Treasure Hunt During Hong Kong Stock Earnings Season! Post-results, stocks surged over 19% in a single day—what’s the outlook for the market ahead?

Recently, multiple international investment banks have released research reports, generally raising their expectations for China's annual economic growth and upgrading their asset allocation recommendations for China from neutral to "overweight," indicating an increasing confidence in the Chinese market.

Meanwhile, as second-quarter performance begins to be disclosed, several Hong Kong-listed companies have won market favor due to their outstanding financial performance and forward-looking strategic positioning, leading to a significant surge in their stock prices.

This quarter, the Hong Kong stock market has seen a plethora of "high-performing stocks," primarily focusing on three sectors: AI, new consumption, and innovative pharmaceuticals.

What are the highlights of these companies’ performances?

As mentioned above, the high-performing stocks in the Hong Kong stock market are mainly found in the AI, new consumption, and innovative pharmaceutical sectors, which are also this year's key investment lines in the Hong Kong stock market. The following sections will analyze the outstanding performance of these companies one by one.

1. AI Sector

Among the AI sector, the standout is $BABA-W(09988.HK)$ , which surged over 18% after its earnings report, marking the largest intraday increase since November 2022.

Alibaba's earnings report indicates that for the quarter ending June 30, revenue from AI-related products recorded triple-digit growth, while the cloud computing division also saw sales rise by 26%, exceeding market expectations.

The company reiterated its commitment to invest 380 billion yuan in AI capital expenditures over the next three years. Although quarterly investment may fluctuate due to supply chain factors, the overall pace remains unchanged. Alibaba also revealed that it has prepared "backup plans" for global AI chip supply and policy changes, establishing a diversified supply chain reserve through collaborations with various partners to ensure that its 380 billion yuan investment plan proceeds as scheduled.

Morgan Stanley analysts believe that Alibaba possesses the "best AI-enabled logic in China." They pointed out that despite the peak losses in the takeaway and instant retail sectors this quarter, the support from AI should not be overlooked.

Tencent's subsidiary $CHINA LIT(00772.HK)$ saw a significant rise of over 19% on its trading debut, with an increase of up to 59% year-to-date.

From the performance aspect, the AI-enabled IP business is quite promising, and the market expects this to be one of the factors driving the surge in shares of China Literature Group.

In the first half of this year, the GMV of the IP derivatives business reached 0.48 billion yuan, close to the total of 0.5 billion yuan for the entire previous year. In terms of literary creation, during the first half of this year, China Literature Group launched the industry's first AI web literature knowledge base feature "Miaobi Tongjian," which provides authors with valuable assistance in plot development and inspiration during long-form writing. Since its launch, the interaction frequency between authors and AI has increased by 40%, driving over 40% year-on-year growth in daily active users of the "Author Assistant," with the weekly usage rate of AI functionalities nearing 70%.

China Literature Group also noted that AI will accelerate the group’s IP globalization process. In the first half of 2025, revenue from AI-translated works on its overseas reading platform WebNovel increased by 38% year-on-year, making up over 35% of total revenue. By the end of June this year, there were 7,200 AI-translated works on the WebNovel platform, accounting for 70% of Chinese translated works.

Market analysis indicates that AI not only enhances creative efficiency but, more importantly, reduces the marginal cost of content production, which is beneficial for improving company profitability.

$MOBVISTA(01860.HK)$ is an AI advertising company in the Hong Kong stock market comparable to Applovin, which saw its share price soar over 14% after its earnings release.

Mosaic Technology's profitability continued to strengthen in the first half of the year—its core programmatic advertising platform, Mintegral, performed exceptionally well, driving the group to record revenues of 0.938 billion USD, a significant increase of 47% year-on-year; adjusted EBITDA was recorded at 88.681 million USD, a year-on-year increase of 41%.

As the core growth engine, Mintegral’s competitiveness stems from an AI and machine learning-driven smart bidding system. In 2025, the platform launched the Hybrid ROAS and IAP ROAS optimization strategies, covering in-app advertising (IAA), in-app purchases (IAP), and mixed monetization scenarios, providing critical support for advertisers to efficiently enhance ROI.

During the reporting period, Mintegral recorded revenue of 0.897 billion USD, a year-on-year increase of 48.6%. Notably, the revenue contributed by the smart bidding product system has exceeded 80% of Mintegral's total revenue, becoming the core driving force for the dual growth of the group's revenue and profit.

$TME-SW(01698.HK)$After the results, it surged over 15%, and the stock price once reached a historic high.

Barclays Bank believes that Tencent Music has not only fully exceeded the market's high expectations but, more importantly, has successfully demonstrated its strong ability to monetize every aspect of the user music experience—from online listening to offline participation.

Performance data shows that Tencent Music's number of super members (SVIP) has successfully surpassed the 15 million mark. Barclays believes that Tencent Music's SVIP growth plan is clear and sustainable. Its strategy can be summarized as: converting users with core benefits and retaining users with ecological benefits.

Specifically, high-definition audio (HD music) can effectively attract ordinary music lovers to become SVIPs; while the priority purchasing rights for artists' digital albums and the early reservation rights for offline concert tickets accurately convert core fans.

The former may be interested in additional podcast/audiobook content, while the latter may be attracted by the AI-driven user sing-along feature and the exclusive fan camera during online concerts.

In the fields of intelligent driving and robotics, there are layouts in place.$HORIZONROBOT-W(09660.HK)$After the performance, it surged nearly 15%. Jensen Huang has previously mentioned that robotics and autonomous driving are the two major application scenarios of physical AI in his view.

According to the research report from Guotou Securities, looking at the performance of Horizon in the first half of 2025, operating revenue continues to grow at a high speed, specifically:

The product solution product line has seen both volume and price increases, achieving revenue of 0.778 billion yuan, a significant year-on-year growth of 249.97%. In the first half of the year, the company's Journey series processing hardware shipments reached 1.98 million units, doubling compared to the same period last year; among them, the higher value processing hardware supporting high-speed NOA functionality reached 0.98 million units, accounting for 49.5% of total shipments, which is six times that of the same period last year.

Revenue from licenses and services reached 0.74 billion yuan, an increase of 6.9% year-on-year. The customer structure has significantly improved; in the same period last year, revenue from licenses and services mainly came from the partner Cool Core, while the concentration of customers in the licensing and service sector has noticeably decreased in the first half of 2025. We believe this is primarily due to an increase in the number of mid-to-high-end solutions obtained by the company and the growth in software service revenue from overseas projects. In the first half of the year, the company licensed algorithms and software to more than 30 OEMs and ecosystem partners.

Additionally, the company's HSD is set to debut in mass production on the Chery Interstellar Yuan E05. The technical route has been upgraded to a one-stage end-to-end and reinforcement learning approach, significantly enhancing the defensive driving capabilities of intelligent driving as well as the human-like experience. Currently, HSD has been designated by multiple automakers, covering 10 vehicle models. Moreover, HSD is expected to grow into the technological foundation for future robotaxi autonomous driving, opening up new avenues for growth.

$JD HEALTH(06618.HK)$ The stock surged nearly 12% post-performance, and this company possesses the most diversified online healthcare scenarios in the industry.

In the first half of 2025, JD Health's total revenue amounted to 35.3 billion yuan, representing a year-on-year increase of 24.5%. Under the Non-IFRS standards, the net profit reached 3.57 billion yuan, a year-on-year growth of 35%. In the context of the deep integration of artificial intelligence (AI) with industry, JD Health focuses on practical application scenarios, achieving the full-scale and situational deployment of AI products, and is continuously leading the intelligent transformation of the domestic healthcare industry.

Moreover, JD Health has launched the industry's first AI product designed for full hospital scenario applications—JD Zhuoyi (JOY DOC). By developing a "personal medical assistant," "digital twin of doctors," and "future digital hospitals," the goal is to make visits more comfortable for patients, enhance the efficiency of clinical research for doctors, and ease the overall operation of hospitals.

2. New Consumption Directions

As one of the Four Sisters of New Consumption, $POP MART(09992.HK)$ the stock once again soared over 12%, with a cumulative increase of over 247% this year.

In the first half of the year, Pop Mart achieved revenues of 13.88 billion yuan, a staggering year-on-year increase of 204.4%. Revenue from plush products surged by 1276.2%, becoming the largest category, accounting for 44.2% of total revenue. THE MONSTERS (mainly LABUBU) generated 4.81 billion yuan, making up 34.7% of total revenue, a significant increase from 13.7% in the same period last year. The overseas market emerged as the largest highlight—sales grew by 440% year-on-year, contributing approximately 50% to total revenue, with per-store efficiency reaching four times that of domestic levels.

In response to questions regarding earnings guidance, Wang Ning expressed confidence at the beginning of this year of achieving a 50% overall growth rate. Last year's revenue was 10 billion, and this year he hopes to reach 20 billion, but now it seems that achieving 30 billion should be quite manageable, while also emphasizing the importance of monitoring health metrics. The management team also projects that the company's net profit margin will continue to improve in the second half of the year, predicting that the net profit margin for the year will be around 35%.

$LAOPU GOLD(06181.HK)$ After the performance, the stock surged nearly 9%; however, it has recently stabilized.

The company's revenue in the first half of the year increased by 251% year-on-year to 12.4 billion yuan, and net profit attributable to the parent company grew by 286% year-on-year to 2.3 billion yuan, meeting market expectations. The company plans to distribute an interim dividend of 9.59 yuan per share, with a payout ratio of approximately 73%, marking its first dividend distribution in the interim report.

The growth in Laopu Gold's performance was driven by strong single-store efficiency and brand value. According to UBS Group's report, the company's same-store sales growth rate (SSSG) reached an astonishing 200.8% in the first half of the year. Citi's data indicated that same-store sales in the domestic and overseas markets achieved year-on-year growth rates of 174% and 208%, respectively.

More importantly, its high-end brand positioning has been validated by data. Reports from Nomura and Citi cited figures indicating that Laopu Gold's customer overlap with five of the world's top luxury brands (such as Hermès, Louis Vuitton, etc.) is as high as 74%-81%. Citi described this figure as "a pleasant surprise," strongly affirming its brand value.

China's bottled water and beverage giant $NONGFU SPRING(09633.HK)$ After the performance, the stock increased by over 7%, with a cumulative rise of over 50% this year.

The company achieved revenue of 25.622 billion yuan in the first half of the year, a year-on-year increase of 15.6%, and a net profit of 7.622 billion yuan, up 22.1% year-on-year. The tea beverage segment continued its rapid growth, while the packaged drinking water business showed signs of recovery; the dual main segments of "water + beverages" jointly propelled the company to set new performance records.

Specifically, the tea beverage business generated revenue of 10.089 billion yuan, surpassing packaged water for the first time to become the company's largest source of income, a remarkable increase of 19.7% year-on-year, accounting for 39.4% of total revenue. The "Oriental Leaf" series serves as the core growth engine.

Pacific Securities believes that in the second half of the year, the company's base will continue to decline, and Red Bottle Water is expected to leverage public sentiment events for rapid market share recovery. Dongfang Shuye is anticipated to maintain steady growth, bolstered by its cap-opening award promotion, while the company's platform capabilities are continually strengthening, and scale effects are increasingly pronounced, suggesting profitability levels may continue to rise.

3. Innovative Pharmaceuticals

Innovative pharmaceuticals are a key focus for investment in the Hong Kong stock market this year. $WUXI APPTEC(02359.HK)$ The performance has soared by over 11%, with a year-to-date increase exceeding 110%.

The company announced its performance for the first half of 2025, reporting operating revenue of 20.8 billion yuan, a year-on-year increase of 20.64%, and a net profit attributable to shareholders soaring by 101.92%. The company projects that revenue from continuing operations will return to double-digit growth in 2025, with the growth rate adjusted from 10-15% to 13-17%, and total annual revenue revised upward from 41.5-43 billion yuan to 42.5-43.5 billion yuan.

In terms of specific segment performance, its high growth is primarily driven by the chemical business, which contributes nearly 80% of revenue and grows at a brisk pace of 33.5%. Notably, the small molecule process R&D and production (D&M) business demonstrated the most robust performance, with revenue increasing by 17.5% year-on-year to 8.68 billion yuan.

The TIDES business (oligonucleotides and peptides) remains the most explosive, benefiting from the gradual ramp-up of new production capacity last year and the strong demand for "large molecule + small molecule" combination therapy in global innovative pharmaceuticals. In the first half of the year, business revenue surged by 141.6% to 5.03 billion yuan, attracting a large number of new clients and orders, with the number of clients served increasing by 12% year-on-year and the number of molecules serviced rising by 16%.

Looking ahead to the second half of the year, what is the outlook for the Hong Kong stock market?

Guangfa Securities reiterates the logic that the Federal Reserve's interest rate cuts are beneficial for Chinese assets: (1) Under interest parity and A/H share earnings effects, the willingness of foreign capital to return to Chinese assets is strong; (2) Domestic monetary policy space is opening up, further releasing liquidity; (3) The renminbi exchange rate is appreciating, supporting a "slow bull" market for A/H shares; (4) Interest-sensitive sectors such as technology and pharmaceuticals may lead, with China's advantageous industries and sector leaders (such as innovative pharmaceuticals, Hong Kong internet leaders, NVIDIA's supply chain, and new energy) likely to attract overseas incremental funds.

CITIC Securities further notes that the anticipated performance rate for the Hong Kong stock market is currently at a new high since 2022. Investors may focus on sectors such as technology and internet (the profitability pressures on leading companies have been gradually eased by the market since April, and the financial reports might mark a point of 'bad news being fully priced in', where growth styles dominate in a liquidity-eased environment), non-bank financials (benefiting from β-type opportunities arising from the stock market's upturn), and individual stocks related to index component adjustments.