Hong Kong stocks closed (07.21) | The Hang Seng Index fell 0.04%, Z.AI surged nearly 37% in a single day, and the semiconductor industry chain rebounded strongly

According to Zhitong Finance APP, the three major indices of the Hong Kong stock market showed mixed performance today. The Hang Seng Index opened slightly higher before turning to decline, while the Hang Seng TECH Index continued to strengthen, driven by semiconductor and AI concept stocks, rising nearly 2% at one point during the session. By the close, the Hang Seng Index fell 0.04% or 10.76 points to 25,132.29 points, with a total turnover of HKD 289.943 billion; the Hang Seng China Enterprises Index dropped 0.25% to 8,360.68 points; the Hang Seng TECH Index rose 1.32% to 4,814.83 points.

Dongxing Securities believes that the Hong Kong stock market is still in a window for catch-up gains, but there are many variables regarding the sustainability and strength of the rebound, and it is currently in a critical observation window. The core driving factors for the future performance of the Hong Kong stock market include: the narrative rhythm of AI technology in the US stock market; expectations for the Federal Reserve's monetary policy this year; valuation and domestic catalysts, which still need to wait for domestic policy stimulus to take effect or new AI industry narratives to provide incremental momentum.

Blue Chip Performance

Lenovo Group (00992) led the blue chips. By the close, it rose 8.5% to HKD 23.24, with a turnover of HKD 2.3 billion, contributing 19.01 points to the Hang Seng Index. Lenovo Group achieved a revenue of USD 83.075 billion for the fiscal year 2025/26, a year-on-year increase of 20%, with an adjusted net profit of USD 2 billion, up 42% year-on-year. The three major business groups IDG, ISG, and SSG achieved annual profitability simultaneously for the first time. The company's AI server orders have exceeded USD 21 billion.

In other blue chip stocks, SMIC (00981) rose 8.24% to HKD 75.5; Zijin Mining (02899) rose 4.65% to HKD 31.52; China Resources Mixc Lifestyle (01209) fell 3.24% to HKD 38.84; Tingyi (Cayman Islands) Holding Corp (00322) fell 3.15% to HKD 11.38.

Popular Sectors

On the market, large technology stocks showed mixed results, with Lenovo Group and SMIC rising over 8%, while Tencent fell 0.8%. Semiconductor, PCB concept, and other computing hardware stocks rebounded strongly, with Hua Hong Grace rising nearly 18% and Zhaoyi Innovation rising over 15%; power equipment stocks rose throughout the day, with Harbin Electric soaring 23% after a positive earnings forecast; gold stocks continued to rise, with Zhaojin Mining surging over 10%; the dual giants of large models strengthened, with Z.AI soaring nearly 37% in a single day. On the other hand, oil stocks generally fell, with CNOOC and PetroChina dropping over 1%; domestic bank stocks generally softened.

1. Semiconductor, PCB, and other computing hardware stocks rebound. By the close, Hua Hong Grace (01347) rose 17.91% to HKD 168.5; Zhaoyi Innovation (03986) rose 15.09% to HKD 614; Tianshu Zhixin (09903) rose 12.13% to HKD 582.5; SMIC (00981) rose 8.24% to HKD 75.5.

Galaxy Securities stated that since July, the global semiconductor sector has continued to adjust, with no significant negative factors in the industry fundamentals, mainly due to deleveraging of funds, profit-taking in the storage sector, and valuation adjustments of certain targets. The semiconductor sector has significantly released risks at its current position, and it is recommended to pay attention to advanced packaging, wafer foundry, semiconductor equipment and materials, and domestic computing directions related to capacity expansion Chen Guo, Deputy Director and Chief Strategist of Dongfang Caifu Securities Research Institute, pointed out that the market does not need to be overly pessimistic about domestic technology leaders. The mid-term prosperity logic of the AI industry has not been disrupted, and the prosperity of domestic chips and computing power expansion cycles is expected to continue to strengthen; compared to the cyclical patterns of the overseas storage industry, the current low-level selling of silicon-based upstream and the tactical cost-effectiveness of chasing dividend assets is relatively low. Trading funds can participate in sector rebounds, while allocation funds should firmly hold core domestic technology assets such as wafers, semiconductor equipment, and Hong Kong stock internet companies.

2. Gold stocks continue to rise. As of the close, China Gold International (02099) rose 10.67% to HKD 157.7; Zijin Mining International (02259) rose 10.46% to HKD 108.2; Zhaojin Mining Industry (01818) rose 10.05% to HKD 20.36.

On Tuesday, spot gold experienced a V-shaped rebound, with prices briefly falling below USD 4,000 before rebounding above USD 4,060. Analysts from ANZ Research reported that physical gold demand and central bank purchases are supporting the gold market. These analysts added that although gold prices face short-term resistance from the Federal Reserve's tightening expectations and a strong dollar, the investment positions in gold appear thin after months of outflows from exchange-traded funds (ETFs), indicating that further downside may be limited. A high-interest-rate environment typically weighs on non-yielding assets like gold. Goldman Sachs believes that central bank gold purchases will provide a price floor for gold, offsetting short-term downward pressure from the Federal Reserve's hawkish expectations.

3. Power equipment stocks rose throughout the day. As of the close, Harbin Electric (01133) rose 23.36% to HKD 16.16; Weichai Power (02338) rose 8.43% to HKD 32.16; Weichai Power (03393) rose 8.11% to HKD 19.33; Dongfang Electric (01072) rose 6.35% to HKD 22.1.

Harbin Electric announced that it expects to achieve a net profit attributable to the parent company of approximately RMB 1.7 billion for the first half of 2026, a year-on-year increase of 61.9%. UBS believes that Harbin Electric's earnings surprise greatly exceeds market expectations, and the potential inclusion in the Hong Kong Stock Connect in August serves as an additional revaluation catalyst, making it a good entry point. It is worth mentioning that the global power grid upgrade combined with the explosive demand for AI computing power is driving the power equipment industry into a new prosperity cycle. The current explosion of AI computing power is causing a disruptive restructuring of the global power supply and demand pattern. The United States, as the core battleground for global AIDC construction, is facing an unprecedented power gap crisis, and capacity bottlenecks are expected to create opportunities for the Chinese industrial chain to overflow.

Popular Active Stocks

Z.AI (02513) significantly surged, closing up 36.89% at HKD 1219.

Z.AI has officially completed the acquisition of domestic AI heterogeneous computing software company Zhongke Jiahe. At the same time, Z.AI has established a 1GW-level domestic AI computing power data center, all using domestic AI chips. Analysts believe that these two actions respectively fill the two key capabilities of computing power supply and computing power release Jiaxin International Resources (03858) remained strong throughout the day, closing up 12.64% at HKD 51.05.

Jiaxin International Resources announced that it plans to implement a share repurchase program in the second half of 2026, intending to use up to HKD 200 million for the share repurchase plan. The implementation of the share repurchase plan demonstrates its firm confidence in the company's intrinsic value and long-term prospects, and will allow the company to optimize its capital structure and enhance shareholder returns.

Sanhuan Group (06951) issued a positive profit alert, closing up 12.49% at HKD 101.8.

Sanhuan Group announced that it expects net profit for the first half of 2026 to be between HKD 1.794 billion and HKD 2.041 billion, a year-on-year increase of 45% to 65%. Benefiting from increased customer recognition and improved industry conditions, the prices of some specifications of MLCC products have been restored to their original reasonable values, with significant year-on-year growth in sales volume and revenue.

Huaqin Technology (03296) continued its upward trend, closing up 12.61% at HKD 69.2.

Huaqin Technology released an investor relations activity record, stating that its super node products have started small batch shipments in the second quarter, and will enter a large-scale delivery phase starting in the third quarter. It is expected that the revenue from super node single products will exceed HKD 10 billion for the entire year, and will maintain rapid growth in the next two years. The data center business is expected to see a year-on-year revenue growth of 50%.

Lee & Man Paper Manufacturing (02314) surged sharply, closing up 10.85% at HKD 3.78.

Lee & Man Paper Manufacturing announced that it expects to achieve a profit of approximately HKD 1.33 billion to HKD 1.39 billion for the six months ending June 30, 2026, an increase of 64% to 71% compared to HKD 811 million in the same period last year. This profit growth is mainly due to the increase in the group's marginal profits.

Modern Dairy (01117) performed well, closing up 8.70% at HKD 1.25.

Modern Dairy announced that the acquisition offer for China Shengmu has been made unconditional. Combined with its existing holdings and the shares accepted in this transaction, Modern Dairy and its concerted parties hold the majority of shares in China Shengmu. After the transaction is completed, the group's overall dairy cattle inventory will exceed 610,000 heads, with annual raw milk production capacity exceeding 4 million tons, and the proportion of specialty organic milk increasing to over 20%