Mourinho • Summary of the Hang Seng Index in the first half of 2025, outlook and deployment for the second half.

Hello everyone! I am Mo Shuai. The first half of 2025 saw dramatic ups and downs in the Hong Kong stock market, from the AI-driven bull market to the stock market crash triggered by Trump's tariffs, with market sentiment resembling a roller coaster ride. Today, I will provide a detailed summary of the performance in the first half of the year and look ahead to the key variables and deployment strategies for the second half!

Hang Seng Index Review for the First Half of 2025: A Dramatic V-Shaped Reversal

Market Trend: V-Shaped Reversal, Reaching a Two-Year High—From the April Crash to 180 Days of Euphoria

•January Low: $Hang Seng Index(00HSI.HK) started the year with disappointing mainland economic data and the shocking news that $TENCENT(00700.HK) was added to the U.S. Department of Defense's 1260H list, which was seen as a sign of escalating U.S.-China tensions. This caused the stock to plummet over 7% in a single day, further dragged down by the mainland property crisis, leading to a mid-January low of 18,671 points (the year's lowest point so far).

•February Turning Point: The emergence of DeepSeek AI sparked a surge in Hong Kong's tech sector, particularly AI-related concept stocks, driving the Hang Seng Index to break through and reach a new high of ~24,076 points. Daily trading volume exceeded HKD 200 billion, reflecting extremely active market activity.

•March Peak: A frenzy of capital inflows into AI concept stocks drove blue-chip heavyweights like $TENCENT(00700.HK), $BABA-W(09988.HK), $XIAOMI-W(01810.HK), and $BYD COMPANY(01211.HK) to new highs, pushing the Hang Seng Index to 24,874 points in mid-March (the highest since 2023). However, this was followed by a wave of share placements, leading to a market correction.

•April Black Swan: On April 7, the market was hit hard by Trump's "reciprocal tariffs," causing the Hang Seng Index to plunge 3,021 points in a single day, reaching a Q2 low of 19,260 points. Safe-haven demand surged, with spot gold prices hitting a record high of USD 3,500/oz.

•May Market Recovery: The mainland central bank's "ten arrows" policy—combining rate cuts and RRR reductions—helped the Hang Seng Index fully recover April's losses. After the U.S.-China tariff agreement, the index rose to 23,800 points. $CATL(03750.HK) reignited the A+H IPO market, pushing the index to a May high of ~23,917 points, nearing 24,000.

•June Frenzy: A U.S.-China leaders' call, the enactment of Hong Kong's Stablecoin Ordinance, and a rally in new consumer stocks drove the Hang Seng Index to a June high of ~24,533 points, approaching the year's peak. Meanwhile, U.S. indices $NASDAQ Composite Index(.IXIC.US) and $S&P 500(.SPX.US) hit record highs, while the $Dow Jones Industrial Average(.DJI.US) only regained the 44,000 level. The $SSE Index(000001.SH) also hit a yearly high of 3,462 points, though the Hang Seng Index failed to surpass its yearly high. Notably, $NVIDIA(NVDA.US) reclaimed its title as the world's most valuable company. The Hang Seng Index closed at 24,072, up 4,012 points (+20%) in H1.

📌Key H1 Data

•Hang Seng Index Low: 18,671 points (Jan 13)

•Hang Seng Index High: 24,874 points (Mar 19)

⚠️ Top 10 Landmark Events of H1

1. DeepSeek AI Ignites Tech Frenzy ~ The domestic AI giant DeepSeek launched a powerful general-purpose large model in late January, rivaling ChatGPT, sparking a rally in the Hang Seng Index and driving the $Hang Seng TECH Index(STECH.HK) to a three-year high of 6,195 points. This also boosted ETFs tracking the Hang Seng Tech Index, such as $CAM HS TECH(03088.HK).

Related concept stocks ~ $BABA-W(09988.HK) surged 36% in H1, $XIAOMI-W(01810.HK) surged 73% in H1, $TENCENT(00700.HK) rose 22% in H1, $SMIC(00981.HK) surged 40% in H1, and $BYD COMPANY(01211.HK) surged 40% in H1.

2. Gold Hits Record High: The tariff storm and escalating Middle East tensions drove safe-haven demand, pushing gold prices to USD 3,500/oz, up nearly 30% in H1.

3. A+H IPO Frenzy: $CATL(03750.HK) ignited an A+H IPO boom, with leading A-share companies like $HENGRUI PHARMA(01276.HK), $SANHUA(02050.HK), and $HAITIAN FLAV(03288.HK) entering the Hong Kong market.

4. Bitcoin Bull Run: Bitcoin broke USD 110,000, hitting a record high, with related ETFs like $CAM BTC(03042.HK) also reaching new highs.

5. Consumer "Three Sisters": $POP MART(09992.HK), $LAOPU GOLD(06181.HK), and $MIXUE GROUP(02097.HK) were among the year's top performers, with multi-bagger gains.

6. Stablecoin Innovation: Hong Kong's new regulations activated stocks like $ZA ONLINE(06060.HK), $BRIGHT SMART(01428.HK), and $GUOTAI JUNAN I(01788.HK). Meanwhile, the first U.S.-listed stablecoin issuer, $Circle(CRCL.US), surged over 9x at its IPO, nearing USD 300.

7. NVIDIA Reigns Supreme: $NVIDIA(NVDA.US) became the world's most valuable company with a market cap of USD 3.85 trillion, boosting chip stocks like $SMIC(00981.HK) and $HUA HONG GRACE(01347.HK).

8.Nasdaq & S&P Hit Records: The AI and chip frenzy drove U.S. indices $NASDAQ Composite Index(.IXIC.US) and $S&P 500(.SPX.US) to repeated highs. However, Hong Kong's tech sector underperformed due to internal competition, with stocks like $MEITUAN(03690.HK) and $JD-SW(09618.HK) declining.

📈 Five Key Themes for H2 2025

1. U.S.-China Tech & Chip War

• AI and high-end chips will remain focal points in U.S.-China tensions, with attention on chip stocks like $SMIC(00981.HK) and $HUA HONG GRACE(01347.HK) (domestic substitution), and tech stocks like $TENCENT(00700.HK), $BABA-W(09988.HK), and $KUAISHOU-W(01024.HK) (AI, cloud services).

2. Fed Monetary Policy

• The market is closely watching the Fed's next moves, with expectations of a rate-cut cycle. This would benefit high-dividend stocks like mainland banks $CCB(00939.HK), $ICBC(01398.HK), and $BANK OF CHINA(03988.HK); insurers $PING AN(02318.HK), $CHINA LIFE(02628.HK), and $AIA(01299.HK); and high-yield stocks like $CHINA MOBILE(00941.HK) and $LINK REIT(00823.HK).

3. Hong Kong Financial Innovation

• The enactment of Hong Kong's Stablecoin Ordinance and the approval of $GUOTAI JUNAN I(01788.HK) as the first Chinese-backed broker to offer virtual asset services signal continued policy support. Brokerage stocks, especially $BRIGHT SMART(01428.HK) (acquired by Ant), will be in focus.

4. Traditional Consumption Recovery

• While new consumer stocks dominated H1, capital is shifting to traditional sectors like sportswear ($ANTA SPORTS(02020.HK), $LI NING(02331.HK)).

5. Energy & Safe-Haven Assets

• Geopolitical risks and Trump's policies will keep oil ($CNOOC(00883.HK), $PETROCHINA(00857.HK), $SINOPEC CORP(00386.HK)) and gold stocks ($ZIJIN MINING(02899.HK), $ZHAOJIN MINING(01818.HK)) in focus.

🎯 Three Key Strategies for H2

🔥Offensive Portfolio (High-Growth Sectors, Targeting 25,000+)

•Tech: $TENCENT(00700.HK), $BABA-W(09988.HK), $XIAOMI-W(01810.HK)

•Traditional Consumer: $LI NING(02331.HK), $ANTA SPORTS(02020.HK)

•Chips: $SMIC(00981.HK), $HUA HONG GRACE(01347.HK)

•ETFs: $CAM HS TECH(03088.HK), $CAM HSI ESG(03403.HK)

🛡️Defensive Portfolio (Safe Havens & Dividends)

$LINK REIT(00823.HK), $ZIJIN MINING(02899.HK), $CNOOC(00883.HK)

Conclusion

The Hang Seng Index's H1 performance was impressive, with a slow-but-steady bull run. H2 will bring new challenges. Watch these three key variables:
1️⃣ Trump's tariff policies
2️⃣ Fed monetary policy
3️⃣ Mainland economic stimulus

Stay disciplined—cut losses early and manage risks 🚀

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Disclaimer: This is for informational purposes only and not investment advice. Invest at your own risk.