[ET Net News Agency, 15 April 2025] The US tariff policy is constantly changing and evolving. President Trump announced exemptions for tariffs on components like smartphones and computers, leading to a strong rebound in US tech stocks. However, he subsequently indicated that there would be tariff measures targeting semiconductors and chips, which narrowed the gains in US stocks at the close. The Hang Seng Index opened 186 points higher, reaching its peak for the morning, but then turned downwards. The index reported 21,457 at midday, up 40 points or 0.2%, with a turnover of nearly HKD 108.8 billion. The Hang Seng China Enterprises Index stood at 7,974, up 8 points or 0.1%. The Hang Seng Tech Index was at 4,969, down 45 points or 0.9%.
"Nip Chun Pong: If the index breaks 21,500 points this week, the outlook remains optimistic"
The Hang Seng Index opened above the ten-day moving average (approximately 21,388 points) today, but the upward momentum was insufficient, resulting in fluctuations downwards. Nip Chun Pong, Chief Analyst at the Chief Strategist at Blackwell Global Securities, told ET Net News Agency that the Hang Seng Index has risen for five consecutive days, accumulating an increase of about 1,600 points, recovering half of the losses since 7 April. He anticipates that the future trend will be volatile. He noted that Trump's recent shift in tariff rhetoric has alleviated market concerns about China's foreign trade outlook, leading to sustained positive sentiment. If the index can close above 21,500 points this week, the outlook remains optimistic; otherwise, this rebound may come to an end. As for support levels, while the index has been above the hundred-day moving average (21,229 points) for two consecutive days, it has yet to establish significant support, with initial support around the 21,000-point mark.
"US revenue share declines; actual impact of semiconductor import investigation is minimal"
The US Department of Commerce has announced that it has begun an investigation under Section 232 of the Trade Expansion Act regarding the impact of semiconductor and pharmaceutical imports on US national security. Analysts suggest this is a decisive step towards imposing tariffs. Additionally, Trump stated that he would announce the tariff rates for imported semiconductors within the next week, emphasising that the US cannot be reliant on "hostile trading nations like China" in these sectors. As a result, chip stocks faced pressure today.
Nip Chun Pong noted that the number of chips exported from China to the US has significantly decreased. While this news is unfavourable for sentiment, its impact on the fundamentals of chip stocks is manageable. He explained that, for example, SMIC (00981) derives only 12% of its revenue from the US, a substantial decline from 25% in 2021. Nip Chun Pong stated that in the semiconductor sector, the current situation is that China is more interested in importing high-end chips from the US rather than exporting them in large quantities, which means that the related tariffs would have a greater impact on companies like TSMC. He predicts that, following Trump's usual pattern, the initial tariff rates announced for the semiconductor industry will be high, but may decrease depending on the progress of negotiations. Compared to the announced tariff rates, the market is currently more focused on the actual rates that will be implemented in the future, which could lead to increased market volatility.
Regarding chip stocks, Nip Chun Pong mentioned that, from a medium to long-term business development perspective, chip stocks are worth considering. However, current research and development costs are high, with SMIC and Hua Hong Semi (01347) having price-to-earnings ratios of around 100 or more, indicating limited profit margins. If investors have limited capital, choosing chip stocks may not be attractive; in contrast, large Chinese tech stocks offer greater investment value.
"Nip Chun Pong: If the index breaks 21,500 points this week, the outlook remains optimistic"
The Hang Seng Index opened above the ten-day moving average (approximately 21,388 points) today, but the upward momentum was insufficient, resulting in fluctuations downwards. Nip Chun Pong, Chief Analyst at the Chief Strategist at Blackwell Global Securities, told ET Net News Agency that the Hang Seng Index has risen for five consecutive days, accumulating an increase of about 1,600 points, recovering half of the losses since 7 April. He anticipates that the future trend will be volatile. He noted that Trump's recent shift in tariff rhetoric has alleviated market concerns about China's foreign trade outlook, leading to sustained positive sentiment. If the index can close above 21,500 points this week, the outlook remains optimistic; otherwise, this rebound may come to an end. As for support levels, while the index has been above the hundred-day moving average (21,229 points) for two consecutive days, it has yet to establish significant support, with initial support around the 21,000-point mark.
"US revenue share declines; actual impact of semiconductor import investigation is minimal"
The US Department of Commerce has announced that it has begun an investigation under Section 232 of the Trade Expansion Act regarding the impact of semiconductor and pharmaceutical imports on US national security. Analysts suggest this is a decisive step towards imposing tariffs. Additionally, Trump stated that he would announce the tariff rates for imported semiconductors within the next week, emphasising that the US cannot be reliant on "hostile trading nations like China" in these sectors. As a result, chip stocks faced pressure today.
Nip Chun Pong noted that the number of chips exported from China to the US has significantly decreased. While this news is unfavourable for sentiment, its impact on the fundamentals of chip stocks is manageable. He explained that, for example, SMIC (00981) derives only 12% of its revenue from the US, a substantial decline from 25% in 2021. Nip Chun Pong stated that in the semiconductor sector, the current situation is that China is more interested in importing high-end chips from the US rather than exporting them in large quantities, which means that the related tariffs would have a greater impact on companies like TSMC. He predicts that, following Trump's usual pattern, the initial tariff rates announced for the semiconductor industry will be high, but may decrease depending on the progress of negotiations. Compared to the announced tariff rates, the market is currently more focused on the actual rates that will be implemented in the future, which could lead to increased market volatility.
Regarding chip stocks, Nip Chun Pong mentioned that, from a medium to long-term business development perspective, chip stocks are worth considering. However, current research and development costs are high, with SMIC and Hua Hong Semi (01347) having price-to-earnings ratios of around 100 or more, indicating limited profit margins. If investors have limited capital, choosing chip stocks may not be attractive; in contrast, large Chinese tech stocks offer greater investment value.