Hang Seng Index

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While the US stock market hovers under the shadow of tariffs, the Hong Kong stock market is experiencing a liquidity-driven structural frenzy. But is this 'Hong Kong stocks feast' the beginning of a trend revaluation, or a short-lived bubble induced by capital?From a macro perspective, the weak dollar cycle and the abundance of Hong Kong dollar liquidity are the core drivers of the Hong Kong stock market. In May, US tariff revenue surged to a peak of $22 billion, yet the CPI remained stable, coupled with the potential impact of immigration policies on the job market, the probability of a Fed rate cut in June-July is extremely low. The US stock market remains in a tug-of-war between 'chicken ribs market and downside risk.' In contrast, the Hong Kong dollar exchange rate has quickly slid from the strong-side guarantee to the weak-side edge, HIBOR rates are nearly zero, and the abundant liquidity is flooding into new consumption, innovative drugs, and A/H premium targets, driving both blue-chip dividend stocks and growth assets higher.However, the sustainability of the structural revaluation of Hong Kong stocks is highly dependent on the liquidity environment. The current extremely low level of HIBOR has deviated from the US benchmark interest rate. If the Fed's policy shifts or there are changes in the supply and demand of funds, a liquidity retreat could trigger a valuation correction. More critically, the structural premium of the same asset in Hong Kong stocks compared to A-shares lacks fundamental support. In a market dominated by southbound funds, caution is needed against the risk of valuation overshoot under 'capital frenzy.'In the short term, as long as the cost of borrowing in Hong Kong dollars remains low, there is still room for liquidity-driven revaluation to continue. However, in the long term, whether Hong Kong stocks can escape the 'capital market' dilemma depends on whether corporate earnings can take over liquidity as the anchor of valuation. Investors need to closely monitor changes in HIBOR rates and maintain sensitivity to risks amid the liquidity feast. $Hang Seng Index(00HSI.HK)

Strategy Report

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Hello everyone! I am Dolphin Research. Last week, I emphasized in the Dolphin Research Strategy Weekly that Chinese concept assets deserve a cognitive reassessment. From the asset performance last week, the valuation repair of Hong Kong stocks led by technology has been significant: the PE valuation of the Hang Seng Index and the Hang Seng China Enterprises Index has repaired to around 10X, reaching about the 60th percentile of the past five years. Next, an important question is, how much more room is there for reassessment? Before answering this question, let's first look at how the external economic data has provided a repair environment. 1. Is the U.S. economy overheating again? 1) Is inflation going to rebound? Since the beginning of the year...

Roundhill China Magnificent Seven ETF

HSCEI ETF

Invesco China Tech

Invesco Golden Dragon China

Chinese Concept Stocks: How Much Longer Can They "Go Crazy"?

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As Alibaba &amp; Hang Seng Technology broke previous highs, here are some insights from Dolphin Research. During the Spring Festival of the Year of the Snake, while everyone is celebrating the New Year, the Chinese stock market, especially the Hong Kong stock market, and overseas markets, is quite vibrant. Taking the Hang Seng Technology Index as an example, from the low point on January 13 to today, it has accumulated a rise of over 25% in just one month, outperforming global capital markets and far better than the generally fluctuating U.S. stock indices during the same period, reminiscent of the significant surge around October last year. In this wave of surge, Alibaba is undoubtedly one of the leading stocks. From January 13 to today, it has accumulated a rise of about 50%. As a trillion-dollar giant, a half-fold increase in just one month is astonishing and has brought substantial returns to investors. Today, both Alibaba and the Hang Seng Technology Index briefly broke through last October's highs (though they have retreated somewhat since), and Dolphin Research would like to share some of our insights: 1) Firstly, the catalyst and main theme of this round of increase are different from last October. The previous surge was due to a policy shift leading to a comprehensive reassessment of Chinese assets. This time can be summarized as follows: DeepSeek has replicated the &#34;singularity moment&#34; of ChatGPT in the U.S. stock market, which has initiated a continuous AI wave. Therefore, the leading stocks in this round are mainly related to AI, including upstream semiconductor chips, cloud computing power providers, and software or hardware applicable to AI (such as smartphones, AR glasses, autonomous driving, etc.). 2) Since the main theme is closely related to AI, borrowing from the experience of the U.S. stock market, the earliest and most benefited from AI investments are the upstream chip hardware (NVIDIA corresponds to China's SMIC). Following closely are cloud computing providers represented by Microsoft (from the low point at the end of 2022 to the mid-2024 high point, trillion-dollar supergiants have seen their stock prices double). With the &#34;replay&#34; of the AI investment theme in China, the demand for cloud computing services from upstream is relatively certain, benefiting from the substantial usage requirements brought by downstream enterprises for both training and inference. Especially after DeepSeek has demonstrated the possibility of low-cost &amp; high-performance AI large models, it suggests that the costs for cloud providers to offer AI services may be lower than previously expected, and downstream demand may be higher than anticipated. This means higher profits + higher revenue potential, which can be said to enhance the market's long-term outlook for cloud providers in the AI era. Under this logic, domestic cloud computing or AI model providers like Alibaba and Baidu are the most direct beneficiaries. The news that Apple will collaborate with Alibaba to provide AI services for domestic iPhone users (which has been confirmed by Joseph Tsai today) has further highlighted Alibaba. Although the details of the collaboration are currently unknown and it is difficult to quantify the benefits, emotionally, the previously somewhat obscure Alibaba large model has been brought to the center of market attention under Apple's endorsement, amidst &#34;has-been internet celebrities&#34; like Wenxin Yiyan, Kimi, and Doubao. In short, the market's reassessment of Alibaba Cloud should be the main contributor to Alibaba's significant surge this time. 3) Additionally, Alibaba's valuation is still largely dependent on its Taobao and Tmall businesses, and the core e-commerce business must not become a drag on valuation. According to the company's guidance for 3QF25, the Taobao and Tmall Group expects CMR to grow by 5% year-on-year, while adjusted EBITA is expected to decline by about 3% year-on-year. Compared to the less than 3% year-on-year growth in CMR and over 5% year-on-year decline in profits in 2QF25, there has been a quarter-on-quarter improvement. Measures like full-site push seem to be starting to show effects in enhancing Taobao and Tmall's TR. Although we currently maintain a cautious outlook on the mid-term trends of domestic e-commerce, the improving state of the core e-commerce business at least won't worry investors about being undermined by a weak-performing e-commerce business while betting on AI and Alibaba Cloud, which is also the foundation for Alibaba's noticeable rise this time. 4) After a rise of about 50%, how do we view Alibaba's current price? Firstly, we want to point out that the aforementioned visions around AI and the reassessment of Alibaba Cloud's performance &amp; valuation are still in the logical and emotional phase, and the actual impact on performance will take time to materialize. In other words, the recent surge is partly driven by valuation expansion, especially the valuation of Alibaba Cloud. We consider two scenarios. Firstly, in a neutral optimistic scenario, we generally keep the valuation of the core Taobao and Tmall business unchanged (corresponding to the unclear prospects of domestic e-commerce), still applying a 10x PE to the adjusted earnings for 2025, corresponding to a valuation of about 1.5+ trillion. For Alibaba Cloud's valuation, we refer to the current implied expectations, applying a 5x P/S for 2025 revenue (slightly lower than the average of about 7x P/S for U.S. SaaS), corresponding to about 570 billion. The total valuation is about 2.1 trillion, roughly corresponding to the current market value. In an extremely optimistic scenario, if we restore the valuation of the core Taobao and Tmall business to 12x PE, Alibaba Cloud's valuation would be raised to above the average of U.S. SaaS at 10x P/S. Then, just the Alibaba Cloud business would correspond to about 1.15 trillion in market value, with the group totaling nearly 3 trillion in market value. It should be noted that this is a simple extrapolation of the valuation range under pure valuation expansion. As seen in the U.S. stock market, after the first wave of emotional surges, it is still necessary to observe the actual performance delivery of each quarter. If the narrative can be transformed into tangible incremental performance, then after raising performance expectations, the final valuation may exceed our above optimistic estimates. If it is just storytelling without performance delivery, then naturally it will &#34;come from nowhere, go back to nowhere.&#34; Of course, Dolphin Research holds an optimistic view on the overall prospects of AI. &lt;End of text&gt; Risk Disclosure and statement of this article: <a href="https://support.longbridge.global/topics/misc/dolphin-disclaimer">Dolphin Research Disclaimer and General Disclosure</a>

海豚投研免责声明及一般披露 - 長橋證券（新西蘭） - 幫助中心

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Today’s Key News Recap

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Dolphin focuses on: 🐬 Macro/Industry 1. Today, both Hong Kong and A-shares were collectively booming, with the Shanghai Composite Index recovering above 3300 points and the Hang Seng Index rising over 2.3%. The market is buzzing with &#34;short essays,&#34; mainly focusing on: 1) Two major meetings in December, with rumors suggesting one may be held earlier, as the market speculates on expectations for economic stimulus; 2) It is rumored that the December economic meeting will expand the deficit ratio to 4.5. However, currently, there is no clear evidence supporting these messages, and the direction of sentiment remains difficult to determine...

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Hong Kong, A accelerates explosion! What happened? | Today's important news review

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Countdown to the U.S. election, the answer will be revealed on the 6th if there are no abnormalities, while the Federal Reserve's interest rate meeting will be held on the 7th. The National People's Congress Standing Committee meeting will conclude at 8 AM Beijing time. The earnings season for U.S. stocks has just passed its peak, and this week is packed with macro events. Where exactly is the market trading now, and how should we view the future? This article aims to outline the current situation from the perspective of considering responses to different scenarios, rather than making predictions. The first question is to take a look at market trading: 1. U.S. economic data is &#34;slightly cool.&#34; Last week, in addition to the earnings reports from the giants...

NASDAQ Composite Index

SPDR S&P 500

Will the AI infrastructure frenzy backfire, and is the Trump trade coming to an end?

Tencent Holdings released the Next Day Disclosure Report on share repurchase

SMIC discloses two new deployments in the advanced packaging field.

BlackRock's Long Position in Meituan-W Decreases to 5.89%

China's Auto Patents Surge, BYD's Quarterly R&D Expenses Exceed 10 Billion Yuan

BYD launches three new energy vehicles in Bangladesh

SMIC states that the specialty memory market is facing tight supply, and the company's related production capacity is steadily advancing with its share increasing each quarter.

JD Health spends 93.26 million HKD to repurchase 2.25 million ordinary shares on May 19

May 19 Lenovo Launches razr fold and Other New Phones with Goodix Solutions

Bank of China and Singapore Exchange Sign MOU to Deepen Financial Cooperation

JD Industrial Development Signs Strategic Cooperation Agreement with Songmics to Build Overseas Warehouse Ecosystem

SAFE Chief Zhu Hexin Meets AIA Chairman Sir Mark Tucker to Discuss Insurance Development

Lenovo Officially Launches New Legion Phone Y70, Equipped with Snapdragon 8 and Tianxi AI4.0

Goldman Sachs reiterates 'Buy' rating on Tencent, encouraged by progress in its AI strategy

China Mobile's 5G Base Stations Exceed 2.84 Million, Leading Global Coverage and Scale

Wednesday Market Focus: US/EU/UK CPI Data and Central Bank Speeches, ZTO Express Reports Results

Sinopharm Group was listed in the "Top 50 Most Valuable Pharma Brands 2026"

Tencent, CATL, and others join a new climate coalition to boost carbon credit demand

BYD Executive Responds to Doubts Over Singular Battery Technology Route, Stating Multiple Routes Are Being Developed Simultaneously

Hang Tai's Shou An Phase 3 Launches with 58 Units, Cumulative Sales Exceed 82% and Raise HKD 2 Billion

Xiaomi's High-Strength Die-Cast Aluminum-Silicon Alloy Wins First-Class Industry Science and Technology Award

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At midday, HSI fell 229 points (0.9%) to 26,160, while HSTI dropped 63 points (1.3%) to 5,012. Notable declines included ALI HEALTH down over 6%, and other heavyweights like MEITUAN and BABA also saw losses. Conversely, SMIC and WUXI BIO experienced gains. Short selling activity was significant across various stocks.

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HSI Closes Midday at 26,160, Down 229 pts; HSTI Closes Midday at 5,012, Down 63 pts; ALI HEALTH Down over 6%

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Morgan Stanley has raised its price targets for major Chinese equity indexes, citing stronger earnings, yuan resilience, and China's role in global supply chains. The Hang Seng Index is projected to reach 28,400, MSCI China at 91, HSCEI at 9,900, and CSI-300 at 5,400, indicating an upside of 8% to 12%. The bank emphasizes opportunities in sectors like technology and green energy, supported by policy initiatives. Despite recent market struggles, Morgan Stanley believes moderate gains are achievable as fundamentals remain strong, with a focus on upcoming geopolitical events potentially influencing investor sentiment.

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Morgan Stanley lifts China equity targets on earnings, yuan strength

The HSI closed up 122 points at 25,797, with a turnover of HKD272.166 billion. TENCENT surged over 2% following positive developments in its cloud platform. Other tech stocks like BABA and MEITUAN also saw gains, while MINIMAX-W and KNOWLEDGE ATLAS dropped significantly. The EV sector struggled, with LI AUTO, NIO, and XPENG all declining. Overall, the market showed mixed results amid profit-taking in US stocks.

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HSI Lifts 122 pts at Close; TENCENT Soars 2%+; MINIMAX-W, KNOWLEDGE ATLAS, XUNCE Wane

Moody's Ratings indicates that Hong Kong's residential property market will continue to recover despite potential interest rate hikes, driven by demand from relocating professionals and rising rents. Residential prices are expected to rise by 12% in 2026, supported by lower mortgage rates and increased homebuyer activity from mainland China. Office and retail sectors are also showing improvement, with overall home sales climbing 16.7% month-on-month in April. However, average property development margins are projected to remain below historical levels.

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Hong Kong property upswing poised to hold despite interest rates risk: Moody’s

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M Stanley has raised its target price for the Hang Seng Index (HSI) to 28,400, anticipating an upward trend extending into the second quarter of next year. The report highlights that Chinese equities are expected to see moderate gains due to earnings improvements, a strong position in the global supply chain, and RMB appreciation. M Stanley also identified key investment themes, including technology stocks aligned with China's 15th Five-Year Plan and companies poised to meet global energy demands. The report emphasizes significant opportunities in China's equity market for targeted portfolio building.

ISHARESHSI

TRACKER FUND

M Stanley Raises HSI TP to 28,400, Expects Uptrend to Extend to 2Q Next Year

Asian markets faced significant pressure, with the HSI falling over 400 points and the Nikkei and Taiwan stocks plunging by 1,000 points each. The KOSPI rebounded after a nearly 5% slump. US inflation and geopolitical tensions contributed to the declines. Major indices in China showed slight recoveries, while Japan's bond yields reached a 29-year high. South Korea's KOSPI saw a sharp recovery after initial losses. Other regional markets also experienced declines, with Indonesia's IDX hitting a one-year low.

Asian Markets Broadly Under Pressure; HSI Falls Over 400 pts; Nikkei, Taiwan Stocks Once Plunge 1,000 pts Each; KOSPI Rebounds After Nearly 5% Slump

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The IMF praised Hong Kong's economic resilience but warned of risks from geopolitical tensions, forecasting GDP growth to slow to 2.4% this year. It urged financial reforms, including a goods and services tax, to stabilize public revenue. The report highlighted ongoing economic slack and challenges in the commercial real estate market. Financial Secretary Paul Chan noted the government's efforts to stabilize the market and projected increasing surpluses in the operating account over the next five years, emphasizing a positive growth outlook driven by global demand for AI-related electronics.

- The International Monetary Fund (IMF) praised Hong Kong's economic resilience, noting ongoing recovery despite not reaching pre-pandemic levels, while warning of risks from escalating geopolitical tensions.  
- The IMF urged mid-term fiscal reforms, including the introduction of a goods and services tax, to stabilize public revenues, predicting GDP growth to slow from 3.5% in 2025 to 2.4% this year due to weak external demand.  
- The report indicates that private investment hasn't fully recovered and highlights the mixed performance in commercial real estate, projecting a moderate economic growth outlook while emphasizing the need for broader revenue reforms.

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IMF lauds resilient Hong Kong economy, but warns of risks linked to Mideast war

On the afternoon of May 18th, the Hong Kong stock market continued its weak downward trend, with the Hang Seng Technology Index plunging over 2%. Pressured by both geopolitical tensions and soaring U.S. Treasury yields, technology heavyweights, automotive, and semiconductor sectors generally faced sharp declines, with Li Auto dropping nearly 14% and SMIC falling over 3%. On the other hand, the logic of high industrial prosperity continued to ferment, with optical fiber and cable and AI concept stocks rising against the trend; additionally, some small-cap stocks experienced significant fluctuations, with Jin Hui Holdings soaring over 55%

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Hong Kong stocks intraday | The three major indices continue to decline, the Hang Seng Tech drops over 2%, automotive and semiconductor sectors fall together, while AI concepts remain active against the trend

Hang Seng Index(HSI.HK)