Zhitong Hong Kong Stock Analysis | Major Financial Adjustments to Address Month-End Effects, Hong Kong Stocks Become a Safe Haven for Funds

[Market Dissection]

This time, the U.S. stock market rose while the Hong Kong stock market did not follow suit. Today, it opened high and then fluctuated downward, but the decline was not significant, closing down 0.17%.

The good news is for others. U.S. durable goods orders in May saw the largest increase since July 2014, but at the same time, the final GDP for the first quarter was revised down to a contraction of 0.5%. The mixed data has increased expectations that the Federal Reserve will cut interest rates at least twice this year.

U.S. President Donald Trump, U.S. Secretary of Commerce Wilbur Ross, and other U.S. officials have been communicating through various channels, stating that a framework agreement reached previously in London between China and the U.S. has achieved further consensus, and both sides have signed a "China Agreement." The core content is that China promises to continue supplying rare earths to the U.S., while the U.S. promises to lift restrictions on high-tech products from China. The specific process is that once China's rare earths arrive in the U.S., the U.S. will immediately lift the relevant restrictions. For now, it appears to be unilateral propaganda from the U.S. JLMAG (06680): has gradually obtained export licenses issued by national authorities, with export regions including the U.S., Europe, and Southeast Asia. Today it rose nearly 5%.

At the same time, Trump stated that a "very large" trade agreement might be signed soon, which will open the Indian market for U.S. companies. Negotiators from both sides are meeting in Washington, hoping to break the recent deadlock on key issues. This is clearly also putting pressure on Europe, as time is running out and tariffs will soon be implemented.

Therefore, it is not surprising that the U.S. stock market reacted positively to the good news released by Trump. However, our domestic market lacks positive stimuli, and the banking sector, which has the greatest impact on the index, is declining across the board, leading the industry index in losses. The reason for the decline is that June and July are peak periods for dividend distribution among listed banks, but this year, the dividend dates have been significantly advanced, especially for state-owned banks, which traditionally distribute dividends in July but have moved it to April to June this year. Therefore, it is not ruled out that some investors may choose to sell after receiving dividends. Moreover, June is also a key point in the half-year quarter, and institutions may choose to adjust their portfolios, making profitable stocks more likely to be sold. This includes insurance stocks as well.

Yesterday, we mentioned the weakening of the U.S. dollar and the collective strengthening of commodities. Today, the focus continues to be on copper, as the U.S. tariffs on copper have yet to be implemented. The price difference between Comex and LME copper remains above $1,000, leading to a continuous inflow of refined copper into the U.S., with Comex copper inventories increasing while inventories in China and LME warehouses are declining. COMEX copper futures once surged by 3.3%. Copper prices jumped to a three-month high, boosting shares of mining companies Freeport-McMoRan and Southern Copper, which rose by 6.8% and 7.8%, respectively. In the Hong Kong stock market, Jiangxi Copper (00358), Luoyang Molybdenum (03993), and Minmetals Resources (01208) all saw gains of over 6%.

In contrast, gold stocks showed divergence. The newly listed stock Chow Tai Fook (06168) surged again by 29% today, reflecting the market's enthusiasm as the subscription was hot. During the subscription period (June 18 to 23), retail subscriptions quickly exceeded HKD 100 billion, with the final oversubscription rate reaching as high as 594 times, triggering the clawback mechanism, increasing the public offering proportion to 50% (approximately 23.4 million shares). This stock has garnered strong interest for two reasons: first, the explosive success of Lao Pu Gold (06181) has set a good example, and there are expectations that Chow Tai Fook can also achieve brilliance Secondly, the market has expectations for Chow Tai Fook's entry into the Hong Kong Stock Connect. It is said that the company only needs to maintain a market value of over HKD 7.3 billion for three trading days after its listing to pass the entry test by the end of June. Once included in the Stock Connect, it will be easy to attract speculative funds.

Other strong performers include Zijin Mining (02899): which may submit a spin-off application in a few weeks, rising over 4% today. Another similarly named stock, Luk Fook Holdings (00590): will distribute a final dividend of HKD 0.55 per share on September 10, also rising over 4% today.

In the securities sector, there continues to be speculation around licenses. Tianfeng Securities (601162.SH): its subsidiary has received approval from the Hong Kong Securities and Futures Commission for the third type of virtual asset SFC-related license, allowing it to provide virtual asset trading services, but its closing price limit was opened. HashKeyChain announced that GF Securities (Hong Kong) is the first broker in Hong Kong to issue tokenized securities and has fully integrated with HashKeyChain as the core on-chain issuance network, issuing the first daily redeemable tokenized security "GFToken". High-net-worth individual professional investors and institutional professional investors can participate in subscription and trading. The stock surged during the day but could not sustain the gains, closing up 2.73%. The marginal effect of speculation in this area is continuously decreasing, as scarcity will diminish, and the potential profit margin needs to be observed.

Recently, the central government issued the "Opinions on Further Ensuring and Improving People's Livelihoods and Focusing on Solving Urgent Problems for the Public," requiring "support and guidance for qualified localities to directly distribute maternity insurance maternity allowances to insured persons according to procedures." As of June 12, maternity allowances in all coordinated areas of 13 provinces nationwide can be directly distributed to individuals. Yesterday, Jinxin Fertility (01951) made a move, and today mainly health and medical stocks are performing well. Ping An Good Doctor (00241) announced on June 10 in Shanghai the launch of a full-scenario, full-cycle, and full-ecosystem "7+N+1" AI medical product matrix. It rose over 6% today; Alibaba Health (00241) announced a partnership with Novo Nordisk to assist in the digital transformation and upgrade of chronic disease management, also rising over 6%. Most of these strong-performing stocks are overlapping with the AI concept.

Xiaomi (01810) held a launch event for its car and home products, unveiling a series of products including Xiaomi YU7, the first AI glasses, and MIX Flip 2 foldable phone, with standard/PRO/MAX versions priced at 253,500/279,900/329,900 yuan, lower than Tesla's pricing (starting at 263,500 yuan), meeting market expectations. The company announced that the YU7 received 200,000 pre-orders within three minutes, and one hour saw pre-orders exceed 289,000 units, equivalent to 82.5% of the company's previously announced annual shipment target for 2025, exceeding market expectations. The first AI glasses feature built-in Super Xiao Ai, supporting voice-controlled photography, video recording, Q&A, translation, QR code payment, and life assistant functions, with a lightweight design (40g) and electrochromic feature being highlights. The electrochromic version sold out on the first night of release. Xiaomi's products are highly sought after upon launch, continuously enriching its product matrix and building a strong ecosystem, which is what the market values most. The future direction is to benchmark against Apple, rising over 4% today According to news from the Civil Aviation Administration of China on the 26th, starting from June 28, passengers are prohibited from carrying power banks without 3C certification, with unclear 3C certification, or models or batches that have been recalled on domestic flights. The regulations regarding lithium batteries are expected to bring new increments, with Tianqi Lithium (09696) and Ganfeng Lithium (01772) rising over 6% and nearly 3%, respectively.

The overall situation of the Hong Kong stock market is improving. The Financial Secretary of the Hong Kong Special Administrative Region, Paul Chan, stated in a blog post on June 22 that the Hong Kong stock market has regained an upward trajectory over the past year, with significant increases in trading volume. The average daily trading volume has increased to over HKD 240 billion this year, and the IPO fundraising amount currently ranks first in the world. "More than 160 companies are queued for IPOs in Hong Kong, and the second half of this year will be better. In the current geopolitical context, global funds are looking for safe places, so global funds are coming to Hong Kong. Newly listed varieties are also diversifying, with Cao Cao Mobility (02643) achieving three consecutive days of gains.

【Sector Focus】

NVIDIA's GB300 is expected to enter mass production in the second half of 2025. The UBB substrate of the GB300 and the OAM sub-board reconstruct chip efficiency, leading to an upgrade across the PCB industry chain. The PCB value of the GB300 has significantly increased: compared to the previous generation GB200, the value of a single GPUPCB of the GB300 has increased by 17%-39%, and compared to the earlier HGX series, it has increased by 88%-186%.

The global AI server PCB market size is expected to reach USD 1.72 billion in 2025, a year-on-year increase of 117%. This indicates a comprehensive upgrade of the PCB industry chain, with a surge in demand for high-layer boards, providing new opportunities for PCB manufacturers.

The main Hong Kong stock, Kingboard Laminates (01888), is the most directly benefited stock, as its copper-clad laminate technology positions it at the core of the GB300 material upgrade; Kingboard Group (00148) covers the entire industry chain from upstream CCL to downstream PCB manufacturing, providing a safety margin.

【Stock Picking】

Jitu Express-W (01519): Achieved positive net profit for the first time in Q1, with impressive growth in the Southeast Asian market

Jitu's total revenue for 2024 is expected to reach USD 10.26 billion, a year-on-year increase of 15.9%. In the first quarter of 2025, Jitu Express's total parcel volume reached 6.6 billion, a year-on-year increase of 31.2%.

Commentary: In the first quarter of 2025, Jitu Express's global business performed strongly. The company's growth in the Southeast Asian market is particularly impressive, ranking first in the Southeast Asian market for five consecutive years. The parcel volume increased by 50.0% year-on-year to 1.54 billion, with an average daily parcel volume of 17.1 million, up 51.6% year-on-year; the Chinese market maintained steady growth, with parcel volume reaching 4.98 billion, a year-on-year increase of 26.5%, and an average daily parcel volume of 55.4 million; although the new market has a smaller base, the parcel volume increased by 19.4% year-on-year to 76.6 million, showing initial growth potential.

The two core markets of Southeast Asia and China contributed over 98% of the parcel volume, becoming the core engine driving performance. The company continues to invest locally to improve its express network and collection and delivery capabilities. In new markets, the company maintains close cooperation with international cross-border e-commerce platforms such as Shein, Temu, and TikTok, and deepens cooperation with local e-commerce platforms (such as Noon in the Middle East and Salla in Saudi Arabia) In the first quarter of this year, the company continued to optimize its network structure and resource allocation in operations. Southeast Asia added 400 new outlets and increased 1,000 trunk vehicles, effectively responding to the increase in packages brought by the Ramadan shopping festival. An additional automated sorting line was added, steadily improving operational efficiency. Furthermore, the total number of automated sorting lines globally increased to 303, with 17 new automated sorting lines added in the China region, and technological upgrades further solidifying the scale delivery capability. The consumption vitality and e-commerce penetration rate in the Southeast Asian market are expected to continue driving package volume growth, and the company's leading position may be further strengthened