[ET Net News Agency, 29 April 2025] Hong Kong stocks have remained around the 22,000
mark for several consecutive days, as investors await key US economic data and the
prospects of US-China tariff negotiations. Chinese enterprises are releasing their
first-quarter results, which have had limited impact on the market. The Hang Seng Index
closed at 21,998, up 26 points or 0.1%, with the main board's turnover nearing HKD 97.3
billion. The Hang Seng China Enterprises Index stood at 8,090, up 10 points or 0.1%. The
Hang Seng Tech Index reported 5,029, up 40 points or 0.8%.

"Market turnover is weak; watch for HSBC's quarterly results at noon"

The external market is cautious regarding the progress of tariff negotiations between
the US and several trading partners, along with upcoming US corporate earnings. Overnight,
European and American stock markets generally stabilised. Although Hong Kong stocks opened
over 100 points higher, early trading was volatile, with a brief decline of several dozen
points before finding support, leading to a rebound of over 200 points. Cheung Chi Wai, a
joint managing director at Prudential Brokerage Ltd, told ET Net News Agency that the
US-China tariff war has not yet seen substantial negotiations, creating uncertainty in the
market. Meanwhile, there are still expectations for economic stimulus measures from the
Mainland China, leading to a cautious investor attitude. The market lacks direction, and
the Hang Seng Index shows weak movement, reflected in the declining turnover. Yesterday,
the main board's turnover was only HKD 169 billion, marking a two-month low.
Cheung Chi Wai noted that the Hang Seng Index has shown a pattern of rising and then
falling for four consecutive days, and today's trend is likely to follow the same
trajectory. As today is the settlement day for the index, significant fluctuations in the
afternoon are not expected. However, he cautioned that with major stocks like HSBC (00005)
and Hang Seng Bank (00011) set to announce their first-quarter results, unexpected
outcomes from HSBC could impact the index's movement.

"WuXi AppTec's first-quarter results are impressive, but stock price has risen
significantly recently"

WuXi AppTec (02359) reported a net profit of RMB 3.672 billion for the first quarter
ending 31 March 2025, up 89.06% year-on-year, significantly exceeding the expected RMB
2.45 billion. The basic earnings per share were RMB 1.29. During this period, revenue
reached RMB 9.655 billion, a 20.96% increase, also surpassing the estimated RMB 8.61
billion. Following the results, major firms have praised WuXi AppTec. Nomura stated that
despite the low base effect, the first-quarter performance still exceeded expectations,
giving WuXi AppTec a "buy" rating with a target price of HKD 84.59.
WuXi AppTec's first-quarter chemical business revenue was RMB 7.39 billion, a
year-on-year increase of 32.9%. The group's gross profit margin improved by 4.1 percentage
points to 41.4%, primarily benefiting from economies of scale in the chemical business.
Morgan Stanley noted that both revenue and net profit for the first quarter surpassed
their expectations, with the strongest growth driven by the US and European markets, which
saw year-on-year increases of 28% and 26%, respectively. These two markets contributed
nearly 80% of the group's revenue.
Cheung Chi Wai believes that while WuXi AppTec's first-quarter results exceeded market
expectations, he cautions that as the US has not yet finalized import tariffs on
pharmaceuticals, it is too early to determine whether tax exemptions or reduced rates will
be maintained. Given the US's indecisiveness on tariff issues and the previous
introduction of a biosafety bill - which, although currently shelved, may resurface - WuXi
AppTec is in a vulnerable position. Furthermore, with US-China relations still unclear,
failure to resolve tariff issues could lead to future burdens from high tariffs. Cheung
Chi Wai pointed out that WuXi AppTec's stock price has rebounded from a high of HKD 44.3
earlier this month, having risen by 40% to date, and buying at current levels carries
risks. He suggests waiting for a price correction to around the 20-day moving average
(approximately HKD 57.3) for safer entry.