The first half of 2025 has been monumental, with opportunities and risks coexisting in the global investment market — DeepSeek emerging, Trump's tariff policies, and conflicts in the Middle East... mooers are both participants in the Capital Markets and witnesses to a great era.
Looking back, consolidating experience, feel free to subscribe to the special topic.2025 Exclusive Mid-Year Review, may all our efforts in the first half of the year lay the groundwork for surprises in the second half.
As the first half of the year comes to a close, driven by Technology, new consumption, and innovative pharmaceuticals, global capital is flowing into Hong Kong. The Hong Kong stock market is showing strong performance, becoming one of the best-performing markets globally and entering a technical bull market.
Looking back at the performance of the Hong Kong stock market in the first half of the year, it has shown a structural upward trend. As of the market close on June 27, $Hang Seng Index (800000.HK)$ there has been a cumulative increase of 21.06% this year. $Hang Seng TECH Index (800700.HK)$ Cumulative increase of 19.55%.
From the beginning of the year to mid-March, Hong Kong stocks experienced significant gains. The domestic trade-in policy continues to be strengthened, and the debut of DeepSeek along with better-than-expected consumer data during the Spring Festival boosted investor sentiment, leading to an increase in the valuation of Hong Kong stocks. On March 19, it peaked at 24,874 points, with a maximum increase of over 24% during this period, becoming the largest rising index among major global markets at that time.
As April approached, despite being impacted by Trump's "tariff policy," the Hang Seng Index temporarily fell back to 19,260 points. However, the U.S. tariff policy showed signs of easing and a package of financial policies released domestically in April stabilized market expectations, effectively boosting investor confidence. After a period of narrow fluctuations, Hong Kong stocks quickly rebounded.
Since May, Hong Kong stocks have maintained an upward trend. On June 9, the Hang Seng Index once again rose above 24,100 points, rebounding over 20% from the April low, re-entering a technical bull market and nearly recovering the previous adjustment losses.
The bullish trend of Hong Kong stocks is inseparable from the continuous inflow of southbound funds. Wind data shows that as of the close on June 27, the net inflow of southbound funds into the Hong Kong stock market this year exceeded 720 billion Hong Kong dollars, the highest for the same period in history, and far exceeding previous years, reaching more than double that of the same period in 2024.
Industry insiders believe that external disruptive factors have relatively limited impact on the fundamentals of Hong Kong stocks, with corporate earnings still showing resilience. The inflow of southbound funds is likely to continue supporting the Hong Kong stock market. With domestic growth stabilization policies leading to upward revisions of Hong Kong stock earnings, coupled with improvements in the global liquidity environment, Hong Kong stocks are expected to experience dual improvements in fundamentals and risk appetite, embarking on a journey to new highs.
In addition, the IPO market's contribution to the activity of Hong Kong stock trading should not be overlooked. Recently, the Hong Kong Stock Exchange disclosed a series of impressive data: as of June 20, there were a total of 31 IPO projects on the Hong Kong Stock Exchange this year, with a cumulative financing scale reaching 88.4 billion Hong Kong dollars, surpassing the total financing amount of last year. This has also made the Hong Kong Stock Exchange surpass other exchanges, reclaiming the top position in the world for IPO financing.
Since the beginning of this year, $CATL (03750.HK)$、 $HENGRUI PHARMA (01276.HK)$ The trend of many high-quality mainland listed companies seeking A+H share listings in Hong Kong has also boosted the hot IPO market in Hong Kong.
The top ten bullish stocks in Hong Kong have been released! Innovative drugs and new consumption have become the new main investment lines.
In the first half of this year, the entire Hong Kong stock market created a bullish atmosphere, and a large number of bullish stocks also emerged. Statistics show that as of the market close on June 27, there were 141 stocks on the Main Board of Hong Kong that had increased by over 100% this year.
Among them, Futu News has selected stocks in the Hong Kong market with a market cap of over 50 billion HKD, ranking in the top ten for year-to-date increases, for cow friends to reference:
Overall, the Hong Kong stock market presents obvious structural characteristics, with new consumption and innovative drugs becoming two important main lines.
Since the beginning of the year, a capital frenzy led by new consumption has been unfolding in the Hong Kong stock market. The suddenly popular high-end ancient method Gold, the queueing and snatching Labubu, and the year with over 100 million cups sold of freshly made tea drinks have led to the phenomenon known as the "three sisters of new consumption."$LAOPU GOLD (06181.HK)$ 、 $POP MART (09992.HK)$ And $MIXUE GROUP (02097.HK)$ This has become a phenomenal trend, with respective cumulative increases of 274.27%, 190.44%, and 150.62% within the year, leading the entire Hong Kong stock market and driving the consumption sector to rise across the board, with the new tea drink "third stock." $GUMING (01364.HK)$ Similarly strong performance, with a cumulative increase of 141.45% this year.
The innovative drug sector is also seeing impressive growth. Since the beginning of this year, Chinese innovative pharmaceutical companies have ignited investment enthusiasm with a series of billion-dollar authorization deals, successful IPOs, and strong research pipelines, ushering in their "DeepSeek moment," with over 30 pharmaceutical companies doubling their stock prices, among which $3SBIO (01530.HK)$ a cumulative increase of 273.36%, $INNOVENT BIO (01801.HK)$ a cumulative increase of 111.34%, $SKB BIO-B (06990.HK)$ Cumulative increase of 100.24%.
In addition, the geopolitical situation was tense in the first half of the year, and international gold prices rose sharply, Hong Kong stock market gold stocks continued last year's strong performance. $SD GOLD (01787.HK)$ Up 125.03% this year, in addition. $CHIFENG GOLD (06693.HK)$ 、 $ZHAOJIN MINING (01818.HK)$ Other gold stocks also showed strong performance.
Some institutions believe that from a long-term perspective, breakthroughs in the research and development of innovative drugs and the rise of new consumer brands are becoming the dual engines driving the high-quality development of China's Capital Markets. The former demonstrates international competitiveness, while the latter leads consumption transformation, together interpreting the vigorous vitality of China's new productive forces. Under the resonance of policies and industries, innovative drugs with quality fundamentals and leading new consumer companies are expected to bring substantial returns to investors.
Which investment opportunities do brokerages see for the Hong Kong stock market in the second half of the year?
Brokerages generally expect that under the combined effect of multiple factors such as fundamental repairs and improved liquidity, the Hong Kong stock market is likely to continue its upward trend in the second half of the year, with sectors such as Technology and new consumption expected to continue leading the market's rise.
"The macro environment, the development of artificial intelligence technology, and the optimization of market structure will collectively drive the Hong Kong stock market to maintain a reversal trend in the second half of the year," stated CITIC SEC. Looking ahead, against the background of ongoing deepening reforms in the Hong Kong stock listing system, it is expected that high-quality companies listing in Hong Kong will further enhance the asset quality and liquidity of the Hong Kong stock market; southbound capital may continue to flow into the Hong Kong stock market. Considering the ongoing uncertainties in the external market, the Hong Kong stock market is expected to display a trend of fluctuation upwards in the third quarter, and with the strengthening of domestic growth stabilization policies, the fourth quarter may see an opportunity for performance upgrades in the Hong Kong stock market.
Focusing on allocation strategies, CITIC SEC recommends that investors pay attention to six areas: first, technology giants benefiting from AI industry catalysis, especially in the Internet sector; second, the innovative drug sector; third, new consumption directions arising from technological advancement; fourth, non-bank finance, especially insurance; fifth, high-quality high-dividend assets such as the Bank, telecommunications, and public utility sectors; sixth, the real estate sector benefiting from the continuous introduction of growth stabilization policies.
China International Capital Corporation stated that the current macro and market environment, which still requires overall repair but has structural highlights, is more favorable for the Hong Kong stock market. This is because whether it is for stable returns from dividends or as a structural opportunity focus with new consumption, AI technology, and even innovative drugs, the Hong Kong stock market has more advantages.
At the same time, the contradiction between surplus liquidity and a lack of good assets domestically is driving a continuous influx of southbound capital. As long as this contradiction exists, mainland capital will still have long-term allocation needs. According to China International Capital Corporation's estimates, the relatively certain incremental southbound capital this year is expected to be 200 billion to 300 billion Hong Kong dollars, with annual cumulative inflow possibly exceeding 1 trillion Hong Kong dollars.
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Editor/rice