[ET Net News Agency, 06 June 2025] Overnight, all three major US indices fell. Although
US President Trump and President Xi Jinping had a successful phone call, the optimistic
sentiment in the Hong Kong market had already been reflected, limiting the call's positive
impact on Hong Kong stocks. The Hang Seng Index opened slightly weaker this morning, with
a midday range of less than 200 points. The Hang Seng Index reported 23,857, down 49
points or 0.2%, with a turnover of nearly HKD 102.1 billion. The Hang Seng China
Enterprises Index stood at 8,652, down 32 points or 0.4%. The Hang Seng Tech Index
reported 5,288, down 31 points or 0.6%.

"Jaseper Tsang: HSI needs China-US negotiation progress or economic data to stabilise at
24,000"

This was the first direct dialogue between the US and Chinese leaders since Trump began
his second term, and the atmosphere was positive, with mutual invitations to visit. Trump
stated that positive results were achieved on trade issues; however, the performance of
Hong Kong stocks today was relatively quiet. Jaseper Tsang, the investment director of
Rafter Capital, told ET Net News Agency that this China-US call was already expected in
the market and lacked substantial outcomes. While it mentioned the US's concerns regarding
rare earth exports, there was no substantial news on tariffs and trade friction, making it
difficult to support the HSI in breaking 24,000. He added that, nonetheless, it eased
market concerns about deteriorating China-US relations.
Tsang pointed out that we are currently in a policy vacuum with a low probability of
significant policy announcements, so investors should focus on stock selection rather than
the overall market. He expects the HSI to fluctuate between the 10-day moving average
(around 23,500 points) and 24,200 points. He believes that for the HSI to stabilise above
24,000, there needs to be further substantial progress in China-US trade negotiations or
strong economic data from China in key areas.

"Kuaishou shows strong monetisation ability, targeting HKD 70 for the year"

Kuaishou (01024) led the blue-chip gainers in early trading. According to news,
Kuaishou's official website indicates that its large model "Kling AI" has surpassed an
annualised revenue run rate (ARR) of USD 100 million within 10 months of launch. Monthly
paid amounts for April and May have both exceeded RMB 100 million, with the global user
base for Kling AI surpassing 22 million.
Tsang stated that Kuaishou's strong monetisation and commercialisation capabilities in
AI stem from Kling AI closely aligning with its core short video business, leading to high
user loyalty and willingness to pay. He further noted that Kuaishou was one of the early
adopters of AI in the Hong Kong stock market. Current data shows impressive rapid progress
among both C-end and B-end users, and he believes AI will become its second growth engine.
Kuaishou's Q1 financial report indicated that "Kling AI" revenues exceeded company
expectations, with 70% of its revenue coming from paid users, showing high growth rates in
the number of paid users and average revenue per user (ARPU).
Tsang added that Kuaishou has another bright spot in its overseas and advertising
businesses. In Q1, overseas business grew rapidly, and this trend is expected to continue.
Regarding advertising, management forecasted a return to double-digit growth in the next
quarter. Tsang noted that Kuaishou's expected price-to-earnings ratio is around 12 times,
and as the overseas and advertising businesses develop, the market may further raise its
earnings expectations for the second half of the year, driving the stock price up. He
believes Kuaishou's target for the year is HKD 70 (based on a 15 times P/E ratio).
However, he warned that there is significant resistance around HKD 60 in the short term.