HK Midday: Hang Seng Edges Up 62 Pts; Xiaomi Jumps 7% Post-Earnings; Chip & AI Stocks Tumble

Hong Kong's three major indexes diverged at the midday close on August 19. The Hang Seng Index added 62 points or 0.24% to settle at 25,533, while the Hang Seng TECH Index slid 38 points or 0.81% to 4,701. The China Enterprises Index gained 52 points or 0.62% to 8,505. Half-day turnover totalled approximately HK$129.3 billion.

On the sector front, Chinese banking stocks powered ahead across the board. Xiaomi (01810.HK) surged nearly 7%, Hong Kong & China Gas (00003.HK) jumped over 7%, and Meituan (03690.HK) rose more than 3%. Meanwhile, chip and AI-linked names suffered a broad sell-off, with Baidu (09888.HK) tumbling nearly 12% following its earnings release, while China Unicom (00762.HK) and Huaneng Power (00902.HK) also slumped post-results. Select property stocks staged a rebound, with Zhenro Properties and Times China soaring over 20% each.

Chinese Banks Rally Across the Board; ABC and ICBC Lead

At the midday break, Agricultural Bank of China (01288.HK) climbed 2.5% to HK$6.24, Bank of China (03988.HK) rose 1.6% to HK$5.41, Industrial and Commercial Bank of China (01398.HK) advanced 1.5% to HK$7.39, and China Construction Bank (00939.HK) gained 1.3% to HK$9.08. The sector attracted inflows on the back of high dividend yields and solid fundamentals, with the big-four state banks all posting active trading volumes.

Xiaomi Jumps Nearly 7% Post-Earnings; Gas Co. Surges 7%; Meituan Up Over 3%

At the midday close, Xiaomi Corp (01810.HK) rallied nearly 7% to HK$28.00. The company reported a 20.3% drop in Q2 profit to HK$9.463 billion, with gross margin narrowing to 19.8%. Citi maintained a Buy rating, citing a better-than-expected smartphone outlook. Hong Kong & China Gas (00003.HK) surged over 7% to HK$7.28 after first-half net profit rose 23% to HK$3.64 billion, with JPMorgan upgrading the stock. Meituan (03690.HK) advanced more than 3% to HK$88.20.

Chip and AI Stocks Tumble Sharply; Hua Hong Plunges Nearly 13%

At the midday break, Hua Hong Semiconductor (01347.HK) cratered nearly 13% to HK$112.50, SMIC (00981.HK) slumped 5.5% to HK$71.65, and Kingsoft Cloud (03896.HK) shed 5% to HK$5.61. A Wall Street Journal report highlighting massive off-balance-sheet debt at AI giants stoked earnings concerns, dragging the entire AI infrastructure sector lower. DBS maintained a Buy rating on SMIC with a target price raised to HK$96.

Baidu Slumps Nearly 12% Post-Earnings; Unicom and Huaneng Also Weaken

At the midday close, Baidu Inc (09888.HK) tumbled nearly 12% to HK$89.20 after reporting a 68% plunge in Q2 net profit to RMB2.32 billion. Capital expenditure surged to RMB11.4 billion for AI infrastructure, raising concerns over capital efficiency. China Unicom (00762.HK) dropped nearly 8% to HK$5.78 as first-half net profit fell 34.6%. Huaneng Power International (00902.HK) declined 6.1% to HK$5.35 after interim earnings slipped 28.3% with no dividend declared.