The Economic Information Daily, August 8 - Demand remained strong in the auction of the US$39 billion 10-year US Treasury note re-opening, with the bid-to-cover ratio rising to 2.77 times, the highest level in nearly 10 years. Amid ongoing risks in overseas bond markets, A-shares resumed trading today and Stock Connect services resumed. Despite a net inflow of over HK$5.2 billion in the morning session, the Hong Kong market continued its downward trend. AI hardware, Apple-related, and banking stocks declined significantly. The Hang Seng Index fell below the 24,000 level in the morning, closing at 23,963, down 167 points or 0.7%. The Hang Seng China Enterprises Index stood at 8,059, down 22 points or 0.3%. The Hang Seng Tech Index was at 4,113, down 80 points or 1.9%. Morning session turnover on the main board reached HK$106.3 billion, already exceeding the full-day turnover levels of the past three days.
*Wen Gangcheng: HSI likely to trade between 23,800 and 24,500 in the short term*
High US bond yields weighed on markets, with overnight declines across European and US markets. Combined with pressure on heavyweight HSBC (00005), the Hang Seng Index opened nearly 100 points lower this morning. However, with northbound funds recording net inflows, the index held above the 24,000 level early in the session before eventually losing ground. Wen Gangcheng, Investment Director at iFAST Global Markets, told the Economic Information Daily that the recent HSI movement has been characterized by narrow-range fluctuations. The defense at the 24,000 level has limited significance in the short term, with stronger support expected around 23,800. Given persistently high US bond yields, the 10-year yield is approaching 5.4%, though Wen expects it will take time to surpass this level.
HSBC's share price declined sharply this morning. Wen Gangcheng noted that the probability of the UK government imposing a windfall tax on the banking sector exceeds 50%. Combined with the impact of high bond yields, HSBC's share price remains under pressure, dragging down the Hang Seng Index today. However, property and domestic consumer stocks performed relatively well today, with both sectors generally rising against the broader market trend. Wen believes that while these sectors may attract speculative interest periodically, their upward momentum may not be sustainable without positive catalysts. Although market attention is focused on the upcoming Fifth Plenum at the end of the month, in the absence of a clear market direction in the near term, the Hang Seng Index is expected to remain range-bound, finding support between 23,800 and 24,000 and facing resistance between 24,300 and 24,500.
*Biren Technology raises capital again, AI-related stocks under pressure*
Biren Technology (06082) announced a placement of 130 million new shares at a discount of about 9.76%, representing approximately 4.76% of its enlarged issued share capital, raising net proceeds of about HK$4.02 billion. Additionally, it was reported that DeepSeek, a large model startup, is considering expanding its latest fundraising round to as much as RMB 100 billion, double its previous target, with state-backed funds and corporate investors competing for stakes.
Biren Technology, having just passed the six-month IPO lock-up period in early July, conducted its first placement shortly thereafter, raising about HK$7 billion. At that time, the company entered into a lock-up agreement with placement agents, committing not to issue or sell any new shares for 90 days. With the lock-up period ending in early October, Biren Technology immediately launched a new HK$4 billion placement plan.
Wen Gangcheng stated that AI-related stocks currently lack profitability, so they can only raise capital through placements or issuing convertible bonds. Although Biren's latest fundraising of HK$4 billion is acceptable in scale, the real concern for investors is how long such fundraising activities will continue.
TianShu Zhixi (09903), another so-called 'GPU dragon' often mentioned alongside Biren Technology, plunged over 10% intraday today, hitting a six-month low. Its decline was even steeper than Biren Technology's after its second placement announcement. Wen Gangcheng pointed out that not only mainland AI stocks but even their US peers face capital-raising needs. Given that TianShu Zhixi previously conducted placements in tandem with Biren, it is likely to have similar future fundraising requirements. Although TianShu Zhixi turned profitable in the first half, whether it can achieve full-year profitability remains uncertain. However, the market holds high expectations for its profitability next year. Due to concerns about following its peers in fundraising, TianShu Zhixi's share price is expected to remain under short-term pressure, although preliminary support is expected around HK$78.
Besides Biren Technology's second placement within three months, Zhipu AI (02513), another large model player, conducted its second placement last month. MiniMax (00100), another major player in large models, also plunged over 10% intraday today. Wen Gangcheng noted that between the two large model stocks listed in Hong Kong, Zhipu has performed more prominently, ranking among the top ten globally, which has given its share price resilience. Despite recent pressure, its current price remains several times higher than its issue price (HK$116.2). In contrast, MiniMax is slightly less popular than Zhipu, and the market even worries about its future revenue pressure. Although MiniMax's share price rose to over HK$1,000 in March, it has since continuously corrected, and its current price has only risen over 30% from its listing price of HK$165. The stock hit a low of HK$186.2 in July, and Wen Gangcheng does not rule out further downward pressure on MiniMax's share price. (vs)
*Wen Gangcheng: HSI likely to trade between 23,800 and 24,500 in the short term*
High US bond yields weighed on markets, with overnight declines across European and US markets. Combined with pressure on heavyweight HSBC (00005), the Hang Seng Index opened nearly 100 points lower this morning. However, with northbound funds recording net inflows, the index held above the 24,000 level early in the session before eventually losing ground. Wen Gangcheng, Investment Director at iFAST Global Markets, told the Economic Information Daily that the recent HSI movement has been characterized by narrow-range fluctuations. The defense at the 24,000 level has limited significance in the short term, with stronger support expected around 23,800. Given persistently high US bond yields, the 10-year yield is approaching 5.4%, though Wen expects it will take time to surpass this level.
HSBC's share price declined sharply this morning. Wen Gangcheng noted that the probability of the UK government imposing a windfall tax on the banking sector exceeds 50%. Combined with the impact of high bond yields, HSBC's share price remains under pressure, dragging down the Hang Seng Index today. However, property and domestic consumer stocks performed relatively well today, with both sectors generally rising against the broader market trend. Wen believes that while these sectors may attract speculative interest periodically, their upward momentum may not be sustainable without positive catalysts. Although market attention is focused on the upcoming Fifth Plenum at the end of the month, in the absence of a clear market direction in the near term, the Hang Seng Index is expected to remain range-bound, finding support between 23,800 and 24,000 and facing resistance between 24,300 and 24,500.
*Biren Technology raises capital again, AI-related stocks under pressure*
Biren Technology (06082) announced a placement of 130 million new shares at a discount of about 9.76%, representing approximately 4.76% of its enlarged issued share capital, raising net proceeds of about HK$4.02 billion. Additionally, it was reported that DeepSeek, a large model startup, is considering expanding its latest fundraising round to as much as RMB 100 billion, double its previous target, with state-backed funds and corporate investors competing for stakes.
Biren Technology, having just passed the six-month IPO lock-up period in early July, conducted its first placement shortly thereafter, raising about HK$7 billion. At that time, the company entered into a lock-up agreement with placement agents, committing not to issue or sell any new shares for 90 days. With the lock-up period ending in early October, Biren Technology immediately launched a new HK$4 billion placement plan.
Wen Gangcheng stated that AI-related stocks currently lack profitability, so they can only raise capital through placements or issuing convertible bonds. Although Biren's latest fundraising of HK$4 billion is acceptable in scale, the real concern for investors is how long such fundraising activities will continue.
TianShu Zhixi (09903), another so-called 'GPU dragon' often mentioned alongside Biren Technology, plunged over 10% intraday today, hitting a six-month low. Its decline was even steeper than Biren Technology's after its second placement announcement. Wen Gangcheng pointed out that not only mainland AI stocks but even their US peers face capital-raising needs. Given that TianShu Zhixi previously conducted placements in tandem with Biren, it is likely to have similar future fundraising requirements. Although TianShu Zhixi turned profitable in the first half, whether it can achieve full-year profitability remains uncertain. However, the market holds high expectations for its profitability next year. Due to concerns about following its peers in fundraising, TianShu Zhixi's share price is expected to remain under short-term pressure, although preliminary support is expected around HK$78.
Besides Biren Technology's second placement within three months, Zhipu AI (02513), another large model player, conducted its second placement last month. MiniMax (00100), another major player in large models, also plunged over 10% intraday today. Wen Gangcheng noted that between the two large model stocks listed in Hong Kong, Zhipu has performed more prominently, ranking among the top ten globally, which has given its share price resilience. Despite recent pressure, its current price remains several times higher than its issue price (HK$116.2). In contrast, MiniMax is slightly less popular than Zhipu, and the market even worries about its future revenue pressure. Although MiniMax's share price rose to over HK$1,000 in March, it has since continuously corrected, and its current price has only risen over 30% from its listing price of HK$165. The stock hit a low of HK$186.2 in July, and Wen Gangcheng does not rule out further downward pressure on MiniMax's share price. (vs)
