[Yuan Zhifeng Column] HSI Finds Technical Support at 25,000 Points

Stock Recommendation Today - CNOOC (883, $22.7), Target Price $25.0, Stop-Loss Price $21.5

1) Market Outlook

Hong Kong stocks fell on Thursday with declining turnover. The short-selling ratio was relatively low at 13.5%, and southbound funds recorded net selling for two consecutive days. After briefly exceeding 26,000 points, the Hang Seng Index encountered profit-taking pressure, indicating short-term consolidation. Technical support exists around the 25,000-point level. August is the peak period for quarterly earnings releases, which will be a critical factor influencing individual stock performances.

2) Summary of Previous Day's China and Hong Kong Market Conditions

On Thursday, the Hang Seng Index opened 249 points lower, marking its intraday high. It dropped as much as 526 points early in the session before narrowing losses to close at 25,530 points, down 385 points or 1.5%. Daily turnover decreased by 8% to HK$255.2 billion, compared to July's average daily turnover of HK$307.2 billion.

Southbound funds via Stock Connect recorded net outflows of approximately HK$1.5 billion. Minimax (100), Kingboard Laminates (1888), and Yangtze Optical Fibre (6869) saw net inflows of HK$2.7 billion, HK$750 million, and HK$590 million respectively. Tencent (700), Alibaba (9988), and SMIC (981) experienced net outflows of HK$2.2 billion, HK$1.63 billion, and HK$1.08 billion respectively. Cumulative net inflows since the beginning of August amount to approximately HK$10.7 billion, compared to about HK$62.9 billion in July.

The Hang Seng Index declined by 1.5%, with 24 constituent stocks rising and 69 falling. Wheelock Properties (1997) surged over 13%, the strongest among blue chips. Lau Pui Gold (6181) and Chow Tai Fook (1929) rose over 3%. WuXi Biologics (2269), China Shenhua (1088), Techtronic Industries (669), and Nongfu Spring (9633) gained over 1%. AIA (1299) and CATL (3750) dropped over 5%, the worst performers among blue chips. Sun Hung Kai Properties (16) and Geely Automobile (175) declined over 4%. Henderson Land (101) fell over 3%. Pop Mart (9992), Cheung Kong (1113), Henderson Land Development (12), WuXi AppTec (2359), China Resources Beer (291), Haidilao (6862), and ENN Energy (2688) dropped over 2%. HSBC (5), CNOOC (883), HKEX (388), and CK Hutchison (1) declined over 1%.

The Hang Seng Tech Index dropped 2.3% to close at 4,820 points, with 4 gainers and 26 losers. Large tech stocks broadly declined: Alibaba (9988), Tencent (700), Xiaomi (1810), JD.com (9618), and Kuaishou (1024) all fell over 2%. Leapmotor (9863), Baidu (9888), and BYD (1211) dropped over 4%, the worst performers. Li Auto (2015), NIO (9866), SMIC (981), Hua Hong Semiconductor (1347), and SenseTime (20) declined over 3%. Alibaba Health (241), BYD Electronic (285), XPeng (9868), and Trip.com (780) fell over 2%. Minimax (100) and Zhipu (2513) surged over 17% and 4% respectively, the top gainers.

Sector-wise, electric vehicles, semiconductors, lithium batteries, and local property stocks underperformed, leading declines. BYD (1211), Geely (175), and Leapmotor (9863) dropped over 4%. Hua Hong (1347) and SMIC (981) fell over 3%. CATL (3750) and Ganfeng Lithium (1772) declined over 5% and 4% respectively. Sun Hung Kai Properties (16) and Swire Properties (1972) dropped over 4%, while Henderson Land (101) and Sino Land (83) fell over 3%.

Conversely, artificial intelligence, coal, gold, and mining stocks rose against the broader market. Minimax (100) and Zhipu (2513) surged over 17% and 4%. Yankuang Energy (1171) and China Coal Energy (1898) rose 6% and 3%. Zhaojin Mining (1818) and Shandong Gold (1787) gained over 2%. MMG (1208) and洛阳钼业 (3993) rose over 1%.

On Thursday, the Shanghai Composite Index opened 0.4% lower, its intraday low. It rebounded early, narrowed gains mid-session, then strengthened toward the close, ending near its high at 3,900.35 points, up 0.6%. The Shenzhen Component Index fell 0.2%. The STAR 50 Index rose 0.5%. Total turnover across Shanghai and Shenzhen markets reached approximately RMB 2.53 trillion, down RMB 130 billion from the previous day. July's average daily turnover was around RMB 2.68 trillion.

3) Stock-Specific News

China Overseas Land & Investment (688) announced that contracted property sales in July amounted to approximately RMB 15.119 billion, up 27.6% year-on-year. For the first seven months of the year, cumulative contracted sales reached approximately RMB 149.47 billion, up 13.2% year-on-year. (Source: Economic Times)

Wheelock Properties (1997) reported interim results for the six months ended June 30, showing a shareholder loss of RMB 176 million, including a net revaluation loss of RMB 3.547 billion on investment properties. Underlying net profit rose 6.2% year-on-year to RMB 3.311 billion. An interim dividend of HK$0.94 per share was declared, up 42.4% year-on-year. The board decided to increase the payout ratio by 25 percentage points from 65% to 90% starting in 2026. (Source: Economic Times)

CLP Holdings (2) reported interim results for the six months ended June 30, with attributable profit reaching HK$5.997 billion, up 6.6% year-on-year. The second interim dividend remains unchanged at HK$0.63 per share. Revenue stood at HK$42.856 billion, broadly stable compared to the same period last year. (Source: Economic Times)

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