Hong Kong Stock Market Closing (06.02) | Hang Seng Index closed down 0.57%, stablecoin concept surged against the trend, domestic property and pharmaceutical stocks generally under pressure

According to Zhitong Finance APP, the Hong Kong stock market had a poor start in June, with all three major indices collectively declining in early trading. The Hang Seng Index briefly fell below the 23,000 mark, and the Hang Seng TECH Index dropped over 3%, although the decline significantly narrowed in the afternoon. By the close, the Hang Seng Index fell 0.57% or 131.8 points, closing at 23,157.97 points, with a total turnover of HKD 145.245 billion; the Hang Seng China Enterprises Index fell 0.86%, closing at 8,359.26 points; the Hang Seng TECH Index fell 0.7%, closing at 5,134.11 points.

CMB International pointed out that the Hong Kong stock market has shown a continuous recovery trend since the impact of "reciprocal tariffs," steadily rebounding from its lows and fully reclaiming the losses caused by the "reciprocal tariffs." An analysis of driving factors indicates that the recovery of the Hong Kong stock market is mainly attributed to a significant decline in risk premiums, while the risk-free interest rate and corporate earnings expectations have remained relatively stable. Meanwhile, the continued net buying from southbound funds has provided strong support for the Hong Kong stock market, effectively stabilizing market volatility.

Blue Chip Performance

Sands China (01928) led the blue chips, closing up 4.28% at HKD 16.08, with a turnover of HKD 504 million, contributing 2.69 points to the Hang Seng Index. The Macao Gaming Inspection and Coordination Bureau announced that the gross gaming revenue in Macao for May was MOP 21.193 billion, a year-on-year increase of 5%. The cumulative gross gaming revenue for the first five months of this year reached MOP 97.707 billion, a year-on-year increase of 1.7%. A report from Daiwa Capital Markets indicated that May's gaming revenue exceeded market consensus expectations by 3%, recovering to 82% of the 2019 level, marking the strongest month so far in 2025, and the highest since the resumption of border crossings in January 2023.

In other blue chip stocks, Chow Tai Fook (01929) rose 3.22%, closing at HKD 11.54, contributing 1.2 points to the Hang Seng Index; Galaxy Entertainment (00027) rose 1.8%, closing at HKD 34, contributing 2.17 points to the Hang Seng Index; CSPC Pharmaceutical Group (01093) fell 4.81%, closing at HKD 7.71, dragging down the Hang Seng Index by 5.27 points; New Oriental Education & Technology Group - S (09901) fell 3.09%, closing at HKD 36.05, dragging down the Hang Seng Index by 1.3 points.

Popular Sectors

On the market, large technology stocks generally softened, with Alibaba falling 0.61%, while Xiaomi rose over 1%. The Hong Kong stablecoin regulations officially became law, causing stablecoin concepts to soar, with Lianlian Digital rising 64%, and Yika rising nearly 40%; geopolitical and trade concerns boosted gold prices, leading gold stocks to rise against the trend; Macao's May gaming revenue exceeded expectations, with most gaming stocks rising; some new consumption stocks performed well, with Mixue Group and Laopu Gold hitting new highs, and Pop Mart rising over 4%. On the other hand, May real estate sales saw an expanded year-on-year decline, leading to significant drops in domestic property stocks; pharmaceutical stocks, automotive stocks, coal stocks, and large financial stocks faced pressure.

1. Stablecoin concept stocks soared. By the close, Lianlian Digital (02598) rose 64.27%, closing at HKD 16.46; Yika (09923) rose 39.87%, closing at HKD 13.12; Lianyi Rong Technology-W (09959) rose 15.57%, closing at HKD 1.41; ZhongAn Online (06060) rose 9.55%, closing at HKD 21.1 On May 30, the Government of the Hong Kong Special Administrative Region published the "Stablecoin Ordinance" in the Gazette, meaning that the "Stablecoin Ordinance" has officially become law, further improving the regulatory framework for digital asset activities in Hong Kong. Previously, on May 21, the Hong Kong Legislative Council passed the "Stablecoin Ordinance Draft" in the third reading. By the end of this year, compliant stablecoins in Hong Kong are expected to be officially launched. It is understood that stablecoins are cryptocurrencies pegged to stable assets such as fiat currencies and gold, with their core value lying in maintaining price stability through collateral mechanisms or algorithms, while retaining the global accessibility, fast transactions, and programmability of cryptocurrencies.

The first batch of stablecoin issuer sandbox lists announced by Hong Kong includes five institutions, two of which are blockchain technology companies, namely JD Group's JD Coin Chain Technology (Hong Kong) and Yuan Coin Innovation Technology. The other three, Standard Chartered Bank (Hong Kong), Animoca Brands Limited, and HKT, chose to apply jointly. According to information, LianLian Digital indirectly holds 100% equity in LianLian Pay Global Limited through multiple wholly-owned subsidiaries. LianLian International collaborates with Yuan Coin Technology on stablecoin applications in cross-border payment scenarios. In addition, LianLian Digital's subsidiary DFX Labs has previously obtained the Hong Kong VATP license, officially entering the crypto field.

2. Most gaming stocks rose. As of the close, Sands China (01928) rose 4.28% to HKD 16.08; Wynn Macau (01128) rose 2.46% to HKD 5.41; Galaxy Entertainment (00027) rose 1.8% to HKD 34.

The Macao Gaming Inspection and Coordination Bureau announced that the gross gaming revenue in Macao for May was MOP 21.193 billion, a year-on-year increase of 5%. The cumulative gross gaming revenue in Macao for the first five months of this year reached MOP 97.707 billion, a year-on-year increase of 1.7%. A report by Daiwa Capital Markets pointed out that May's gaming revenue exceeded market consensus expectations by 3%, recovering to 82% of the 2019 level, making it the strongest month so far in 2025, and the highest since the resumption of border crossings in January 2023. Citigroup predicts that gaming revenue in June will increase by 5% year-on-year to MOP 18.5 billion, with an average daily gaming revenue of about MOP 617 million. Benefiting from a lower base in the same period last year, Citigroup continues to predict that gaming revenue in Macao will grow by 6% year-on-year in the second half of 2025.

3. Gold stocks rose against the trend. As of the close, Tongguan Gold (00340) rose 18.23% to HKD 2.27; Chifeng Jilong Gold Mining (06693) rose 5.77% to HKD 29.35; Jihai Resources (02489) rose 5.56% to HKD 1.71; China Gold International (02099) rose 4.48% to HKD 62.95.

On June 2, spot gold touched USD 3,350 per ounce, rising nearly 2% during the day. U.S. President Trump announced on May 30 that starting June 4, tariffs on imported steel and aluminum would be raised from 25% to 50%. In addition, the second round of negotiations between Russia and Ukraine will be held on June 2 at the Çırağan Palace in Istanbul. In the lead-up to this meeting, several "black swan" events have occurred in succession This includes two bridge collapse incidents in two Russian states within 24 hours, and the Ukrainian side revealing a special operation against Russia to destroy 41 Russian strategic bombers, among other events. Minsheng Securities pointed out that in the medium to long term, the central bank's purchase of gold and the weakening of US dollar credit are the main themes, global trade concerns still exist, and with the escalation of geopolitical conflicts, they are optimistic about the upward movement of gold prices.

4. Domestic property stocks decline significantly. As of the close, Agile Group (03383) fell 4.65%, closing at HKD 0.41; R&F Properties (02777) fell 4.08%, closing at HKD 0.94; New Town Development (01030) fell 2.58%, closing at HKD 1.89.

According to the China Index Academy, from January to May 2025, the total sales of the top 100 real estate companies amounted to CNY 1,443.64 billion, a year-on-year decrease of 10.8%, with the decline rate remaining basically stable compared to January to April, slightly decreasing by 0.6 percentage points. In May alone, the sales of the top 100 real estate companies decreased by 17.3% year-on-year, with the decline rate expanding by 0.5 percentage points compared to April. Additionally, according to CRIC real estate data, from January to May 2025, the overall Chinese real estate market continued to stabilize after a decline. The top 100 real estate companies achieved a sales turnover of CNY 294.58 billion in May, a month-on-month increase of 3.5%. The cumulative sales turnover from January to May reached CNY 1,312.75 billion. Tianfeng Securities pointed out that while the sales of the top 100 companies rebounded month-on-month in May, the year-on-year growth rate for both the single month and cumulative figures has expanded compared to April, indicating that the new housing market still faces pressure from growth volatility.

5. Automotive stocks are under pressure again. As of the close, GAC Group (02238) fell 3.28%, closing at HKD 2.65; Li Auto-W (02015) fell 2.05%, closing at HKD 110; Great Wall Motors (02333) fell 1.97%, closing at HKD 11.94.

A new round of price wars in the automotive sector has begun. Recently, the Ministry of Industry and Information Technology and the China Association of Automobile Manufacturers have both expressed opposition. The Ministry of Industry and Information Technology stated that it will strengthen the regulation of "involution" competition in the automotive industry. The China Association of Automobile Manufacturers also clearly stated its support for companies to participate in market competition through normal means and firmly opposes bottomless "price wars." Haitong International previously pointed out that in the short term, the price war will catalyze industry reshuffling, intensifying sales fluctuations, and the popularity of hybrid vehicles priced at CNY 60,000 and high-end models priced at CNY 100,000 will accelerate the replacement of fuel vehicles by new energy vehicles. In the long term, competition will shift towards technological depth and industrial chain integration capabilities, with the industry's future being dominated by companies that combine cost control with technological innovation.

Popular volatile stocks

1. Mixue Group (02097) hits a new high. As of the close, it rose 7.54%, closing at HKD 584.5.

Daiwa reiterated its "outperform the market" rating for Mixue Group, raising the target price from HKD 539 to HKD 608 to reflect higher same-store sales growth forecasts due to the latest competition in the takeaway platform, as well as a rapid store opening pace since the beginning of the year, with earnings per share forecasts raised by 5-6%. In addition, the results of the quarterly review of the Hang Seng Index series were announced, and Mixue Group was included in the Hang Seng Composite Index constituents, with the changes taking effect from June 9 2. Alibaba Pictures (01060) rose in the afternoon. As of the close, up 7.41%, at HKD 0.87.

On May 21, Alibaba Pictures announced that the board of directors proposed to change the company's name from Alibaba Pictures to Damai Entertainment. This name change may signify that Alibaba Pictures will focus more on two high-growth areas in the future: offline performances and IP derivatives. On May 28, Alibaba Pictures disclosed that it will hold a Chiikawa pop-up store event with Bailian ZX in June.

3. Leapmotor (09863) rose against the trend. As of the close, up 3.34%, at HKD 57.25.

Leapmotor recently announced its delivery volume for May. In May 2025, Leapmotor's monthly delivery volume reached 45,067 units, a year-on-year increase of over 148%, maintaining its leading position among new car manufacturers for three consecutive months. CMB International previously raised its sales forecast for the fiscal year 2025 by 15% to 550,000 units. It is expected that the fiscal year 2025 will achieve a net balance, followed by a tenfold increase in net profit to RMB 1.2 billion in the fiscal year 2026.

4. Stone Four Pharmaceutical Group (02005) fell after earnings. As of the close, down 5.46%, at HKD 2.77.

Stone Four Pharmaceutical Group announced its first-quarter results for 2025, with revenue decreasing by 36.9% year-on-year to approximately HKD 1.136 billion, gross profit decreasing by 50.6% year-on-year to approximately HKD 509 million, and profit attributable to shareholders decreasing by approximately 59.5% year-on-year to approximately HKD 168 million. In addition, the group expects that profit attributable to equity holders for the first half of 2025 will decline by approximately 45% to 60% year-on-year