[ET Net News Agency, 04 August 2026] US-Iran tensions have eased somewhat and US stock market sentiment is positive, with the Dow hitting a record high and the Nasdaq surging sharply. Hong Kong stocks were relatively strong in early trading, with the WuXi twins outperforming and tech stocks also moving higher. The HSI touched 26,187 points to continue refreshing a two-and-a-half-month high, but before the midday close, state-owned enterprise concepts and domestic demand sectors faced selling pressure, dragging the Hang Seng Index down to 25,882 at midday, a fall of 126 points or 0.5%, with main board turnover close to HKD 135.2 billion. The Hang Seng China Enterprises Index stood at 8,578, down 73 points or 0.9%. The Hang Seng TECH Index stood at 4,866, down 9 points or 0.2%.
"Retracement in tech stocks due to capital diversion is normal"
US-Iran tensions have eased somewhat, and external US stocks performed well, with the Dow hitting a record high and the Nasdaq surging 2%. Hong Kong's semiconductor sector also rebounded, led by external chip leaders, such as Hua Hong (01347), which rose 4.3% to HKD 132.3. Meanwhile, tech stocks recorded a certain degree of retracement; Tencent (00700) halted its six-day winning streak, falling 0.6% to HKD 487.4, dragging the broader market down by about 126 points by midday. Nip Chun Pong, the Chief Strategist at Solo Securities, told ET Net News Agency that the HSI has accumulated a gain of about 3,000 points since July, and with five consecutive weeks of gains, the overbought situation is severe. Coupled with the better performance of the semiconductor sector today, which diverted performance from heavyweight tech stocks, today's retracement is a normal phenomenon.
However, Nip Chun Pong stated that the performance of Hong Kong stocks remains relatively strong, and the downside room for the HSI is expected to be limited. Even with further adjustment, 25,500 points should see substantial support. However, due to the massive accumulated gains in July, the gains for August are expected to be limited, with the short-term resistance level first eyed at 26,200 points.
"WuXi AppTec has a potential gain of about ten percent"
WuXi AppTec (02359) released its results yesterday, with mid-term adjusted net profit surging 83% and an interim dividend of CNY 0.51 per share, up 45.7% year-on-year. In addition, the overall revenue guidance for the full year of 2026 was raised to between CNY 58.5 billion and CNY 60.5 billion, and the construction of the new Changzhou base was brought forward, with capital expenditure for 2026 expected to be raised to between CNY 7.5 billion and CNY 8.5 billion. WuXi AppTec opened gap-higher by ten percent today, rising 10.7% by midday to HKD 180.3, and the share prices of other life science stocks also performed well.
Nip Chun Pong believes that WuXi AppTec's results came as a surprise, and coupled with optimistic earnings guidance, it drove the strong opening of the share price today. However, Nip Chun Pong stated that the market needs to monitor whether WuXi AppTec's capital expenditure will expand further going forward to match its high revenue and earnings growth rates. In addition, WuXi AppTec's revenue from the US accounts for about 70% of its total revenue; combined with its previous inclusion on the US Department of Defense's list of Chinese military companies, if news of further US suppression against Mainland China's pharmaceutical enterprises emerges later, the share price may face significant adjustment pressure.
Nip Chun Pong expects WuXi AppTec's target price to be HKD 200, with a potential gain of about ten percent. For more aggressive investors, they can choose to buy at the current price, but it is recommended to divide it into two to three tranches, buying one tranche first to test the waters. For more conservative investors, they can wait for the share price to pull back to HKD 165 before considering entering.
"Retracement in tech stocks due to capital diversion is normal"
US-Iran tensions have eased somewhat, and external US stocks performed well, with the Dow hitting a record high and the Nasdaq surging 2%. Hong Kong's semiconductor sector also rebounded, led by external chip leaders, such as Hua Hong (01347), which rose 4.3% to HKD 132.3. Meanwhile, tech stocks recorded a certain degree of retracement; Tencent (00700) halted its six-day winning streak, falling 0.6% to HKD 487.4, dragging the broader market down by about 126 points by midday. Nip Chun Pong, the Chief Strategist at Solo Securities, told ET Net News Agency that the HSI has accumulated a gain of about 3,000 points since July, and with five consecutive weeks of gains, the overbought situation is severe. Coupled with the better performance of the semiconductor sector today, which diverted performance from heavyweight tech stocks, today's retracement is a normal phenomenon.
However, Nip Chun Pong stated that the performance of Hong Kong stocks remains relatively strong, and the downside room for the HSI is expected to be limited. Even with further adjustment, 25,500 points should see substantial support. However, due to the massive accumulated gains in July, the gains for August are expected to be limited, with the short-term resistance level first eyed at 26,200 points.
"WuXi AppTec has a potential gain of about ten percent"
WuXi AppTec (02359) released its results yesterday, with mid-term adjusted net profit surging 83% and an interim dividend of CNY 0.51 per share, up 45.7% year-on-year. In addition, the overall revenue guidance for the full year of 2026 was raised to between CNY 58.5 billion and CNY 60.5 billion, and the construction of the new Changzhou base was brought forward, with capital expenditure for 2026 expected to be raised to between CNY 7.5 billion and CNY 8.5 billion. WuXi AppTec opened gap-higher by ten percent today, rising 10.7% by midday to HKD 180.3, and the share prices of other life science stocks also performed well.
Nip Chun Pong believes that WuXi AppTec's results came as a surprise, and coupled with optimistic earnings guidance, it drove the strong opening of the share price today. However, Nip Chun Pong stated that the market needs to monitor whether WuXi AppTec's capital expenditure will expand further going forward to match its high revenue and earnings growth rates. In addition, WuXi AppTec's revenue from the US accounts for about 70% of its total revenue; combined with its previous inclusion on the US Department of Defense's list of Chinese military companies, if news of further US suppression against Mainland China's pharmaceutical enterprises emerges later, the share price may face significant adjustment pressure.
Nip Chun Pong expects WuXi AppTec's target price to be HKD 200, with a potential gain of about ten percent. For more aggressive investors, they can choose to buy at the current price, but it is recommended to divide it into two to three tranches, buying one tranche first to test the waters. For more conservative investors, they can wait for the share price to pull back to HKD 165 before considering entering.
