December 2nd [BOC Guest] Hang Seng Index, Xiaomi, Pop Mart, Zijin Mining, Galaxy Entertainment

Simon: Niki, hello. Today we are back to discuss stocks and the index situation. Let’s first take a look at the Hang Seng Index. As you can see, frankly speaking, the Hang Seng Index has been hovering around the 26,000-point level recently, moving up and down with some fluctuations every day. However, overall, it seems to be staying near this point.Actually, I would like to ask, given the current market conditions, what should investors in derivatives such as warrants or bull/bear certificates pay attention to when facing this kind of narrow-range fluctuation?

BOC International Director Niki: Simon, your question is very timely and appropriate because of the current market conditions. This morning, the Hang Seng Index opened more than 200 points higher, but by the afternoon, it had erased those gains. Therefore, we can see that there is volatility in the market, but it remains stuck around the 26,000-point level—there is fluctuation, but no significant upward movement. If you look at the Hang Seng Index chart, you will notice that over the past week, it has been hovering around this range, with the overall market’s high-low range being only about 300 points. Additionally, trading volume has been relatively subdued compared to previous months, averaging close to 200 billion yuan. Hence, your question is indeed pertinent: if the market enters a narrow-range consolidation phase, how might this affect the implied volatility of warrants, and what should investors be mindful of? There are indeed considerations to keep in mind. Recently, some investors have contacted me asking why their warrants don’t seem to move in tandem with the underlying stocks. For example, they note that the underlying stock may appear to fluctuate within a narrow range since the broader market is also confined to such movements, with many individual stocks similarly exhibiting limited ups and downs. Consequently, they observe that while the underlying stock might rise by 0.5%, the warrant could instead drop by 1% or 2%.

The situation is as follows: when the market feels sluggish, with low volatility and reduced trading volumes, short-term warrants—especially deep out-of-the-money ones—are particularly vulnerable to declines in implied volatility. During this period, towards the end of last month, the U.S. Thanksgiving holiday season began to weigh on market activity, and now that we are entering December, with Christmas holidays approaching, investors need to be reminded to exercise caution when selecting products during these holiday periods. Specifically, for products like warrants that are highly sensitive to drops in implied volatility, it is advisable not to choose overly short-dated maturities. Instead, consider terms expiring around February or March of next year, avoiding December or early January maturities, as short-dated, out-of-the-money warrants are more significantly affected when implied volatility declines. By comparison, products with maturities of three months or longer carry relatively lower risk than shorter-term options; hence, investors should be aware of the associated risks. On the other hand, bull and bear certificates do not carry the risk of implied volatility, so many investors who perceive broad market fluctuations as significant but are uncertain about which individual stocks or sectors to invest in may opt for Hang Seng Index-related bull and bear certificates to amplify the limited fluctuations in the broader market and thus generate investment returns.

Simon: Therefore, under the current circumstances, investors really need to pay closer attention when selecting products. In fact, investors can refer to BOC International’s website (www.bocifp.com), where in the warrant search section, they can conveniently use filters to select different maturity ranges—such as 2 to 4 months, 4 to 6 months—and quickly identify available products based on varying maturity periods.

BOC International Director Niki: If anyone has questions, you can also call our warrant hotline at 39886909 during trading hours for consultation.

Simon: Let me add one more point. From a technical perspective, the current market remains in a “neutral” state without a clear directional bias. Therefore, when investors consider purchasing products, as Niki just mentioned, they must exercise caution when selecting contract terms.

Next, let's discuss individual stocks. The first stock I would like to explore with Niki today is 1810 Xiaomi. Xiaomi's share price previously fell to around 36.6 yuan but has now rebounded to approximately 40 yuan, with the past few days showing a narrow-range consolidation pattern. I would like to ask about the situation in the warrant market—how are capital flows and investor sentiment shaping up?

Niki, Director of BOC International: Regarding Xiaomi, Lei Jun, the company’s founder, has recently purchased company shares worth 100 million yuan in cash. This clearly indicates his confidence in the company’s future prospects, casting a vote of confidence with real money. The share price has responded positively, rebounding from the previous low of 36.6 yuan to above 40 yuan. However, the stock has recently been consolidating around the 40-yuan level. Investors have taken advantage of this opportunity to follow the management’s lead in purchasing at lower levels, viewing the 40-yuan mark as a potential bottom, with the likelihood of the previous low of 36.6 yuan reappearing being slim. As a result, capital inflows continue to favor bullish positions on Xiaomi. Additionally, there was positive news about Xiaomi Auto today, as cumulative deliveries have exceeded 500,000 units, surpassing the annual target of 350,000 units set at the beginning of the year. These figures are highly encouraging, and there is growing sentiment that Xiaomi Auto will continue to gain strong market support and bring further benefits to the company. Hence, we see continued inflows into bullish positions on Xiaomi today. Investors may refer to Xiaomi-related products, such as the call warrants with code 15276. $BIXIAMI@EC2604D.C (15276.HK)$ This particular call warrant has a strike price of 57.8 yuan and expires at the end of April next year, offering leverage of approximately 7 times. For put warrants, investors can refer to code 22168. $BIXIAMI@EP2606C.P (22168.HK)$ This put warrant has a strike price of 32.18 yuan, expiring at the end of June next year, with leverage of about 5 times. As I mentioned earlier, the product terms displayed on our homepage typically have maturities exceeding three months, making them suitable for consideration during holiday periods for strategic planning.

Simon: In addition to the featured stocks and well-suited product terms displayed on the BOC International homepage, investors can also use the search engine to find more products with different strike prices and expiration dates. For instance, taking Xiaomi (1810) as an example, there are currently 31 call warrants available for selection. From a technical analysis perspective, Xiaomi remains slightly favored for "buy" signals, which slightly outnumber "sell" signals. This information can provide some reference for technical analysis.

Next, let us discuss another stock, 9992 Pop Mart. Pop Mart's share price had previously fallen to around 192 yuan but has since rebounded significantly, with the current trading range between approximately 216 and 218 yuan. I would like to ask whether investors continue to maintain a bullish outlook on 9992 at this stage.

Niki, Director of BOC International: The previous low of around 192 yuan for Pop Mart indeed represents a recent bottom. Market-wise, Pop Mart also made it to the list in the Thanksgiving sales data, so investor confidence has somewhat recovered. Despite earlier negative news, such as pressure on second-hand speculative prices, the Thanksgiving data this time has made everyone relatively more optimistic and positive, causing the stock price to rebound significantly above 200 yuan. During this period, some official mainland news also mentioned that they would continue to encourage products related to this IP trend, hoping to boost consumption by stimulating domestic demand. Therefore, when Pop Mart's stock price slightly pulled back, investor confidence increased again, and capital flowed into its long position. Investors can prepare for two scenarios: if the stock rebounds significantly from the low, and continues to rise afterwards, they can consider reversing their positions; if the stock price pulls back, it can still be viewed positively because its volatility is sufficient. For Pop Mart's call warrants, reference can be made to 22285. $BIPOMRT@EC2604B.C (22285.HK)$ , with an exercise price of 260.12 yuan, expiring mid-April next year, leverage is approximately 5 times; for put warrants, attention can be paid to 20663. $BIPOMRT@EP2602B.P (20663.HK)$ , with an exercise price of 199.9 yuan, expiring mid-February next year, leverage is approximately 5 times. This pair of products can be referenced by investors.

Simon: As Niki just reminded, when choosing call or put warrants, investors should pay attention to the expiration date. Even if investors have a clear direction themselves, if short-term market volatility may be limited or trends are unclear, and if planning to hold the product long-term, one must be mindful of time value decay. Therefore, choosing a slightly longer-term product would be more appropriate.

Next, let’s look at another stock, Zijin Mining (2899). Let’s switch sectors and talk about Zijin Mining, which has rebounded quite a bit recently and looks very promising. I’d like to ask Niki, has investor confidence in Zijin Mining strengthened recently?

Niki, Director of BOC International: This can be reflected in the stock price. This round, especially with the recovery of international gold prices to recent highs, which had previously fallen near 4,000 USD per ounce but has now rebounded to around 4,200 USD. This is because the market has noticed that the Federal Reserve might take rate-cutting measures in December, which will further weaken the US dollar. Therefore, commodity prices denominated in US dollars have risen significantly during this period. Last weekend, gold prices rose by 2%, so on Monday, commodity-related and gold-related stocks performed very strongly, with Zijin Mining (2899) being one of them. Some may ask, does BOC International offer products related to Zijin Mining? In fact, our product range is quite comprehensive. We currently have tools for nearly 100 stocks, and in 2026, we plan to issue even more products across different industry sectors, ensuring that regardless of market conditions, investors can always find suitable options within BOC International’s offerings.

The warrants for Zijin Mining can refer to 21590. $BIZIJIN@EC2604B.C (21590.HK)$ The exercise price is 48.6 yuan, with expiry in mid-April next year and a leverage of approximately 7 times. In addition to Zijin Mining (2899), we also offer related products such as Shandong Gold (2840) and Jiangxi Copper. Everyone is welcome to visit our website (/www.bocifp.com) to check the relevant product codes and terms.

Simon: Everyone can also frequently visit the BOC International website to view the latest product information and data. If you have any questions, you can call Niki’s team during trading hours, and they will be happy to provide more detailed answers during the trading session.

Before today’s session ends, let’s talk about Galaxy Entertainment (27). The stock price of Galaxy Entertainment has rebounded recently, currently hovering around 40 yuan. I would like to ask if this stock still sees substantial fund inflows and whether many investors remain optimistic about it?

Niki, Director of BOC International: The rise in Galaxy Entertainment over the past two days is mainly due to the market seeing Macau's total gaming revenue data for November, which reached 21.1 billion yuan, surpassing earlier market expectations. Investors recognize that November is not typically a peak holiday season — October had Golden Week, while December may benefit from year-end holidays, Lunar New Year, or Christmas. Given the strong performance in November, there are high expectations for consumer activity in December and January next year. Overall, the Macau sector may receive a boost from stimulated domestic demand, and tourist destination preferences may shift, with more people potentially choosing Macau. As such, related stocks have received some support and momentum. Investors may wish to keep an eye on Macau’s gaming sector. For Galaxy Entertainment (27), the warrants can refer to 21991. $BI-GEG @EC2604A.C (21991.HK)$ The exercise price is 50.05 yuan, with expiry in mid-April next year and a leverage of approximately 8 times. For put warrants, refer to 22044. $BI-GEG @EP2605A.P (22044.HK)$ The exercise price is 28.98 yuan, with expiry in mid-May next year and a leverage of approximately 7 times.

Simon: As you can see, taking Galaxy Entertainment (27) as an example, BOC International offers both put warrants and call warrants. Regardless of whether investors are optimistic about an upward or downward trend, there are corresponding options available for your reference. From the summary of technical signals, there are slightly more short-term 'sell' signals, which is data from a technical analysis perspective for your reference. That’s all for today's discussion. Thank you very much to Niki for her time and for sharing extensive information on individual stocks and indices. We hope to have the opportunity to invite Niki again to provide us with updates on the latest market conditions.

Niki, Director at BOC International: Sure, thank you, Simon. It was a pleasure chatting with you. Next time, I will share more information about the warrant, bull, and bear markets.

Simon: I’m also glad to see you every week. Let’s talk again next week. 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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