Market Overview
▪ On February 26, Hong Kong stocks saw all three major indices weaken, failing to continue yesterday's strong upward trend. After reaching a temporary high yesterday, the market exhibited clear profit-taking characteristics today, with investor sentiment turning cautious. As of the time of writing:
▪ The Hang Seng Index reported 26,511.22 points, down 0.95%, facing resistance and falling back, indicating some selling pressure above.
▪ The Hang Seng TECH Index performed the weakest, reporting 5,145.16 points, down 2.19%, with technology heavyweight stocks generally retreating, dragging the index down.
▪ The National Enterprises Index reported 8,869.17 points, down 1.83%, also entering a correction. The current market is in the process of confirming a pullback after a breakout, with short-term attention on support levels.
Sector Performance
▪ The retail sector is overall in a downward trend, with a clear pattern of declines. Leading stock Alibaba -W (9988.HK) fell 2.9%, with a trading volume of HKD 9.47 billion. Although there have been signs of capital inflow recently, concerns over the State Administration for Market Regulation's discussions with platform companies regarding antitrust compliance have suppressed valuation recovery momentum. JD.com -SW (9618.HK) fell 2.15%, with a trading volume of HKD 721 million, mainly due to Bank of America's downgrade of its target price and market concerns over rising consumer incentive costs impacting profit margins. Miniso (9896.HK) performed the weakest, significantly dropping 5.59%, as the market continues to digest the implications of its spin-off Top Toy listing and investment in Yonghui Superstores.
▪ The internet content and information sector fell with the market, facing both regulatory pressure and performance wait-and-see sentiment. Heavyweight stock Tencent Holdings (0700.HK) fell 1.82%, with a trading volume of HKD 9.391 billion. Despite the company strengthening its AI medical layout through the acquisition of Insighta, previous concerns over lagging competition in AI chatbots continue to pressure the stock price. Baidu -SW (9888.HK) fell 3.34%, with a trading volume of HKD 921 million, also affected by antitrust discussions, and the market has begun to digest some of the positive expectations for its AI commercialization. Kuaishou -W (1024.HK) fell 3.32%, following the overall pullback in the technology sector.
▪ The communication equipment sector rose against the market trend, with demand for AI computing infrastructure becoming the core driving force. YOFC (6869.HK) rose 4.04%, with a trading volume of HKD 3.328 billion, benefiting from China's accelerated construction of AI data centers, leading to a surge in demand for optical communication components. Cambridge Technology (6166.HK) surged 5.91%, with a trading volume of HKD 219 million, as capital activity increased. ZTE Corporation (0763.HK) slightly rose 0.22%, benefiting from expectations of accelerated local computing power deployment due to NVIDIA chips entering China.
Macroeconomic Background
▪ The current trading focus of Hong Kong stocks is on liquidity verification and domestic demand recovery. The market is closely tracking M3 money supply and retail sales data to confirm the strength of capital support and local consumption momentum. Additionally, marginal changes in HSBC's manufacturing PMI and import-export data are also key to assessing economic resilience, and investors need to be wary of valuation disturbances caused by external macro fluctuations
Popular Stocks
▪ Southern Communication (1617.HK) rose 37.78%, with a trading volume of HKD 45.9863 million. This stock, as a small-cap in the optical communication sector, has attracted significant capital, recently benefiting from expectations surrounding the upcoming 2026 OFC (Optical Fiber Communication Conference). Market funds have concentrated on the optical module and fiber communication sectors, with high prosperity in sub-sectors driving valuation recovery.
▪ Putian Communication Group (1720.HK) rose 39.06%, with a trading volume of HKD 29.9940 million. The stock price surged in a single day, reaching a new 52-week high, mainly driven by expectations of a recovery in the optical communication industry, creating a linkage effect with other stocks in the same sector like Southern Communication. The market is speculating on its potential growth space against the backdrop of computing power center construction.
▪ Dongfang Electric (1072.HK) rose 17.80%, with a trading volume of HKD 1.266 billion. Influenced by the trend of self-built power sources in North America and a surge in global power equipment demand, the stock price rose sharply against the market trend. Institutions pointed out that the rekindled supply-demand gap for mainframes will continue long-term, and the company, as a leader, is expected to benefit from the growth of overseas orders and energy transition dividends.
▪ Tensyn Smart Chip (9903.HK) rose 19.26%, with a trading volume of HKD 386 million. As the &#34;first domestic GPU stock in Hong Kong,&#34; the stock price continues to be strong, with recent market enthusiasm for AI applications transmitting to the upstream computing power chip sector. The logic of domestic substitution combined with the explosion of AI demand continues to attract capital attention.
▪ Hon Teng Precision (6088.HK) rose 14.64%, with a trading volume of HKD 965 million. The stock price surged again, mainly benefiting from the high prosperity of the global optical module market and strong demand for AI servers. With the OFC conference approaching, institutions are optimistic about the company's effectiveness in transforming towards system-level interconnection solutions and the contribution of AI business revenue.
Market Trading Volume TOP10
▪ Alibaba -W (09988.HK) latest trading price HKD 144.00, down 2.90%, trading volume HKD 9.431 billion
▪ Tencent Holdings (00700.HK) latest trading price HKD 512.50, down 1.91%, trading volume HKD 9.294 billion
▪ YOFC (06869.HK) latest trading price HKD 136.50, up 3.96%, trading volume HKD 3.320 billion
▪ HSBC Holdings (00005.HK) latest trading price HKD 145.40, up 1.89%, trading volume HKD 3.105 billion
▪ Xiaomi Group -W (01810.HK) latest trading price HKD 35.42, down 0.51%, trading volume HKD 2.935 billion
▪ Meituan -W (03690.HK) latest trading price HKD 80.82, down 2.31%, trading volume HKD 2.082 billion
▪ SMIC (00981.HK) latest trading price HKD 68.60, down 1.79%, trading volume HKD 2.549 billion
▪ Hong Kong Stock Exchange (00388.HK) latest transaction price 413.40 HKD, up 0.29%, transaction amount 2.349 billion
▪ Ping An Insurance (02318.HK) latest transaction price 68.05 HKD, down 4.36%, transaction amount 2.343 billion
▪ Hua Hong Semiconductor (01347.HK) latest transaction price 98.35 HKD, down 4.33%, transaction amount 2.122 billion

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On February 26th, the Hong Kong stock market sentiment turned cautious, with all three major indices retreating. The Hang Seng Index fell by 0.95%, and the Hang Seng TECH Index plummeted by 2.19%. Blue-chip stocks generally weakened, with Alibaba and Tencent Holdings dropping by 2.9% and 1.82%, respectively. The funding situation showed a clear divergence, with the demand for AI computing infrastructure driving the communication equipment sector to rise against the trend, as YOFC surged over 4%. The current market is in the pullback confirmation phase after a breakout, with macro-level attention focused on liquidity verification and signals of domestic demand recovery

- On February 26, Hong Kong stocks declined across all major indices, reversing previous gains due to profit-taking and cautious investor sentiment.  
- The Hang Seng Index fell 0.95% to 26,511.22 points, with significant losses in technology stocks, while communication equipment firms saw gains driven by AI infrastructure demand.  
- Market liquidity and domestic consumption recovery remain key focuses for investors, monitoring M3 money supply and retail sales for insights into economic resilience.

Market Heartbeat

BABA-W

JD-SW

MNSO

TENCENT

BIDU-SW

KUAISHOU-W

YOFC

NANFANG COMM

PUTIAN COMM

DONGFANG ELEC

ILUVATAR COREX

FIT HON TENG

HSBC HOLDINGS

Tencent Holdings Limited

ALI HEALTH

CSOP HS TECH

Fullgoal CSI Communication Equipment Thematic ETF

Hang Seng TECH Index

Alibaba

Hong Kong Stock Market Update | The Hang Seng Index fell 0.95%, Alibaba dropped 2.9%, while the communication equipment sector surged against the trend