[ET Net News Agency, 18 June 2025] The Lujiazui Forum delivered less financial stimulus
than expected, while the shadow of Middle East conflict lingers. Ahead of the US Federal
Reserve's interest rate decision, Hong Kong stocks fell, with the HSI closing at 23,698 at
midday, down 281 points or 1.2%, breaching the 20-day moving average (around 23,716). Main
board turnover exceeded HKD 103.9 billion, and southbound capital inflows were also
cautious, with only HKD 230 million net inflow so far. The Hang Seng China Enterprises
Index was at 8,592, down 102 points or 1.2%. The Hang Seng Tech Index was at 5,208, down
83 points or 1.6%.

"Nip Chun Pong: HSI rallies see weak turnover, market awaits NDRC policy at end-June"

Israel has stepped up attacks on Iran, making hopes for peace talks increasingly remote.
The HSI opened more than 100 points lower and losses widened, breaking below the 20-day
moving average (around 23,717) during the session. Nip Chun Pong, the Chief Strategist at
Blackwell Global Securities, told ET Net News Agency that the HSI's weakness is not
without reason, as recent rebounds have not been matched by strong turnover. Looking at
six trading days in March, when the HSI was above 24,000, turnover generally held around
HKD 300 billion. Recently, even when the HSI has been at the 24,000 level, turnover has
fallen far short of HKD 300 billion. There is also a trend of higher turnover on down days
and lower turnover on up days. For example, last Friday (13 Jun) the HSI fell 142 points
on turnover of HKD 290 billion, whereas Monday's 168-point rebound saw turnover of less
than HKD 230 billion.
Nip noted that while the Federal Reserve's rate decision is imminent, the market
generally expects no change in interest rates for now. Meanwhile, despite the start of the
Lujiazui Forum today, the policies announced are not expected to have much impact on the
market. Instead, market participants are more focused on the NDRC's expected employment
and economic stimulus measures, originally slated for June but now likely to be announced
at the end of the month. With considerable external uncertainty, some investors are
inevitably taking profits and leaving the market. He expects the HSI to trade in a narrow
range in the near term. Even if the 20-day moving average holds today, it is not
particularly meaningful, and he sees support for the HSI at 23,500.

"Haitian: Mainland China's leading condiments producer, oversubscription not surprising"

Haitian Flav (03288), Mainland China's leading condiments company, closed its share
offering on Monday (16 Jun), setting its H-share issue price at HKD 36.3, the top end of
the range. Reports suggest more than 390,000 people subscribed for the public offer, with
oversubscription of more than 930 times, outperforming both CATL (03750) and Hengrui
Pharma (01276). The stock will debut tomorrow (19 Jun). Nip Chun Pong noted that the
strong demand for Haitian's IPO is not surprising given its impressive results, with last
year's revenue and net profit both growing by about 10%, and net profit reaching RMB 6.3
billion. Its market share is far ahead of second place. With H shares trading at about a
20% discount to A shares, he expects the stock could reach HKD 39-40 after listing.
However, he believes any catch-up to the A share price (around RMB 40.5) will require a
positive market environment, such as the HSI rising to the 24,200 level.

"Fierce competition means Caocao Inc faces challenges in gaining market share"

Caocao Inc (02643), a Mainland China ride-hailing platform incubated by Geely Group,
opened its IPO yesterday (17 Jun) and will close on 20 Jun. Caocao plans to issue 44.179
million shares, with 10% for public offer in Hong Kong, at HKD 41.94 per share, raising
HKD 1.85 billion. Each board lot is 100 shares, with a minimum investment of HKD 4,236.3.
On the first day, margin subscriptions totalled HKD 160 million, or 86% of the public
offer size. Nip Chun Pong was not surprised by the lacklustre margin subscriptions, as
Caocao's brand recognition in Mainland China lags behind Didi, and it remains loss-making
(with a RMB 1.25 billion loss last year), making it less attractive to investors. The
ride-hailing sector has a low entry threshold and intense competition, making further
gains in market share difficult. With several IPOs in the market recently, competition for
funds is fierce. He expects limited upside for the stock after listing, with trading to
begin on 25 Jun.

"Gold price yet to peak, positive for Zhou Liu Fu"

Mainland China jewellery retailer Zhou Liu Fu (06168) opened its IPO today (18 Jun) and
closes on 23 Jun. The company plans to issue 46.808 million H shares, 10% in Hong Kong, at
HKD 24 per share, raising HKD 1.12 billion. Each board lot is 100 shares, with a minimum
investment of HKD 2,424.2. It is expected to list on 26 Jun, with CICC and CSC
International as joint sponsors.
Nip Chun Pong said that although Zhou Liu Fu is somewhat controversial in the market,
its recent results show steady growth in both revenue and net profit. Last year, revenue
reached RMB 5.72 billion, up 11% year-on-year, and net profit was RMB 710 million, up over
7%. Although self-operated store revenue is low, just RMB 460 million last year, or less
than 10% of total revenue, it continued growth in results should still support its share
price. Recently, other gold jewellery stocks such as Chow Tai Fook (01929) have also
performed well, providing a tailwind. Most importantly, the market expects gold prices
have not yet peaked, which supports Zhou Liu Fu. As such, Nip remains optimistic about the
IPO and post-listing share price performance.