Weekly | Big News Hits, But Southbound Funds Pull Off a Surprise
This week, the Hong Kong stock market rallied for a fifth straight week, with the $HSI(HSI)$ up 2.09%.
The big driver? A major breakthrough in U.S.-China trade talks. Top officials from both sides met in Geneva and reached meaningful consensus.
Both countries agreed to slash tariffs. 91% of the so-called “emotional tariffs” were scrapped outright. Of the remaining 34% tariffs imposed post-“Liberation Day,” 24 percentage points are on a 90-day pause—only 10% remains.
This means the current U.S. administration has cut its tariffs on China from 145% to just 30%. China’s tariffs on U.S. goods dropped from 125% to 10%.
Markets loved it. The Hang Seng surged 3.4% on Monday.
But then—something unexpected.
Southbound Funds, which had been actively bottom-fishing Hong Kong stocks, flipped hard. On Monday, net selling hit HK$18.53 billion, the second-largest single-day sell-off ever—only topped by one day in February 2021.
For the full week, Southbound Funds were net sellers of HK$8.68 billion, the largest weekly outflow in over a year.
Despite cautious fund flows, IPO activity is red-hot.
$CATL(03750)$ saw sky-high demand in its Hong Kong secondary listing—over 120x oversubscribed, with HK$280 billion locked in. It now ranks third in terms of IPO frozen capital over the past six months, just behind $MIXUE GROUP(02097)$ and $BLOKS(00325)$ .
Next up: $HENGRUI PHARMA(01276)$ . The A-share giant kicked off its IPO this week. On Tiger Brokers, financing subscriptions are already 36x oversubscribed—poised to become the biggest biotech IPO in Hong Kong in five years.
Tech Giants Report: Mixed Reactions
Earnings season stirred up some market action. $TENCENT(00700)$ $BABA-W(09988)$ $JD-SW(09618)$ all released Q1 results this week.
Tencent posted strong numbers: net profit hit RMB 47.82 billion, up 14% YoY—better than expected.
Alibaba’s Q4 revenue came in at RMB 236.45 billion, up 7%—but missed estimates.
JD.com delivered a solid beat: Q1 revenue grew 15.8% YoY to RMB 301.1 billion—its fastest growth in three years.
Among them, $NTES-S(09999)$ stole the show—surging 13% post-earnings and hitting a record high.
Sector Highlights
This week’s sector winners: Utilities and Financials led the gains, and Telecom was the only sector in the red.
China’s National Bureau of Statistics will release key April data—retail sales, industrial output, unemployment, etc. These figures could shape the market tone for weeks ahead.
$XPENG-W(09868)$ $LEAPMOTOR(09863)$ $BILIBILI-W(09626)$ are among companies set to report next week. Volatility expected.
Major Events in Hong Kong Stocks This Week
1. $CATL(03750)$ IPO this week, trading starts next Tuesday
2.U.S.-China trade deal cuts tariffs drastically
3. $JD-SW(09618)$ Q1 revenue RMB 301.08B (+16% YoY)
4.U.S. April CPI at 2.3% YoY—lowest since Feb 2021
5. $TENCENT(00700)$ Q1 net profit RMB 47.82B (+14% YoY)
6.Shenzhen Metro Group plans RMB 1.55B loan to $CHINA VANKE(02202)$
7. $HENGRUI PHARMA(01276)$ kicks off IPO—biggest healthcare listing since 2019
8. $NTES-S(09999)$ Q1 revenue RMB 28.8B (+7.4% YoY), beat estimates
9. $BABA-W(09988)$ Q4 revenue RMB 236.45B (+7% YoY), missed forecast
Four Stocks Worth Attention Among Top Trading HK Stocks This Week
Top 2: $BABA-W(09988)$ . Reported Q4 FY2025 results this week. Revenue came in at RMB 236.45 billion, up 7% year-over-year—but slightly below the expected RMB 237.91 billion.
Top 4: $TENCENT(00700)$ . Posted strong Q1 FY2025 results. Revenue reached RMB 180.02 billion, up 13% YoY. Net profit attributable to shareholders was RMB 47.82 billion, up 14%—beating expectations.
Top 5: $GREEN TEA GROUP(06831)$ . Debuted on the Hong Kong Stock Exchange this Friday. Shares dropped 12.5% on the first day. The IPO was 317.54 times oversubscribed, with a 40% allotment rate per lot.
Top 7: $JD.com(JD)$ . Q1 revenue hit RMB 301.1 billion, up 15.8% YoY—marking the fastest growth in nearly three years. Net profit rose to RMB 10.9 billion from RMB 7.1 billion a year ago.
Next Week's Hong Kong Stock Market Events
1.China’s National Bureau of Statistics will release April data on retail sales, industrial output, and unemployment next Monday.
2.Earnings season continues: look out for reports from $LEAPMOTOR(09863)$ $BILIBILI-W(09626)$ $XPENG-W(09868)$.
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