According to Zhitong Finance APP, the three major indexes of Hong Kong stocks opened slightly higher in the early session but then fell. There was a brief surge during the session, with the Hang Seng TECH Index rising nearly 1% at one point, but it soon retreated into a decline, with losses expanding in the afternoon. At the close, the Hang Seng Index fell by 0.36% or 71.98 points, closing at 19,688.29 points, with a total turnover of 121.635 billion HKD; the Hang Seng China Enterprises Index fell by 0.33%, closing at 7,135.48 points; the Hang Seng TECH Index declined by 0.18%, closing at 4,395.08 points.

CICC pointed out that in the first week of 2025, both A-shares and Hong Kong stocks unexpectedly weakened, catching many investors off guard. However, the performance of Hong Kong stocks was better than that of A-shares, reaffirming several judgments of the bank: 1) The market has not yet escaped a volatile pattern; 2) At the current position, it can go either up or down, so the short-term focus remains cautious; 3) The main advantages of Hong Kong stocks over A-shares come from valuation and the attractiveness of the industry structure.

Blue chip performance

XINYI SOLAR (00968) led the blue-chip stocks. At the close, it rose 5.02%, closing at 3.14 HKD, with a turnover of 0.193 billion HKD, contributing 1.19 points to the Hang Seng Index. XINYI SOLAR expects its net profit for 2024 to decline by 70-80% year-on-year to 0.77-1.15 billion RMB. Looking ahead, Goldman Sachs suggests that investors pay attention to improvements in the company's fundamentals, including production cuts progress in the first quarter of this year, and a potential seasonal demand recovery in the second quarter, believing it could accelerate inventory digestion and restore the industry's profitability to normal levels. It is also expected that XINYI SOLAR can gain more market share in the long run through cost advantages and overseas expansion.

In terms of other blue-chip stocks, JD HEALTH (06618) rose 2.82%, closing at 27.3 HKD, contributing 1.34 points to the Hang Seng Index; SINOPHARM (01099) rose 1.2%, closing at 21.05 HKD, contributing 0.52 points to the Hang Seng Index; CHINA RES BEER (00291) fell 3.74%, closing at 23.15 HKD, dragging down the Hang Seng Index by 2.29 points; OOIL (00316) fell 3.19%, closing at 115.4 HKD, dragging down the Hang Seng Index by 0.82 points.

Hot sectors

On the market, large tech stocks have mixed performance, with Tencent down 1.16%, Alibaba down 0.54%, and JD.com up 1.12%. Bitcoin has returned to above $99,000, and Global cryptocurrency concept stocks remained strong throughout the day, with GRANDSHORES rising 22%; most Biomedical stocks were up, with Hec CJ Pharm rising nearly 17%; the increase in flu cases has driven related pharmaceutical sales to surge, with SHANDONG XINHUA and HEC CJ PHARM both closing up over 6%; China-Affiliated Brokerage stocks, solar stocks, some chip stocks, and Autos were all on the rise. On the other hand, Mainland Real Estate stocks and CSI Consumer 360 index stocks all fell, with SUNAC at one point declining nearly 18%.

1. Cryptocurrency concept stocks led the gains. By the close, GRANDSHORES (01647) was up 22.22%, at 0.088 Hong Kong dollars; BOYAA (00434) was up 12.47%, at 5.23 Hong Kong dollars; OKG TECH (01499) was up 12.05%, at 0.186 Hong Kong dollars; LINEKONG (08267) was up 10.64%, at 0.52 Hong Kong dollars.

After experiencing a sharp correction at the end of 2024, Bitcoin's price has returned to above $99,000. As of the time of writing, Bitcoin was reported at $99,497 each. It is reported that Michael Saylor, the co-founder and executive chairman of the publicly listed company MicroStrategy known for holding Bitcoin, released a Bitcoin tracking chart on Sunday, hinting at a renewed push by MicroStrategy to acquire more Bitcoin on Monday. Additionally, an Analyst pointed out that Bitcoin may rise above $125,000 in the first quarter, but could also drop to around $77,000, depending on whether the incoming president Donald Trump quickly fulfills his promises to the cryptocurrency industry after taking office.

2. Some pharmaceutical stocks strengthened. By the close, SHANDONG XINHUA (00719) was up 6.18%, at 6.36 Hong Kong dollars; HEC CJ PHARM (01558) was up 6.54%, at 9.94 Hong Kong dollars.

As of January 5, according to the latest data from the Chinese Center for Disease Control and Prevention, the positivity rate of flu viruses continues to rise, with more than 99% being type A flu. Reports indicate that with the increase in flu infections, sales of anti-influenza drugs have also continued to rise recently. Currently, the main available antiviral drugs for influenza in the country include Oseltamivir, Abidol, Baloxavir marboxil, Zanamivir, and Peramivir. Many pharmacies have reported tight inventory levels for Baloxavir marboxil, and some have sold out.

Public information shows that Shandong Xinhua Pharmaceutical is a major Global supplier of antipyretic analgesic drugs, with a series of products including Ibuprofen, Aspirin, Wufan series, and Meloxicam; HEC CJ PHARM's main products include the anti-flu drug Kewai (Oseltamivir phosphate capsules and granules) among others. As a core product, Kewai accounts for about 60% of sales to Hospitals, with coverage rates for secondary and tertiary hospitals reaching 70% and 76%, respectively, making Oseltamivir products have a leading position in domestic anti-flu treatments.

3. Most solar stocks rebounded. By the close, XINYI SOLAR (00968) was up 5.02%, at 3.14 Hong Kong dollars; XINTE ENERGY (01799) was up 4.5%, at 7.43 Hong Kong dollars; FLAT GLASS (06865) was up 2.66%, at 11.56 Hong Kong dollars; GCL NEWENERGY (00451) was up 2.13%, at 0.48 Hong Kong dollars.

According to the Silicon Industry Association, both silicon wafers and Solar Cells have seen some increase this week, due to supply not meeting demand. HAITONG INT'L believes that against the backdrop of the national crackdown on "involution" competition, the photovoltaic industry is actively implementing supply-side self-discipline actions, with leading enterprises taking proactive measures. Based on the current upward price trend, these self-discipline actions are starting to show effects. Recently, prices in the solar sector have experienced some adjustments, creating a more subdued atmosphere; the firm believes that the fundamentals of the solar industry are at a turning point upwards, with supply and demand and inventory levels beginning to show positive trends. After a short-term adjustment, the solar sector now offers a higher investment cost-performance ratio.

4. The Mainland Real Estate sector saw an increase in losses in the afternoon. By the close, SUNAC (01918) fell by 14.35% to HKD 1.91; RONSHINECHINA (03301) fell by 12.68% to HKD 0.31; SINO-OCEAN GP (03377) fell by 7.85% to HKD 0.223; AGILE GROUP (03383) fell by 5.71% to HKD 0.66.

UBS Group published a report on Mainland Real Estate, expecting multiple trends from last year to continue this year, including an increase in the proportion of second-hand home sales, rising importance of the rental market, ongoing challenges for high-end malls, the rise of real estate investment trusts in low-interest conditions, and a decrease in the policy influence on the mainland housing market and Mainland Real Estate stocks. The firm anticipates that the trend of de-inventory in Mainland Real Estate will continue this year. They expect new sales area of completed Residences and new construction to decrease by 10% and 15% year-on-year, respectively, and housing prices in first-tier cities to decrease by 10% year-on-year. Their latest inventory model indicates that de-inventory may be completed by mid-next year, earlier than the originally expected third quarter next year, benefiting from recent policy stimuli.

Popular stocks with abnormal movements

1. UBTECH (09880) performed strongly throughout the day. By the close, it rose by 10.58% to HKD 51.2.

On January 5, UBTECH announced that its CTO and Executive Director Xiong Youjun, Executive Director Wang Lin, and individual shareholder Zhao Guoqun committed to not selling any of their directly held UBTECH shares within 12 months starting January 5, 2025. This is the second lock-up promise announcement from the company's core executives, following that of founder, Chairman of the Board, and CEO Zhou Jian.

2. KANATECH OPTICS (02276) reached a new high again. By the close, it rose by 8.03% to HKD 26.9.

GTJA pointed out that the company is actively laying out its smart glasses business, which will benefit from the accelerated industry development. AI smart glasses are the best hardware carrier for the implementation of AI, and the industry is entering a phase of rapid growth. The company's collaboration efforts are proceeding smoothly and will be among the first to benefit. SWHY stated that Goertek plans to continuously subscribe to and acquire shares, demonstrating recognition of the Industry Chain and is expected to empower related business development, opening up future growth opportunities.

3. BESTSTUDY EDU (03978) surged in early trading. By the close, it rose by 6.38% to HKD 4.

BESTSTUDY EDU announced that its Board of Directors has approved a dividend plan for the financial years 2024, 2025, and 2026 (three-year dividend plan). According to this plan, the company intends to gradually increase the dividend payout ratio to 50%, 60%, and 70% of the net income attributable to the owners of the company for the previous financial year over the next three years, distributing through final and interim dividends in two installments.

4. MTR CORPORATION (00066) showed weak performance. At the close, it fell by 1.51%, trading at 26.05 HKD.

Last week, market news indicated that MTR is planning to invest at least over 160 billion HKD in maintenance updates and several new railroad projects over the next 10 to 12 years. If additional new lines under consideration are included, the total investment could reach up to 200 billion HKD. In light of these potentially high expenditures, MTR is currently exploring cost-saving measures, including considering bond financing, selling or mortgaging malls or other properties, potentially adopting a 'combined approach' to meet funding needs.