[ET Net News Agency, 27 August 2025] Hong Kong stocks followed Wall Street higher at the
open, but sentiment across Asian markets was cautious in the morning. Rising US Treasury
yields also weighed on the overall market mood. Despite gains in the Shanghai Composite,
the HSI was range-bound and closed the half-day session at 25,541, up 16 points or less
than 0.1 per cent, with main board turnover exceeding HKD 161.9 billion. There was a net
southbound inflow of HKD 5.1 billion via Stock Connect. The Hang Seng China Enterprises
Index finished at 9,161, up 12 points or 0.1 per cent. The Hang Seng Tech Index closed at
5,815, up 32 points or 0.6 per cent.

"Profit-taking at HSI highs is normal, index likely to maintain choppy upward trend"

After the HSI surged on Monday (25 Aug) and pulled back on Tuesday, it was choppy in
early trade today, rising initially before easing. Cheung Chi Wai, a joint managing
director at Prudential Brokerage Ltd, told ET Net News Agency that although expectations
for a US rate cut in September have increased, the news has largely been digested. The HSI
tends to pull back after breaking new yearly highs, as some investors take profits, which
is normal. In addition, with index futures settlement tomorrow (28 Aug), major players are
likely to keep the index near current levels for settlement, rather than pushing it
higher. Cheung noted that the HSI 14-day RSI is currently around 58, indicating that risk
is not excessive. He expects the HSI's upward momentum to continue in the short term, as
past corrections only occurred when the RSI reached 80. Cheung forecasts that the HSI will
maintain a choppy upward trend in the near term, and even if it falls, there should be
support near the gap left by Monday's rally around 25,349.

"Nongfu Spring's overseas expansion raises market expectations"

Nongfu Spring (09633) posted interim net profit of RMB 7.622 billion, up 22.2 per cent
year-on-year, with revenue for the period at RMB 25.622 billion, up 15.6 per cent. Nongfu
Spring's share price opened 3 per cent higher this morning and extended gains to as much
as 7.4 per cent, hitting HKD 50.45, the highest in four years. Cheung noted that Nongfu
Spring's full-year results for 2024 were flat, with annual net profit rising less than 0.4
per cent and revenue increasing just 0.5 per cent. With Mainland China facing intensifying
competition, Nongfu Spring's strong interim results surprised the market somewhat.
Management has also emphasised that the group entered the Hong Kong market this June and
will explore other overseas markets in the future, raising hopes that the group can
diversify and reduce reliance on the Mainland China market.
Cheung added that competition in the beverage industry is intensifying further. CR
Beverage (02460), another beverage stock, has underperformed, mainly because it is highly
concentrated in the bottled water segment, lacking product and market diversification. At
the end of July, CR Beverage issued a profit warning, predicting interim net profit would
drop by around 20 to 30 per cent. Even though an interim dividend is expected, the share
price plunged 13 per cent after the warning and is now hovering around HKD 11, still below
its IPO price of HKD 14.5.
Another beverage stock, Mengniu Dairy (02319), will announce interim results today. The
share price has underperformed this morning and remains down about 2 per cent. Cheung
noted that Mengniu's full-year net profit for 2024 plummeted nearly 98 per cent, with the
second half particularly weak. As a result, the market has low expectations for this set
of interim results, and the share price has been fluctuating around HKD 16. However,
Cheung said that as the market is not expecting much, as long as the interim net profit
decline is not too severe, the share price should find support at current levels.