[ET Net News Agency, 28 February 2025] U.S. President Trump announced that, in addition
to the 10% tariff already imposed on Chinese goods at the beginning of February, an
additional 10% tariff will be applied to Chinese imports, effective from 4 March. The Hang
Seng Index reported 23,171 at half-day, down 546 points or 2.3%, with a turnover of nearly
HKD 191.7 billion. The Hang Seng China Enterprises Index stood at 8,520, down 214 points
or 2.5%. The Hang Seng Tech Index was at 5,658, down 222 points or 3.8%.

"Jaseper Tsang: The current upward trend may be coming to an end; short-term focus on the
ten-day moving average"

As external markets turned bearish, the Hang Seng Index opened over a hundred points
down today and fell further, dropping more than 500 points at one point, nearing the
ten-day moving average (around 23,167 points). Jaseper Tsang, the investment director of
Rafter Capital, told ET Net News Agency that compared to Trump's previous claims of
imposing a 60% tariff on China, the additional 10% tariff was already anticipated by the
market. The index's decline today was attributed to the market not expecting Trump to
impose tariffs so swiftly; the timing of the announcement and the tariff's implementation
were earlier than expected. Furthermore, investors are concerned that Trump might
introduce more sanctions against China. He further noted that the recent upward trend
driven by DeepSeek is likely to come to an end, especially if the policy announcements at
the Two Sessions do not meet market expectations, which could lead to further declines.
Currently, the strongest support for the Hang Seng Index remains at the ten-day moving
average, which is the bottom of the upward channel; if it breaks below this, the index
could drop to 22,000 points, aligning with the 0.382 Fibonacci retracement level of the
current rise.

"Xiaomi's stock has peaked; new car price cuts raise concerns over profit margins"

Xiaomi (01810) officially launched its Xiaomi SU7 Ultra car on the evening of the 27th,
with sales starting immediately on the Xiaomi Auto app. Reports indicated that within two
hours of launch, orders exceeded 10,000 units, achieving the annual sales target early.
However, after opening high, Xiaomi's stock fell. Jaseper Tsang pointed out that aside
from monitoring the sales of the SU7 Ultra, attention should also be given to its pricing,
which is set at RMB 529,900 - substantially lower by RMB 285,000 compared to last year's
pre-sale price of RMB 814,900. There are concerns that this price cut will intensify the
price war in the electric vehicle market, putting further downward pressure on the SU7
Ultra's price. Jaseper Tsang noted that the market initially expected the SU7 Ultra, as a
high-end model, to improve Xiaomi's profit margins and average selling prices, expanding
its product portfolio in the electric vehicle sector. However, the significant price drop
raises doubts about whether Xiaomi will rely on low margins and high sales volume for
growth, as well as the potential for profit margins to rise.
Jaseper Tsang also emphasised that the market is not worried about Xiaomi's sales volume
or the short-term turnaround of the automotive division into profitability through
economies of scale; rather, the concern lies with Xiaomi's profit margins and future
breakthroughs in smart driving.
Regarding Xiaomi's stock price, Jaseper Tsang believes that it has risen too much, with
a projected price-to-earnings ratio reaching sixty times, already reflecting many positive
expectations and an optimistic outlook. He suggests that Xiaomi's stock has peaked and
should be closely monitored around the ten-day moving average (approximately HKD 51). If
it falls below this level, it is highly likely to enter a correction phase. The key
factors for Xiaomi's stock price going forward will be the delivery volumes of its cars,
sales performance, and any new breakthroughs in intelligent driving.
Jaseper Tsang warned that while Xiaomi's net profit grew in the first three quarters of
last year, the growth rate is declining, leading investors to worry about whether profit
growth can match the current high valuation.