HK Stock Market Recap | HK Stocks Adjust as Optical Module Leader Surges 34%, Southbound Capital Buys HKD 17 Billion!

Following a significant surge yesterday (April 16), the Hong Kong stock market experienced a minor pullback today.

At the close of trading, the Hang Seng Index stood at 26,160.33 points, down 233.93 points or 0.89%.

The Hang Seng Tech Index closed at 5,042.68 points, down 49.40 points or 0.97%.

In terms of market highlights, Cambridge Technology (HK06166), the leader in optical modules, surged 34.87%, reaching a new high since its Hong Kong listing in October last year.

A Galaxy Securities research report suggests that AI-driven optical module iterations are accelerating, and the growing demand for AI computing power is also driving rapid iteration, upgrades, and commercial scaling of optical modules. The increasing demand for AI computing power is pushing data centers to expand capacity, with larger AI clusters requiring more optical modules per GPU. Huatai Securities believes that as CPO technology accelerates from R&D to commercialization, upstream core component segments will be the first to see incremental opportunities. It is recommended to focus on upstream leaders.

Newly listed stocks performed strongly today, with ClusterCore Technologies (HK00068), one of the 'Hangzhou Six Dragons,' surging 144%.

During the public offering phase, ClusterCore Technologies received 1,590.56 times subscription, with the final number of shares offered to the public amounting to 16.062 million shares, accounting for approximately 10% of the total offering. A total of about 240,700 valid applications were received, and the percentage allocation of shares for one-lot subscribers was approximately 3% of the total shares applied for.

Changguang Chenxin (HK03277) soared 75.53%.

During the public offering phase, Changguang Chenxin received 1,138.21 times subscription, with the final number of shares offered to the public amounting to 6.5295 million shares, accounting for approximately 10% of the total offering. A total of about 266,500 valid applications were received, and the percentage allocation of shares for one-lot subscribers was approximately 1% of the total shares applied for.

Elsewhere, tech stocks generally fell with more declines than gains. Meituan, Bilibili, and NetEase dropped over 2%, while Lenovo rose over 1%. Gold stocks led the declines, with Lingbao Gold falling over 4%. Insurance stocks broadly declined, with AIA dropping over 3%.

In terms of capital, southbound capital saw a surge in net purchases today. By the close of trading, southbound capital had net purchased more than 17 billion Hong Kong dollars worth of Hong Kong stocks.

Outlook for the Future:

Everbright Securities' research report stated that the Hong Kong stock market will be driven by three factors in 2026: valuation recovery, profit growth, and the return of key investment themes. The technology sector, as a field that gathers core new economy assets of China, is expected to become the strongest theme driving market rebound.

CITIC Securities predicts that Hong Kong stocks will experience a valuation expansion phase in April to May. Recommended areas of focus include: internet and semiconductor sectors within the technology segment where earnings expectations have been fully adjusted; pharmaceuticals with overall high earnings growth and continued overseas business development; consumer sectors with bottomed-out fundamental expectations, low valuations, and high dividend yields; and the aviation sector benefiting from falling oil prices and the appreciation of the renminbi.

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