Hong Kong Stocks: Hang Seng and Tech Index Edge Up; Memory and PCB Stocks Slump

Hong Kong's major indices closed higher on Tuesday (28th), showing a volatile session with an initial rally, followed by a pullback and eventual recovery. By the close, the Hang Seng Index rose 0.41% to 25,310.85 points; the Hang Seng Tech Index gained 0.61%; and the H-share Index advanced 0.85%. Total market turnover reached HK$250.63 billion.

The market opened higher, with the Hang Seng Index briefly touching 25,440 points. However, dragged down by memory and AI-related stocks, it turned negative mid-session, plunging 132 points to 25,074, testing support at the 100-day moving average, before recovering slightly near the close.

The catering sector led gains, with Xiaocaiyuan rising over 5%. Analysts noted that June’s catering revenue data suggests the industry’s weakest period is over, with marginal improvements showing a mild upward trend. Tech and internet stocks were active, with NetEase and JD.com up over 4%, and Xiaomi gaining around 2%.

New energy vehicle (NEV) stocks strengthened, with Leapmotor up 3.72% and Li Auto up 3.33%. The sector’s strength stems from strong export growth, overseas localization progress, and the ongoing trend toward vehicle intelligence.

Despite the broader market’s gains, memory-related stocks and the PCB sector were hit hard. The 2x Long Hynix ETF by CSOP plunged over 30%, while the 2x Long Samsung Electronics ETF dropped more than 26%. Zhongdie Innovation (GigaDevice) and Lamtech (Montage Technology) fell 17.36% and 13.79%, respectively.

Analysts attributed the semiconductor sector’s broad selloff to a confluence of concerns:

Funding Pressure and Capital Withdrawal: Investors are wary of financing pressures from AI data center projects, and capital is exiting the high-beta memory supply chain.

Technological Breakthroughs and Competition: Advances in China’s semiconductor technology and fierce competition from domestic players have heightened expectations of oversupply from Korean memory giants.

AI Expectations Correction: Following Google’s historically negative cash flow in Q2, markets are revising down previously inflated AI capital expenditure forecasts, raising concerns over 'circular financing' risks.

Additionally, PCB-related stocks declined, with Kingboard Laminates down over 16%, reflecting a market shift from trading on 'high prosperity' to focusing on capacity absorption and valuation corrections. Individual stocks also suffered: Laopu Gold plunged 23.76%, while AI-related firms such as Zhipu and MiniMax recorded losses exceeding 14%.