According to Zhitong Finance APP, Hong Kong stocks quickly rebounded after a slight dip in the early session, and all three major indices turned positive, with the Hang Seng TECH Index briefly rising over 1%. In the afternoon, the stock indices remained volatile, and the Hang Seng Index fell again towards the close. At the end of trading, the Hang Seng Index fell by 0.04% or 7.83 points to 20,090.46 points, with a total trading volume of 139.519 billion Hong Kong dollars; the Hang Seng China Enterprises Index rose by 0.02% to 7,305.36 points; the Hang Seng TECH Index rose by 0.69% to 4,538.59 points. Over the week, the Hang Seng Index increased by 1.87%, the China Enterprises Index rose by 2.26%, and the Hang Seng TECH Index climbed by 2.12%.

Guoyuan International believes that based on the judgment of the market environment, the bank is relatively cautiously optimistic about the future short-term and medium-term trends of Hong Kong stocks. In the short term, as specific policies still need time to be issued, the Hong Kong stock market may continue to show volatile trends, combined with some sectors' structural market conditions. If subsequent stimulus measures lead to a noticeable recovery in domestic demand and drive the economic leverage process, it is believed that a long-term trend for Hong Kong stocks can be expected.

Blue chip performance

LENOVO GROUP (00992) led the blue chips. At the close, it rose by 9.2% to 10.56 Hong Kong dollars, with a trading volume of 2.05 billion Hong Kong dollars, contributing 11.28 points to the Hang Seng Index. On December 26, at the 2024 LENOVO Ecosystem Partner Conference, LENOVO officially announced its collaboration with Volcano Engine to embed the powerful large model "Super Brain" into its AI desktop assistant Ruyi (AI Stick), enhancing user experience comprehensively. Sealand Securities pointed out that with the help of the general model Pro from Douchao, Ruyi has completed the transformation from a traditional system tool assistant to an intelligent conversational comprehensive assistant, greatly enhancing the intelligent interaction experience between users and PC systems and improving Lenovo's competitive capabilities in PCs.

In other blue-chip stocks, LEAPMOTOR-W (02015) rose by 6.13% to 100.4 Hong Kong dollars, contributing 12.69 points to the Hang Seng Index; Semiconductor Manufacturing International Corporation (00981) rose by 5.15% to 30.65 Hong Kong dollars, contributing 9.93 points to the Hang Seng Index; ZHONGSHENG HLDG (00881) fell by 4.38% to 14.42 Hong Kong dollars, dragging down the Hang Seng Index by 0.7 points; WUXI APPTEC (02359) fell by 3.14% to 53.9 Hong Kong dollars, dragging down the Hang Seng Index by 0.95 points.

Hot sectors

On the market, most large Technology stocks were in the red, with Alibaba down 0.96%, Tencent down 0.62%, while Xiaomi defied the trend, rising over 4% close to its historical high. Semiconductor stocks performed strongly today, with Semiconductor Manufacturing International Corporation soaring nearly 9% in early trading; November sales continued to show impressive performance, and Automotive stocks broadly rose today; Defense stocks, Apple Related stocks, and Pulp and Paper stocks generally rose. On the other hand, the box office on Christmas Eve reached a ten-year low, with MAOYAN ENT leading the decline in Theater stocks, falling more than 5%; CRO Related stocks, Dining stocks, Dairy Product stocks, and Mainland Real Estate stocks were weak in performance.

1. Semiconductor stocks led the gains. At the close, HG SEMI (06908) rose 6.78%, trading at 0.63 HKD; HUA HONG SEMI (01347) rose 5.44%, trading at 22.3 HKD; Semiconductor Manufacturing International Corporation (00981) rose 5.15%, trading at 30.65 HKD; SOLOMON SYSTECH (02878) rose 3.16%, trading at 0.49 HKD.

The Semiconductor industry observation agency TechInsights released a report stating that due to improved end-demand and rising prices, IC sales are expected to grow 26% by 2025. As the number of sold devices increases, IC sales are expected to jump 17%, which will drive silicon demand accordingly by 17%, since ICs are the main consumers of silicon. Continuous investment is crucial to enhance manufacturing capabilities and push technological advancements to support this growth. Therefore, Semiconductor capital expenditure is expected to surge by 14%. The report indicates that 2025 will be a key year for the Semiconductor and subsystem market. With AI, interest rate cuts, and consumer replacement cycles aligning in 2025, the industry drivers will be fully leveraged.

Goldman Sachs' research report pointed out that Semiconductor Manufacturing International Corporation remains bullish as a leading wafer foundry enterprise in China, due to the increasing demand for localized production from its clients. However, ongoing capacity expansion, increased supply of mature nodes, intensified competition, and geopolitical risks remain valuation concerns and uncertainties. It is anticipated that in the second half of this year, demand for end products in the industrial and automotive sectors may weaken amid fierce competition, but it should gradually recover as inventory digestion completes. With healthier inventory levels and the push for localization trends, a positive outlook on Semiconductor Manufacturing International Corporation's revenue prospects is held.

2. Automotive stocks broadly rose today. At the close, LI AUTO-W (02015) rose 6.13%, trading at 100.4 HKD; LEAPMOTOR (09863) rose 3.51%, trading at 33.9 HKD; NIO-SW (09866) rose 3.41%, trading at 36.4 HKD; Peking Automotive (01958) rose 1.75%, trading at 2.33 HKD.

Hua Chuang Securities released a research report stating that November sales continued to excel, with New energy experiencing high growth year-on-year. The 2024 trade-in policy will expire at the end of the year, but the market also anticipates continued policies; under the normal conditions of policy implementation, demand is expected to be slightly pulled forward at the beginning of 2025, combined with the relatively early Spring Festival (January 29), historical experience suggests that the terminal channel is likely to see replenishment from January to February, with performance in wholesale expected to outperform retail.

It is worth mentioning that on December 25, LI AUTO CEO Li Xiang proposed at the "2024 Ideal AI Talk" event that cars will evolve from industrial-age vehicles into AI-era spatial robots. Regarding LI AUTO's strategic layout in the AI era, Li Xiang stated that in the future, they will definitely create humanoid robots, but first need to solve L4 autonomous driving. Li Xiang revealed that the company invests over 10 billion annually in R&D, with nearly half allocated to AI.

3. Tencent Related stocks rose and then fell. At the close, EAST BUY (01797) fell 3.69%, trading at 17.22 HKD; Youzan (08083) fell 9.8%, trading at 0.138 HKD; WEIMOB INC (02013) rose 3.08%, trading at 3.35 HKD.

Recently, there have been online reports claiming that WeChat plans to fully open the "Gift" feature of WeChat Store before the Spring Festival. This feature has been in grayscale testing for some time and has been publicly opened for less than a week, with the whitelist users exceeding 0.3 billion, reaching over 40 million cumulative users. On December 19 alone, nearly 2 million users placed orders through this feature, and the cumulative GMV (Gross Merchandise Volume) is less than 0.4 billion (as of December 20 data). Subsequently, Zhang Jun, the general manager of Tencent's market public relations department, posted on WeChat Moments to deny any commercial plans for the WeChat gift feature, stating it is a rumor.

AVIC Securities stated that relying on WeChat's inherent massive traffic, WeChat e-commerce ecosystem players are expected to usher in a new period of development dividends. Additionally, with Tencent's continuous layout in AI, the AI e-commerce scenario in the WeChat ecosystem is expected to activate greater consumer demand, achieving the "moment of surprise attack" in e-commerce battles. The firm is optimistic about three types of companies that may directly benefit: first, e-commerce Saas companies/operating agencies; second, advertising agencies in the WeChat field; and third, brands that have opened WeChat stores and have the gift function.

Popular stocks with abnormal movements

1. Kingsoft Cloud (03896) reached a historical high. By the close, it rose by 37.8%, reporting at 6.38 Hong Kong dollars.

According to Jiemian News, Xiaomi is working on building its own GPU Wan Card cluster, which will heavily invest in AI large models. When the Xiaomi large model team was established, they already had 6,500 GPU resources. Previously, on November 19, Kingsoft Cloud announced that Kingsoft Software and Xiaomi signed a new framework agreement. GF Securities indicated optimism regarding the demand for computing power as Xiaomi deeply integrates AI into its ecosystem.

2. FIT HON TENG (06088) rose significantly. By the close, it rose by 17.76%, reporting at 3.78 Hong Kong dollars.

China Securities Co.,Ltd. previously pointed out that FIT HON TENG is a leading manufacturer in the precision components field globally, with Foxconn as the actual controller of the company. The development of AI drives the construction of computing power infrastructure and upgrades the connection system architecture to higher speeds. FIT HON TENG's layout in high-speed connection systems covers Copper connections, optical modules, and other areas, which is expected to benefit fully. With the expansion of the business scale and continuous quality improvement and efficiency enhancement, the company's profitability is expected to increase in the future.

3. ZTE (00763) was strong throughout the day. By the close, it rose by 13.18%, reporting at 24.9 Hong Kong dollars.

China Great Wall pointed out that ZTE, as the leader in the domestic ICT industry, is continuously accelerating its expansion from connectivity to computing power, focusing on the rapid development of the major country, major network, and major T Global Strategy. The company's performance is likely to maintain stable growth. HUA HONG SEMI believes that the company is actively expanding its mobile phone and computing power business and is expected to benefit from the rapid development trend of AI.

4. SUTENG JUNCHUANG (02498) continued its upward trend. By the close, it rose 7.39%, closing at 31.25 HKD.

FIRST SHANGHAI previously pointed out that the company's high-level intelligent driving and robotics business are growing rapidly. The L4 level autonomous driving business has secured SOP collaboration agreements from multiple industry-leading L4+ autonomous driving companies. In terms of robotics, the company has utilized the E Lidar platform to collaborate with several key clients in industrial, commercial, and consumer sectors to jointly develop new products across different verticals, with expected deliveries within the next 18 months.

5. ALPHAMAB-B (09966) surged in the afternoon. By the close, it rose 5.23%, closing at 3.62 HKD.

ALPHAMAB announced at noon that the HER2 bispecific antibody conjugate (ADC) JSKN003 has received approval from the National Medical Products Administration (NMPA) Drug Evaluation Center (CDE) to conduct a Phase III clinical trial (Study Number: JSKN003-306) for comparative research against investigator-selected chemotherapy for platinum-resistant recurrent epithelial ovarian cancer, primary peritoneal cancer, or fallopian tube cancer.

New stock first listing.

YOUJIA INNOVATION (02431) performed brilliantly. By the close, it rose 14.12%, closing at 19.4 HKD.

YOUJIA INNOVATION priced its shares at 18.8 HKD and 17 HKD each, issuing a total of 39.19 million shares, with a board lot of 200 shares. According to public information, YOUJIA INNOVATION was established in 2014 and is a supplier of intelligent driving and smart cockpit solutions in China. It is committed to the gradual realization of L0-L2+ level autonomous driving technology mass production through fully self-developed soft and hard integration technology, while also actively developing more advanced autonomous driving. Solutions include intelligent driving, smart cockpit, and vehicle-road collaboration.