[ET Net News Agency, 16 October 2025] US President Trump described the situation as
having reignited a trade war with China. However, US Treasury Secretary Bessent suggested
that if China suspends the implementation of strict new rare earth export controls, the US
side may consider extending the tariff suspension period by more than three months. Hong
Kong equities were volatile and trended lower by midday, with the HSI closing the half-day
at 25,799, down 111 points or 0.4 percent. Main board turnover was close to HKD 15.62
billion, southbound net inflows reached HKD 10.257 billion. Mainland China healthcare and
banking stocks were actively bought, while tech stocks saw heavier selling. The Hang Seng
China Enterprises Index stood at 9,229, down 21 points or 0.2 percent. The Hang Seng Tech
Index closed at 5,992, down 82 points or 1.4 percent.

"Mak Ka Ka: Market focus shifts to Fourth Plenary Session on 20 Oct"

China-US trade relations are gradually easing. US Treasury Secretary Bessent told CNBC
that US President Trump is prepared to meet with Chinese President Xi Jinping, and both
sides are working to arrange the meeting. He also said the US may extend the tariff truce
if China delays implementing new rare earth export controls, with consultations set to
take place in the coming weeks. The HSI ended a seven-day losing streak, trading in a
narrow range near 25,900 in early sessions. Mak Ka Ka, Head of Financial Products Trading
and Research Department of SinoPac Securities (Asia), told ET Net News Agency that she
expects continued communication between China and the US in the near future, and the
market's focus has shifted towards the upcoming Fourth Plenary Session from 20 Oct to 23
Oct, as well as the 15th Five-Year Plan. The HSI is expected to consolidate within a range
of 25,500 to 26,500 in the short term.
Mak Ka Ka pointed out that the Fourth Plenary Session will discuss the direction of the
15th Five-Year Plan, setting out economic policy for the next five years. It is expected
to cover two core areas: technological self-sufficiency and security, and economic
structural upgrades. There will be an emphasis on promoting consumption-driven economic
growth, focusing on "dual circulation", that is, expanding domestic demand and improving
its quality.
Mak Ka Ka expects that consumption will be the primary driver of economic growth,
bringing structural opportunities to the entire consumption sector. This includes new
branded consumption, traditional content consumption, lifestyle services and cultural
tourism, and upgrades in local consumption. Among these, Mak Ka Ka anticipates that Pop
Mart (09992) and LaoPu Gold (06181) will benefit the most from the policy stimulus linked
to the Fourth Plenary Session, with branded new consumption and traditional content
consumption entering a period of high incremental growth.
Additionally, Mak Ka Ka noted that since the Fourth Plenary Session will focus on macro
five-year economic policy, specific implementation figures such as RRR and interest rate
cuts, and data on fiscal stimulus, will not be announced at the meeting.

"Top picks in consumption: Pop Mart and LaoPu Gold"

The new consumption sector continues to rally. Pop Mart has risen for four consecutive
days, with a cumulative gain of 10.4 percent, while LaoPu Gold has gained 15.2 percent
over two days. Mixue Group (02097) has also advanced 8.2 percent over two days. Mak Ka Ka
believes the rally in new consumption is driven by macro policy support and industry-wide
structural reform.
For Pop Mart and LaoPu Gold, Mak Ka Ka stated that new policy expectations, coupled with
Pop Mart's own development prospects, including IP growth, brand strength, and IP
development capability, which together build a robust fan-based economic ecosystem, are
expected to provide a short-term boost to the share price. The company's future growth
will come from overseas expansion and continued IP innovation, and its performance is
worth watching. She expects that ahead of the Fourth Plenary Session, optimism around the
consumption sector will continue to support share prices. Investors may consider
accumulating Pop Mart shares in stages at HKD 278, with a short-term target price of HKD
295.
As for LaoPu Gold, Mak Ka Ka believes the company has a dual nature, as both a consumer
product and an investment asset. On the consumption side, its traditional gold jewellery
brand meets consumer demand for both cultural value and quality, while on the asset side,
its gold products serve as a hedge. With rising incomes and an upgrade in cultural
consumption, LaoPu Gold is expected to continue to benefit in the high-end segment. She
suggests investors accumulate in stages near HKD 800, with a short-term target price of
HKD 820.

"Cautious view on Mixue's move into alcohol, unlikely to become a profit growth driver"

Mixue, also part of the new consumption sector, has been very active recently. On 14
Oct, its beer product from Mixue Bingcheng, priced at RMB 5.9 per cup, became a hot topic
on Weibo. During the National Day holiday, Mixue Bingcheng announced a RMB 297 million
acquisition of a 53 percent stake in Xianpi Fulujia. After the transaction, Xianpi Fulujia
becomes a non-wholly-owned subsidiary, and its results will be consolidated, marking
Mixue's official entry into the alcoholic beverages sector, expanding from tea and coffee
into alcohol.
Mak Ka Ka remains cautious about this move. She noted that Mixue has long focused on the
low-end market, and competition in Mainland China's low-end beer sector is intense. Its
beer business is unlikely to become a major profit or margin driver in the future. The
share price is expected to remain volatile in the short term, fluctuating between HKD 448
and HKD 467.