CGS International
June 11, 2025

Hong Kong Stocks in Focus: SJM Holdings Signals Bullish Reversal, AIA Group Sees Positive Leadership Change

Market Overview: Trade Talks Lift Sentiment, Eyes on US Inflation Data

Wall Street saw cautious optimism as investors closely tracked ongoing US-China trade negotiations. Despite a relatively quiet economic calendar, the S&P 500 edged higher and hovered just 2% below its record highs. Treasury yields were steady ahead of a major \$58 billion auction, with the US dollar fluctuating as bond traders awaited further clarity on inflation and trade. Notably, US Commerce Secretary Howard Lutnick highlighted constructive progress in talks, with the market poised to react to any significant headlines before the critical May CPI data release. Expectations are for US core consumer prices (excluding food and energy) to post their largest gain in four months, up 0.3% in May, as companies begin to pass higher import duties to consumers.

AIA Group: Mark Tucker Returns as Chairman, Stock Outlook Remains Strong

• Leadership News: Mark Tucker will step in as AIA Group’s chairman from October 1, 2025, a move seen as highly positive for the company given his deep operational expertise and successful leadership history.
• Historical Performance: During Tucker’s previous tenure, AIA shares rose an average 4% in the five-day window around company results announcements, underscoring the market’s confidence in his leadership.
• Analyst View: The broker reiterates an “Add” rating and a target price of HK\$103, keeping AIA as a top sector pick for investors seeking robust, sector-leading exposure.

SJM Holdings Ltd (880): Technical Buy Triggered, Bullish Reversal Confirmed

Company Snapshot: SJM Holdings Limited operates gaming, hotel, and tourism-related ventures in Macau, making it a key player in Asia’s leisure and entertainment sector.
Latest Price Action:

• Last price: HK\$2.55
• Technical rating: Strong Bullish Reversal

Key Technical Levels and Trade Plan:

Technical Analysis Highlights:

1. Trend Break: SJM has decisively broken above its downtrend line, completing an inverted head and shoulders formation — a classic signal for a trend reversal and higher prices ahead.
2. Ichimoku Indicator: Three bullish golden crosses signal robust upward momentum.
3. MACD: The histogram turns positive, with a bullish crossover at the bottom, strengthening the reversal case.
4. Stochastic Oscillator: Indicates steady upward price momentum.
5. Rate of Change (ROC): The 23-period ROC is positive, confirming bullish conditions.
6. Directional Movement Index: Signals that bullish strength is returning.
7. Volume: Notable volume spikes accompany the breakout, adding conviction to the technical setup.

Disclosures, Ratings Definitions, and Coverage Summary

Stock Ratings:

• Add: Expected total return exceeds 10% over the next 12 months.
• Hold: Expected total return between 0% and 10% over 12 months.
• Reduce: Expected total return below 0% over 12 months.

Sector Ratings:

• Overweight: Positive absolute recommendation for sector stocks on a market cap-weighted basis.
• Neutral: Neutral absolute recommendation for sector stocks.
• Underweight: Negative absolute recommendation for sector stocks.

Country Ratings:

• Overweight: Above-benchmark country exposure recommended.
• Neutral: Benchmark-matching country exposure recommended.
• Underweight: Below-benchmark country exposure recommended.

Coverage Distribution (as of March 31, 2025):

Total companies under coverage: 551

Important Jurisdictional Notices

This research is produced and distributed by CGS International and its affiliates, regulated across several jurisdictions including Hong Kong, Singapore, Malaysia, Indonesia, South Korea, Thailand, and others. The report is strictly confidential, for the exclusive use of clients, and not intended as investment advice for the general public. Investors are urged to independently assess the information and consult their financial advisers to ensure suitability.

Conclusion: Key Picks for Hong Kong Investors

AIA Group remains a top sector pick, with leadership changes expected to reinforce investor confidence. SJM Holdings offers a compelling technical setup, with multiple bullish signals and significant upside targets for traders and investors seeking exposure to Macau’s gaming sector. Both stocks warrant close attention as Hong Kong equities navigate global macroeconomic shifts and sector-specific catalysts.