On the final trading day of the Year of the Dragon in Hong Kong stocks, the half-day session still moved higher in a volatile fashion, extending gains for a third consecutive trading day. The Hang Seng Index opened 139 points higher this morning (January 28), at 20,337, hitting a one-and-a-half-month high again, but the broader market could not sustain the rally and once turned down 32 points to a low of 20,165. It then stopped falling and rebounded, and the Hang Seng ultimately rose 27 points, or 0.1%, to 20,225; the H-Share Index edged down 0.01% to 7,382; the Tech Index rose 0.8% to 4,723. Turnover in the half-day session was HK$51.6 billion.
DeepSeek’s surge raises market expectations for homegrown AI
The hottest topic lately is surely DeepSeek. The AI assistant from DeepSeek, the open-source model company under mainland private equity giant High-Flyer Quant, topped the free download charts in the App Store in both China and the United States, even surpassing ChatGPT in the U.S. downloads ranking. Analysts point out that its performance comes close to OpenAI’s o1, and even exceeds Meta’s Llama, while its cost is extremely low. DeepSeek’s surge has raised market expectations for homegrown AI. DeepSeek has broken the pattern of reliance on high-end chips, overturning the previous landscape in which chips were dominated by the United States. Because of a sudden and substantial drop in costs, people feel that there is basically no need to buy very high-end chips; the tide has suddenly reversed. Instead of everyone chasing U.S. chips as before, the focus has shifted, and China is now rapidly catching up.
Alibaba’s Wenxin Yiyan is expected to reach a new level
Baidu (9888.HK) rose another 3.6% today, closing at HK$87.8, marking a third straight day of gains. Baidu will be one of the main beneficiaries of this revolutionary breakthrough by DeepSeek. Baidu’s Wenxin Yiyan was previously constrained by high-end chips, and its development results were less than ideal. Now DeepSeek’s breakthrough shows that Baidu does not need to rely on high-end chips to develop low-cost, high-quality AI. As a mainland early mover in ChatGPT-style AI, Wenxin Yiyan is expected to reach a new level, and this should help push Baidu’s share price further up to around HK$92.6.
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Author bio: Zhang Zhiwei studied economics at university and completed a finance program at Heriot-Watt University in the UK. He has accumulated many years of hands-on experience in market investing, with in-depth research and unique insights into the stock market. He is currently a licensed representative of the Hong Kong Securities and Futures Commission dealer, a responsible officer of a securities and futures company (RO1&2), and an instructor for continuous professional training (CPT) seminars in the industry. He has taught various investment courses, broker internship classes, order placement system applications, securities firm business operations, and has co-organized options seminars with the Hong Kong Stock Exchange.
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