[ET Net News Agency, 19 November 2025] With global attention focused on AI chip leader
Nvidia's upcoming results, Asia-Pacific markets remained under pressure following
yesterday's mini-selloff. Xiaomi (1810) was hit by post-earnings selling, and even
defensive buying in gold and oil stocks failed to sustain gains. The Hang Seng Index
opened higher but soon reversed course, closing the morning at 25,812, down 117 points or
0.5%, with main board turnover approaching HKD 112.6 billion. The Hang Seng China
Enterprises Index finished at 9,142, down 32 points or 0.3%, while the Hang Seng Tech
Index fell 55 points, or 1%, to 5,590.

"Nip Chun Pong: Watch if HSI can hold 25,800"

US indices continued to slide overnight, with both the Dow and S&P 500 down for a fourth
consecutive session, and Hong Kong stocks remained under selling pressure. Nip Chun Pong,
the Chief Strategist at Solo Securities, told ET Net News Agency that with the year-end
approaching, some investors are choosing to lock in profits early. Although some capital
is searching for new opportunities, the spillover effect from US markets to Hong Kong is
less pronounced than it was in the first half of the year. He noted that with US
employment data yet to show significant deterioration, the upcoming non-farm payroll
report may offer little support for rate cut expectations, so the benefit to US and Hong
Kong equities is likely to be limited. Nip emphasised that Hong Kong stocks will need
their own positive catalysts; otherwise, the market may remain on the weak side.
Nip stressed that the key level to watch for the HSI is 25,800, if this support fails
this week, the index could test 25,500, which has only been briefly breached once since
October and remains a relatively strong support area. The market is still watching whether
US tech, especially AI-related stocks, are overvalued. If Nvidia's results spark even a
modest rebound in US tech, Hong Kong could see a mild recovery, with resistance to watch
at 26,300.

"Xiaomi constrained by safety concerns and cost pressures"

Xiaomi (01810) reported net profit of RMB 12.27 billion for the third quarter ended 30
September 2025, up 130% year-on-year and ahead of expectations. Revenue climbed 22.3% to
RMB 113.12 billion, while adjusted net profit rose 80.9% to RMB 11.31 billion, also
beating forecasts.
Smartphone revenue was RMB 46 billion, down 3.1% year-on-year, with global shipments
reaching 43.3 million units, a 0.5% increase. Third-party data shows Xiaomi ranked second
in China's smartphone market for the sixth consecutive quarter, with a 16.7% share in Q3.
Daiwa noted that rising memory costs are likely to squeeze smartphone margins and has
accordingly cut profit forecasts for 2026 and 2027.
Nip Chun Pong said Xiaomi's share price has weakened recently due to two main factors:
ongoing concerns over EV safety and elevated memory costs weighing on smartphone
profitability. While the company remains profitable, market sentiment is cautious. He
added that although Xiaomi has made progress in developing its own chips and memory
technologies, it has yet to reach international standards, and cost reductions are
unlikely to materialise over the next two quarters or into the first half of next year,
limiting the potential for earnings improvement.
From a technical perspective, Nip sees initial support for Xiaomi shares at HKD 36, with
upside resistance at HKD 44-45. Interested investors may consider accumulating if the
price falls to HKD 38.5 or below, with a two-week target price of HKD 44.