Last week, the U.S. government shutdown came to an end, briefly boosting sentiment in Hong Kong stocks. However, new concerns emerged, and the Hang Seng Index weakened again on Friday. Over the weekend, the biggest news was China’s Ministry of Foreign Affairs and its embassy in Japan advising Chinese citizens to avoid traveling to Japan, with China preparing substantive countermeasures. This development may dampen foreign investor sentiment.

With the U.S. government reopening, the September non-farm payroll report will be released on November 20. As the October FOMC meeting minutes approach, internal Fed debates on rate cuts will further influence markets. Meanwhile, EU member states have agreed to abolish tax exemptions for small parcels, primarily targeting cheap Chinese goods flooding the region.

This week is expected to be challenging. Although the People’s Bank of China injected liquidity into the banking system via open market reverse repos on November 14, the November LPR announcement on November 20 may offer limited stimulus if unchanged. NVIDIA’s earnings report will be a major focus, significantly impacting tech stocks. While strong earnings are anticipated, guidance and stock performance will be key. Other notable earnings include Baidu, Pinduoduo, Kuaishou, NetEase, and XPeng.

Huawei is set to unveil a breakthrough in AI technology on November 21, potentially solving efficiency challenges in computing resources. Semiconductor stocks may benefit. In terms of market themes, China’s countermeasures against Japan could dominate, while Yushu Technology’s IPO progress may make it the first humanoid robotics firm listed on the A-share market.

The Central Meteorological Office issued a cold wave blue alert on November 16, which may boost coal, power, gas, and winter apparel sectors. Flu prevention amid cold weather is another potential theme.

**Stock Pick: GuShenTang (02273)** On November 16, the company announced plans to acquire 100% of DaZhongTang, adding 14 TCM clinics in Singapore to expand its network. While short-term contributions may be limited, the move opens long-term overseas growth. Earlier, GuShenTang formed a JV with Singapore’s 1doc in October 2025, holding 70% ownership. Domestically, it added four new branches since July 2025, entering Tianjin, Chengdu, and Shantou. The company also announced an additional HK$300 million buyback, raising the total to HK$600 million.

**Sector Watch: Biotech Rebounds** After a two-month correction, biotech stocks rebounded last week. Key catalysts include December medical conferences (ASH, ESMO Asia, ESMO IO) and overseas clinical progress for partnered ADC/bispecific drugs. BeiGene and InnoCare reported strong Q3 earnings, with BeiGene turning profitable. Pfizer and 3SBio’s PD-1/VEGF bispecific antibody plans also drew attention.

**Market Data** HKEX data shows 118,711 open contracts for the November Hang Seng futures, with a net open interest of 44,843. The settlement date is November 27, 2024. The Hang Seng Index sits at 26,572, with bearish sentiment amid cooling rate-cut expectations and AI investment concerns.

**Final Thoughts** Hong Kong stock liquidity remains tied to U.S. dollar conditions. As bond fund relocations taper off and QT transitions to technical QE, a gap repair is likely. Currently, Hong Kong stocks offer strong value.