On July 28, 2026, Hong Kong stock market showed structural divergence, with the Hang Seng Index edging up 0.8%, but the new energy sector took center stage. BYD (01211.HK) surged over 7% intraday, closing at HK$405.6, a record high since listing, with market cap exceeding HK$1.2 trillion. Led by BYD, new energy sub-sectors such as power equipment, lithium batteries, and photovoltaics rallied, becoming the most concentrated inflow sectors of the day.
BYD's Strong Breakthrough: Earnings and Policy Dual Drivers
BYD's rise was not accidental. On the evening of July 27, the company released its 2026 interim earnings forecast, expecting a 45%-55% YoY increase in net profit attributable to parent company, well above market expectations. Key data: NEV sales grew 30% YoY, overseas market share rose to 15%, and power battery installations ranked second globally. Additionally, market reports indicated that BYD's premium brand "Yangwang" series received over 50,000 orders in Europe, further boosting investor confidence.
Industry analysts noted that BYD's breakthrough reflects the overall trend of Hong Kong's new energy sector. Recently, the National Energy Administration released the "2026-2030 New Energy Industry Development Plan," explicitly targeting 50% of power generation from new energy by 2028, and increasing support for distributed photovoltaics and energy storage. Meanwhile, the implementation of the EU Carbon Border Adjustment Mechanism (CBAM) has prompted overseas automakers to accelerate cooperation with China's new energy supply chain, bringing additional orders to HK-listed companies.
Sector-Wide Rally, Funds Rotate from Tech Stocks
Led by BYD, many new energy stocks hit new highs. Lithium battery leader CATL (300750.SZ/Stock Connect) rose 4.2%, solar glass maker Flat Glass (06865.HK) gained 5.6%, and wind turbine manufacturer Goldwind (02204.HK) advanced 3.9%. Notably, Southbound capital saw net buying of HK$8.5 billion, with new energy accounting for over 60% of net inflows, indicating mainland funds are heavily adding positions.
In contrast, previously strong tech stocks pulled back. The Hang Seng Tech Index edged down 0.2%, with heavyweights Meituan (03690.HK) and Tencent (00700.HK) weakening slightly. Market participants believe funds are flowing from high-tech stocks to more attractively valued new energy. Fund Securities' analysis report stated: "The new energy sector has higher certainty in prosperity, benefiting from global green transformation with sustainable profit growth. Tech stocks face antitrust and gaming regulatory uncertainties, so short-term outflows are reasonable rotation."
Hong Kong Market Rebounds, HSI Stabilizes at 24,000
The Hang Seng Index closed at 24,125, up 0.8%, once touching 24,300 intraday. Among index constituents, property and financial sectors contributed most of the gains, but the new energy sector was more active. Hang Seng Indexes Company announced a quarterly review in August, expecting multiple new energy stocks to be included in the Hang Seng Composite Index, further attracting passive fund allocation.
On the macro front, the market has fully priced in the Fed's expected 75-bps rate hike in July, while the People's Bank of China maintains accommodative liquidity, coupled with a stable RMB exchange rate, providing a favorable environment for Hong Kong stocks. Additionally, the Hong Kong SAR government announced a HK$30 billion green fund to invest in new energy, environmental technology, and other fields, injecting a boost into the real economy.
Institutions Optimistic on New Energy Long-Term, But Warn of Pullback Risk
Several top foreign banks issued bullish reports on Hong Kong's new energy sector. Goldman Sachs raised BYD's target price to HK$450, citing faster-than-expected overseas expansion and the potential for blade battery technology to win more automaker orders. Morgan Stanley believes the new energy sector still trades at a discount compared to A-shares, recommending overweight on HK-listed solar and storage leaders.
However, some analysts caution against short-term chasing. Guotai Junan (Hong Kong) noted that after the continuous rally, some stocks' P/E ratios have exceeded 50x, posing valuation premium pressure. They advise investors to focus on targets with Q2 earnings surprises and reasonable valuations, such as wind equipment makers and energy storage system integrators.
Outlook: Policy Catalysts and Earnings Delivery Key
Looking ahead to H2 2026, the trend of Hong Kong's new energy sector depends on two factors: the progress of domestic new energy power consumption policies, and the Q3 earnings delivery of companies. Sector divergence may widen, with leaders possessing core technology, overseas orders, and cost advantages commanding higher premiums.
For retail investors, consider diversifying through Stock Connect or Hong Kong-listed ETFs. Currently, ETFs like China AMC Hang Seng New Energy ETF (02809.HK) and CSOP New Energy Index ETF (03182.HK) are available, with fund sizes growing. Operationally, low-buying is recommended, avoiding chasing highs and selling lows.
- BYD (01211.HK): Broke HK$400, benefiting from earnings beat and overseas orders.
- CATL (300750.SZ): Lithium battery leader, watch European expansion.
- Flat Glass (06865.HK): Solar glass capacity release, margin improvement.
- Goldwind (02204.HK): Offshore wind policy tailwind, ample order backlog.
Overall, Hong Kong's new energy sector has shifted from concept speculation to earnings-driven phase. Against the backdrop of global energy transition, leading companies with technological moats are expected to continue outperforming the market. Investors should maintain a long-term perspective and manage positions well.