Hong Kong stocks closed (07.21) | Hang Seng Index closed down 0.04%, Smart Spectrum (02513) surged nearly 37% in a single day, and the semiconductor industry chain rebounded strongly

The Zhitong Finance App learned that the trend of the three major Hong Kong stock indices diverged. The Hang Seng Index opened slightly higher and then fell, while the Hengke Index continued to strengthen, driven by semiconductor and AI concept stocks. At one point, it rose nearly 2% intraday. At the close, the Hang Seng Index fell 0.04% or 10.76 points to 25132.29 points, with a full day turnover of HK$289.943 billion; the Hang Seng State-owned Enterprises Index fell 0.25% to 8360.68 points; and the Hang Seng Technology Index rose 1.32% to 4814.83 points.

Dongwu Securities believes that Hong Kong stocks are still in the recovery window, but there are many variables in the continuation and strength of the rebound, and it is currently in a critical observation window. The core drivers of the future performance of Hong Kong stocks include: the pace of interpretation of the AI technology narrative of US stocks; the Federal Reserve's monetary policy expectations during the year; valuation and domestic catalysts. We still need to wait for domestic policy incentives to be implemented or new AI industry narratives to provide incremental impetus.

Blue-chip stock performance

Lenovo Group (00992) led the blue chip increase. At the close, it rose 8.5% to HK$23.24, with a turnover of HK$2.3 billion, contributing 19.01 points to the Hang Seng Index. In the 2025/26 fiscal year, Lenovo Group achieved operating income of US$83,075 billion, an increase of 20% year on year, and adjusted net profit of US$2 billion, an increase of 42% year on year. For the first time, the three major business groups IDG, ISG and SSG achieved full-year profits simultaneously. The company's on-hand orders for AI servers have exceeded 21 billion US dollars.

In terms of other blue-chip stocks, SMIC (00981) rose 8.24% to HK$75.5; Zijin Mining (02899) rose 4.65% to HK$31.52; China Resources Vientiane Life (01209) fell 3.24% to HK$38.84; and Master Kong Holdings (00322) fell 3.15% to HK$11.38.

Popular sector aspects

On the market, large technology stocks had mixed ups and downs. Lenovo Group and SMIC rose more than 8%, and Tencent fell 0.8%. Computing power hardware stocks such as semiconductors and PCB concepts rebounded strongly. Huahong Hongli rose nearly 18%, and Zhaoyi Innovation surged more than 15%; power equipment stocks surged 23% after the day; gold stocks continued to rise, with Zhaojin Mining surging more than 10%; Big Model Duo strengthened, and Smart Spectrum soared nearly 37% in a single day. On the other side, petroleum stocks generally declined; CNOOC and CNPC fell more than 1%; domestic bank stocks generally weakened.

1. Computing power hardware stocks such as semiconductors and PCBs rebounded. At the close, Huahong Hongli (01347) rose 17.91% to HK$168.5; GigaYi Innovation (03986) rose 15.09% to HK$614; Tianshu Zhixin (09903) rose 12.13% to HK$582.5; and SMIC (00981) rose 8.24% to HK$75.5.

Galaxy Securities said that since July, the global semiconductor sector has continued to recover, and there are no major negative factors in the fundamentals of the industry, mainly due to factors such as capital deleveraging, the redemption of profits in the storage sector, and a correction in the valuation of some targets. The current position of the semiconductor sector has greatly unleashed risks. It is recommended to focus on advanced packaging, foundry, semiconductor equipment and materials, and the direction of domestic computing power related to expanding production.

Chen Guo, Deputy Director and Chief Strategy Officer of Dongfang Wealth Securities Research Institute, pointed out that there is no need for the market to be overly pessimistic about domestic technology leaders. The mid-term boom logic of the AI industry has not been destroyed, and the boom in the domestic chip and computing power expansion cycle is expected to continue to strengthen; compared with the current cyclical rules of the overseas storage industry, the tactical cost performance of selling silicon-based upstream and chasing dividend assets at a low level is low. Transactional capital can participate in the sector's rebound, and allocated funds should stick to domestic technology core assets such as wafers, semiconductor equipment, and the Hong Kong Stock Internet.

2. Gold stocks continued to rise. At the close, China Gold International (02099) rose 10.67% to HK$157.7; Zijin Gold International (02259) rose 10.46% to HK$108.2; and Zhaojin Mining (01818) rose 10.05% to HK$20.36.

Spot gold rebounded in a V-shape on Tuesday. The price once fell below $4,000 and then rebounded above $4,060. ANZ Research Analysts reported that physical gold demand for this metal and central bank purchases are supporting the gold market. The analysts added that although the price of gold faced short-term resistance from the Federal Reserve's tightening expectations and a strong dollar, after several months of exchange-traded fund (ETF) outflows, gold's investment position seemed very thin, indicating that there may be limited room for further decline. High interest rate environments usually drag down unprofitable assets such as gold. Goldman Sachs believes that the central bank's purchase of gold will provide bottom price support and offset the short-term downward pressure brought about by the Federal Reserve's hawkish expectations.

3. Electric equipment stocks were higher throughout the day. At the close, Harbin Electric (01133) rose 23.36% to HK$16.16; Weichai Power (02338) rose 8.43% to HK$32.16; Weisheng Holdings (03393) rose 8.11% to HK$19.33; and Dongfang Electric (01072) rose 6.35% to HK$22.1.

Harbin Electric announced that it expects the company to obtain a net profit of about RMB 1.7 billion attributable to the owners of the parent company for the first half year of 2026, an increase of 61.9% over the previous year. UBS believes that Harbin Electric is winning big against market expectations, plus the potential inclusion of the Hong Kong Stock Connect in August as an additional revaluation catalyst, now is the time to enter the market. It is worth mentioning that the rise in demand for global power grid upgrades and AI computing power is driving the power equipment industry into a new boom cycle. The current AI computing power explosion has triggered a disruptive restructuring of the global electricity supply and demand pattern. As the core position for global AIDC construction, the US is facing an unprecedented power gap crisis, and production capacity bottlenecks are expected to spill over into China's industrial chain.

Popular exotic stocks

Smart Spectrum (02513) rose significantly. At the close, it rose 36.89% to HK$1,219.

Zhipu officially completed the acquisition of Zhongke Jiahe, a domestic AI heterogeneous computing power software company. At the same time, Smart Spectrum has built a 1GW domestic AI computing power data center, and all domestic AI chips have been used. Analysts believe that these two actions separately complement the two key capabilities of computing power supply and computing power release.

Jiaxin International Resources (03858) was strong throughout the day. At the close, it rose 12.64% to HK$51.05.

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

Sanhuan Group (06951) had a positive profit. At the close, it rose 12.49% to HK$101.8.

Sanhuan Group announced that net profit for the first half of 2026 is expected to be 1,794 billion yuan to 2,041 billion yuan, an increase of 45% to 65% over the previous year. Benefiting from increased customer recognition and increased industry sentiment, the price of some MLCC product specifications was restored to their original reasonable value, and sales volume and sales increased significantly over the same period last year.

Huaqin Technology (03296) continued its gains. At the close, it rose 12.61% to HK$69.2.

Huaqin Technology released a record sheet of investor relations activities. The company's supernode products began small-batch shipments in the second quarter, and large-scale delivery will begin in the third quarter. It is estimated that the revenue of individual Supernode products alone will exceed 10 billion yuan throughout the year, and will maintain rapid growth for the next two years. Data center business revenue is expected to grow 50% year over year.

Lee & Man Paper (02314) jumped sharply. At the close, it rose 10.85% to HK$3.78.

Lee & Man Paper announced that the six months ending June 30, 2026 are expected to obtain the company's profit for the period of approximately HK$1.33 billion to HK$1.39 billion, an increase of 64% to 71% over HK$811 million in the same period last year. This increase in earnings was mainly due to a rise in the Group's marginal profit.

Modern Animal Husbandry (01117) performed well. At the close, it rose 8.70% to HK$1.25.

Hyundai Animal Husbandry announced that the offer to acquire China's Shengmu was reached unconditionally. Combining the original holdings and the shares accepted this time, Hyundai Animal Husbandry and its co-actors hold the vast majority of China Shengmu's shares. After the transaction was implemented, the Group's overall dairy cow inventory exceeded 610,000 heads, the annual production capacity of raw milk exceeded 4 million tons, and the proportion of specialty organic milk increased to more than 20%.