January 28th [BOC Guest] Hang Seng Index, Zijin Mining, Zijin Gold International, Huahong Semiconductor, Alibaba

Simon: Hello, Niki.Today’s live stream with you is really well-timed because if you look at the Hang Seng Index, today (January 28) it really broke some records. I saw a striking headline on BOC International's website that it reached a four-year high. I believe everyone is very happy and hopes it will continue to rise even more. Maybe we should also aim for a bit more growth. Let’s take a look at today’s market conditions where the Hang Seng Index hit a four-year high. You must be very busy, right? For example, how are investors viewing the current investment situation or their attitude towards investing in the Hang Seng Index?

Niki, Director of BOC International: The timing today is excellent as we’ve caught a good moment to share the stock market status with everyone. It truly surged to a four-year high above 27,700 points. Overall, from the market open, trading was very heated; my traders were all shouting 'wow' about implied volatility. Whether it’s the index or major leading stocks within individual equities, their related implied volatilities shot up today. So, actually, if people bought some good-positioned call warrants products in the last couple of days, they made money both on price and implied volatility. What does this mean? It means if you predicted an upward trend and the market indeed rose, that’s one part of the profit. Another part is the increase in market volatility, which broadens overall market fluctuations, so the implied volatility of related CBBCs (Callable Bull/Bear Contracts) also significantly rose. Therefore, today's investors should be making profits on both stock prices and volatility, which is truly satisfying and makes us very happy.

However, regarding the index, I noticed the market has risen for six consecutive trading days, quickly breaking through the four-year high and approaching the vicinity of 28,000 points. We used to talk about 27,000 points, then 26,000 points, and now we’re discussing 28,000 points. So, over the past week’s five trading days, investors’ deployment shows funds flowing out of long positions to take profits while simultaneously flowing into short positions of the Hang Seng Index. The amounts are similar, with approximately 120 million HKD flowing out from long positions to take profits and around 100 million HKD flowing into short positions.

But I advise everyone that under the current market conditions, these two to three days, many investors have entered short positions thinking the market might slow down its rate of increase, thus betting on bearish positions. They think like this, but in fact, CBBCs (Callable Bull/Bear Contracts) are short-term investment tools. I suggest that during this rising market phase, you should follow the trend, meaning continue buying products moving in the same direction as the broader market, riding the trend upwards rather than guessing when the peak will come. So even if you want to bet on a market pullback, I don’t recommend choosing Hang Seng Index bear contracts with strike prices too close to the current level. This means with the market currently at 27,700 points, selecting a bear contract with a strike price at 28,000 points is somewhat near, and even more aggressive investors might choose ones much closer, just a hundred points away from the strike price, so I don’t recommend choosing products too close to the strike price. Of course, for short-term speculation, holding for one to two days might work, but if holding for one to two days, I think it’s not suitable to buy overly aggressive bear contracts.

For example, with the Hang Seng Index bull contracts, today investors are referencing products with a recovery clause around 26,700 points. Some may ask, why not introduce some closer-to-the-money ones, like those around 27,500 points? The market has risen so quickly that our products haven't had time to be listed yet. So our latest batch of new bull contracts actually have recovery prices around 26,700 points. Regarding put warrants, some investors who prefer ones closer to the recovery price might choose 27,700 or 27,800 points. But if you want to hold them longer, I suggest choosing ones with a slightly higher recovery price. It’s possible that our website updates aren’t timely enough; sometimes when the market rises too fast, we don’t have time to update. But that doesn’t mean we don’t have them — we have four to five hundred products, very comprehensive. So feel free to visit our company website at www.bocifp.com, search for Hang Seng Index bull/bear contracts or call/put warrant products, and then choose the one with the recovery clause that suits you. We definitely have a wide range.

Simon: Niki, you just mentioned a few things.First, on a day like today, if investors pick the right direction, they could experience the happiest outcome — profiting both from the rise in implied volatility and the increase in warrant prices because related warrants will move up accordingly. If they buy call warrants, they’ll also rise, which is great. Second, an important point Niki just mentioned is seeing capital flow into bearish products. It's completely fine for every investor to have their own opinion, but when it comes to product selection, I hope everyone chooses products that aren’t too close to the current price. Because when the market is rising, there’s no guarantee it won’t continue going up. Therefore, if you choose products too close to the money, you could easily face recovery risk. So even though it feels good to buy on an upward trend, if you’re planning a contrarian strategy, you need to pay more attention to the recovery price or other terms of the product. The market changes so fast; while checking the website is important, sometimes calling might be faster, right?Niki, tell us again what the phone number is.

BOCI Director Niki: Sure, because the market really fluctuates so quickly. Sometimes people urgently need the number but can’t find it, so you must jot down this number.: Warrant Hotline: 00+852 3988 6909,Call our customer service department, and my colleagues and I will help you select products suitable for the current market based on your investment preferences. For instance, if you say you want the closest-to-the-money one and don’t mind if the recovery price is 100 points away as long as it's quick, we’ll recommend a few. In fact, we currently have several products with recovery prices within 50 points. You can take advantage of this service to solve your product search issues and consult whether a product suits you, such as “I’m considering this one, is it appropriate?” Feel free to ask us first.

Simon: Anyway, if you have any questions regarding warrant or bull/bear contract investments, feel free to call BOCI’s warrant hotline at 3988 6909 anytime to reach out to Niki’s team for communication.

Simon: Actually, Niki just mentioned earlier,Today is a good opportunity to share the stock market situation with everyone, and not just today. I’ve noticed several sectors and industries gradually rising since we started doing shows with Niki, so Niki really does have a bullish market effect. Hope everyone listening to the show can make more profits. One thing I’d like to discuss with Niki is Zijin Mining (02899). Gold prices continue to hit new highs, and today 2899 is maintaining its upward momentum with significantly increased trading volume. I’d like to ask about recent investor sentiment in the warrant market regarding 2899 or other related stocks?

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BOC International director Niki: The rise of Zijin Mining has been very significant, at the beginning of this year it was still around 37 or 38 yuan, now it has risen to near 45 yuan. In fact, since last year’s program, we have been reminding everyone to pay attention to gold and silver prices, precious metals, and commodity portfolios. I believe all our listeners have heard this and more or less participated. I remember emphasizing last week on the program that the external environment remains unstable. Therefore, international investors are increasingly focusing on tangible investments, meaning they allocate funds to assets like gold, copper, and silver. Thus, international gold prices have risen rapidly this year, reaching 5,200 yuan today. From the beginning of this year until now, in less than a month, it has already increased by more than 20%. Market reaction is swift, and China's market prices already reflect growing attention and participation, whether in physical gold trading, stocks, or ETF investments, which are all highly active.

I personally believe that gold prices will continue to rise this year, extending this uptrend. Although it has already risen by 20% this year, I expect the trend to continue. There are several reasons for this: First, the level of trust in the US dollar within international central bank asset portfolios is gradually decreasing. More banks are increasing their gold holdings, but the current gold holding ratio is only around 7%, slightly higher in the US, and domestically about 7-8%. If global central banks increase their gold holdings to 10%, it would provide strong support for international gold prices. Second, the US dollar remains weak, and many precious metal prices are settled in dollars. When the dollar is weak, the relative value of physical gold or commodities increases. Third, gold production cannot be easily increased. It takes 5 to 10 years to develop a mine. Rising demand with limited supply will drive prices up. So during this cycle, everyone can actively position themselves.

You can keep an eye on 2899, Shandong Gold (1787) $SD GOLD (01787.HK)$ , or international gold-related stocks such as 2840, etc. BOC International has issued related asset warrants. For example, for 2899, we have a warrant 21590 $BIZIJIN@EC2604B.C (21590.HK)$ with an exercise price of 48.6 yuan, expiring in mid-April this year, offering leverage of approximately 6 times; another warrant for Zijin Mining International (02259.HK) is 24632 $BIZJGLD@EC2607B.C (24632.HK)$ , with an exercise price of around 209 yuan, expiring in early July this year, offering leverage of around 3 times. You can view these terms clearly on our website.

In fact, when market changes happen quickly, it may be hard to remember product terms. No problem, visit the BOC International website bocifp.com, where the homepage features daily news topics, hot trends, and references to related products. You can also use the product search function on the site, such as warrant searches or bull/bear certificate searches, to find all product information.

Simon: Besides the gold-related sector, another sector frequently mentioned by Niki is semiconductors,one of which is Huahong Semiconductor (01347). Today, 1347's stock price rose to 122.8 yuan, performing quite well recently. I’d like to ask about the sentiment among investors in the warrant market towards the semiconductor sector recently?

BOC International director Niki: We’ve been talking about the chip sector from last year into this year, consistently emphasizing the development of AI sectors, with related chips being an indispensable element. In terms of high-end chips, we might still need to continue importing foreign products to supplement domestic needs, but the urgency of self-development and improving product quality has been emphasized by the country over recent years. The other day, there was news that NVIDIA started selling the H28 chip to mainland tech companies, after which two leading stocks listed in Hong Kong, 981 $SMIC (00981.HK)$ Hua Hong (1347) stock price has pulled back a bit, but today's news says that two mainland chip companies are facing a shortage of products, with some product categories even seeing price hikes of 40% to 80%. Demand for various chips is very strong. Today, chip stocks performed exceptionally well, such as Hua Hong (1347), which surged to around 122 HKD. Since the beginning of this year, it has risen by 50%, a really staggering increase.

Some may wonder if it’s still worth buying after such a big rise. I suggest first deciding whether your portfolio should allocate to this sector. However, given the sharp rise in recent days, you might wait for a slight pullback. The demand in this sector is extremely strong, with significant capital inflows, so there won’t be a major drop. You can consider buying during a pullback or use 10%-20% of your funds to look into related warrants and bull/bear certificates. We offer a full range of Hua Hong warrant products; visit our website (www.bocifp.com) for more information, such as Hua Hong call warrant 26663. $BIHUAHO@EC2605C.C (26663.HK)$ The strike price is 145 HKD, expiring in early May this year, with leverage of about 3 to 4 times. When this product was issued, Hua Hong’s share price was only in the 80s, making the strike price of 145 HKD deeply out-of-the-money. But now, within just one month, the stock price has risen to 122 HKD, making it about 18% out-of-the-money, which is quite reasonable.

You may notice that only BOC International offers products at these price levels because we put a lot of effort into designing terms and issuing products to help bring returns and allow you to find terms and prices you like. If you feel certain terms are unsuitable, or market changes leave no suitable options, feel free to call us to discuss. For example, you might say, “Can you issue higher-leverage products?” or “Can you lower the price slightly?” We welcome all feedback. Even if you think there are no available warrants for a particular stock but are interested in related derivatives, you can call 39886909 to let us know. However, there are two prerequisites for issuing warrants and bull/bear certificates: First, the stock must be approved by the Hong Kong Stock Exchange for issuance. Second, the stock must have sufficient liquidity; if major shareholders hold too much stock, it affects our hedging ability and thus issuance decisions. Nevertheless, I welcome calls—I’ll listen to your suggestions and try to reflect them to my team to see if we can meet your expectations.

Simon: So, investors, if you have any questions about warrant products, please feel free to call BOC International's hotline at 39886909 and speak with Niki and her team to learn more about different product information.

Simon: Let me mention another sector.On the homepage of BOC International’s website today, there's a prominent headline about Alibaba (09988). Its stock price continued to rise today. I want to ask Niki about how investors in the warrant market are viewing Alibaba recently?

Niki from BOC International: Alibaba is one of the most outstanding leading tech stocks. At the beginning of this year, its stock price was around 140 HKD, and now it has risen to 172-173 HKD, hovering near 173 HKD, looking for opportunities to break through further. Fundamentally, Alibaba looks positive for several reasons. First, there’s talk about the potential spin-off of its semiconductor business—similar to how Baidu plans to spin off Kunlun Cloud—which has drawn significant market attention. Such spin-offs are generally positive because they enable valuations to better reflect market assessments, potentially boosting the company's overall value. Second, regarding Ele.me’s previous price war incident, Chinese regulators have been closely monitoring and advising platforms not to focus solely on price competition but instead improve service and quality. Therefore, the price war phase likely ended, and related short-term losses shouldn't impact the company anymore. Third, Alibaba is advancing its AI business, integrating AI technologies into platforms like Fliggy and AutoNavi, giving confidence in future growth driven by AI.

Investors continue to show interest in Alibaba-related investment tools. For call warrants, you can refer to code 22984. $BIALIBA@EC2604D.C (22984.HK)$ The strike price is 207.19 HKD, expiring around mid-April this year, with leverage of about 8 times. For put warrants, refer to code 21943. $BIALIBA@EP2606B.P (21943.HK)$ , with a strike price of 144.09 yuan, expiring in mid-June this year, offering leverage of approximately 5x.

Simon:The market is quite heated today, with many sectors and individual stocks showing good performance. The BOC International website features various themes. Niki will give everyone a quick overview. Besides the previously mentioned 2899, 1347, and 9988, what are some recent market highlights that can be shared?

Niki, Director at BOC International: Actually, there are many hot topics in the market recently. Most sectors have rebounded and risen following the broader market and index trends, though some have lagged behind. For instance, Xiaomi (01810), Meituan (03690), and automotive stocks like BYD (01211) saw about a 4% rebound today.

1. Previously analyzed precious metals, such as gold-related stocks like Luoyang Molybdenum (3993) $CMOC (03993.HK)$, which are still worth keeping an eye on;

2. Additionally, AI concept stocks and technology enterprise sectors;

3. Even recently, trading activity in Hong Kong stocks and A-shares has been relatively active, benefiting companies like HKEX (00388) $HKEX (00388.HK)$, as trading volumes have significantly increased. Moreover, with several large IPOs being listed in Hong Kong, HKEX’s revenue is expected to increase, so it remains a favorable outlook.

4. A-shares have reached a multi-year high, so domestic insurance stocks heavily weighted in A-shares, such as China Life (2628) $CHINA LIFE (02628.HK)$, have shown very strong performance recently.

5. There are also domestic demand stocks, Pop Mart (09992). $POP MART (09992.HK)$It seems to show a trend of bottoming out and rebounding; the recently launched Molly phone case IP product has received good market feedback, and there are other new products being rolled out.

6. Today, bank stocks in mainland China also saw a significant rise.

Overall, there is more positive news in the market, and I believe this upward trend could continue until before the Lunar New Year. I hope everyone’s investments go smoothly and that you make good profits. If you’re trading options like CBBCs or warrants, you can refer to BOC International’s offerings.

Simon: Everyone can pay more attention to the BOC International website; the homepage headlines are updated daily. If you have any questions about product information, feel free to call the BOC International hotline at 39886909 and talk to Niki and her team. Time’s almost up for today, thank you, Niki, for your sharing. I hope next week we can bring more diverse investment insights to everyone. Thank you, Niki.

BOC International Director Niki: Thank you, Simon. I'm very happy to chat with you. Every time we talk, the market shows new directions. I hope that while the market is so hot right now, from both the investors’ and issuers’ perspectives, we can discuss and share valuable information to help everyone start off strong in this year’s investment market.

Simon: Absolutely, thanks to your kind words. I hope all investors make good profits. Thank you, Niki, goodbye.

This article does not constitute any investment advice.

This article is for reference only and does not constitute any investment advice. The market data, opinions, and analysis contained herein may change at any time without prior notice. We shall not be liable for any loss or damage arising from reliance on the information in this article. Technical analysis merely indicates whether certain technical conditions are met; a comprehensive evaluation of asset performance should incorporate additional data. Trading decisions should not be based solely on the content of this article. Please note that past performance is not indicative of future results.

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