the Hang Seng Tech Index fell 0.26%, closing at 5,345.16 points.

Zhang Yidong from Industrial Securities stated that Hong Kong stocks are expected to fluctuate upward in the second half of 2025 and may continue to reach new highs in the autumn. In the first phase, caution is advised regarding potential tactical adjustments in the early third quarter of the Hong Kong stock market; however, this will be a good opportunity to continue buying during fluctuations for layout in the second half of the year. In the second phase, with greater progress in Sino-U.S. trade negotiations, interest rate cuts by the Federal Reserve, and the commemoration of the 80th anniversary of the victory in the Anti-Japanese War, the Hong Kong stock market is expected to see improvements in both fundamentals and risk appetite, thus embarking on a journey of new highs.

Blue Chip Performance

KUAISHOU-W (01024) rose moderately. By the close, it was up 3.26%, closing at HKD 61.75, with a turnover of HKD 3.168 billion, contributing 9.26 points to the Hang Seng Index. The latest research report from CICC pointed out that based on KuaLing AI's technological leadership in the video tools sector, clear commercialization path, and huge growth potential, KuaLing AI's standalone valuation could reach approximately USD 6 billion. CITIC Securities expects that by 2030, KuaLing's annual revenue could reach USD 868 million, with a compound annual growth rate of 44.7%.

In other blue chip stocks, CHINAHONGQIAO (01378) rose 4.2%, closing at HKD 17.88, contributing 3.18 points to the Hang Seng Index; Chow Tai Fook (01929) rose 3.72%, closing at HKD 13.4, contributing 1.55 points to the Hang Seng Index; CHINA SHENHUA (01088) fell 4.25%, closing at HKD 30.4, dragging down the Hang Seng Index by 7.39 points; New Oriental-S (09901) fell 3.27%, closing at HKD 42.85, dragging down the Hang Seng Index by 1.76 points.

Popular Sectors

On the market, large tech stocks showed mixed performance, with KUAISHOU rising over 3% while Alibaba fell 2.86%. The brokerage crypto license ignited sentiment for stablecoins, with most related concept stocks surging in the morning; Victory Securities once skyrocketed by 150%, while GUOTAI JUNAN I engaged in a fierce battle with billions of funds, surging nearly 90% in the morning before plummeting in the afternoon; a weaker dollar boosted non-ferrous metals; oil and gas stocks rebounded in the afternoon, with Shandong Molong's stock price doubling at one point; some tourism stocks surged, with Hong Kong Travel rising nearly 86%; airline and gaming stocks continued to rise; on the other hand, brokerage stocks and innovative drug concepts fell, while coal, automotive, and home appliance stocks generally turned red.

1. Stablecoin concept surged and then retreated. By the close, Victory Securities (08540) was up 44.89%, closing at HKD 5.39; China Everbright Holdings (00165) was up 6.19%, closing at HKD 7.2; Huaxing Capital Holdings (01911) was up 3.38%, closing at HKD 4.28; GUOTAI JUNAN I (01788) fell 4.32%, closing at HKD 3.54.

Since May, the popularity of stablecoins has rapidly increased, driven by accelerated legislative processes in Hong Kong and the U.S., major players like Ant Group actively laying out, and the soaring stock price of "the first stablecoin stock" Circle In addition, Guotai Junan International recently announced that it has received approval from the Hong Kong Securities and Futures Commission to upgrade its virtual asset trading license, becoming the first Chinese brokerage to provide comprehensive virtual asset services. According to reports, several local Hong Kong brokerages (such as Victory Securities, Ade Securities, etc.) have completed the upgrade of License No. 1, and Guotai Junan International is not the only Chinese brokerage applying for a license, with more institutions likely to enter the market in the future.

2. Non-ferrous metal stocks perform well. As of the close, Shandong Gold (01787) rose 6.7% to HKD 28.65; Luoyang Molybdenum (03993) rose 5.77% to HKD 7.51; China Hongqiao (01378) rose 4.2% to HKD 17.88; Jiangxi Copper (00358) rose 1.86% to HKD 14.26.

Recent economic data has been slightly weak; with the situation between Iran and Israel easing and Trump once again calling for the Federal Reserve to cut interest rates, the US dollar index has returned to a downward trend. Guolian Minsheng Securities pointed out that the allocation ratio of funds to the non-ferrous metal sector in the first quarter of 2025 increased by 1.07 percentage points to 4.59%, with copper, gold, and aluminum becoming key varieties for increased allocation. Multiple factors are driving up gold prices, and silver is expected to see a rebound; the supply-demand pattern of rare earths is marginally improving, and export controls are catalyzing the enhancement of strategic value; the fundamentals of cyclical copper and aluminum are strongly supported, and an upward trend is worth looking forward to. In the context of ongoing uncertainty in the current economic landscape, investment opportunities in the non-ferrous metal sector remain promising.

3. Military stocks rise against the trend. As of the close, China Shipbuilding Defense (00317) rose 6.16% to HKD 13.44; Aerospace Holdings (00031) rose 4.88% to HKD 0.43; AVIC Science and Technology (02357) rose 1.68% to HKD 4.24.

On June 24, the State Council Information Office confirmed that a military parade will be held on September 3, showcasing all domestically produced active main battle equipment. In addition to displaying a new generation of traditional weaponry, some new combat forces such as unmanned intelligence, underwater operations, cyber offense and defense, and hypersonic capabilities will also be included. Guojin Securities pointed out that 2025 is a critical period for the conclusion of the 14th Five-Year Plan and the layout of the 15th Five-Year Plan. Driven by multiple factors such as industry prosperity reversal and global arms race, China's defense and military assets are expected to undergo a value reassessment. Changjiang Securities believes that overall demand for global military trade may significantly increase in recent years, and China's military trade may usher in a period of rapid growth, with corresponding improvements in the profitability and profit quality of relevant enterprises.

4. Gaming stocks continue to rise. As of the close, Melco International Development (00200) rose 11.89% to HKD 4.14; MGM China (02282) rose 3.75% to HKD 12.72; SJM Holdings (00880) rose 3.67% to HKD 2.54; Wynn Macau (01128) rose 2.44% to HKD 5.46.

Morgan Stanley stated that in the first 22 days of this month, Macau's gross gaming revenue reached MOP 14.8 billion, averaging over MOP 670 million per day, indicating that the average daily gross gaming revenue for the last seven days was MOP 685 million, similar to May's MOP 684 million, breaking the seasonal slump in June. Although the data was boosted by a concert by Jacky Cheung, the bank is encouraged by the recent demand that exceeds seasonal expectations, showing a positive turnaround after more than a year of disappointing trends The bank indicated that Macau's gross gaming revenue this month is likely to exceed 19.5 billion patacas, marking the first double-digit growth in recent times. Additionally, Citigroup has raised its forecast for Macau's gaming revenue in June from 19 billion patacas to 19.75 billion patacas.

Popular Volatile Stocks

1. Rongchang Biologics (09995) AH shares plummet, closing down 11.71% at HKD 59.2.

Rongchang Biologics announced this morning that it has granted rights to its core product Taitasip to the American biotechnology company Vor Bio outside of Greater China. The total amount involved in this transaction could reach up to USD 4.105 billion, including a USD 45 million upfront payment and USD 80 million in warrants, along with multiple milestone payments and product sales sharing.

According to China Securities Journal, a relevant person from Rongchang Biologics' securities department responded to reporters, stating that today's stock price fluctuations may be due to differences in market understanding. Most business development (BD) cooperation models in the market typically consist of "upfront payment + milestone payments," while the upfront payment structure in this cooperation by Rongchang Biologics is different, including part cash and equity.

2. Innovent Biologics (01801) stock price under pressure, closing down 4.61% at HKD 78.6.

Innovent Biologics plans to place 55 million shares, accounting for approximately 3.22% of the enlarged share capital, at a price of HKD 78.36 per share, representing a discount of about 4.9% compared to the closing price of HKD 82.4 on June 25. The expected net fundraising is about HKD 4.265 billion, with approximately 90% intended for advancing the company's rich clinical and preclinical innovative pipeline's global R&D, and for the company's global facility and equipment layout; about 10% for the company's daily operations.

3. Shandong Molong (00568) surges in the afternoon, closing up 19.68% at HKD 4.5.

Shandong Molong experienced significant volatility in the afternoon, with its stock price once soaring by 100%, followed by a sharp decline, resulting in an intraday fluctuation of about 111%. On June 25, local time, U.S. President Trump stated that the U.S. would hold talks with Iran next week. Trump expressed that he is "very confident" that the military conflict between Israel and Iran has ended. The conflict between Israel and Iran may flare up again, possibly soon. He does not believe Iran will resume its nuclear program.

4. Western Cement (02233) remains strong throughout the day, closing up 8.63% at HKD 1.51.

Western Cement announced a related transaction, selling all equity of Yili Yaobo Cement, Nangang Xixin Mining, and Xinjiang Baihang Environmental Technology to Conch Cement, including non-current assets, to focus on developing overseas markets, with a total consideration of RMB 1.65 billion. The estimated proceeds from the sale are about RMB 189 million. The funds are intended to be used to repay priority notes due in July 2026.

New Stock Debut

1. Shengbeila (02508) performs strongly. As of closing, it rose 33.74%, trading at HKD 8.8. Shengbeila's share price is set at HKD 6.58, with a total issuance of 109.7 million shares, and each lot consists of 500 shares, resulting in a net amount of approximately HKD 630 million. The company is not only the largest postpartum care group in Asia and China but also the fastest-growing scaled postpartum care group in China, and it is the first postpartum care brand to go overseas. The prospectus shows that Shengbeila currently operates three main business lines: postpartum care services and postpartum recovery services, home care services, and food.

2. Chow Tai Fook (06168) performs brilliantly. As of the close, it rose 25%, closing at HKD 30.

Chow Tai Fook's share price is set at HKD 24.00, with a total issuance of 53.8292 million shares, and each lot consists of 100 shares, resulting in a net amount of approximately HKD 1.193 billion. According to Frost & Sullivan data, the company has maintained its position among the top five brands in China's jewelry market for eight consecutive years from 2017 to 2024 based on the number of stores in China. For the fiscal year ending December 31, 2024, the company ranks sixth and tenth among all gold and jewelry companies in China in terms of total merchandise transaction volume and revenue from gold jewelry products, with market shares of 6.2% and 1.0%, respectively