Core Viewpoint - The Hang Seng Index fell by 0.29% on January 20, with southbound capital transactions totaling HKD 97.283 billion, resulting in a net inflow of HKD 36.63 billion [1] Group 1: Southbound Capital Transactions - Total southbound capital transactions amounted to HKD 97.283 billion, with buy transactions at HKD 50.473 billion and sell transactions at HKD 46.810 billion, leading to a net buy of HKD 36.63 billion [1] - The Hong Kong Stock Connect (Shenzhen) recorded a total transaction amount of HKD 37.804 billion, with net buying of HKD 2.18 billion, while the Hong Kong Stock Connect (Shanghai) had a total transaction amount of HKD 59.479 billion, with net buying of HKD 34.44 billion [1] Group 2: Active Stocks - Tencent Holdings had the highest transaction amount among active stocks, totaling HKD 63.88 billion, with a net buy of HKD 6.63 billion, despite a closing price drop of 1.48% [1][2] - Other notable stocks included Alibaba-W and Xiaomi Group-W, with transaction amounts of HKD 48.94 billion and HKD 46.53 billion, respectively [1] - The most significant net sell was recorded for SMIC, with a net sell of HKD 7.18 billion and a closing price drop of 3.25% [1][2] Group 3: Continuous Net Buying - Five stocks experienced continuous net buying for more than three days, with Tencent Holdings leading at 10 days, followed by Alibaba-W at 7 days and Huahong Semiconductor at 4 days [2] - The total net buying amounts during this period were HKD 106.21 billion for Tencent Holdings, HKD 47.56 billion for Alibaba-W, and HKD 14.29 billion for Xiaomi Group-W [2]

Core Viewpoint - On January 20, the Hang Seng Index fell by 0.29%, closing at 26,487.51 points, while southbound funds through the Stock Connect recorded a net buy of HKD 36.63 billion [1]. Group 1: Market Activity - The total trading volume for the Stock Connect on January 20 was HKD 972.83 billion, with a net buy of HKD 36.63 billion [1]. - The Shanghai Stock Connect accounted for HKD 594.79 billion in trading volume with a net buy of HKD 34.44 billion, while the Shenzhen Stock Connect had a trading volume of HKD 378.04 billion and a net buy of HKD 2.18 billion [1]. Group 2: Active Stocks - In the Shanghai Stock Connect, Tencent Holdings was the most actively traded stock with a transaction amount of HKD 37.26 billion, followed by Xiaomi Group-W and Alibaba-W with transaction amounts of HKD 30.51 billion and HKD 23.91 billion, respectively [1]. - Tencent Holdings had a net buy of HKD 5.03 billion, despite its closing price dropping by 1.48% [1]. - China Mobile recorded the highest net sell amount of HKD 6.37 billion, closing flat [1]. Group 3: Shenzhen Stock Connect Activity - In the Shenzhen Stock Connect, Tencent Holdings also led with a transaction amount of HKD 26.62 billion, followed by Alibaba-W and SMIC with transaction amounts of HKD 25.02 billion and HKD 19.36 billion, respectively [2]. - Meituan-W had the highest net buy amount of HKD 2.54 billion, although it closed down by 1.17% [2]. - SMIC experienced the largest net sell amount of HKD 5.42 billion, closing down by 3.25% [2].

Market Overview - The Hong Kong stock market has been experiencing a downward trend, with the index dropping to around 26,300 points after reaching 27,000 points [1][2] - The market sentiment remains cautious, and the index needs to stabilize around 26,400 points to avoid further declines, with a potential drop to 25,800 points if it fails to hold [2][3] Investment Strategies - Investors are advised to monitor the distribution of warrants, particularly the heavy positions around 25,800 points, which is a critical support level [2][4] - The current trading range for the index is suggested to be between 25,800 and 27,500 points for investment deployment [2] Stock Analysis: Xiaomi Group (01810) - Xiaomi's stock has shown weakness, dropping to a low of 35.6 HKD, with concerns about its automotive safety impacting investor sentiment [6][7] - Despite previous strong performance, the stock has fallen below key support levels, leading to cautious investor behavior regarding long-term entry points [8] - Investors are considering options like call warrants with lower entry costs to mitigate risks while betting on potential rebounds [8][9] Stock Analysis: Semiconductor Industry (SMIC 00981) - SMIC has seen a decline in stock price, currently around 34 HKD, after a peak of 94 HKD, but investor interest remains strong for rebound opportunities [10][11] - New high-leverage products have been introduced to attract investors looking for higher returns in the semiconductor sector [11][13] Stock Analysis: Pop Mart (09992) - Pop Mart's stock has shown signs of recovery after management's first buyback in two years, indicating confidence in the company's future [15][16] - Investors are encouraged to consider call warrants as a way to capitalize on potential rebounds, with specific products highlighted for their favorable terms [16][24] Resource Sector Insights - The resource sector, particularly gold and silver, is gaining attention as prices reach historical highs, with recommendations for investing in related stocks or ETFs [19][20] - Investors are advised to consider leveraged products in the resource sector to maximize returns while managing capital [20] Domestic Consumption Sector - The domestic consumption sector is expected to benefit from ongoing policies promoting local brands, with companies like Li Ning and Midea being highlighted for potential investment [23][24] - Specific warrants for these companies are suggested as viable options for investors looking to capitalize on the domestic consumption trend [24][25]

Core Insights - The rise of China's wafer foundries is addressing the demand for 8-inch chips as global giants shift focus to 12-inch wafers and AI-related chip needs increase [1][6] - A structural reversal in the 8-inch wafer market is occurring due to a combination of reduced capacity from major players and strong demand for power management chips driven by AI [4][5] Group 1: Market Dynamics - The global supply and demand for 8-inch wafers is entering a state of imbalance, with a projected 2.4% decline in total global 8-inch foundry capacity by 2026 due to strategic capacity reductions by TSMC and Samsung [4][6] - The average capacity utilization rate in the industry is expected to rise to 90% by Q4 2025, reflecting a year-on-year increase of approximately 7 percentage points, driven by AI applications and recovery in automotive and industrial control sectors [4][6] Group 2: Chinese Foundries' Position - Chinese wafer foundries are positioned to fill the global capacity vacuum left by TSMC and Samsung, with companies like SMIC and Hua Hong Semiconductor showing strong performance in 8-inch production [6][7] - SMIC's monthly production capacity for logic chips (equivalent to 8-inch) has reached a historic high of 1.023 million wafers, with a capacity utilization rate of 95.8% as of Q3 2025 [7] - Hua Hong Semiconductor's 8-inch production lines are nearing full capacity, benefiting from orders redirected from international power semiconductor giants [7] Group 3: Pricing Trends - Due to the surge in demand, Chinese wafer foundries have raised prices for 8-inch chip processes by approximately 10%, with some orders seeing increases of up to 20% [8][9] - The price increase trend is expected to continue into 2026, as the supply-demand tightness persists [9] Group 4: Long-term Outlook - Despite the current boom in 8-inch wafer production, the long-term trend indicates a migration of power management and display driver chips towards 12-inch nodes, necessitating Chinese manufacturers to accelerate their 12-inch specialty process development [9] - The global semiconductor manufacturing sector anticipates an increase in 12-inch wafer production capacity to a historical high of 9.6 million wafers per month by 2026, driven by sustained strong demand [9]

Group 1: Market Activity - Southbound funds net bought Hong Kong stocks worth 36.63 billion HKD on January 20, with notable purchases in Tencent Holdings (6.63 billion HKD), Meituan-W (5.73 billion HKD), and Xiaomi Group-W (3.95 billion HKD) [1] - Southbound funds have continuously net bought Tencent for 10 days, totaling 106.2116 billion HKD, and Alibaba for 7 days, totaling 47.5655 billion HKD [3] Group 2: Company Performance - Tencent Holdings is expected to see a 13% year-on-year revenue growth in Q4 2025, with adjusted net profit projected to increase by 16% to 643 billion HKD, driven by growth in gaming, advertising, and fintech revenues [4] - Meituan reported a significant increase in flight bookings for "reverse Spring Festival" travel, with a year-on-year growth of approximately 35% in January, indicating a trend of movement from midwestern cities to first-tier and new first-tier cities [4] Group 3: Stock Buybacks - Xiaomi Group repurchased approximately 5.5 million B shares for about 1.96 billion HKD, with a repurchase price ranging from 35.46 HKD to 35.86 HKD per share [5] - Pop Mart announced a share buyback of 140,000 shares for 2.51 billion HKD, marking its first buyback since early 2024, which is expected to attract more investor attention [5] Group 4: Industry Insights - TSMC raised its capital expenditure guidance for 2026 to 52-56 billion USD, reflecting strong long-term demand driven by AI, while DRAM prices continue to rise, with certain DDR4 models seeing weekly increases of over 12% [5] - The humanoid robot market is projected to see an annual installation of approximately 16,000 units by 2025, driven by advancements in data collection, logistics, manufacturing, and the automotive industry [5]

Group 1 - The core point of the news is that the Hong Kong stock market saw significant net buying from northbound capital, totaling HKD 36.63 billion, with Tencent, Meituan, and Xiaomi being the most purchased stocks [2][6] - Tencent Holdings (00700) had a net inflow of HKD 5.03 billion, with total buy and sell amounts of HKD 21.15 billion and HKD 16.12 billion respectively [3][5] - Meituan (03690) recorded a net inflow of HKD 3.19 billion, with total buy and sell amounts of HKD 5.98 billion and HKD 2.79 billion respectively [3][6] Group 2 - Semiconductor stocks showed divergence, with Hua Hong Semiconductor (01347) receiving a net inflow of HKD 2.45 billion, while SMIC (00981) faced a net outflow of HKD 7.17 billion [7] - The report from Open Source Securities indicated that TSMC raised its capital expenditure forecast significantly, reflecting strong long-term demand driven by AI [7] - Long-distance fiber optic cable stocks like Changfei Optical Fiber (06869) saw a net inflow of HKD 1.54 billion, supported by rising prices in the G.652.D fiber market [7] Group 3 - Xiaomi Group-W (01810) received a net inflow of HKD 3.95 billion, while China Mobile (00941) faced a net outflow of HKD 6.37 billion [8] - The report from Bank of America noted that the growth in metal demand is no longer cyclical, as economies are restructuring their energy infrastructure [8] - The sentiment around resource competition is affecting copper prices, which may remain volatile in the short term [8]

Core Insights - On January 20, 2026, Tencent Holdings (00700), Xiaomi Group-W (01810), and Alibaba-W (09988) were the top three companies by trading volume in the Southbound Stock Connect, with trading amounts of 3.726 billion, 3.051 billion, and 2.391 billion respectively [1] - In the Shenzhen-Hong Kong Stock Connect, Tencent Holdings (00700), Alibaba-W (09988), and SMIC (00981) led the trading volume, with amounts of 2.662 billion, 2.502 billion, and 1.936 billion respectively [1] Southbound Stock Connect Trading Activity - The top active companies in the Southbound Stock Connect included: - Tencent Holdings (00700) with a trading amount of 3.726 billion and a net buying amount of +0.503 billion [2] - Xiaomi Group-W (01810) with a trading amount of 3.051 billion and a net buying amount of +0.287 billion [2] - Alibaba-W (09988) with a trading amount of 2.391 billion and a net selling amount of -5.778 million [2] - Other notable companies included Pop Mart (09992) and SMIC (00981) with trading amounts of 2.178 billion and 2.123 billion respectively [2] Shenzhen-Hong Kong Stock Connect Trading Activity - The top active companies in the Shenzhen-Hong Kong Stock Connect included: - Tencent Holdings (00700) with a trading amount of 2.662 billion and a net buying amount of +0.160 billion [2] - Alibaba-W (09988) with a trading amount of 2.502 billion and a net buying amount of +7.257 million [2] - SMIC (00981) with a trading amount of 1.936 billion and a net selling amount of -5.420 billion [2] - Other notable companies included Xiaomi Group-W (01810) with a trading amount of 1.603 billion and a net buying amount of +0.108 billion [2]

Group 1 - Southbound funds net bought Hong Kong stocks worth HKD 3.663 billion today [1] - The top net purchases included Tencent Holdings at HKD 663 million, Meituan-W at HKD 573 million, and Xiaomi Group-W at HKD 395 million [1] - Continuous net buying trends were observed for Tencent over 10 days totaling HKD 10.62116 billion and Alibaba over 7 days totaling HKD 4.75655 billion [1] Group 2 - Southbound funds net sold shares of SMIC at HKD 717 million and China Mobile at HKD 637 million [1] - China Mobile has seen continuous net selling for 12 days, amounting to HKD 9.29936 billion [1] - Hua Hong Semiconductor and Xiaomi also experienced net buying trends over multiple days, with Hua Hong totaling HKD 1.33901 billion over 4 days and Xiaomi HKD 1.42914 billion over 3 days [1]

Core Viewpoint - The Hong Kong stock market experienced significant net inflows from northbound trading, with a total net buy of HKD 36.63 billion on January 20, 2023, indicating strong investor interest in certain stocks [1]. Group 1: Net Buying and Selling Activities - Tencent (00700) received the highest net buy of HKD 21.15 billion, with a total trading volume of HKD 37.26 billion, reflecting a net inflow of HKD 5.03 billion [2]. - Meituan-W (03690) saw a net buy of HKD 16.69 billion, with a total trading volume of HKD 30.51 billion, resulting in a net inflow of HKD 2.87 billion [2]. - Xiaomi Group-W (01810) had a net buy of HKD 3.95 billion, contributing to the overall positive sentiment in the tech sector [7]. - Conversely, SMIC (00981) faced the largest net sell of HKD 9.73 billion, with a total trading volume of HKD 21.23 billion, indicating a net outflow of HKD 1.76 billion [2]. - China Mobile (00941) also experienced significant net selling, with a net outflow of HKD 6.37 billion [7]. Group 2: Sector Insights and Market Trends - The technology sector, particularly companies like Tencent, Meituan, and Alibaba, is seeing increased investment interest, driven by expectations of growth in AI and cloud computing [4]. - The semiconductor sector showed divergence, with Hua Hong Semiconductor (01347) receiving a net buy of HKD 2.45 billion, while SMIC faced a net sell of HKD 7.17 billion, reflecting varying investor confidence [5]. - The optical fiber and cable industry is experiencing a price recovery, with Longi Optical Fiber (06869) receiving a net buy of HKD 1.54 billion, supported by rising market prices for G.652.D optical fibers [5]. - The mining sector, particularly Zijin Mining (02899) and Luoyang Molybdenum (03993), faced net selling pressures, attributed to changing market sentiments regarding metal demand and supply dynamics [6].

Investment Rating - The report indicates a positive outlook for the storage industry, particularly in DRAM and NAND sectors, with expectations of price increases and demand recovery in the coming quarters [6][20][44]. Core Insights - The report highlights a significant transition in the memory market, with major manufacturers like Samsung, SK Hynix, and Micron phasing out DDR4 production in favor of DDR5 and HBM technologies, which is expected to tighten supply and drive prices up [6][23][24]. - DRAM prices have surged, leading to increased activity in the spot market, while NAND prices have stabilized after a period of volatility [6][47]. - The rise of AI PCs is anticipated to boost demand for high-performance memory solutions, with projections indicating a 37% penetration rate by 2025 [6][21][22]. - ODM manufacturers are cautious about demand in the second half of the year, anticipating a slowdown due to earlier stockpiling and market uncertainties [6][20]. - Ongoing geopolitical tensions and tariff adjustments are influencing supply chain dynamics and market stability, with potential long-term implications for pricing and availability [6][7][20]. Summary by Sections Macro Economy - In May, China's manufacturing PMI rose to 49.5%, indicating improved manufacturing activity, while the U.S. PMI remained below expansion levels at 48.5% [7][9]. - The report notes a 10.8% year-on-year growth in China's electronic information manufacturing sector from January to April [12][13]. Upstream Market - Global laptop shipments are expected to increase by 5.8% in Q2, driven by preemptive stockpiling and seasonal demand [20][21]. - Major manufacturers are transitioning away from DDR4, with supply constraints expected to impact pricing significantly [23][24]. Storage Market Dynamics - The report details a notable increase in DRAM prices, with DDR4 prices rising from $2.4 to $3.95, a 64% increase [23]. - NAND flash market dynamics are shifting, with Samsung's exit from the MLC market expected to create supply shortages and price increases [28][29]. Application Market - The PC market is experiencing fluctuations, with major manufacturers reporting mixed results in shipments and revenues due to seasonal effects and tariff uncertainties [71][72]. - AI server-related revenues are projected to grow significantly, while traditional PC demand remains uncertain [72][74].