[ET Net News Agency, 20 August 2025] As the market awaited remarks from Fed Chair Jerome
Powell, sentiment was further dampened by Nvidia's decline, which weighed on the Nasdaq
and global equities. The HSI opened lower today, losing the 25,000 mark, and at midday was
at 24,980, down 142 points or 0.6 per cent, with main board turnover exceeding HKD 144.4
billion. The Hang Seng China Enterprises Index stood at 8,945, down 60 points or 0.7 per
cent. The Hang Seng Tech Index was at 5,472, down 69 points or 1.3 per cent.

"Hopes for Mainland China property stimulus; market takes wait-and-see approach"

Overnight, US equities were subdued. Although the Dow hit a new intraday high, it closed
up just 10 points, as significant weakness in US tech stocks dragged down Hong Kong
stocks, which opened over 100 points lower and at one stage fell by more than 200 points.
Nip Chun Pong, the Chief Strategist at Blackwell Global Securities, told ET Net News
Agency that US equities have risen substantially since July and some profit-taking is
normal. In Hong Kong, sentiment remains cautious, with hopes pinned on forthcoming policy
support for the mainland property sector. Premier Li Qiang recently called for further
efforts to boost property sales, and the NDRC has mentioned since June that economic
stabilisation policies are forthcoming, though there have been no concrete announcements
so far. As a result, the market is still waiting for potential policy moves in September.
The HSI briefly lost the 25,000 level this morning, but quickly recovered. Nip Chun Pong
noted that the HSI gapped up on 13 August and is still in the process of filling the gap
from 12-13 August. He expects the HSI to continue consolidating around 25,000 for now,
with initial support at 24,800 if 25,000 is breached again. He also pointed out that today
marks a fifth consecutive day of declines for the HSI. While a technical rebound is
possible, any recovery is likely to be limited.

"Xiaomi results beat expectations, but share price under pressure after significant rally"

Xiaomi (01810) posted second-quarter net profit of RMB 11.904 billion, up 134 per cent
year-on-year. Adjusted net profit was RMB 10.83 billion, up 75.4 per cent, both ahead of
expectations. Revenue for the quarter was RMB 115.956 billion, up 30.5 per cent, also
beating forecasts. For the first half, net profit was RMB 22.829 billion, up 146 per cent
year-on-year, with revenue at RMB 227.249 billion, up 38.2 per cent.
The group said innovative businesses such as smart EVs and AI continued to grow rapidly
in Q2. Losses in the EV business narrowed to RMB 300 million, and profitability is
expected in the second half. As of July 2025, cumulative EV deliveries surpassed 300,000
units. In Q2 alone, automotive revenue broke through RMB 20 billion for the first time,
marking rapid scaling of the business. Deliveries continued to grow, reaching 81,302
vehicles in the quarter; even before the YU7 began deliveries, Xiaomi's first-half EV
deliveries exceeded 157,000.
Despite the strong interim results, Xiaomi's share price came under pressure after
several major brokers, including Citi, Goldman Sachs, Jefferies, and Macquarie, lowered
their target prices. Macquarie's cut of 12 per cent was the most significant. Only
Deutsche Bank raised its target slightly by 1.3 per cent, from HKD 76 to HKD 77. Xiaomi's
share price opened down 2 per cent today. Nip Chun Pong noted that Xiaomi has staged an
impressive rally over the past few years, frequently reaching new highs this year. By
comparison, other tech majors such as Tencent (00700) are still trading well below their
2021 peaks, while Alibaba (09988) is far from its 2020 high of around HKD 304. In
contrast, even after pulling back from its June high, Xiaomi's current price remains more
than 40 per cent above its 2021 peak.
Nip Chun Pong pointed out that Xiaomi is now one of the top five HSI constituents, and
its valuation is inevitably compared with other tech giants. While Xiaomi's interim
earnings growth is notable, its forward P/E is above 30 times, compared to 23 times for
Tencent and just 14-15 times for Alibaba. As a result, even with strong results, the share
price remains under pressure. Technically, Xiaomi is now trading around its early June
level; as long as it holds above HKD 50, the correction from the late-June high of HKD
61.45 can be considered largely complete, and the stock is expected to consolidate between
HKD 50 and HKD 55 for now.