[ET Net News Agency, 29 May 2025] US President Trump's tariff war encountered a
significant judicial setback when a US trade court ruled on Wednesday (28th) that the
global tariffs were illegal and issued an injunction. This news stimulated a collective
rally in export stocks, boosting market sentiment. During trading, the Hong Kong market
initially rose but struggled to maintain momentum around the 10-day moving average
(approximately 23,466). The Hang Seng Index reported 23,408, up 150 points or 0.6%, with
turnover exceeding HKD 1,109 billion. The Hang Seng China Enterprises Index stood at
8,501, up 57 points or 0.7%. The Hang Seng Tech Index was at 5,255, up 80 points or 1.6%.

"Yuen Che Hay: Trump still has options to counter judicial restrictions"

While the US court ruled to suspend most of Trump's tariff measures, the Hong Kong
market's early performance was relatively calm, with gains of about 100 points. As
lunchtime approached, the increase expanded to around 180 points. Yuen Che Hay, the
Co-Director of Investment Strategy of Quam Asset Securities, told ET Net News Agency that
the court's decision has limited positive implications. He pointed out that many variables
remain, as Trump could issue another executive order to overturn this decision or
introduce other measures to achieve his goals. The White House is also expected to appeal
the court's ruling, so caution is advised. Regarding the Hang Seng Index, Yuen Che Hay
indicated that it has been rallying around major blue-chip stocks like Meituan (03690) and
Alibaba (09988), showing less sensitivity to external news. The performance of large-cap
stocks is mainly influenced by internal issues rather than the trade war.
On the outlook for the Hang Seng Index, Yuen Che Hay said that it has been consolidating
for three weeks and could break out, potentially reaching 24,000 or dropping by 1,000
points. He suggested that the bearish scenario is more likely, with the index possibly
hitting 23,600 before losing steam. Observing for clearer direction is recommended.

"Shenzhou Intl faces client performance issues, resistance at HKD 62"

The court's decision to suspend most of Trump's tariffs led to excitement among export
stocks, with Shenzhou Intl (02313) rising over 4%, Sunny Optical (02382) up more than 3%,
and Lenovo (00992) gaining nearly 3%.
Yuen Che Hay stated that the outlook for export stocks remains uncertain due to Trump's
potential follow-up measures. Previously, export stocks surged due to a tariff buffer
period, but the current gains have narrowed, leading to a potentially volatile outlook.
Shenzhou Intl is now close to its pre-tariff trading range. Yuen Che Hay mentioned that
besides tariff concerns, client performance issues, such as those related to Nike and
Adidas, are also affecting Shenzhou Intl's results. Tonight, lululemon will announce its
earnings, and its performance will be closely watched. If lululemon performs well,
Shenzhou may stabilize, but there are currently no signs of breaking out of the trading
range, with resistance expected at HKD 62.
Regarding Apple-related stocks, Yuen Che Hay noted that their early performance was not
particularly active, lacking a clear upward trend. He believes Trump is closely monitoring
issues within Apple's supply chain and may target Apple with additional measures, which
could lead to underperformance compared to the broader market.
US Secretary Rubio announced plans to revise visa review standards for all applicants
from Mainland China and Hong Kong, increasing scrutiny and starting to revoke visas for
Chinese students linked to the government or studying in certain critical fields. After a
drop yesterday, New Oriental (09901) rebounded today. Yuen Che Hay commented that the
study abroad business represents a small portion of New Oriental's revenue, so the impact
on its business is limited. Additionally, the ongoing situation between Trump and Harvard
University remains unresolved, making it difficult to predict the effects. With New
Oriental's performance also underwhelming, investors are advised to tread carefully with
such stocks.