The first week of the Year of the Snake saw a stellar performance in Hong Kong stocks, with the $HSI(HSI)$ rising 4.49% weekly, hitting its highest level since mid-October last year!
"Sputnik Moment" for AI
The buzz around DeepSeek continues to grow. Marc Andreessen, the godfather of Wall Street venture capital, called it a "Sputnik Moment" for AI!
For context, the "Sputnik Moment" refers to 1957 when the Soviet Union launched the first artificial satellite, Sputnik 1, shocking the U.S. and igniting a tech race.
DeepSeek's emergence has shattered the U.S. blockade on compute power, making it possible for Chinese AI to surpass the U.S. This has stirred up the capital markets.
Deutsche Bank released a report predicting that 2025 will be the year China overtakes other nations, with the "valuation discount" on Chinese stocks disappearing. The A-share and Hong Kong stock bull markets are expected to continue and surpass previous highs.
Chinese Assets Surge
Deutsche Bank believes DeepSeek's rise isn't just a "Sputnik Moment" for AI—it's China's "Sputnik Moment." The report highlights China's leadership in industries like apparel, textiles, toys, basic electronics, steel, and shipbuilding, as well as complex sectors like telecom equipment, nuclear energy, defense, and high-speed rail.
This week, Chinese assets exploded. Internet giants, AI concepts, autonomous driving, semiconductors, and AI pharmaceuticals all saw significant gains. The IT sector led the charge, surging 8% weekly.
Southbound funds saw a net inflow of HKD 4.8 billion this week:
Next week, China and the U.S. will release January CPI data, which could have a major impact on the markets.
Major Events in Hong Kong Stocks This Week
1.DeepSeek released the DeepSeek-R1 model, capturing global attention ahead of the Chinese New Year.
2.The Caixin Manufacturing PMI for January stood at 50.1, maintaining a steady position on the growth-contraction line for the fourth consecutive month.
3.Stock prices for $SMIC(00981)$ and $XIAOMI-W(01810)$ hit new historic highs.
4.$GUMING(01364)$ went public this week, securing cornerstone investors like $TENCENT(00700)$ .
5.Deutsche Bank predicts 2025 will be the year Chinese companies rise globally, with China’s stock "valuation discount" disappearing.
6. $BYD COMPANY(01211)$ is set to launch its “God's Eye” advanced driver-assistance system, boosting the auto-driving sector.
7. $BLACK SESAME(02533)$ and $HORIZONROBOT-W(09660)$ hit new record highs, riding the smart driving trend.
8. $BABA-W(09988)$ insiders dismissed rumors of investment in DeepSeek.
9.The China Securities Regulatory Commission released implementation guidelines for the financial "five big articles" in capital markets.
10. $XIAOMI-W(01810)$ entered the global top three in market cap among listed car manufacturers.
Six Stocks Worth Attention Among Top Trading HK Stocks This Week
Top1: $XIAOMI-W(01810)$ . Xiaomi's SU7 model exceeded 20,000 deliveries in January for the fourth consecutive month, and the official launch of Xiaomi Glasses sparked optimism, pushing stock prices to new highs.
Top2: $SMIC(00981)$ . With DeepSeek breaking the computing power myth, semiconductor stocks like SMIC are benefiting as the industry enters a golden development phase, pushing SMIC’s stock to new highs.
Top3: $BABA-W(09988)$ . Alibaba released the Qwen 2.5-Max AI model, claiming performance surpassing DeepSeek-V3. Rumors of Alibaba investing in DeepSeek also contributed to a stock surge.
Top4: $KINGSOFT CLOUD(03896)$ . The DeepSeek craze fueled AI stock growth, benefiting cloud services like Kingsoft Cloud, which saw its stock prices rise.
Top5: $HORIZONROBOT-W(09660)$ . BYD’s launch of its “God's Eye” system sparked a boom in the smart driving chip sector, with Horizon Robotics hitting new record highs.
Top6: $XPENG-W(09868)$ . XPeng’s sales hit 30,350 vehicles in January, a 268% year-on-year increase, driving stock price growth.
Next Week's Hong Kong Stock Market Events
1. On Sunday, China will release January CPI data, with economists predicting a 0.4% YoY increase.
2. Next Monday, China’s central bank will publish January monetary data, including M2, new loans, and social financing.
3. Next Wednesday, the US will announce January CPI data, with a predicted 2.9% YoY increase.
4. $SMIC(00981)$ will report its earnings next Tuesday, with other semiconductor giants like $Advanced Micro Devices(AMD)$ and $Applied Materials(AMAT)$ also releasing their reports.
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