First Day After the Holiday, Hong Kong Stocks Plunge! Tech Stocks Underperform, BAT Stocks All Decline

On the first trading day after the holiday, the Hong Kong stock market declined sharply overall.

On the fourth day of the Lunar New Year, the Hong Kong stock market迎来the first trading day of the Year of the Horse, with major indices falling significantly. By the close, the Hang Seng Index dropped 1.1%, the Hang Seng Tech Index fell 2.91%, and the Hang Seng China Enterprises Index declined 1.22%.

In terms of specific sectors, tech stocks plummeted, dragging the Hang Seng Tech Index lower; artificial intelligence and some leading biotech companies surged, and cryptocurrency concept stocks also rose against the trend.

Tech Stocks Underperform, BAT Stocks Fall

Regarding tech stocks, by the close, JD Health and Baidu fell over 6%, Tencent Music and Bilibili declined over 5%, Alibaba and NetEase dropped over 4%, Tongcheng Travel, Kuaishou, and Tencent Holdings fell over 2%, and JD.com declined nearly 2%. As a result, the Hang Seng Tech Index fell 2.91% to 5,211.50 points, hitting a nearly five-month low.

Major component stocks with significant declines in the Hang Seng Tech Index

Industry analysts believe that, before and after the Spring Festival, fierce competition in delivery and red envelope businesses among internet companies has raised investor concerns about the returns on AI investments. Additionally, since tech stocks are not currently the main focus of funds, it is expected that Hong Kong tech stocks will remain weak in the near term. It may not be until companies like Tencent announce their annual results in March that tech stocks might restart share buybacks, leading to a gradual stabilization of prices.

In stark contrast, concepts such as AI applications and humanoid robots rose against the trend. In the humanoid robot sector, Yuejiang surged over 21%, SUTENG Juchuang rose over 9%, UBTECH increased over 4%, and MicroPort Robotics gained over 3%.

Furthermore, some AI concept stocks soared, with Zhipu and MiniMax both surpassing HKD 300 billion in market capitalization. Specifically, Zhipu closed up 42.72%, with a share price of HKD 725, and a total market cap of HKD 3,232 billion. On February 12, the company announced a structural adjustment to the pricing system of its GLM Coding Plan packages, with overall prices increased by over 30%. MiniMax rose 14.52%, trading at HKD 970 per share, with a total market cap of HKD 3,042 billion.

Certain Cryptocurrency Stocks Surge

Virtual asset and Bitcoin concept stocks also participated in the rally. Xing Tai Chain Group surged over 122%, and Lianlian Digital rose over 3%.

On the news front, on February 2, Hong Kong Monetary Authority Chief Executive Eddie Yue told media after a Legislative Council Financial Services Panel meeting that the HKMA is evaluating applications for stablecoin issuer licenses it has received, and has requested additional information from some institutions, such as specific use cases, risk management frameworks, and reserve asset categories. The goal is to issue the first stablecoin issuer licenses in Hong Kong by March this year.

Regarding companies, Xing Tai Chain Group recently announced that it has entered into a strategic cooperation framework agreement with China International Digital Financial Group Limited on a real-world asset (RWA) tokenization project for gold, aiming to leverage Hong Kong’s regulatory framework to strengthen its digital finance position and create new revenue streams. According to publicly available information, the project plans to diversify income through technology services and ecosystem operations, enhancing the company’s international footprint in digital finance.

Although the first trading day did not open strongly, Hong Kong SAR Financial Secretary Paul Chan expressed optimism about the market outlook for the Year of the Horse during the opening ceremony at HKEX today: “In fact, looking back at the past four Horse Years, three of them have been bullish, with double-digit percentage gains. Overall, we are optimistic about the market conditions in this Year of the Horse.” He added that Hong Kong stocks already have the qualities of a “swift horse”: not only a “safe haven” for international investors but also accelerating in new economic fields such as AI, life sciences, and quantum computing. HKEX Chairman Charles Li also remarked at the opening ceremony, “There are 488 companies waiting in line to list. We’ve never been this busy, but it’s a happy busyness because it reflects market activity and liquidity.”

(Source: Securities Times)