Hong Kong stocks closed (10.21) | Hang Seng Index closed down 0.9%, Tech Network stocks, lithium batteries, and telecom stocks plummeted 11% after falling Ningde Era (03750) results

The Zhitong Finance App learned that Hong Kong stocks turned downward after opening higher in early trading. The Hang Seng Index opened at 24139.11 points, the highest in the whole day and above the 24,000 mark. After that, the Hang Seng Technology Index fell below 4,000 points due to heavy stocks such as the Ningde Era and others dragged down unilaterally. At the close, the Hang Seng Index fell 0.90% or 215.87 points to 23651.87 points, with a full-day turnover of HK$176.597 billion; the Hang Seng State-owned Enterprises Index fell 1.08% to 7943.41 points; and the Hang Seng Technology Index fell 1.26% to 3994.77 points.

Societe Generale Securities pointed out that on the profit side, the Hang Seng Index and Hengke's 2026 and 2027 EPS expectations are still being revised down as a whole, and there has been no significant stabilization. On the valuation side, although the dynamic PE of the Hang Seng Index has fallen back to close to the historical average, ERP is still at a low level under high risk-free interest rates, showing limited appeal. On the capital side, the allocation ratio of foreign-funded Hong Kong stocks fell to a historically low level, but the trend of active foreign capital outflows has not changed; compounded by the 2027Q1 ban and a recovery in supply, it may bring phased pressure, and there is still insufficient fundamentals and incremental capital catalysts in the short term.

Blue-chip stock performance

The Ningde Era (03750) led the blue chip decline after the results. At the close, it decreased by 11.41% to HK$364.8, with a turnover of HK$4.961 billion. The third quarter revenue of the Ningde Era was 165.221 billion yuan, up 58.58% year on year, and net profit to mother was 21.246 billion yuan, up 14.54% year on year, and down 5.77% month on month, mainly affected by changes in product structure, export tax rebates, and consumption tax.

In terms of other blue-chip stocks, Lenovo Group (00992) rose 2.93% to HK$26; Chuangke Industrial (00669) rose 2.09% to HK$131.9. On the downside, Tencent Holdings (00700) fell 4.04% to HK$393.8; China Mobile (00941) fell 3.66% to HK$77.55.

Popular sector aspects

On the market, large tech stocks opened high and went low. Tencent Holdings fell below HK$400, and memory chip stocks strengthened against the market, rising nearly 9% after Lanqi Technology's profit; the countdown to ESMO's annual conference began, and innovative pharmaceutical stocks continued to be active. On the other side, lithium battery stocks fell collectively, falling more than 11% after the performance of the Ningde era; the three major operators were under pressure simultaneously, and China Mobile fell 3.66%; and trends in automobiles, coal, and new consumption weakened.

Innovative drug stocks continued their gains. At the close, Rongchang Biotech (09995) rose 3.72% to HK$66.9; BeiGene (06160) rose 2.66% to HK$231.4; Cinda Biotech (01801) rose 1.95% to HK$89.1; and Health Biotech (09926) rose 1.53% to HK$92.8.

The 2026 European Society of Medical Oncology (ESMO) Annual Meeting will be held in Madrid on October 23-27. A total of 29 domestic innovative drug studies were selected for the LBA Breakthrough Summary, accounting for about one-third of the total LBA. 5 projects entered the Chairman's Seminar, covering cutting-edge tracks such as ADC, dual antibodies, and targeted drugs. Meanwhile, the recent launch of platform-based BDs continues to convey confidence. It is worth mentioning that recent industrial events have been intense in the AI pharmaceutical industry. OpenAI recently announced that it has completed the acquisition of the biomedical R&D collaboration platform Orchestra Bio and will deeply integrate it with its own life science AI R&D platform Rosalind.

The pork concept is active. At the close, Dekang Agriculture and Animal Husbandry (02419) rose 4.12% to HK$58.15; Muyuan shares (02714) rose 3.62% to HK$37.2.

Entering October, signs of elimination in the pig industry chain continued to increase: on the one hand, leading pig companies took the initiative to reduce sow production capacity, and piglet prices and breeding profits continued to bottom out; on the other hand, sows that can be raised in September were still declining, but the extent of removal was narrower than in August. According to the data, in September, Yongyi and Steel Union's sow stocks declined by 0.52% and 0.86%, respectively. Combined, the cumulative elimination in July-August has exceeded 6.5%, and the annual production capacity reduction is expected to reach 10%.

AI hardware soared and fell back. At the close, Jingwang Electronics (03228) rose 5.79% to HK$66.65; Cambridge Technology (06166) rose 3.99% to HK$82; and GigaYi Innovation (03986) rose 3.15% to HK$347.6.

Recently, the huge scale of AI infrastructure debt financing has raised concerns among investors, and emerging cloud service providers and chip financing have become the focus of this round of sell-off. However, the latest financial reports released by SpaceX and Ultra Microcomputer all exceeded market expectations, boosting the market's confidence in AI transactions. SpaceX's AI revenue in the third quarter increased more than 9 times year over year, reaching 7.56 billion US dollars, becoming the company's largest source of revenue for the first time. Ultramicrocomputer's revenue for the quarter ending September 30 is expected to soar 279% year over year, up about 27% from previous guidance.

Lithium battery stocks fell collectively. At the close, Ningde Times (03750) fell 11.41% to HK$364.8; Pilot Smart (00470) fell 9.58% to HK$19.06; and China Airlines (03931) fell 3.57% to HK$13.5.

According to the three-quarter report disclosed by Ningde Times last night, net profit for the third quarter was 21.246 billion yuan, up only 14.54% year-on-year, and down about 5.8% from the second quarter. The profit for the third quarter was lower than market expectations, mainly due to changes in product structure, lower export tax rebates, and consumption tax. J.P. Morgan Chase released a research report saying that battery stocks have clearly failed in the past few months. Initially, it was mainly due to concerns about demand prospects, but now the focus has turned to profit. The bank comprehensively lowered the profit forecast for the battery industry chain, and is increasingly concerned that the industry's profitability is deteriorating faster than expected.

The three major operators are collectively under pressure. At the close, China Mobile (00941) fell 3.66% to HK$77.55; China Unicom (00762) fell 3.59% to HK$5.37; and China Telecom (00728) fell 2.94% to HK$4.45.

China Mobile announced its third quarter results on October 20. Revenue for the third quarter was 242.3 billion yuan, down 3.4% year on year, main business revenue was 205.1 billion yuan, down 5.1% year on year, and profit attributable to shareholders was 27.3 billion yuan, down 12% year on year. According to Citi, although the number of mobile users, 5G and broadband business customers continued to grow steadily, profit margin expansion was limited due to continued weakening telecommunications business revenue and continuing cost pressure, and overall performance was slightly lower than expected.

Popular exotic stocks

The volume of exchange bars (01753) soared. At the close, it rose 40.94% to HK$1.05.

The AI short drama business recorded net profit for three consecutive months in July, August, and September. The number of new broadcasts on the entire network exceeded 45.8 billion in the third quarter, more than nine times the cumulative total of 5 billion in the first half of the year. Currently, the company's positioning has switched to an AI-Native content platform. Its core competency is not a hit, but rather a full-process AI workflow and self-developed agent matrix covering the entire process from screenwriting to commercialization, turning production from individual talent to system replication.

Dipu Technology (01384) has been strong throughout the day. At the close, it was up 10.30% to HK$17.35.

DeepWorks, an enterprise intelligence platform owned by Dipu Technology, has officially ended the trial application mode and is open to all users to register independently. It marks that in addition to delivering enterprise solutions, Dipu Technology has officially established a large-scale service model with platform-based and standardized cloud services as the core, and the AI product system is expected to officially enter a new stage of large-scale operation.

Lanqi Technology (06809) is happy. At the close, it was up 8.97% to HK$221.2.

Lanqi Technology expects revenue of about 2,079 billion yuan in the third quarter, up about 46.0% year on year, and net profit of 1.2 billion yuan to 1.3 billion yuan, up 153.6% to 174.7% year on year. Strong growth is driven by the rapid development of AI inference and agent applications, which support the demand for memory modules and interconnect chips.

Fuyao Glass (03606) declined after the results. At the close, it was down 6.50% to HK$51.75.

Fuyao Glass disclosed the three-quarter report. Revenue for the first three quarters was 34.123 billion yuan, up 2.46% year on year, and net profit to mother was 6.06 billion yuan, down 14.97% year on year; revenue for the third quarter was 12.152 billion yuan and net profit to mother was 2,036 billion yuan, down 9.87% year on year. The decline in profits was mainly due to exchange losses of 1,067 billion yuan.