Hong Kong stocks closed (12.19) | Hang Seng Index closed up 0.75%, strengthened in the direction of intelligent driving, and biomedical stocks rebounded markedly

The Zhitong Finance App learned that the slowdown in US inflation supports expectations of interest rate cuts. At the same time, the Bank of Japan raised interest rates by 25 basis points as scheduled. By the close, the Hang Seng Index rose 0.75% or 192.4 points to 25,690.53 points, with a full-day turnover of HK$221,186 billion; the Hang Seng State-owned Enterprises Index rose 0.68% to 8901.23 points; the Hang Seng Technology Index rose 1.12% to 5479.04 points. Looking at the whole week, the Hang Seng Index fell 1.1%, the National Index fell 1.96%, and the Hengke Index fell 2.82%.

CITIC Construction Investment Securities believes that after experiencing a unilateral rise in September, Hong Kong stocks have experienced volatile adjustments since October due to repeated effects of overseas macroeconomic expectations. Currently, AH and AH are simultaneously completing mid-term adjustments, and some high-quality assets of Hong Kong stocks have re-entered the cost-effective range. Under the resonance of Beishui's continuous allocation, restoration of profit expectations, and improvements in the macroeconomic environment at home and abroad at the end of the year, Hong Kong stocks are entering a year-end trading window that cannot be ignored.

Blue-chip stock performance

Shenzhou International (02313) led the blue chip decline. At the close, it fell 3.18% to HK$60.95, with a turnover of HK$490 million, dragging down the Hang Seng Index by 2.67 points. Nike, a major customer of Shenzhou International, released its results report for the second quarter of the 2026 fiscal year after the market on Thursday. The stock price plummeted by more than 10%. The report shows that although both revenue and profit exceeded market expectations, net profit declined year-on-year due to declining profit margins and continued pressure on the direct sales business. The company's net profit for the period fell 32% year over year.

In terms of other blue-chip stocks, Yao Ming Biotech (02269) rose 4.4% to HK$34.16, contributing 8.53 points to the Hang Seng Index; Ideal Automobile-W (02015) rose 3.81% to HK$65.45, contributing 5.34 points to the Hang Seng Index; Sinopec (00386) fell 1.52% to HK$4.53, dragging down the Hang Seng Index by 2.56 points; and Ali Health (00241) fell 1.32% to HK$5.23, dragging down the Hang Seng Index by 0.71 points.

Popular sector aspects

On the market, most large technology stocks rose; Tencent, Kuaishou, and Meituan rose more than 1%, while Ali rose 0.83%. Commercialization of L3 autonomous driving accelerated, and smart driving concept stocks exploded; risks of innovative drugs were phased out, and pharmaceutical stocks rebounded markedly; auto stocks strengthened in the afternoon, with Xiaopeng Auto leading a sharp rise of more than 7%; lithium carbonate futures broke through the 110,000 mark, and lithium industry stocks rallied in the afternoon; gaming stocks, copper stocks, and robotics concept stocks were active. On the other side, the trend of sporting goods stocks and oil stocks is weak.

1. Smart driving concept stocks exploded today. At the close, Youjiao Innovation (02431) rose 31.22% to HK$14.71; Zhejiang Shibao (01057) rose 10.41% to HK$5.09; Xiaopeng Motor-W (09868) rose 7.65% to HK$76.65; and Horizon Robot-W (09660) rose 7.04% to HK$9.12.

On December 15, the Ministry of Industry and Information Technology officially announced the entry permits for the first batch of L3 class conditional autonomous driving models in China. This license is a substantial implementation following the clear framework of the 2023 pilot notice and the selection of the first batch of 9 consortia in June 2024, marking the shift of domestic L3 from “pilot declaration and test evaluation” to a “pilot product entry and road access pilot”. Huatai Securities believes that L3 entry and implementation will accelerate the restructuring of the smart driving industry chain. Smart driving is expected to become an important direction for AI applications in 2026. It is recommended to focus on investment opportunities in core areas such as smart vehicles, wire-controlled chassis, domain control chips, and lidar.

2. Pharmaceutical stocks rebounded markedly, and CRO took the lead. At the close, Gloria Engineering (06821) rose 10.42% to HK$80; Yingyan Biotech (09606) rose 9.29% to HK$336.6; Viva Biotech (01873) rose 7.45% to HK$2.02; and Pharmaceutical Biotech (02269) rose 4.4% to HK$34.16.

In the early morning of December 18, Beijing time, the Senate's official website showed that the US FY2026 National Defense Authorization Act (2026 NDAA), equipped with a revised version of the Biosafety Act, was passed. The new version of the Biosafety Act does not specifically name any company. Motong Daikan believes that geopolitical concerns about China's CXO industry have reached their peak, and it is expected that China's medical policy environment will remain stable and will continue to support innovation, while more moderate drug volume procurement will drive the recovery of the medical device and diagnostic sector. Regarding the external licensing of innovative drugs, the bank believes the trend is sustainable. Currently, there are several potential targets and drug forms, which are expected to bring new licensing opportunities next year.

3. Lithium stocks rallied in the afternoon. At the close, Ganfeng Lithium (01772) rose 1.87% to HK$51.65; Tianqi Lithium (09696) rose 1.72% to HK$49.76.

Guangzhou's main contract for lithium carbonate rose sharply this afternoon, breaking through the 110,000 yuan mark. According to Futures Daily, Jiangxi Yichun Bidding Network released the “First EIA Information Notice on Environmental Impact Assessment of the Zhenkouli-Fengxin County Jianxiawo Lithium Mine Mining Project in Yichun Times Mining Co., Ltd.” to publicize the first EIA information on the Jianxiawo lithium mining project in Zhenkouli-Fengxin County, Yifeng County, Jiangxi Province. Cao Xusheng, director of the Mineral Resources Legal Department at Beijing Jingshi Law Firm, said that this is one of the normal approval steps in many certification processes. If normal mining is to be carried out, a series of procedures such as application, examination, filing, and approval are still required.

4. The robot concept is active. At the close, Hong Kong Robotics (00370) rose 10.29% to HK$0.75; Sanhua Intelligent Control (02050) rose 4.92% to HK$34.8; and Premium Choice (09880) rose 4.68% to HK$111.8.

Recently, Preferred Choice Technology and Domestic Service Platform Swan arrived home and formally signed a strategic cooperation agreement in Shenzhen. The two sides will jointly promote the deep integration of humanoid robots with “home” scenarios and promote application implementation. Furthermore, Morgan Stanley released a forecast that the humanoid robot market is expected to reach 5 trillion US dollars by 2050. According to an analysis by Kim Young-chan, head of research in the Asian technology industry at the agency, physical intelligence is becoming one of the core driving forces for the development of artificial intelligence. At that time, the global deployment of humanoid robots is expected to reach 1 billion units, or about 1 for every 10 people.

Popular exotic stocks

1. The trend of the two IPOs clearly diverged. By the close, Zhihui Mining (02546) rose 90.69% to HK$8.6; Sidi Smart Drive (03881) fell 13.69% to HK$227.

On December 19, “Commercial Vehicle Smart Driving First Stock” Sidi Smart Driving and “Tibet's leading copper, zinc and lead concentrate” Zhihui Mining were both listed. However, there was a clear divergence in the trend of the two IPOs. Sidi Smart Driving experienced a “cliff-jumping” decline after opening. At one point, it fell by more than 15% in the intraday period, while Zhihui Mining declined after opening sharply higher, and still surged more than 90% by the close.

2. CIMC Group (02039) was strong throughout the day and closed up 15.47% to HK$8.88.

CIMC Group announced that on December 18, the board of directors approved the continued use of the general authorization to repurchase H shares, adding no more than HK$300 million for the second batch of H share repurchases. According to the group, the H shares to be repurchased will be held as treasury shares, and the proposed repurchase funds are from its own funds and self-raised funds.

3. Changfei Optical Fiber Cable (06869) climbed sharply to the close, up 12.01% to HK$51.75.

Guosheng Securities pointed out that after experiencing a cyclical bottoming out of the traditional fiber optic cable market for about 4 years, the loose fiber market has now shown a clear sign of recovery; at the same time, the overseas specialty optical fiber market has entered a golden track of high growth, driven by breakthroughs in AI computing power and the explosion of application scenarios.

4. China's free (01880) AH shares rose sharply and ended at the close, up 6.88% to HK$70.7.

On December 18, the customs clearance operation for the entire island of the Hainan Free Trade Port was officially launched. UBS believes that the optimized offshore duty-free shopping policy will drive the growth of China's free offshore duty-free sales in Hainan. China's net profit from 2026 to 2027 is predicted to rebound by 34% year on year and continue to rise 21%, respectively, reversing the decline in 2024 and 25.

5. China Tobacco Hong Kong (06055) performed well, rising 6.68% to HK$34.48 at the close.

The State Administration issued “Opinions on Combating Illegal Tobacco-Related Activities” to comprehensively strengthen the supervision of e-cigarettes and strictly investigate and punish illegal activities such as illegal production, wholesale, transportation, sale of e-cigarettes and the export and return of e-cigarettes. China Merchants Securities released a research report saying that the tobacco sector continues to be optimistic about Hong Kong stocks, China Tobacco, Hong Kong, etc.