[ET Net News Agency, 10 February 2025] In January, the U.S. non-farm payrolls added
143,000 jobs, falling short of expectations, which supports the Federal Reserve's easing
policy. Alongside the continued speculation around AI applications in tech stocks, the
Hang Seng Index rose by 90 points. Later, driven by the share prices of Chinese telecom
companies, it expanded to over 300 points, reaching a high of 21,518 points, a new high
since 10 October of last year. It closed up 301 points, or 1.4%, at 21,435 points at
half-day, with turnover exceeding HKD 135.3 billion.
The Hang Seng China Enterprises Index closed at 7,902, up 118 points, or 1.5%. The Hang
Seng Tech Index reported 5,243, up 93 points, or 1.8%.

"Wong Wai Ho: Trump's less aggressive actions support the market"

With global enthusiasm for AI, especially after the DeepSeek trend took off in Mainland
China, any company announcing its integration with DeepSeek typically sees significant
stock price increases, even state-owned enterprises struggle to resist its appeal. The
Ministry of Industry and Information Technology confirmed that the three major state-owned
telecom companies have all integrated DeepSeek's open-source model, driving a collective
rise in their stock prices. China Telecom (00728) rose by over 7% at its peak this
morning, while China Mobile (00941) also increased nearly 4%.
At the same time, U.S. President Trump delayed the removal of tax exemptions for small
parcels, causing Alibaba (09988) to surge nearly 5% in half a day, stimulating a positive
atmosphere that pushed the Hang Seng Index to rise over 300 points at one point, breaking
past the 21,300 resistance. Wong Wai Ho, the First Vice President of the Yan Yun Family
Office (HK) Limited, told ET Net News Agency that the market atmosphere has indeed
improved significantly. Since the Hang Seng Index bottomed in early January, it has risen
about 2,800 points from a low of 18,700, with Trump's stance being particularly relevant.
Although Trump has not delayed tariffs on China as he did with Canada and Mexico, and
China has implemented several countermeasures, Wong Wai Ho believes Trump's overall
approach to China has been more restrained than expected, reducing market worries.
However, he added that Trump remains unpredictable, and future directions could change
suddenly, so a cautious outlook is advisable. Recent risk appetite for funds has clearly
increased, and with last Friday's significant turnover in Hong Kong stocks, it is expected
that the market's steady rise will attract foreign capital back into Hong Kong stocks. The
Hang Seng Index is likely to challenge 22,000, and if it stabilizes, it may have a chance
to test the October high of about 23,200.
In two weeks, Mainland China is expected to hold the Two Sessions meetings, which
usually stabilize the stock market. However, Wong noted that while there is anticipation
for the meetings, if the policies do not meet market expectations, it could serve as a
bearish factor for the Hang Seng Index at high levels. Close attention should be paid to
news from the end of this month to early next month.

"Global enthusiasm for AI applications, telecom stocks may be the stable choice"

DeepSeek's rapid rise requires state-owned enterprises to catch up. Wong Wai Ho
indicates that AI news has been an important catalyst for the market's steady climb after
finding support. Recently, leading the rise have been tech stocks, particularly those
related to AI and DeepSeek. He believes that the market is currently inclined to speculate
on DeepSeek concepts, and U.S. stocks have also started to focus on AI applications. He
mentioned that over the past two years, the market has become accustomed to speculating on
AI upstream suppliers, such as chip manufacturers and developers, whose stock prices have
generally risen over the past year. Therefore, recently, the focus has shifted to finding
midstream and downstream AI application concept stocks as the new investment theme.
Wong explained that DeepSeek's ability to lower AI costs has become a theme attracting
global capital. However, many AI-related stocks have already seen significant price
increases; thus, he cautions that entering these stocks at current prices carries the risk
of a pullback. If investors wish to enter now, they should control their positions and
consider returning to fundamentals, focusing on companies like China Mobile and China
Telecom, which have strong profit foundations and AI concepts.
Regarding AI stocks, Wong believes that Fourth Paradigm (06682) has solid fundamentals
and may continue to reach higher levels, but the company has not yet recorded profits,
which poses a risk of pullback at high levels and is likely to be volatile. The stock
announced a placement last week, but he noted that the market had already anticipated the
capital needs of startups, so a successful placement would benefit subsequent fundraising
and outlook. Therefore, if the stock can successfully hold above the 10-day moving average
(around HKD 54.1), it could continue to challenge the previous high of HKD 63.