To The Moon

This week, Hong Kong stocks surged, with the $HSI(HSI)$ rising 7.04% and reclaiming the 22,000-point mark, approaching the highs seen during the National Day holidays!

The Catalyst: DeepSeek Breaks the AI Narrative

The key driving force behind the rally is DeepSeek, which has completely overturned the AI narrative. The idea that Chinese AI could only follow the U.S. has been shattered, and both domestic and international funds are reevaluating tech stock investments.

UBS even stated that the rise in the Chinese stock market driven by DeepSeek has only completed half of its potential!

Alibaba Leads the Charge

In AI tech stocks, $BABA-W(09988)$ is leading the way. Not only did it launch the Qwen 2.5-Max AI model, rivaling DeepSeek-V3 in performance, but this week, Jack Ma also made a surprise return to Alibaba's headquarters in Hangzhou. Rumors spread that Alibaba would develop AI features for the iPhone in China.

On Thursday afternoon, this rumor was confirmed when Alibaba's co-founder and chairman, Jack Ma’s business partner, Joseph Tsai, announced at the World Governments Summit 2025 in Dubai that $Apple(AAPL)$ would collaborate with Alibaba in China.

Tsai mentioned, “Apple needs a local partner for their services in China. They’ve been picky and have talked to several Chinese companies. In the end, they chose to do business with us. We’re lucky and honored to work with a great company like Apple."

The news caused Alibaba’s stock to skyrocket by 9% at one point, but it quickly pulled back, ending the day up just 2.55%. The Hang Seng Index also saw a significant drop, turning from a nearly 3% rise into the red.

Just when investors were nervous about Friday’s performance, Alibaba jumped another 6.34%, reaching a three-year high!

With Alibaba leading the charge, investor enthusiasm for tech stocks soared, pushing $BIDU-SW(09888)$ $KUAISHOU-W(01024)$ $MEITUAN-W(03690)$ $TENCENT(00700)$ to significant gains. AI healthcare, autonomous driving chips, and more followed suit, bringing the Hang Seng Index closer to its 2023 National Day highs!

BYD’s Big Move

In addition to Alibaba, $BYD COMPANY(01211)$ held a press conference this week to announce that all of its models will come equipped with "God’s Eye" advanced driver-assistance technology, including cars priced below 100,000 yuan. This lit up the stock price and the autonomous driving industry chain. BYD’s stock hit an all-time high this week!

Meanwhile, the animated film NeZha continues to break records, with box office revenue surpassing 10.2 billion yuan. It has become the first Asian film to enter the top 20 in the global box office chart.

The success of NeZha has given a major boost to national cultural confidence, pushing related concept stocks higher. $POP MART(09992)$ reached a new all-time high, and industrial upgrades are now a hot topic for investors.

Real Estate Rebounds

Apart from tech stocks, there’s also great news from the real estate sector. $CHINA VANKE(02202)$ ’s major shareholder, Shenzhen Metro Group, has agreed to provide a loan of 2.8 billion yuan to Vanke.

Additionally, reports indicate that the Chinese government will assist Vanke in resolving its debt crisis. Recently, land auctions have seen high premiums again, and property transactions in first-tier cities like Shanghai and Shenzhen have surged.

Real estate remains a pillar industry in China, and signs of stabilization are significant. This week, bank stocks also hit historic highs.

Overall, DeepSeek’s emergence has not only broken the U.S. AI blockade but has also led investors to reassess Chinese assets. The Hong Kong stock bull market is definitely back!

This week, healthcare and information technology sectors led the rally.

Southbound funds saw a net inflow of HKD21.8 billion this week.

Next week, earnings reports from companies like $BABA-W(09988)$ and $NETEASE MUSIC(09899)$ are expected to have a significant impact on market trends.

Major Events in Hong Kong Stocks This Week

1. $BYD COMPANY(01211)$ announced that all of its models will be equipped with the advanced "God’s Eye" driver-assistance system.

2. $CHINA MOBILE(00941)$ and $CHINA TELECOM(00728)$ 's stocks hit new highs after fully integrating DeepSeek technology.

3. Shenzhen Metro Group plans to provide $CHINA VANKE(02202)$ with a loan of 2.8 billion yuan.

4. Billionaire investor David Tepper has significantly increased his stakes in Chinese stocks and China-focused ETFs.

5. $JD-SW(09618)$ launches a recruitment campaign for “quality dine-in restaurants,” offering commission-free service for the year.

6. Hong Kong Business Chamber suggests loosening "Southbound Connect" investor eligibility.

7. Nezha 2 broke 10 billion yuan at the box office, and led to widespread shortages of blind boxes.

8. Retail sales of new energy vehicles in January hit 744,000 units, up 10.5% year-over-year.

9. Jack Ma was seen back at $BABA-W(09988)$ ’s headquarters in Hangzhou, confirming that Alibaba would collaborate with $Apple(AAPL)$ on AI features for iPhones in China.

10. $Contemporary Amperex Technology Co.,Ltd.(300750)$ has submitted its application to list on the Hong Kong Stock Exchange.

11. $SMIC(00981)$ released its Q4 2024 performance, exceeding market expectations.

12. $GUMING(01364)$ 's stock price fell 6.44% on its first trading day.

13. Hong Kong plans to ease listing requirements for Chinese mainland companies.

14. $BYD COMPANY(01211)$ 's stock price reached an all-time high this week.

15. U.S. inflation rose by 3% in January, surpassing the previous 2.9% increase.

Five Stocks Worth Attention Among Top Trading HK Stocks This Week

Top 2: $BABA-W(09988)$ . Jack Ma's reappearance in Hangzhou sparked rumors, and Alibaba's co-founder and chairman, Joseph Tsai, confirmed that Alibaba would be collaborating with Apple to develop AI features for the Chinese iPhone. The stock surged, hitting a three-year high, and fueled gains in internet stocks across the board.

Top 3: $SMIC(00981)$ . The company released its Q4 results, posting revenue of 15.92 billion yuan, up 31% year-over-year. However, the stock struggled due to concerns over price reductions in the industry in the second half of the year.

Top 4: $MEITUAN-W(03690)$ . $JD-SW(09618)$ announced its entry into the food delivery market, sparking competition fears. Meituan's stock initially fell, but as Alibaba’s stock surged, Meituan recovered its losses.

Top 6: $GUMING(01364)$ . Guming debuted on the Hong Kong Stock Exchange this week with an initial surge, but the stock fell 6.44% on the first trading day, continuing the trend of first-day losses for milk tea stocks.

Top 10: $ALI HEALTH(00241)$ . AI healthcare stocks saw a boost this week as investors turned to the sector. Ali Health benefited from both the rising tide in AI stocks and Alibaba's overall surge in price.

Next Week's Hong Kong Stock Market Events

Next week, Baidu, Alibaba, Bilibili, NetEase, and other companies will release their financial results.