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<Review> Hong Kong Stocks Fall Below 25,000; Kuaishou, China Life, and Pop Mart Under Pressure
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Shares of certain companies, including CHINA LIFE (02628.HK) and KUAISHOU-W (01024.HK), declined after announcing their results, leading to a drop in Hong Kong stocks today (26th). The market anticipates a ceasefire agreement between the US and Iran, with the DJIA and Nasdaq rising 0.7% and 0.8% respectively overnight (25th). At the time of writing, the US 2-year bond yield rose to 3.939%, the US 10-year bond yield increased to 4.372%, and the US Dollar Index rose to 99.67. DJIA futures recently fell by 234 points or 0.5%, and Nasdaq futures fell by 171 points or 0.7%. The Shanghai Composite Index fell 42 points or 1.1% to close at 3,889 points, while the Shenzhen Component Index fell 1.4%. The total turnover of the Shanghai and Shenzhen markets was RMB1.94 trillion. US President Donald Trump stated he would visit China in mid-May, and Chinese Foreign Ministry spokesperson Lin Jian responded that head-of-state diplomacy plays an irreplaceable strategic guiding role in China-US relations, with both sides maintaining communication regarding President Trump's visit to China. The HSI opened 68 points lower and its decline widened, dropping 542 points to a low of 24,793 points, closing down 479 points or 1.9% at 24,856 points. The HSCEI fell 192 points or 2.2% to 8,389 points, and the HSTECH fell 161 points or 3.3% to 4,761 points. The total market turnover for the day was HKD261.662 billion. The total turnover of Northbound trading was HKD117.155 billion, while Southbound funds had a net inflow of HKD3.34 billion today (previous trading day's net inflow was HKD22.323 billion). POP MART (09992.HK) fell another 10.5% today to close at HKD77.5, with a turnover of HKD15.385 billion. CHINA LIFE fell 8.5% for the day to close at HKD25.04, with Lyon estimating CHINA LIFE's loss in the fourth quarter last year to be RMB13 billion. [POP MART Weak, Kuaishou Falls After Results] TENCENT (00700.HK) fell below the HKD500 mark, closing down 2% at HKD495.6. MEITUAN-W (03690.HK) retreated 3.7%. ALIBABA-W (09988.HK) fell 4.6% to close at HKD123, while BAIDU-SW (09888.HK) and NETEASE-S (09999.HK) fell 2.3% and 2.6%, respectively. JD-SW (09618.HK) rose 1.1%. Kuaishou faced market concerns over the slowdown in core business growth and the impact of AI investments on profitability, with the stock plummeting 14% to HKD45.6, making it the biggest blue-chip loser. M Stanley published a report stating that Kuaishou's revenue grew 12% in the fourth quarter last year, exceeding the bank's expectation by 2%, benefiting from accelerated growth in online marketing. The Gross Merchandise Volume (GMV) grew 13%, outperforming other e-commerce platforms; Kuaishou AI revenue was RMB340 million, slightly below expectations. Adjusted profit rose 16% YoY, exceeding the bank's expectation by 1%. The full-year adjusted net profit was RMB20.65 billion, higher than earlier guidance. The bank lowered its EPS forecast for 2026 to 2028 by 17% to 24%, and its TP was reduced by 25% from HKD73 to HKD55, with a rating of "Equalweight". M Stanley noted that increased AI investment is common among Chinese tech stocks, but the significant slowdown in total revenue (especially online marketing) raises concerns about investment returns. The bank cited Kuaishou management's expectation that revenue growth will slow to 4% to 4.5% by 2026, with a goal to achieve overall positive free cash flow by 2026 and improve absolute shareholder returns. The bank believes the outlook for this year is unexpectedly bearish. [1,600 Stocks Decline, China Mobile to Announce Results Today] The breadth of the Hong Kong stock market continued to weaken today, with a main board stock rise-to-fall ratio of 13 to 38 (previous day 34 to 17), with 1,602 stocks declining (a decline of 2.9%); 13 HSI constituent stocks rose today, while 76 fell, with a rise-to-fall ratio of 14 to 84 (previous day 71 to 27); the market recorded short selling of HKD50.685 billion today, accounting for 21.603% of the HKD234.618 billion in shortable stock turnover (previous day was 20.947%). CHINA MOBILE (00941.HK) closed flat at HKD77.5. After the market closed, CHINA MOBILE announced last year's results, with a net profit of RMB137.095 billion, down 0.9% YoY, close to the lower end of the net profit forecast range of RMB136.138 billion to RMB145.3 billion by five brokers, with a median of RMB144.122 billion. The basic EPS was RMB6.35. The company declared a final dividend of HKD2.52 per share (compared to HKD2.49 per share in the same period last year), with a total annual dividend of HKD5.27 per share, up 3.5% YoY, compared to the annual dividend forecast range of RMB4.68 to RMB5.01 per share by four brokers; the annual payout ratio was 75%. Last year, the company's operating revenue was nearly RMB1.0502 trillion, up 0.9% YoY, in line with the forecast range of RMB1.0416 trillion to RMB1.0653 trillion by five brokers, with a median of RMB1.0504 trillion. The main business revenue was RMB895.5 billion, up 0.7% YoY; among which, computing power service revenue was RMB89.8 billion, up 11.1% YoY. Communication service revenue was RMB714.9 billion, down 1% YoY. In its earnings report, CHINA MOBILE stated that looking ahead, the adjustment of the telecommunications service VAT policy brings certain impacts, and the company faces some uncertainties in its development. (wl/da) Auto-translated by third-party software This translation was auto-generated by third-party software. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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