Hong Kong Market Wrap: Hang Seng Index Trades Sideways as Tech Index Surges on Chip and AI Large Model Rally

Hong Kong's three major indices diverged on Tuesday (21st). The Hang Seng Index traded in a narrow range throughout the day, closing down 0.04% at 25,132.29 points. The Hang Seng Tech Index rose 1.32% to 4,814.83 points, while the H-share Index fell 0.25% to 8,360.68 points.

Chip and semiconductor stocks rallied collectively, with Hua Hong Semiconductor surging nearly 18% and SMIC rising over 8%. Market expectations suggest TSMC may raise pricing for mature process nodes by 2027, indicating that AI-driven semiconductor demand is expanding beyond high-performance computing into areas like power management chips. Additionally, memory sector recovery fueled by AI boosted GigaDevice, whose net profit surged approximately 11-fold in the first half, sending its shares up 15%. Montage Technology also jumped 17% on strong earnings.

AI large model leaders, Zhipu and MiniMax—dubbed the 'twin giants'—led gains, with Zhipu soaring nearly 37% at close. The company recently announced the deployment of a 1GW-class domestic AI computing data center and completed the acquisition of Zhongke Jiahe, a domestic AI heterogeneous computing software firm. Haitong International subsequently raised Zhipu’s target price to HK$2,300, maintaining an 'Outperform' rating.

Hardware and PCB stocks also performed strongly, with Kingboard Chemical Holdings jumping over 12%. Analysts noted that NVIDIA’s new Rubin architecture could trigger a revaluation of hardware stocks, with overseas computing demand expected to peak in concentrated growth during the third quarter.

Other sectors saw gold stocks rally in afternoon trading, with Zijin Gold International rising over 10%. Gold prices remain stable above the $4,000 mark. In contrast, oil stocks retreated collectively as expectations for oil prices cooled due to easing U.S.-Iran tensions, with CNOOC falling over 1%.

On individual stocks, Harbin Electric stood out with a gain of over 23%, forecasting a first-half net profit of RMB 1.7 billion, a year-on-year increase of approximately 62%. Meanwhile, mainland property and banking stocks showed relative weakness.