[ET Net News Agency, 22 October 2025] US corporate earnings have generally been solid in
the latest round of results, but US equities saw mixed performance after sudden reports
that US President Trump may not meet with President Xi Jinping at the end of the month for
unspecified reasons. Hong Kong shares opened lower and losses widened, with heavy selling
in tech stocks. The Hang Seng Index closed the morning session at 25,697, down 329 points
or 1.3 percent, with main board turnover exceeding HKD 12.81 billion. The Hang Seng China
Enterprises Index was at 9,174, down 128 points or 1.4 percent. The Hang Seng Tech Index
stood at 5,880, down 127 points or 2.1 percent.

"Jaseper Tsang: HSI expected to range trade between 25,100 and 26,300"

Overnight, the three major US indices were mixed: the Dow closed at a record high, but
the Nasdaq retreated. After rising for two consecutive days, the HSI gave back gains
today. Jaseper Tsang, Vice-Chairman of the Hong Kong Institute of Financial Analysts and
Professional Commentators Limited, told ET Net News Agency that China-US relations remain
the market's key focus. While there is some optimism over negotiations and unilateral
efforts by the US to ease tensions, Beijing has so far given no clear response and talks
remain highly uncertain. Trump has said he is optimistic about the outcome of a possible
meeting with Xi Jinping at the end of the month, but told Republican lawmakers on Tuesday
that the much-anticipated summit might not happen for unspecified reasons.
Tsang added that even if a leaders' meeting does go ahead at APEC, the substantive
results are still in doubt. The US is likely to continue pressuring China in the
technology and biotech sectors. Meanwhile, China's recent economic data, such as retail
sales and fixed asset investment, is not satisfactory, raising concerns over a possible
slowdown in the economy in Q4. The Fourth Plenary Session is underway, and while the
meeting is mainly to set the policy framework for the coming years, the market is watching
to see if any new stimulus measures are announced afterwards. In the short term, Tsang
expects the HSI to remain volatile, broadly trading between 25,100 and 26,300.

"Second share placement and sharp gold price drop see Laopu Gold fall as much as 8%"

Laopu Gold (06181) plans to place 3.7118 million new H shares with no fewer than six
institutional investors, representing 2.1 percent of the enlarged share capital, at HKD
732.49 per share, a 4.5 percent discount to the previous closing price of HKD 767. The
company expects net proceeds of around HKD 2.707 billion. About 70 percent of the funds
raised will be used to increase inventory, around 10 percent to expand and optimise the
store network, and about 20 percent for working capital and general corporate purposes.
Safe-haven demand has faded, the US dollar has strengthened, and precious metals, having
become heavily overbought, have seen prices correct sharply. After spot gold surged to a
record high of USD 4,381 per ounce on Monday, it tumbled by up to USD 274 or 6.3 percent
on Tuesday, the largest percentage drop since 2013, with a low of USD 4,082. In Asian
trading this morning, gold dropped further to USD 4,012. The share placement news,
together with the plunge in gold prices, saw Laopu Gold fall as much as 8 percent this
morning.

"Two placements in six months: Laopu Gold's correction may not be over"

Jaseper Tsang pointed out that this is Laopu Gold's second share placement, with the
previous one in May involving 4.3 million shares and raising roughly the same amount,
about HKD 2.7 billion. It is unusual for a company to conduct two placements less than 18
months after listing. Tsang believes that, given Laopu Gold's consistently high inventory
levels, the capital raising is primarily to replenish free cash flow. The sharp rally in
gold prices recently provided a good window for fundraising. By contrast, other jewellery
peers such as Chow Tai Fook (01929) and Luk Fook (00590) have lower inventory ratios and
less pressure to raise funds.
Tsang noted that Laopu Gold shares have soared since listing, with staggering cumulative
gains. Although interim results were impressive, with both revenue and net profit more
than doubling, he is concerned that such high growth rates may not be sustainable. Laopu
Gold's positioning as a purveyor of traditional gold jewellery aims to create a brand akin
to Cartier or Tiffany, but traditional gold is not the same as antiques and lacks
historical value, while building a premium brand takes time. Moreover, the traditional
gold jewellery approach is not difficult for other retailers to replicate and trends can
change quickly. In the past, Laopu Gold's sales attracted not only consumers but also
investors, as the company offered to buy back previously sold products. When gold prices
were rising, investors could profit, but if prices fall, profits may evaporate or even
turn negative, which could hurt sales.
Tsang also pointed out that gold has climbed from below USD 3,000 per ounce at the start
of the year to over USD 4,300 recently, a remarkable run. He does not rule out the
possibility that funds may take profits in the short term, putting further pressure on
gold prices. As a result, he is cautious on Laopu Gold's outlook. With two placements in
less than six months and the expiry of IPO lock-up periods increasing the H-share float,
the share price may remain under pressure and could retest the early October low around
HKD 661.