[ET Net News Agency, 20 August 2026] The US Treasury unexpectedly announced that it would expand the scale of its long-term government bond repurchase operations by at least double, causing US long-term bond yields to fall in response, driving a recovery in Asia-Pacific stock markets and a pick-up in Hong Kong stock market turnover. Driven by biotech and gold concept stocks, the Hong Kong market challenged the 250-day moving average (around 25,754), with the HSI closing the morning session up 291 points or 1.1% at 25,786. The Hang Seng China Enterprises Index was up 120 points or 1.4% at 8,591. The Hang Seng TECH Index was up 72 points or 1.5% at 4,754. Main board turnover for the morning session exceeded HKD 144.1 billion, with southbound net outflow standing at HKD 800 million.
"Cheung Chi Wai: US long-term bond yields falling is positive while major players squeeze shorts; future market trend depends on Alibaba's earnings"
The US Treasury unexpectedly announced that it would expand the scale of its long-term government bond repurchase operations by at least double, causing long-term bond yields to fall sharply in response, though the three major US stock indices closed slightly higher. By contrast, the Hong Kong stock market performed strongly this morning, with the HSI rising by over 300 points at most, an increase of over 1%. Cheung Chi Wai, a joint managing director at Prudential Brokerage Ltd, told ET Net News Agency that the fall in US long-term bond yields helps lower corporate financing costs, which is positive for the stock market. However, behind the rise of over 300 points, it cannot be ruled out that major players squeezed shorts, with the HSI hitting a high of 25,807 this morning, and about 1,400 short positions across three zones including the bear certificate heavy cargo zone falling into the mandatory call range. After clearing the shorts, the HSI's gains pulled back from the high.
Cheung Chi Wai noted that the HSI faced resistance near the 20-day moving average (around 25,582) for three consecutive days, and the upward momentum of the market was originally not strong. Today, it pushed upwards by borrowing the positive sentiment of falling US bond yields. However, whether the future market can continue to move upwards depends on the results of heavyweight stock Alibaba (09988) to be released after the market closes today. The market is focusing on the development momentum of Alibaba Cloud and data centres to see if they can continuously increase their weight within the group. Nonetheless, the market is equally concerned about its capital expenditure and cash flow. Once various indicators fail to meet market expectations, a drop in the share price may drag the HSI downwards. Conversely, if the earnings are ideal, a rise in Alibaba's share price may have the opportunity to drive the HSI further upwards. Cheung Chi Wai expects the HSI to fluctuate between 25,000 and 26,100 points in the short term, with 26,100 points being the upper Bollinger Band.
"Kuaishou downgraded by major institutions after earnings, share price does not rule out continuing to seek bottom"
Kuaishou (01024) reported a second-quarter net profit of RMB 3.146 billion, down 36.1% year-on-year; adjusted net profit stood at RMB 3.913 billion, down 30.3% year-on-year, slightly outperforming the expected RMB 3.89 billion. Revenue for the period reached RMB 35.535 billion, up 1.4%, meeting expectations. Among this, revenue from Kling AI exceeded RMB 850 million, representing year-on-year growth of over 200%. Online marketing services revenue grew by 4.4% year-on-year to RMB 20.64 billion, accounting for 58.1% of total revenue.
During the period, the group's domestic operating profit was RMB 3.733 billion, a year-on-year decrease of 30.9%; overseas operations turned from profit to loss, recording a loss of RMB 25 million compared to a profit of RMB 19 million in the same period last year.
Research and development expenses increased by 34.7% to RMB 4.58 billion, and the gross profit margin declined by 4.1 percentage points from 55.7% in the same period last year to 51.6%. Kuaishou Chief Financial Officer Jin Bing stated that the group recorded positive free cash flow during the quarter and hopes to maintain a positive value in the second half of the year, using leasing to solve computing power demands and further improving the group's cash flow. Kuaishou previously forecasted in March that full-year capital expenditure would be RMB 26 billion, involving computing power investments such as Kling, data storage, and server procurement, though the latest forecast has not been updated.
Kuaishou's share price plunged following its earnings release, tumbling as much as 12% during trading to a low of HKD 33.2. Cheung Chi Wai stated that Kuaishou's two major sources of revenue are its e-commerce business and advertising revenue, but the market generally believes that the group's revenue in both areas will face competition and challenges in the second half of the year. Citing CLSA, he noted that Kuaishou's outlook for the second half is grim, as it will not only face stronger macroeconomic headwinds but also continue to increase investment in artificial intelligence (AI) research and development and computing power, with Kuaishou's earnings over the next two years expected to drop by over 40% each.
Cheung Chi Wai pointed out that besides CLSA, other major institutions are generally bearish on Kuaishou. In addition to lowering target prices, some institutions such as Citigroup and Morgan Stanley have simultaneously downgraded their ratings, causing Kuaishou's share price to plunge sharply after the earnings report. Furthermore, Kuaishou's failure to update its full-year capital expenditure guidance as it did in March has also caused investor anxiety regarding its capital expenditure status. Citing another heavyweight stock, Tencent (00700), Cheung Chi Wai noted that Tencent's previously released earnings were respectable, but because capital expenditure surged and quarterly cash flow turned negative, its share price came under pressure, let alone Kuaishou, which saw declining profits. He expects that Kuaishou's share price still has the chance to continue seeking a bottom in the short term, and the possibility of breaking below HKD 30 in the future market cannot be ruled out.
"Cheung Chi Wai: US long-term bond yields falling is positive while major players squeeze shorts; future market trend depends on Alibaba's earnings"
The US Treasury unexpectedly announced that it would expand the scale of its long-term government bond repurchase operations by at least double, causing long-term bond yields to fall sharply in response, though the three major US stock indices closed slightly higher. By contrast, the Hong Kong stock market performed strongly this morning, with the HSI rising by over 300 points at most, an increase of over 1%. Cheung Chi Wai, a joint managing director at Prudential Brokerage Ltd, told ET Net News Agency that the fall in US long-term bond yields helps lower corporate financing costs, which is positive for the stock market. However, behind the rise of over 300 points, it cannot be ruled out that major players squeezed shorts, with the HSI hitting a high of 25,807 this morning, and about 1,400 short positions across three zones including the bear certificate heavy cargo zone falling into the mandatory call range. After clearing the shorts, the HSI's gains pulled back from the high.
Cheung Chi Wai noted that the HSI faced resistance near the 20-day moving average (around 25,582) for three consecutive days, and the upward momentum of the market was originally not strong. Today, it pushed upwards by borrowing the positive sentiment of falling US bond yields. However, whether the future market can continue to move upwards depends on the results of heavyweight stock Alibaba (09988) to be released after the market closes today. The market is focusing on the development momentum of Alibaba Cloud and data centres to see if they can continuously increase their weight within the group. Nonetheless, the market is equally concerned about its capital expenditure and cash flow. Once various indicators fail to meet market expectations, a drop in the share price may drag the HSI downwards. Conversely, if the earnings are ideal, a rise in Alibaba's share price may have the opportunity to drive the HSI further upwards. Cheung Chi Wai expects the HSI to fluctuate between 25,000 and 26,100 points in the short term, with 26,100 points being the upper Bollinger Band.
"Kuaishou downgraded by major institutions after earnings, share price does not rule out continuing to seek bottom"
Kuaishou (01024) reported a second-quarter net profit of RMB 3.146 billion, down 36.1% year-on-year; adjusted net profit stood at RMB 3.913 billion, down 30.3% year-on-year, slightly outperforming the expected RMB 3.89 billion. Revenue for the period reached RMB 35.535 billion, up 1.4%, meeting expectations. Among this, revenue from Kling AI exceeded RMB 850 million, representing year-on-year growth of over 200%. Online marketing services revenue grew by 4.4% year-on-year to RMB 20.64 billion, accounting for 58.1% of total revenue.
During the period, the group's domestic operating profit was RMB 3.733 billion, a year-on-year decrease of 30.9%; overseas operations turned from profit to loss, recording a loss of RMB 25 million compared to a profit of RMB 19 million in the same period last year.
Research and development expenses increased by 34.7% to RMB 4.58 billion, and the gross profit margin declined by 4.1 percentage points from 55.7% in the same period last year to 51.6%. Kuaishou Chief Financial Officer Jin Bing stated that the group recorded positive free cash flow during the quarter and hopes to maintain a positive value in the second half of the year, using leasing to solve computing power demands and further improving the group's cash flow. Kuaishou previously forecasted in March that full-year capital expenditure would be RMB 26 billion, involving computing power investments such as Kling, data storage, and server procurement, though the latest forecast has not been updated.
Kuaishou's share price plunged following its earnings release, tumbling as much as 12% during trading to a low of HKD 33.2. Cheung Chi Wai stated that Kuaishou's two major sources of revenue are its e-commerce business and advertising revenue, but the market generally believes that the group's revenue in both areas will face competition and challenges in the second half of the year. Citing CLSA, he noted that Kuaishou's outlook for the second half is grim, as it will not only face stronger macroeconomic headwinds but also continue to increase investment in artificial intelligence (AI) research and development and computing power, with Kuaishou's earnings over the next two years expected to drop by over 40% each.
Cheung Chi Wai pointed out that besides CLSA, other major institutions are generally bearish on Kuaishou. In addition to lowering target prices, some institutions such as Citigroup and Morgan Stanley have simultaneously downgraded their ratings, causing Kuaishou's share price to plunge sharply after the earnings report. Furthermore, Kuaishou's failure to update its full-year capital expenditure guidance as it did in March has also caused investor anxiety regarding its capital expenditure status. Citing another heavyweight stock, Tencent (00700), Cheung Chi Wai noted that Tencent's previously released earnings were respectable, but because capital expenditure surged and quarterly cash flow turned negative, its share price came under pressure, let alone Kuaishou, which saw declining profits. He expects that Kuaishou's share price still has the chance to continue seeking a bottom in the short term, and the possibility of breaking below HKD 30 in the future market cannot be ruled out.
