Market Overview - Hong Kong stocks opened strong in September, with the Hang Seng Index rising by 2.15% to 25,617.42 points and a total trading volume of HKD 380.23 billion [1] - The Hang Seng Tech Index increased by 2.2%, indicating a positive sentiment towards technology stocks [1] Blue-Chip Performance - Alibaba (09988) led blue-chip stocks, surging 18.5% to HKD 137.1, contributing 353.44 points to the Hang Seng Index [2] - Alibaba's cloud business revenue reached RMB 33.398 billion, up 26% year-on-year, with a significant capital expenditure of RMB 38.676 billion, reflecting a 220% increase [2] - Other notable blue-chip movements included a 9.14% rise for CSPC Pharmaceutical (01093) and an 8.37% increase for WuXi Biologics (02269) [2] Sector Highlights - Large technology stocks generally performed well, with Alibaba's post-earnings surge leading the way, while Baidu and JD.com rose over 3% [3] - Gold stocks saw significant gains due to rising gold prices, with China National Gold and Zhaojin Mining reaching new highs [3][4] - Pharmaceutical stocks also strengthened, with Clover Biopharmaceuticals (02197) soaring 34% [4] Pharmaceutical Sector Insights - Hong Kong pharmaceutical companies showed robust performance in the first half of the year, with major firms like Hengrui Medicine and Hansoh Pharmaceutical exceeding revenue expectations [5] - Upcoming international conferences are expected to showcase innovative drug research, which may further benefit the sector [5] Semiconductor Sector Developments - Semiconductor stocks experienced mixed results, with SMIC (00981) rising nearly 5% while Hua Hong Semiconductor (01347) fell by 3.16% [5] - Recent merger activities in the semiconductor industry indicate a growing trend, with companies like Hua Hong planning significant acquisitions [5][6] Real Estate Sector Movements - Some real estate stocks saw upward movement, with China Overseas Grand Oceans Group (00081) rising 8.41% [6] - The sales performance of the top 100 real estate companies showed a decline of 13.3% year-on-year, but government support measures are expected to stabilize the market [6] Notable Stock Movements - Huajian Medical (01931) surged 15.89% after announcing a significant acquisition [7] - Hylink Technology (01860) rose 14.1% following strong mid-year earnings, with a 47% increase in revenue [8] - BYD Electronics (00285) reported a 2.58% increase in revenue, driven by new AI product lines [9] - Bank of China Hong Kong (02388) reached a new high with a 6.7% increase in share price [10] - GAC Group (02238) faced pressure, with a 3.68% decline in share price due to a significant loss reported in its latest earnings [11]

Core Viewpoint - The potential for unexpected capital inflow from foreign investors into the Hong Kong stock market exists under the backdrop of the Federal Reserve's renewed interest rate cuts [2][3]. Group 1: Foreign Capital Trends - Since May, foreign capital has been gradually returning to the Hong Kong stock market due to a temporary easing in Sino-U.S. trade negotiations and the ongoing weak dollar narrative [2][3]. - From May to July, long-term stable foreign capital inflow amounted to approximately 67.7 billion HKD, while short-term flexible capital inflow reached about 16.2 billion HKD [3]. - As of August 19, long-term foreign capital had seen an outflow of over 40 billion HKD, and short-term capital had withdrawn around 17 billion HKD due to renewed focus on Sino-U.S. trade talks [3]. Group 2: Sector Preferences - Foreign investors show a strong preference for the technology and financial sectors within the Hong Kong stock market, with significant foreign ownership in these areas [4]. - As of August 26, foreign capital ownership in various sectors is as follows: Retail (77%), Insurance (75%), Software and Services (74%), and Media (69%) [4]. - The return of foreign capital is expected to favor sectors with strong fundamentals, particularly technology and finance, as evidenced by a higher return on equity (ROE) for foreign-held stocks compared to the overall market [4]. Group 3: Recent Capital Flows - Since May, both long-term and short-term foreign capital have consistently flowed into technology sectors, particularly software and services, which saw an inflow of 76 billion HKD [6]. - The hardware sector also attracted significant foreign investment, totaling 33.4 billion HKD [6]. - Conversely, sectors such as biopharmaceuticals, real estate, and automotive have shown mixed results, with some experiencing outflows while others saw inflows [7]. Group 4: Market Outlook - The valuation of the Hong Kong technology sector remains attractive, with the Hang Seng Technology Index's price-to-earnings ratio at the 18th percentile since data collection began in 2020 [8]. - The anticipated growth in the AI sector is expected to further enhance the appeal of leading technology stocks in Hong Kong, as they are well-positioned to benefit from the ongoing AI industry transformation [8].