Hong Kong stocks closed (06.10) | The Hang Seng Index fell slightly by 0.08%, and innovative pharmaceuticals once again boosted gold, shipping stocks, etc. bucked the trend

The Zhitong Finance App learned that the market continues to pay attention to the progress of the Sino-US economic and trade talks in London. The three major Hong Kong stock indices collectively dived in the afternoon, and the Hang Seng Technology Index had increased its decline by more than 1%. At the close, the Hang Seng Index fell 0.08% or 18.56 points to 24162.87 points, with a full-day turnover of HK$250,339 billion; the Hang Seng State-owned Enterprises Index fell 0.15% to 8767.36 points; and the Hang Seng Technology Index fell 0.76% to 5392.19 points.

CICC believes that in the current macroeconomic and market environment where China as a whole still needs to be repaired but has structural highlights, Hong Kong stocks have an advantage, whether it is dividends that provide stable returns or new consumption, AI technology, and innovative drugs as the main line of structural opportunity. At the same time, the contradiction of excessive domestic liquidity but lack of good assets is driving a continuous influx of south-bound capital.

Blue-chip stock performance

China's Hongqiao (01378) led the blue chip increase. At the close, it rose 4.83% to HK$15.2, with a turnover of HK$533 million, contributing 3.15 points to the Hang Seng Index. China Hongqiao announced that Hongchuang Holdings (002379.SZ) plans to issue new shares to existing shareholders of Hongtuo Industrial (including Weiqiao Aluminum-Electric) to purchase target shares held by them. As one of the prerequisites for this transaction, the shareholders of Hongchuang Holdings approved the transaction at the shareholders' meeting held on June 9, 2025.

In terms of other blue-chip stocks, BYD shares (01211) rose 3.71% to HK$135.6, contributing 28.49 points to the Hang Seng Index; Hanson Pharmaceuticals (03692) rose 3.59% to HK$28.85, contributing 1.91 points to the Hang Seng Index; Ideal Automobile-W (02015) fell 2.75% to HK$116.7, dragging down the Hang Seng Index by 7.25 points; and Galaxy Entertainment (00027) fell 2.22% to HK$33.1, dragging down the Hang Seng Index by 2.57 points.

Popular sector aspects

On the market, all large technology stocks weakened, with Tencent down 0.87% and Ali down 0.42%. Chip stocks dived in the afternoon, and Huahong Semiconductor fell more than 3%; yesterday, the strong trend of new consumer stocks diverged. Gu Ming and Bruke spit back more than 6%, and Bubble Mart continued to reach a record high; the 11 satellite markets in Macau ended at the end of the year. Gaming stocks showed mixed performance, and Huicai Holdings resumed trading and fell another 8%. On the other side, rare earth exports may welcome positive signals. China's rare earths rose more than 26% in the afternoon; innovative pharmaceuticals, aviation, non-ferrous metals, shipping stocks, and domestic bank stocks performed brilliantly.

1. Innovative drug concepts continue to rise. At the close, Jingtai Holdings (02228) rose 16.7% to HK$5.94; Lepu Biotech (02157) rose 11.5% to HK$5.72; Kangfang Biotech (09926) rose 10.43% to HK$96.35; and Sansheng Pharmaceutical (01530) rose 9.84% to HK$24.

The Central Office and the State Office issued “Opinions on Further Safeguarding and Improving People's Livelihood and Focusing on Addressing the Urgent Worries and Hopes of the People”. It is proposed to improve the mechanism for adjusting the basic medical insurance drug catalogue, and to formulate and introduce a catalogue of innovative commercial health insurance drugs to better meet the needs of the people at many levels of drug use coverage. According to the Lyon Research Report, the innovative drug sector rebounded significantly in the first half of this year, mainly driven by a strong recovery in market liquidity and a series of unanticipated authorized exchanges. It is estimated that continued trading activity and steady corporate earnings performance in the second half of the year will all become the focus of market attention. The bank believes that the first phase of the biotech company's valuation repair has been largely completed.

2. Airline stocks performed brilliantly. At the close, Eastern Airlines (00670) rose 4.08% to HK$3.06; China Southern Airlines (01055) rose 3.39% to HK$3.96; and Air China (00753) rose 2.42% to HK$5.92.

Citi said that the reasons for maintaining the “buy” rating for the three major Chinese airline stocks include 2025-2026. Under a more balanced supply and demand outlook, domestic yields are becoming more stable or gradually increasing. Domestic air ticket prices improved year on year during the Labor Day holiday period, then showed relatively stable performance throughout May, indicating that prices have bottomed out and may be ready to rebound. The bank sees this as a positive sign of summer performance. Other reasons include bearish oil prices and relatively stable foreign exchange. The bank raised the target price of Air China from HK$6.4 to HK$6.8; China Eastern Airlines's target price from HK$3.3 to HK$3.61; and the target price of China Southern Airlines was reduced from HK$4.8 to HK$4.6.

3. Shipping stocks were higher in the afternoon. At the close, Haifeng International (01308) rose 6.39% to HK$25.8; Dexiang Shipping (02510) rose 5.03% to HK$7.52; and COSCO Haifa (02866) rose 2.97% to HK$1.04.

Due to concerns about tariff risk and uncertainty, there has recently been a concentrated blowout in demand for trade and transportation, which is beneficial to the shipping boom. According to data from the Shanghai Shipping Exchange, as of June 9, 2025, the Shanghai export container settlement price index (European routes) reported 1622.81 points, an increase of 29.5% compared with the previous period. Cathay Pacific Haitong Securities said that tariff friction intensified in the first half of 2025, the US line experienced a backlog of exports and a wave of shipments, and the sustainability of the economy will depend on tariffs and economic expectations. In the next few years, the mainline market will once again face large-scale ships and supply pressure, and trade frictions will affect or continue, focusing on the restructuring and differentiation of shipping alliances and the reshaping of the global trade pattern.

4. The trend of gaming stocks is diverging. At the close, Huicai Holdings (01180) fell 8.33% to HK$0.88; Galaxy Entertainment (00027) fell 2.22% to HK$33.1; Aobo Holdings (00880) rose 6.25% to HK$2.55; and Macau International Development (00200) rose 4.83% to HK$3.47.

The Macao SAR Government has received an official notice from Macau Entertainment Integrated Resort Co., Ltd., Melco Asia (Macau) Co., Ltd. and Galaxy Casino Co., Ltd. to end the operation of 11 “satellite stadiums” by December 31 this year. Among them, Melco International Development took the lead in announcing yesterday that it will stop operating Junlong Casino and the three Moca Cabo Airport before the end of the year, but Melco said it is applying for relevant authorization and approval from the Macau Special Administrative Region Government to continue operations after December this year.

In addition, Macau Expo intends to acquire the properties where Macau Triumphal Arch Casino and Sixteen Pu Casino are located; Huicai Holdings announced that the Group's service agreement to provide casino management services to Macau Jinbi Huicai Casino, a subsidiary of Macau Entertainment Group, will not be renewed or extended after it expires on December 31 this year. It is expected that the company's revenue and profit will be drastically reduced from 2026.

Popular exotic stocks

1. Dekang Agriculture and Animal Husbandry (02419) reached a new high. At the close, it rose 8.3% to HK$79.55.

Dekang Agriculture and Animal Husbandry announced that in May 2025, the company sold 869,400 pigs (including 839,900 commercial pigs), with sales revenue of RMB 1.7 billion; the average sales price of the company's commercial pork during the period was RMB 14.64 yuan/kg. In the five months ended May 31, 2025, the company sold a total of 4.2971 million pigs (including 4.051,700 commercial pigs), with sales revenue of RMB 8.457 billion.

2. The volume of Xincheng Development (01030) increased. At the close, it was up 7.18% to HK$2.24.

According to news from Pengpai, on June 9, we learned from people familiar with the matter that Xincheng Development, the parent company of Xincheng Holdings, is promoting the issuance of US dollars, and the estimated issuance amount is between 250 million US dollars and 300 million US dollars. According to people familiar with the matter, Xincheng has selected four brokerage firms, including Cathay Junan International, Haitong International, Citibank, and CITIC Lyon.

3. Lung Poon Technology (02465) rose again. At the close, it was up 6.47% to HK$6.91.

Recently, the popularity of the solid-state battery market has continued to rise. CITIC Securities expects global solid-state battery shipments to reach 642.6 GWh in 2030, with a compound growth rate of 133% from 2024 to 2030. Longpan Technology said earlier that the company's wholly-owned subsidiary Sanjin Lithium Battery focuses on the development and production of solid-state battery precursors. High-nickel precursors and lithium-rich manganese-based precursors for solid-state batteries are currently being verified with customers.

Initial listing of IPOs

1. Rongda Technology (09881) was strong throughout the day. At the close, it was up 42 percent to HK$14.2.

Rongda Technology is priced at HK$10 per share. A total of 18.4 million shares were issued, with a net proceeds of approximately HK$131.2 million per lot of 500 shares. Rongda Technology is a supplier of automatic identification and data collection (AIDC) devices and solutions with a global sales network. It is engaged in the design, R&D, manufacture and marketing of printing equipment, scales, POS terminals and PDAs. The company strives to help enterprises and individuals continuously improve the efficiency and accuracy of daily operations and daily life by introducing functions such as AIDC devices and IoT technology, cloud printing, and artificial intelligence synthesis.

2. Xinqian (02573) performed brilliantly. At the close, it was up 21.43 percent to HK$22.95.

Priced at HK$18.9 per share, Xinqian issued a total of 10.585,400 shares, 200 shares per lot, with a net proceeds of approximately HK$164 million. According to reports, Xinqian Group focuses on the production and sale of food additives. The main products include the high sweetener sucralose, food grade and industrial grade glycine, and is the world's leading producer of food ingredients. According to 2023 sales volume and sales revenue, Xinqian ranked first in the global food-grade glycine manufacturing industry.