[ET Net News Agency, 05 May 2026] US President Trump's initiation of the "Project Freedom" has immediately touched a nerve in Iran, with merchant ships and neighbouring energy facilities coming under attack. This implies that Iran's attempt to use the navigation of the Strait of Hormuz as leverage remains unshaken. Trump continues to downplay the incidents, and reaching a peace deal between the US and Iran remains difficult. US stocks tumbled overnight, and with markets in Japan, Korea, and Mainland China closed, Hong Kong stocks saw a significant retracement in the morning session. The market first lost the 26,000 level, the 10 day line (approx. 25,992), and the 20 day line (approx. 25,948), testing 25,690 during the session. The market closed at 25,793 at midday, down 302 points or 1.2%, with the 50 day line (approx. 25,801) also being surrendered. The HSI China Enterprises Index stood at 8,664, down 109 points or 1.3%. The HSI Technology Index stood at 4,885, down 90 points or 1.8%. However, it is worth noting that the wait and see atmosphere in the market has strengthened, and with southbound trading remaining suspended, the main board turnover at midday was only HKD 64.5 billion.
"Jaseper Tsang: HSI consolidates in the short term, capital favours high yield stocks"
The US and Iran have traded fire again but the situation remains under control, though Brent oil futures have returned to above 110 US dollars. Jaseper Tsang, Vice-Chairman of the Hong Kong Institute of Financial Analysts and Professional Commentators Limited, told ET Net News Agency that this small scale conflict is still within market expectations. The HSI will remain in a range bound pattern in the short term, unless the US Iran conflict escalates into a full scale war. He expects that it will be normal for Brent oil to stay above 100 US dollars recently, and the HSI will fluctuate between 25,500 and 26,500 in the short term. As the hype for AI related stocks has not faded, related concept stocks will continue to perform more prominently in the short term. Meanwhile, stocks with dividends of 5.8% or above will also be favoured by defensive capital.
"Demand for AI power generation benefits Weichai Power"
Weichai Power (02338) has capitalised on the AI "wealth code", and several major banks previously raised their target prices following its results. JPMorgan released a research report stating that it raised the Hs stock target price for Weichai Power (02338) to HKD 52, a 30% increase from the previous HKD 40. The bank stated that its valuation model also incorporates larger scale and higher quality earnings drivers from 2027 onwards, and described the market valuation as only reflecting half of the company's potential. Jaseper Tsang stated that Weichai currently benefits from the major trend of AI development in Mainland China, with increasing investment in data centres, energy storage, and power generation related products. This provides Weichai's earnings with sustainable growth momentum, leading the market to view it as a high growth stock. Jaseper Tsang noted that Mainland China currently attaches great importance to AI development, but since the AI industry consumes a staggering amount of electricity, the central government may lower electricity prices through national policies, which could negatively impact the power generation industry. In contrast, Weichai's products are mainly power generation equipment, and it is expected not to be interfered with by such policies, thus providing better protection for its gross profit margin and profitability.
Jaseper Tsang further pointed out that Weichai still possesses high growth potential over the next few years, and medium to long term capital is gradually absorbing the stock. He suggests that existing shareholders can make medium to long term arrangements, holding for at least 6 to 12 months. For investors wishing to enter the market recently, they can wait for a technical retracement in the share price to make a move, with a potential buy in level at around HKD 37.
Weichai Power's first quarter profit was approximately RMB 3.085 billion, up 13.8% year on year, with operating revenue of RMB 62.5 billion, up 8.9% year on year.
"Jaseper Tsang: HSI consolidates in the short term, capital favours high yield stocks"
The US and Iran have traded fire again but the situation remains under control, though Brent oil futures have returned to above 110 US dollars. Jaseper Tsang, Vice-Chairman of the Hong Kong Institute of Financial Analysts and Professional Commentators Limited, told ET Net News Agency that this small scale conflict is still within market expectations. The HSI will remain in a range bound pattern in the short term, unless the US Iran conflict escalates into a full scale war. He expects that it will be normal for Brent oil to stay above 100 US dollars recently, and the HSI will fluctuate between 25,500 and 26,500 in the short term. As the hype for AI related stocks has not faded, related concept stocks will continue to perform more prominently in the short term. Meanwhile, stocks with dividends of 5.8% or above will also be favoured by defensive capital.
"Demand for AI power generation benefits Weichai Power"
Weichai Power (02338) has capitalised on the AI "wealth code", and several major banks previously raised their target prices following its results. JPMorgan released a research report stating that it raised the Hs stock target price for Weichai Power (02338) to HKD 52, a 30% increase from the previous HKD 40. The bank stated that its valuation model also incorporates larger scale and higher quality earnings drivers from 2027 onwards, and described the market valuation as only reflecting half of the company's potential. Jaseper Tsang stated that Weichai currently benefits from the major trend of AI development in Mainland China, with increasing investment in data centres, energy storage, and power generation related products. This provides Weichai's earnings with sustainable growth momentum, leading the market to view it as a high growth stock. Jaseper Tsang noted that Mainland China currently attaches great importance to AI development, but since the AI industry consumes a staggering amount of electricity, the central government may lower electricity prices through national policies, which could negatively impact the power generation industry. In contrast, Weichai's products are mainly power generation equipment, and it is expected not to be interfered with by such policies, thus providing better protection for its gross profit margin and profitability.
Jaseper Tsang further pointed out that Weichai still possesses high growth potential over the next few years, and medium to long term capital is gradually absorbing the stock. He suggests that existing shareholders can make medium to long term arrangements, holding for at least 6 to 12 months. For investors wishing to enter the market recently, they can wait for a technical retracement in the share price to make a move, with a potential buy in level at around HKD 37.
Weichai Power's first quarter profit was approximately RMB 3.085 billion, up 13.8% year on year, with operating revenue of RMB 62.5 billion, up 8.9% year on year.
