Market Overview - The Hang Seng Index fell 2.5% last week, closing at 22,849 points, while the Hang Seng Tech Index dropped 3.5% to 5,313 points. The Hong Kong Chinese Enterprises Index rose 0.6% as funds flowed back into high-dividend central state-owned enterprises [1] - Average daily trading volume in Hong Kong stocks decreased by 2.3% to HKD 253.4 billion, with significant inflows of HKD 63.2 billion through the Stock Connect, supporting the market [1] - The valuation of Hong Kong stocks has significantly recovered, with the AH premium at a four-year low, indicating potential for short-term pullbacks due to external pressures and liquidity concerns from company placements [1] Geopolitical and Economic Impact - The announcement of "reciprocal tariffs" by the U.S. has heightened market volatility, with tariffs on Chinese exports expected to rise to 66-67% when considering previous tariffs [2] - The Federal Reserve's cautious stance amid inflation uncertainty has led to increased risk aversion in global markets, impacting asset prices across various sectors [2] - The geopolitical tensions between the U.S. and China are expected to elevate risk premiums for Chinese assets, with potential negative impacts on emerging markets and Hong Kong stocks [2][3] Sector Analysis Consumer Sector - Haier Smart Home's stock fell 8.0% due to the unexpected increase in tariffs, which could negatively affect the investment climate for export-oriented companies [4] - The healthcare sector saw a 1.39% increase in the Hang Seng Healthcare Index, although some companies in the CXO sector experienced declines due to tariff impacts [4] Public Utilities and Environmental Sector - The public utilities sector is expected to benefit from new pricing governance policies aimed at improving pricing mechanisms for water and gas services, potentially leading to increased service charges [5][10] - The performance of public utility stocks has been mixed, with some companies like China Water Affairs showing strong revenue growth due to their high exposure to domestic water supply operations [11] Energy Sector - The coal price has decreased by 20.6% year-on-year, which may alleviate some negative impacts on the thermal power industry despite a decline in power generation [8] - The public utilities sector is expected to see a positive impact from the government's pricing reforms, particularly in water and gas operations [10] Company-Specific Insights WuXi Biologics - WuXi Biologics is projected to see a 9.6% increase in revenue for FY24, driven by a significant rise in new project numbers and improved demand in North America and Europe [13][14] - The company has a robust order backlog, with a 5.1% year-on-year increase expected by the end of FY24, supporting steady revenue growth [14] Market Sentiment - The overall performance of Hong Kong stocks in FY24 has been disappointing, with 83.3% of selected stocks underperforming market expectations, indicating a challenging operating environment [7] - The public utilities sector has shown more stability, with a lower error rate in earnings forecasts compared to other sectors [7]