[ET Net News Agency, 16 September 2025] China-US talks reached a framework consensus on
TikTok, and the two leaders will speak on Friday (19 Apr). A strong close in US stocks and
a push to 45,000 at the intraday high in Japan lifted Hong Kong shares to open higher this
morning 16 Apr, but the move was later swayed by Mainland China's choppy performance. The
market mostly traded around the 26,400 level, with the index briefly dropping more than
100 points before rebounding. By midday the HSI was at 26,465, up 19 points or under 0.1%,
with main board turnover near HKD 160.2 billion. The Hang Seng China Enterprises Index was
at 9,394, up 9 points or 0.1%. The Hang Seng Tech Index was at 6,067, up 23 points or
0.4%.

"Mak Ka Ka: HSI to consolidate short term within 26,000 to 26,800"

The HSI lacked follow through at the open. After a higher open and a choppy push to a
new intraday high of 26,601, gains narrowed and it even slipped into the red, losing
26,500. Mak Ka Ka, Head of Financial Products Trading and Research Department of SinoPac
Securities (Asia), told ET Net News Agency that in the short term the market is focused on
rate meetings by the US, UK and Japan. For the Federal Reserve, the market generally
expects a 0.25 percentage point cut. More important than the cut size is the Fed's
guidance on the future path of easing, hence the cautious tone. Near term the HSI is
expected to consolidate between 26,000 and 26,800. Even if the Fed trims by 0.25 as
expected and the market dips slightly, 26,000 should offer initial support.
Separately, US President Trump posted that a framework agreement on TikTok has been
reached with China, and he will speak with President Xi Jinping on Friday (19 Apr) to
finalise details. Mak said if China-US relations maintain the current optimism, the market
could see ongoing support. If sentiment turns abruptly, Hong Kong stocks may adjust lower.
A clean break of 26,000 would open a test of 25,800.

"Auto sector frequently rectified but tangible effects may only show after 2026"

Regulators have been active in promoting high quality development in autos. The China
Association of Automobile Manufacturers issued an initiative on standardising payment
terms to suppliers, pushing automakers to adopt a 60 day payment period. The clock starts
when the supplier delivers and the automaker accepts the goods, and should not exceed 60
calendar days. Two days earlier, eight ministries including the MIIT jointly released the
Auto Industry Stabilisation Plan 2025 to 2026, aiming for 32.3 million vehicle sales in
2025, about 3% year on year growth, including 15.5 million NEVs, around 20% growth.
Mak said these measures aim to standardise competition, curb price wars, protect
suppliers, improve SME cash flow and stabilise the supply chain. The ultimate goal is
industry upgrade, advancing intelligent connected vehicles and enabling L3 autonomous
driving. She noted the market is focused on NEV penetration. In the first eight months of
the year, China's NEV sales rose 36% year on year to 9.59 million units, with a 45%
penetration rate. By year end, forecasts see penetration rising further to 53%.
However, the sector is in an intense price war, with margins under pressure, weighing on
valuations. Mak keeps a neutral call on the sector. Even with new rules, the industry's
restructuring will take time, likely not evident until after 2026.
Mak suggests positioning around three sub themes intelligent driving, solid state
batteries and vehicle connectivity prioritising leaders with tech advantages and strong
cost control. Examples include BYD (01211) and Li Auto (02015). For BYD, the share may be
in consolidation near term. Consider staggered entries if it pulls back below HKD 100,
with a provisional target at HKD 110. For growth names, watch Leapmotor (09863) and XPeng
(09868).