CGS International
June 10, 2025

Hong Kong Market Trendspotter: CSSC Hong Kong Shipping Co and AIA Group in Focus Amid US-China Trade Talks

Market Overview: US-China Trade Negotiations Reignite Investor Attention

The Hong Kong equities landscape is abuzz as US and China prepare to resume crucial trade negotiations in London. This follows a high-profile phone call between Donald Trump and Xi Jinping, setting the stage for potential de-escalation in trade tensions, especially around rare-earth minerals and advanced technology exports. Both nations previously accused each other of backtracking on a Geneva deal that had aimed to reduce tariffs exceeding 100%.
New approvals from China for some rare-earth exports, though lacking specifics, signal a possible thaw. The US, meanwhile, is intent on restoring the flow of critical minerals like rare-earth magnets, vital for American EVs and defense infrastructure. This follows US complaints over declining shipments and Chinese concerns over restrictions on AI chips, software for chip design, aircraft engines, and student visas. The upcoming London meeting includes top US officials and China’s Vice Premier He Lifeng, with hints that the US may reconsider certain technology restrictions.

Company Focus: CSSC Hong Kong Shipping Co Ltd (HKG: 3877) – Early-Stage Uptrend

Technical Buy: CSSC Hong Kong Shipping Co Ltd

• Last Price: HK\$1.95
• Technical Outlook: CSSC is exhibiting a robust bullish trend, now in the early stages of its uptrend channel which began in October 2022.

Company Profile: CSSC (Hong Kong) Shipping Company Limited operates as a ship leasing company, offering loans, shipbroking, and leasing services in Hong Kong.
Technical Analysis Highlights:

• Stock continues to move within a defined uptrend channel since October 2022.
• A bullish breakout from a range/flag formation indicates strong upward momentum.
• Previously observed bearish breakaway gap has been fully filled.
• Ichimoku indicator signals a clear bullish outlook with all components sloping upwards.
• MACD histogram is positive, with both MACD and signal lines elevated above zero.
• Stochastic Oscillator remains above the 50 midpoint and is climbing.
• 23-period Rate of Change (ROC) is above zero, confirming momentum.
• Directional Movement Index reflects strong bullish strength.
• Trading volume is experiencing healthy expansion, supporting the price action.

Recommendation: Technical buy with a clear uptrend, multiple entry points, tight stop loss, and aggressive upside targets.

AIA Group (HKG: 1299): Positive Sentiment on Leadership Change

• Leadership Update: Mark Tucker will become AIA’s new chairman effective October 1, 2025. Tucker’s past performance and deep understanding of AIA’s operations are seen as highly positive for the group.
• Historical Performance: During Mark Tucker’s previous tenure, AIA’s share price posted an average 4% increase over the 5-day trading window around results announcements.
• Analyst View: The report reiterates an “Add” rating and a target price of HK\$103, maintaining AIA as one of the top sector picks.

Important Disclosures and Ratings Framework

• The report is intended for qualified investors and is distributed according to strict jurisdictional guidelines and regulatory requirements.
• CGS International and its affiliates may hold interests or positions in the securities mentioned.
• Analyst compensation is not directly tied to specific recommendations or investment banking transactions.
• The research is provided on a confidential basis and should not be redistributed without permission.

Stock Ratings Definition:

• Add: Total return expected to exceed 10% over the next 12 months.
• Hold: Total return expected between 0% and 10% over 12 months.
• Reduce: Total return expected to fall below 0% over 12 months.

Sector and Country Ratings:

• Sector Overweight: Positive absolute recommendation on a market cap-weighted basis.
• Neutral: Neutral absolute recommendation on a market cap-weighted basis.
• Underweight: Negative absolute recommendation on a market cap-weighted basis.
• Country Overweight/Neutral/Underweight: Guidance for portfolio positioning relative to benchmark.

Distribution of stock ratings and investment banking clients, quarter ended March 31, 2025. 551 companies under coverage.

Conclusion: Investment Outlook for Hong Kong Equities

With major geopolitical negotiations between the US and China underway, the Hong Kong market is closely monitoring developments in critical sectors such as shipping and insurance. CSSC Hong Kong Shipping stands out with a strong technical uptrend and well-defined entry and exit points, while AIA Group’s leadership transition under Mark Tucker is viewed as a catalyst for further growth. Investors are encouraged to review their individual objectives and consult with financial advisors, as market dynamics remain highly fluid amid ongoing global trade negotiations.