[ET Net News Agency, 22 July 2025] US stocks saw the Nasdaq and S&P 500 set new highs
once again. Hong Kong stocks also broke above 25000 at the open, reaching 25,120 for a new
multi-year high, before immediately facing selling pressure, with the HSI dropping nearly
100 points. However, before the midday break, the market climbed back up, with the HSI
closing at 25,057 at midday, up 62 points or 0.3 percent. Main board turnover was close to
HKD 137.8 billion. The Hang Seng China Enterprises Index stood at 9,040, up less than 1
point. The Hang Seng Tech Index was at 5,589, up 3 points or less than 0.1 percent.

"Nip Chun Pong: If HSI holds 24,800 this month, there is a strong chance to challenge
above 25,000 next month"

After breaking above 25,000 yesterday, Hong Kong stocks saw choppy trading, falling
before recovering, with the HSI up less than 100 points at midday. Nip Chun Pong, the
Chief Strategist at Blackwell Global Securities, told ET Net News Agency that the HSI
climbing above 25,000 represents a new high for about three and a half years, meaning
funds that have been stuck during this period are finally seeing a return to profit. He
expects the market will need to absorb this selling pressure in the short term before it
has the strength to move higher. He pointed out that market turnover remains active
recently, with daily averages around HKD 230 to 240 billion, a significant increase from
around HKD 150 billion in 2021, which will help the market's ability to absorb supply. He
also said that should the HSI pull back, the first support is at 24,800. If the index can
hold above this level for the rest of the month, there is a greater chance it will
stabilise above 25,000 and move higher next month.
August is results season for Hong Kong stocks, but major tech names like Meituan
(03690), Alibaba (09988), and JD.com (09618) could see their results affected by the
ongoing food delivery price war. However, Nip Chun Pong does not believe these stocks will
have a significant negative impact, as the recent rally has been broad-based and not
solely reliant on tech stocks. In addition, these tech names have already seen some
pullback over the past week or two, so the likelihood of dragging down the market next
month is relatively low. He added that Beijing will soon announce new urban planning
policies, so August is likely to see more focus on policy-driven themes.

"Bullish on Innoscience returning to highs, limited impact from tariffs"

After the White House announced approval for Nvidia to resume sales of H20 chips to
Mainland China, Hong Kong-listed chip stocks came under selling pressure. This morning,
Innoscience (02577) announced a placement at an approximate 9 percent discount, raising
over HKD 500 million, and the share price was hit initially but then rebounded along with
the sector. Nip Chun Pong believes that Nvidia news will definitely weigh on chip stocks
in the short term, but developing chips in China is inevitable, as AI is advancing rapidly
and demand for advanced chips continues to rise. He expects chip stocks will continue to
benefit from national policy, and investing in these names is not just a short-term trade.
Taking Innoscience as an example, the share price has fallen sharply recently, with the
discount from high to low being nearly 50 percent, so today's placement did not result in
a significant drop and the stock has room to rebound. The key level is HKD 50; if
Innoscience can hold above this, it could challenge its previous high near HKD 67 in the
second half of the year.
As for the upcoming US chip tariffs, Nip Chun Pong does not expect them to have much
impact on Innoscience, as 85 percent of its business is based in China, with only 15
percent overseas, including the US, so the effect is not expected to be significant. By
comparison, SMIC (00981) has 12 percent of its business in the US, and Hua Hong (01347)
has 10 percent in North America, so they are likely to be a bit more affected than
Innoscience.