According to the market data, the Hang Seng Index opened 0.69% higher in the morning but turned down during the trading session before slightly recovering. At the close, the Hang Seng Index increased by 0.14% or 27.34 points, reporting 20225.11 points, with a half-day turnover of 51.663 billion HKD; the Hang Seng China Enterprises Index fell by 0.01%, reporting 7382.13 points; the Hang Seng TECH Index rose by 0.77%, reporting 4723.63 points.

Zhongtai International stated that with the Spring Festival approaching, the Hong Kong stock market will lack guidance from the A-shares, combined with a vacuum period of policies and data, overseas market fluctuations may temporarily dominate the performance of Hong Kong stocks. The Trump administration's tariff policy on China is expected to start at a 'low level and gradually increase', and tariff negotiations and conflicts are expected to last for a long time, with a high probability of a strong 'export rush' in the first quarter or even the first half of the year. Zhongtai International believes that the Hang Seng Index is expected to fluctuate between 18,500 and 21,000 points in the short term.

Performance of blue chips.

NONGFU SPRING (09633) performed remarkably, closing up 3.98% at 36.55 HKD, with a turnover of 80.7653 million HKD, contributing 4.42 points to the Hang Seng Index. According to media reports, on January 22, NONGFU SPRING founder Zhong Shanshan stated at a health forum that there will absolutely be no price wars, as low prices cannot create high-quality products, and low prices can only create a life-and-death competition in a downward spiral. Zhong also mentioned that in the future, NONGFU SPRING will move towards globalization, but 'price' is definitely not the key to globalization.

In terms of other Blue Chip stocks, ALI HEALTH (00241) rose by 4.34%, reporting 3.61 HKD, contributing 1.49 points to the Hang Seng Index; NEW ORIENTAL-S (09901) rose by 3.7%, reporting 37.85 HKD, contributing 1.42 points; Tencent (00700) rose by 1.42%, reporting 401.2 HKD, contributing 21.86 points; Sinopharm (01177) fell by 3.75%, reporting 2.82 HKD, dragging down the Hang Seng Index by 1.82 points.

In terms of popular sectors.

In the market, DeepSeek has raised concerns about excess demand for computing power, and the impact continues to spread. Chip stocks in the AI hardware sector, Datacenter suppliers, Nuclear Power stocks, and Copper stocks led the declines today. However, the reduction in inference costs is expected to drive the proliferation of AI applications, which led the gains in AI applications today.

1. Computing power concept stocks led the declines today. At the close, FIT HON TENG (06088) fell by 7%, closing at 3.32 HKD; YOFC (06869) dropped by 6.41%, closing at 16.36 HKD; ASMPT (00522) declined by 3.79%, closing at 71.05 HKD; TIME INTERCON (01729) fell by 2.24%, closing at 4.37 HKD. Additionally, Nuclear Power stocks that provide electricity for AI infrastructure were also impacted, with CGN MINING (01164) plummeting 15.93%, closing at 1.53 HKD.

DeepSeek recently launched a new model that achieved performance comparable to giants like OpenAI at an extremely low cost (6 million USD) and with a small number of chips (2000 pieces). The market is worried that the low training costs indicate a significant decrease in the demand for computing power investments in AI large models. NVIDIA (NVDA.US) fell 17% overnight, dragging down the global performance of computing power assets. Citi pointed out that AI capital expenditures by super-large American companies may not decline due to DeepSeek's influence, as the total training costs of DeepSeek's model may be underestimated. The lower operational costs could also increase the demand for AI applications and inferences, further boosting the demand for computing power; industry capital expenditures are expected to continue.

2. Copper stocks collectively weakened. At the close, CMOC Group Limited (03993) fell by 5.45%, closing at 5.72 HKD; MMG (01208) declined by 4.49%, closing at 2.55 HKD; JIANGXI COPPER (00358) dropped by 4.06%, closing at 12.28 HKD; Zijin Mining Group (02899) fell by 2.41%, closing at 14.56 HKD.

The impact of DeepSeek has spread to Copper stocks. According to a recent report from BHP Group Ltd, the company's copper output grew by 10% year-on-year in the second half of last year, with production in the Escondida mine in northern Chile increasing by 22%, setting a decade-high. The company anticipates that due to strong demand from AI Datacenters for Copper, demand for Copper will grow by 70% by 2050 compared to 2021. It is understood that Copper, as a key material for Datacenters, is used not only in power supply systems but also in cooling systems and connecting processors.

3. AI application stocks led the gains. At the close, MEITU (01357) rose by 15.38%, closing at 4.2 HKD; KINGSOFT (03888) increased by 5.82%, closing at 39.1 HKD; KINGDEE INT'L (00268) gained 3.63%, closing at 10.28 HKD; Baidu Group-SW (09888) rose by 3.6%, closing at 87.8 HKD.

CITIC SEC Research Reports noted that the smaller parameter size of the DeepSeek model compared to the GPT4 model also implies lower inference costs. The reduction in inference costs will be a prelude to the proliferation of AI applications, just as the acceleration and cost reduction of 4G benefited China's mobile internet industry. It is expected that with the continuous improvement in the cost-effectiveness of models and the rich ecosystem and mature traffic in domestic AI applications, deployment across various fields will accelerate. Citi stated that DeepSeek has shown good performance and relatively low training and inference costs, which will contribute to the popularization of AI applications and accelerate the monetization process of AI.

Popular stocks with abnormal movements

1. CHINA VANKE (02202) announced changes in management. At the close, it rose 2.12%, closing at 5.78 HKD.

CHINA VANKE announced that Yu Liang applied to resign from the position of Chairman of the Board of Directors due to work adjustments. Zhu Jiusheng and Zhu Xu also resigned from their executive positions. Xin Jie, Chairman of Shenzhen Metro, has assumed the role of Chairman of the Board of Directors of CHINA VANKE. The head of Shenzhen State-owned Assets Supervision and Administration Commission emphasized that there is enough "ammunition" to support CHINA VANKE. JP Morgan stated that the changes in CHINA VANKE's management and the government’s commitment to support are positive developments, expecting a positive response in the short-term stock price. Nomura stated that the restructuring of CHINA VANKE’s management is a milestone that may end three years of industry liquidity crisis.

2. MEDBOT-B (02252) rose over 10% again, accumulating an increase of 85% in the last half month. At the close, it rose 10.2%, closing at 16.2 HKD.

MEDBOT recently announced that according to internal preliminary statistics, the comprehensive order volume of core products including endoscopy, orthopedics, and vascular intervention under the group last year has exceeded 100 units. Among them, the global order for the Tumai endoscopic surgical robot reached 39 units, with commercial installations exceeding 30 units, and a cumulative global commercial order of nearly 60 units. The global order for the Honghu orthopedic surgical robot reached 25 units, with cumulative orders exceeding 40 units, covering medical institutions in five continents including China, the USA, Germany, Italy, Belgium, Greece, Australia, and Brazil.

3. GANFENGLITHIUM (01772) dropped after profit warning. At the close, it fell 4.59%, closing at 19.32 HKD.

GANFENGLITHIUM issued a profit warning, expecting a net loss attributable to shareholders of the listed company between 1.4 billion to 2.1 billion RMB, compared to a net income of 4.947 billion RMB last year. The non-recurring profit and loss is mainly due to fair value change losses from the decline in PLS stock price, with performance below market expectations. UBS Group indicated that GANFENGLITHIUM's preliminary Earnings Reports last year were disappointing, expecting investors to react negatively to the group’s Earnings Reports. With more upstream projects coming online and capacity increases, the firm expects the self-sufficiency rate of lithium raw materials to grow significantly this year, but the key factor this year is cost control in mining and battery businesses.