[ET Net News Agency, 12 September 2025] Hong Kong equities shook off their recent
weakness, with the Hang Seng Index opening sharply higher in line with Wall Street and
continuing to climb throughout the morning. Tech stocks provided solid support, pushing
the HSI to close the midday session at 26,484, up 398 points or 1.5%, with main board
turnover close to HKD 184.9 billion. The Hang Seng China Enterprises Index rose 148 points
or 1.6% to 9,408. The Hang Seng Tech Index gained 128 points or 2.2% to 6,016.

"Wan Kong Shing: HSI likely to consolidate around 26,000, but faces heavy pullback risk
after testing 27,000"

With rate cut expectations on the rise, market sentiment remains optimistic. The HSI
opened 453 points higher but pared some gains by midday. Wan Kong Shing, the Chief
Investment Officer of iFAST Global Markets, told ET Net News Agency that with a US rate
cut imminent, investor optimism is supporting the HSI, which is expected to consolidate
around the 26,000 level over the coming week. He added that a weaker US dollar and
strengthening Hong Kong dollar are favourable for local stocks, and the HSI could
potentially challenge 26,800 in the near term.
However, Wan cautioned that once the positive catalyst of a rate cut is realised, the
market could see profit-taking, putting short-term pressure on the HSI. Contributing
factors include quarter-end tightening of liquidity, weak recent data on trade, PMI, and
CPI, as well as the US tax season at the end of September, which could trigger further
profit-taking. He expects that after testing the 26,800-27,000 range, the HSI could
experience a significant pullback, potentially retracing to 25,000.

"Alibaba's in-house chips spark interest, but resistance seen near IPO price of HKD 176"

Reports indicate that Alibaba (09988) and Baidu (09888) have started using their own
self-developed chips to train AI models, partially replacing reliance on Nvidia chips.
Since early this year, Alibaba has used its in-house "Zhenwu" processors for training
smaller AI models, while Baidu is testing its Kunlun P800 chips for the next-generation
Ernie AI model. Although both firms still use Nvidia for some workloads, these moves
signal a major strategic shift for China in AI and semiconductor development.
Wan commented that the technical level of Alibaba's and Baidu's in-house chips is
roughly equivalent to Nvidia's A100-while Nvidia's latest chips are around six times more
powerful, making full replacement impossible, these domestic chips could still substitute
for the China-specific H20 model. He noted that Alibaba's recent share price rise
post-earnings was mainly driven by market optimism over its chip developments, reflecting
confidence in China's rapidly advancing semiconductor industry. However, Alibaba's share
price is now approaching its listing price of HKD 176, where significant resistance is
expected.
Wan added that Alibaba's gains could spill over to related chip names such as SMIC
(00981), although SMIC is already near its recent high of HKD 65, so any further upside
may be limited. He also pointed out that while SMIC could face some short-term correction,
this would be a healthy pullback rather than a major issue.