[ET Net News Agency, 29 December 2025] Following Chinese regulatory action on excessive
competition among the "new three" sectors, new energy vehicle shares led the gains. The
Hang Seng Index opened over 100 points higher and maintained its strength in early
trading, reaching as high as 26,082, the first return above the 26,000 mark in half a
month. By midday, the HSI was up 68 points or 0.3 per cent at 25,887, with main board
turnover exceeding HKD 126.4 billion. The Hang Seng China Enterprises Index rose 68 points
or 0.8 per cent to 8,983. The Hang Seng Tech Index gained 88 points or 1.6 per cent to
5,587.

"Nip Chun Pong: Even if HSI holds above 26,000, market range-bound trading will persist"

On the first trading day after Christmas, Hong Kong stocks moved higher, surging more
than 200 points intraday to break above 26,000, but ultimately failed to hold that level.
Nip Chun Pong, the Chief Strategist at Solo Securities, told ET Net News Agency that for
the HSI to consolidate above 26,000, turnover must cooperate, ideally reaching at least
HKD 20 billion. However, with only a half-day session on Wednesday and a holiday on
Thursday, turnover is likely to remain subdued. He also pointed out that since 18
November, the HSI has consistently struggled with resistance at the 26,200 level. As such,
even if the HSI stands firm at 26,000, it is unlikely to break out of its current volatile
range.
Looking ahead to key events this week, the US Federal Reserve will release the minutes
of its monetary policy meeting on Wednesday, while China will announce its official
December manufacturing PMI. Nip noted that if Federal Reserve Chair Jerome Powell hints at
a rate cut in the first quarter or before the end of his term, it could boost US equities
and Hong Kong stocks could benefit as well. For China's manufacturing PMI, the market
currently expects a reading of 49.4, slightly up from November's 49.2, indicating a modest
easing in the pace of contraction. However, he believes that, compared to the impact of
new policy measures or announcements, the improvement in PMI alone is unlikely to provide
strong support for Hong Kong stocks.

"Leapmotor's premium share placement and potential full-year profit spark optimism,
targeting HKD 56"

Leapmotor (09863) announced that it has entered into a domestic share subscription
agreement with FAW Equity, issuing 74.83 million new domestic shares, representing about 5
per cent of the enlarged domestic share capital. The subscription price is RMB 50.03 per
share, equivalent to approximately HKD 55.29, representing a premium of about 10.7 per
cent to the company's closing price of RMB 49.94 on the agreement date. Total gross
proceeds will be around RMB 3.744 billion (about HKD 4.138 billion), with approximately 50
per cent allocated to R&D, 25 per cent to working capital, and 25 per cent to expanding
its sales and service network.
The group stated that the domestic share subscription represents a strategic investment
by FAW Equity, signalling confidence in Leapmotor's new energy and smart EV business, and
further deepening commercial and industrial cooperation between the two parties.
Leapmotor shares opened 4 per cent higher and touched HKD 53.5 in early trading, still
below the subscription price of HKD 55.29, before narrowing gains to around HKD 51.8. Nip
explained that the lack of aggressive buying after the announcement may be due to the
placement not yet being completed and the new energy vehicle sector not having fully
recovered. He noted that investors remain cautious about chasing the stock, as price gains
could quickly trigger profit taking.
Nip believes that FAW Group's willingness to subscribe for Leapmotor domestic shares at
a ten per cent premium reflects the market's optimism about Leapmotor's prospects. In
addition, Leapmotor turned profitable in the first half of this year, raising expectations
for a full-year profit. Nip expects that after the company's annual results are released,
the market will become even more positive on its outlook. Combining these two factors, Nip
considers Leapmotor's share price could move higher, possibly reaching the placement price
of around HKD 56 in January. However, further upside remains uncertain. Conservative
investors may consider entering below HKD 51, while those positive on this year's annual
results could consider buying at the current level around HKD 52.