[ET Net News Agency, 29 April 2025] Hong Kong stocks have remained around the 22,000 mark for several consecutive days, as investors await key US economic data and the prospects of US-China tariff negotiations. Chinese enterprises are releasing their first-quarter results, which have had limited impact on the market. The Hang Seng Index closed at 21,998, up 26 points or 0.1%, with the main board's turnover nearing HKD 97.3 billion. The Hang Seng China Enterprises Index stood at 8,090, up 10 points or 0.1%. The Hang Seng Tech Index reported 5,029, up 40 points or 0.8%.
"Market turnover is weak; watch for HSBC's quarterly results at noon"
The external market is cautious regarding the progress of tariff negotiations between the US and several trading partners, along with upcoming US corporate earnings. Overnight, European and American stock markets generally stabilised. Although Hong Kong stocks opened over 100 points higher, early trading was volatile, with a brief decline of several dozen points before finding support, leading to a rebound of over 200 points. Cheung Chi Wai, a joint managing director at Prudential Brokerage Ltd, told ET Net News Agency that the US-China tariff war has not yet seen substantial negotiations, creating uncertainty in the market. Meanwhile, there are still expectations for economic stimulus measures from the Mainland China, leading to a cautious investor attitude. The market lacks direction, and the Hang Seng Index shows weak movement, reflected in the declining turnover. Yesterday, the main board's turnover was only HKD 169 billion, marking a two-month low.
Cheung Chi Wai noted that the Hang Seng Index has shown a pattern of rising and then falling for four consecutive days, and today's trend is likely to follow the same trajectory. As today is the settlement day for the index, significant fluctuations in the afternoon are not expected. However, he cautioned that with major stocks like HSBC (00005) and Hang Seng Bank (00011) set to announce their first-quarter results, unexpected outcomes from HSBC could impact the index's movement.
"WuXi AppTec's first-quarter results are impressive, but stock price has risen significantly recently"
WuXi AppTec (02359) reported a net profit of RMB 3.672 billion for the first quarter ending 31 March 2025, up 89.06% year-on-year, significantly exceeding the expected RMB 2.45 billion. The basic earnings per share were RMB 1.29. During this period, revenue reached RMB 9.655 billion, a 20.96% increase, also surpassing the estimated RMB 8.61 billion. Following the results, major firms have praised WuXi AppTec. Nomura stated that despite the low base effect, the first-quarter performance still exceeded expectations, giving WuXi AppTec a "buy" rating with a target price of HKD 84.59.
WuXi AppTec's first-quarter chemical business revenue was RMB 7.39 billion, a year-on-year increase of 32.9%. The group's gross profit margin improved by 4.1 percentage points to 41.4%, primarily benefiting from economies of scale in the chemical business. Morgan Stanley noted that both revenue and net profit for the first quarter surpassed their expectations, with the strongest growth driven by the US and European markets, which saw year-on-year increases of 28% and 26%, respectively. These two markets contributed nearly 80% of the group's revenue.
Cheung Chi Wai believes that while WuXi AppTec's first-quarter results exceeded market expectations, he cautions that as the US has not yet finalized import tariffs on pharmaceuticals, it is too early to determine whether tax exemptions or reduced rates will be maintained. Given the US's indecisiveness on tariff issues and the previous introduction of a biosafety bill - which, although currently shelved, may resurface - WuXi AppTec is in a vulnerable position. Furthermore, with US-China relations still unclear, failure to resolve tariff issues could lead to future burdens from high tariffs. Cheung Chi Wai pointed out that WuXi AppTec's stock price has rebounded from a high of HKD 44.3 earlier this month, having risen by 40% to date, and buying at current levels carries risks. He suggests waiting for a price correction to around the 20-day moving average (approximately HKD 57.3) for safer entry.
"Market turnover is weak; watch for HSBC's quarterly results at noon"
The external market is cautious regarding the progress of tariff negotiations between the US and several trading partners, along with upcoming US corporate earnings. Overnight, European and American stock markets generally stabilised. Although Hong Kong stocks opened over 100 points higher, early trading was volatile, with a brief decline of several dozen points before finding support, leading to a rebound of over 200 points. Cheung Chi Wai, a joint managing director at Prudential Brokerage Ltd, told ET Net News Agency that the US-China tariff war has not yet seen substantial negotiations, creating uncertainty in the market. Meanwhile, there are still expectations for economic stimulus measures from the Mainland China, leading to a cautious investor attitude. The market lacks direction, and the Hang Seng Index shows weak movement, reflected in the declining turnover. Yesterday, the main board's turnover was only HKD 169 billion, marking a two-month low.
Cheung Chi Wai noted that the Hang Seng Index has shown a pattern of rising and then falling for four consecutive days, and today's trend is likely to follow the same trajectory. As today is the settlement day for the index, significant fluctuations in the afternoon are not expected. However, he cautioned that with major stocks like HSBC (00005) and Hang Seng Bank (00011) set to announce their first-quarter results, unexpected outcomes from HSBC could impact the index's movement.
"WuXi AppTec's first-quarter results are impressive, but stock price has risen significantly recently"
WuXi AppTec (02359) reported a net profit of RMB 3.672 billion for the first quarter ending 31 March 2025, up 89.06% year-on-year, significantly exceeding the expected RMB 2.45 billion. The basic earnings per share were RMB 1.29. During this period, revenue reached RMB 9.655 billion, a 20.96% increase, also surpassing the estimated RMB 8.61 billion. Following the results, major firms have praised WuXi AppTec. Nomura stated that despite the low base effect, the first-quarter performance still exceeded expectations, giving WuXi AppTec a "buy" rating with a target price of HKD 84.59.
WuXi AppTec's first-quarter chemical business revenue was RMB 7.39 billion, a year-on-year increase of 32.9%. The group's gross profit margin improved by 4.1 percentage points to 41.4%, primarily benefiting from economies of scale in the chemical business. Morgan Stanley noted that both revenue and net profit for the first quarter surpassed their expectations, with the strongest growth driven by the US and European markets, which saw year-on-year increases of 28% and 26%, respectively. These two markets contributed nearly 80% of the group's revenue.
Cheung Chi Wai believes that while WuXi AppTec's first-quarter results exceeded market expectations, he cautions that as the US has not yet finalized import tariffs on pharmaceuticals, it is too early to determine whether tax exemptions or reduced rates will be maintained. Given the US's indecisiveness on tariff issues and the previous introduction of a biosafety bill - which, although currently shelved, may resurface - WuXi AppTec is in a vulnerable position. Furthermore, with US-China relations still unclear, failure to resolve tariff issues could lead to future burdens from high tariffs. Cheung Chi Wai pointed out that WuXi AppTec's stock price has rebounded from a high of HKD 44.3 earlier this month, having risen by 40% to date, and buying at current levels carries risks. He suggests waiting for a price correction to around the 20-day moving average (approximately HKD 57.3) for safer entry.