[ET Net News Agency, 31 October 2025] Uncertainty over a US rate cut in December,
coupled with mixed results from major tech companies, weighed on US equities Thursday,
with Chinese ADRs also declining overnight. The Hang Seng Index opened slightly lower and
then lost further ground throughout the morning. Mainland China A-shares fell for a second
day, with the Shanghai Composite slipping further after breaching the 4,000-point mark
yesterday, dragging the HSI lower. By midday, the HSI stood at 26,050, down 232 points or
0.9%, with main board turnover close to HKD 142.3 billion. The Hang Seng China Enterprises
Index was at 9,237, down 109 points or 1.2%. The Hang Seng Tech Index was at 5,936, down
115 points or 1.9%.

"Nip Chun Pong: HSI expected to trade between 25,800 and 26,500 in the short term"

Hong Kong stocks remained weak, extending losses from yesterday's afternoon session into
this morning. Nip Chun Pong, the Chief Strategist at Blackwell Global Securities, told ET
Net News Agency that the content of the recent Xi-Trump talks was in line with market
expectations, prompting investors to lock in gains, which weighed on the HSI. He noted
that since 20 October, the HSI has seen a series of bearish candlesticks on the chart,
indicating that any slight uptick is quickly met with selling pressure, capping the
index's performance. Given that the HSI has already rallied around 30% in the first nine
months of the year, many investors, including some institutions, are reluctant to take
further risks in the fourth quarter, dampening sentiment for the rest of the year.
Nip expects the HSI to fluctuate between 25,800 and 26,500 in the near term, with
attention focused on heavyweight tech earnings and whether the Fourth Plenum will prompt
new domestic stimulus policies in Q4.

"BYD earnings unlikely to recover until Q1 next year"

BYD (01211) reported Q3 net profit of RMB 7.82 billion, down 32.6%, with EPS at RMB
0.85. Excluding non-recurring items, net profit fell 36.7% to RMB 6.89 billion, while
revenue dropped 3% to RMB 195 billion, both earnings and revenue missing market
expectations.
Nip attributed BYD's profit decline to involution in the Mainland China NEV sector, as
well as timing issues with its overseas expansion. He noted that such competitive
pressures are unlikely to ease in the short term, and that most automakers are looking
abroad for growth. However, since April, rising China-US tensions have introduced
uncertainty for overseas factory approvals, while high costs for overseas plants are
putting pressure on margins, particularly for BYD, which is actively building plants
abroad. Furthermore, it takes time for new plants to move from construction to production.
For these reasons, Nip expects BYD's earnings may only start to recover in Q1 next year.
While BYD's results remain under pressure, up-and-coming EV makers such as Leapmotor
(09863) are breaking delivery records, raising concerns about BYD's domestic market share.
Nip pointed out that BYD's large base makes it harder to sustain growth, while new
entrants are indeed eroding its market share. He added that signs of overcapacity are
emerging in BYD's Mainland China operations, which was particularly evident during the
Golden Week holiday. The company has launched frequent promotional campaigns, with some
entry-level NEVs priced below RMB 100,000. While BYD is working to reduce inventory, new
models from rivals are hitting the market, making older stock less attractive. Nip expects
BYD's market share to slip slightly over the next one to two quarters.
BYD's share price fell over 6% in early trade to an eight-month low, before narrowing
losses and reclaiming the HKD 100 level. Nip said the stock only becomes attractive if it
retreats to HKD 90-92, but any rebound is likely to be limited, with a target of HKD 115
for this quarter.