Chip stocks surged to support the market; after a lower open, the Hang Seng Index reversed to gain 62 points. Auto stocks were sold off. Investors looking to hedge against market uncertainty with high-yield products may consider the monthly dividend-paying CSOP FTSE China A50 Covered Call ETF.

US-Iran negotiations have reached a deadlock as Iran's Revolutionary Guard forcefully intervened, sidelining moderates and demanding that the US fully lift sanctions before agreeing to compromise. Tehran has even activated its air defense system in preparation for conflict. Meanwhile, Trump announced a complete blockade of the Strait of Hormuz and ordered forces to fire on Iranian mine-laying vessels. The ceasefire agreement is on the verge of collapse. Overnight, the three major US stock indices fell, Hong Kong stocks opened 181 points lower, testing a low of 275 points to reach 25,639. However, market focus quickly shifted to the semiconductor sector before noon. DeepSeek released a V4 preview version, reportedly deeply compatible with domestic chips, while Taiwan Semiconductor surged 5% in the Taiwan market, and demand for Intel AI server chips skyrocketed. Local chip stocks surged in the afternoon, driving the broader market to reverse course and rise, rebounding to as high as 26,004 points, briefly reclaiming the 26,000 level, and finally closing at 25,978 points, up 62 points or 0.24%, with turnover at HKD 236.7 billion. The Hang Seng Tech Index closed at 4,902 points, up 36 points or 0.75%. The Hang Seng China Enterprises Index closed at 8,775 points, up 42 points or 0.49%. Among blue chips, 46 rose, 43 fell, and one remained unchanged. Southbound capital net inflow was RMB 3.4 billion.

Chip stocks soared today, becoming the biggest contributors to reversing the market trend. $HUA HONG SEMI (01347.HK)$ (1347.HK) surged by HKD 14.25 or 15.18%, closing at HKD 108.1; SMIC $SMIC (00981.HK)$ (0981.HK) rose by HKD 5.85 or 10.01%, closing at HKD 64.3, making it the best-performing blue-chip stock of the day. Tianshu Zhixin $ILUVATAR COREX (09903.HK)$ (9903) rose by 39.8 yuan or 9.54%, closing at 457 yuan; Nexchip (2676) rose by 12.8 yuan or 9%, closing at 155 yuan; ASMPT $ASMPT (00522.HK)$ (0522) rose by 10.7 yuan or 6.93%, closing at 165.2 yuan, hitting a record high; Biren Technology $BIREN TECH (06082.HK)$ (6082) rose by 1.8 yuan or 4.05%, closing at 46.3 yuan; Newly listed Changguang Cenchip $GPIXEL (03277.HK)$ (3277) rose by 3.95 yuan or 4.89%, closing at 84.7 yuan; Server manufacturer Lenovo Group $LENOVO GROUP (00992.HK)$ (0992) rose by 0.36 yuan or 3.09%, closing at 12 yuan; Kingboard Group $KINGBOARD HLDG (00148.HK)$ (0148) rose by 1.84 yuan or 4.06%, closing at 47.22 yuan, hitting a record high.

AI large model stocks were hit, as the White House Office of Science and Technology issued a memorandum stating that foreign entities, primarily from China, are massively using distillation techniques to extract capabilities from US AI models. Chinese-funded AI concept stocks plummeted. Zhipu $KNOWLEDGE ATLAS (02513.HK)$ fell by 93 yuan or 9.05%, closing at 935 yuan; MINIMAX $MINIMAX-W (00100.HK)$ fell by 81 yuan or 9.44%, closing at 777.5 yuan; XunCe $XUNCE (03317.HK)$ plummeted by 54.6 yuan or 15.98%, closing at 287 yuan. Tencent $TENCENT (00700.HK)$ Released and open-sourced the preview version of HunYuan Hy3; stock price fell by 1.8 yuan or 0.36%, closing at 493.4 yuan; Xiaomi $XIAOMI-W (01810.HK)$ Released and open-sourced the MiMo-V2.5 series large model, closing slightly higher by 0.02 yuan or 0.06%, at 31.2 yuan.

Other tech stocks performed individually; Alibaba $BABA-W (09988.HK)$ (9988) rose by 1.4 yuan or 1.07%, closing at 131.8 yuan; Baidu $BIDU-SW (09888.HK)$ (9888) rose by 0.9 yuan or 0.75%, closing at 121.4 yuan; Meituan $MEITUAN-W (03690.HK)$ (3690) fell by 0.65 yuan or 0.78%, closing at 82.45 yuan; Kuaishou $KUAISHOU-W (01024.HK)$ (1024) fell by 0.44 yuan or 1%, closing at 43.7 yuan; Bilibili $BILIBILI-W (09626.HK)$ (9626) fell by 3.2 yuan or 1.8%, closing at 174.4 yuan; Kingsoft Cloud $KINGSOFT CLOUD (03896.HK)$ (3896) fell by 0.41 yuan or 4.56%, closing at 8.59 yuan; Kingsoft Software (3888), under which Kingsoft Office's Q1 net profit surged 4.45 times but its share price fell by 0.12 or 0.5%, closing at 24.16 yuan; Ping An Good Doctor $PA GOODDOCTOR (01833.HK)$ (1833) Q1 net profit increased 1.38 times to 79.114 million yuan, with the stock price opening 1.7% higher but reversing to close 3.9% lower at 11.29 yuan.

Auto stocks were hit by dual negative factors as mainland banks tightened restrictions on low-interest auto loans, and the opening of the Beijing Auto Show failed to lift sentiment. The sector weakened across the board. Li Auto $LI AUTO-W (02015.HK)$ (2015) fell 3.25 yuan or 4.44%, closing at 69.9 yuan, making it the worst-performing blue-chip stock of the day; Leapmotor $LEAPMOTOR (09863.HK)$ (9863) dropped 1.94 yuan or 4.02%, closing at 46.32 yuan; Nio $NIO-SW (09866.HK)$ (9866) declined 1.72 yuan or 3.38%, closing at 49.18 yuan; Geely Auto $GEELY AUTO (00175.HK)$ (0175) fell 0.64 yuan or 2.71%, closing at 23.02 yuan; BYD $BYD COMPANY (01211.HK)$ (1211) dropped 2.3 yuan or 2.22%, closing at 101.2 yuan; GAC Group $GAC GROUP (02238.HK)$ fell 0.05 yuan or 1.61%, closing at 3.05 yuan; however, XPeng Motors $XPENG-W (09868.HK)$ rose against the trend by 2.1 yuan or 3.38%, closing at 64.2 yuan, driven by expectations that its flying car and humanoid robot would enter mass production this year.

Lithium mining stocks were affected by Australian mining company IGO significantly lowering production forecasts for Greenbushes, the world’s largest hard rock lithium mine, which expanded expectations of a supply gap. Ganfeng Lithium $GANFENGLITHIUM (01772.HK)$ (1772) surged 6.9 yuan or 9.18%, closing at 82.05 yuan; Tianqi Lithium $TIANQI LITHIUM (09696.HK)$ (9696) rose by 3.45 yuan or 6.05%, closing at 60.45 yuan; Chalco $CHALCO (02600.HK)$ (2600) reported a 56% year-on-year increase in net profit for the first quarter to 5.527 billion RMB, with its share price rising by 0.43 yuan or 3.72%, closing at 11.99 yuan; China Hongqiao $CHINAHONGQIAO (01378.HK)$ (1378) increased by 0.96 yuan or 2.71%, closing at 36.4 yuan; In other individual stocks, PetroChina $PETROCHINA (00857.HK)$ (0857) rose by 0.23 yuan or 2.07%, closing at 11.33 yuan, hitting a new all-time high; Xinyi Glass $XINYI GLASS (00868.HK)$ (0868) climbed by 0.41 yuan or 4.26%, closing at 10.03 yuan; Innovent Bio $INNOVENT BIO (01801.HK)$ (1801) gained 2.8 yuan or 3.37%, closing at 85.8 yuan.

The ongoing tensions in the Middle East and continued market volatility may lead some investors to seek high-yield products to hedge against market uncertainty while maintaining exposure to core assets in Hong Kong stocks. The CSOP FTSE China A50 Covered Call Active ETF $CSOP HSCEI Covered Call Active ETF (02802.HK)$ (2802) employs a covered call strategy, primarily holding constituent stocks of the Hang Seng China Enterprises Index, including Tencent $TENCENT (00700.HK)$ (0700), China Construction Bank $CCB (00939.HK)$ (0939), and Alibaba $BABA-W (09988.HK)$ (9988), ICBC $ICBC (01398.HK)$ (1398), and Xiaomi $XIAOMI-W (01810.HK)$ (1810) among other key Chinese enterprises, while actively selling covered call options on the Hang Seng China Enterprises Index, using option premiums as an additional income source. Compared to merely holding stocks, the premium income from selling call options can provide some hedging during market downturns, helping investors reduce losses and volatility. This ETF aims for an annualized dividend yield of approximately 21%, employing a monthly dividend mechanism. Its latest ex-dividend date was April 30, with the most recent close at 8.215 yuan, up by 0.061%. The fund's net asset value is approximately 6.578 billion HKD. Investors should note that the covered call strategy has limited upside potential in bull markets. Dividends are not guaranteed and have recently been paid mostly from capital, which could gradually decrease the net asset value, eroding principal. This product is more suitable for income-focused investors seeking stable high-yield cash flow and willing to trade some upside potential for income.

@孫子的末代傳人 @中戶變大戶小牛變大牛 @股海GSO

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