01772 Overview

Market Overview: Hong Kong stocks opened higher but fell during the morning session, with the HSI down 0.4% to 26,656 and total half-day turnover at $130.935 billion.

CKI Holdings Performance: CKI Holdings surged 5.5% following news of a consortium selling UK power distributor UKPN for an estimated $176.8 billion, positively impacting related companies like CKH Holdings and Power Assets.

Lithium Market Impact: Zimbabwe's lithium mining ban led to a rise in lithium futures, boosting stocks like Tianqi Lithium and Ganfeng Lithium, while battery manufacturers CATL and CALB experienced significant declines.

Automaker Struggles: Several automakers, including BYD and XPENG, saw declines of over 2%, with Zhongsheng Holdings plummeting nearly 10% after Goldman Sachs cut profit forecasts significantly.

Export Suspension: Zimbabwe's mines ministry has suspended all exports of raw minerals and lithium concentrates due to improper conduct during the export process, affecting all minerals in transit and deemed necessary for national interest.

Market Reaction: Following the announcement, the main contract for lithium carbonate in mainland China surged over 11%, while Hong Kong lithium mining stocks also experienced significant increases.

Nickel Production Quota: Indonesia has set a significantly reduced ore production quota of 12 million tons for Weda Bay Nickel this year, down from 42 million tons last year.

Market Reaction: The news led to a 2.8% increase in the three-month nickel futures price on the London Metal Exchange, reaching US$17,980 per ton, and positively impacted GANFENGLITHIUM's stock price, which rose by 5.15%.

Top Shorted Stocks: S&P Global Market Intelligence identified the top ten most shorted stocks in Hong Kong, with metrics including the number of shares lent and short selling ratios.

HTSC Highlights: HTSC (06886.HK) leads with a short selling ratio of 43.867% and a significant short selling amount of $129.04 million, despite a recent price drop.

Other Notable Stocks: Other stocks with high short selling ratios include PING AN (30.985%) and COSCO SHIP HOLD (29.243%), indicating investor skepticism.

Market Trends: The data reflects ongoing trends in the Hong Kong stock market, with various companies experiencing fluctuations in share prices alongside their short selling activities.

Market Performance: The Chinese stock market saw a rebound in January, with the HSI/ MSCI China Index increasing by 6.9% and 5% MoM, despite a significant sell-off by the 'National Team' amounting to US$68 billion.

Top Performers: WUXI BIO and PLOVER BAY TECH were highlighted as top performers with returns of 17.7% and 16.6%, respectively, while several stocks, including Alibaba and Ganfeng Lithium, were added to the Buy list.

Volatility Outlook: UOB Kay Hian anticipates continued market volatility in February due to recent corrections in gold and silver prices, but maintains a positive medium-term outlook supported by macro policies.

Stock Recommendations: The broker updated its recommendations, adding stocks like Alibaba and Ganfeng Lithium to the Buy list, while placing Meituan on the Sell list, and noted the need to cut losses on several other stocks.

DBS Group Research Forecast: DBS Group Research predicts GANFENGLITHIUM's net profit for 2025 will be between RMB1.1 billion and RMB1.65 billion, with expectations of high lithium prices until the Jiangxi lithium mine secures a mining permit.

Earnings and Target Price Adjustments: The firm raised its 2026 EPS forecast for GANFENGLITHIUM to RMB1.85 ($2.07) due to anticipated higher lithium prices and profit margins, while also increasing target prices for its H-/A-shares significantly.

Investment Rating: DBS Group maintains a "Buy" rating on GANFENGLITHIUM, reflecting confidence in the company's growth potential and profitability in the lithium sector.

Market Context: The report notes that the profitability of the lithium industry is expected to reach its lowest point in 2026, amidst current short selling activity and market fluctuations.