CGS International
June 5, 2025

China Youran Dairy Group and NIO: Bullish Signals and Growing Pains in Hong Kong’s Evolving Equity Landscape

Market Recap: Macro Uncertainty and Sector Divergence

The Hong Kong equities market continues to reflect a complex global economic landscape. U.S. Treasuries have surged this year as weaker-than-expected economic data fosters expectations of at least two interest rate cuts by the Federal Reserve before the end of 2025. U.S. service sector contraction and the slowest hiring pace in two years have driven bond yields lower and weakened the U.S. dollar, while the S&P 500 inched higher, led by healthcare and communication sectors.

Trade uncertainty is weighing on sectors like health care, technology, and construction, while retailers and financial services firms are still finding pockets of growth. With such wide dispersion in sector outlooks, investors are urged to allocate capital wisely.

Company Focus: China Youran Dairy Group Ltd (HKG: 9858)

Technical Buy: Bullish Momentum in Early Uptrend

China Youran Dairy Group Ltd, a leading player in China’s dairy sector, is currently exhibiting a strong bullish trend. The company is engaged in dairy product manufacturing, covering breeding, feed business, raw milk production, and other related operations. Its market presence extends throughout China.

Technical Snapshot: Why China Youran Dairy Looks Bullish

• The uptrend is in its early stage and poised to continue higher upon a bullish pennant breakout, confirming strong bullish momentum.
• The weekly chart shows a significant breakout from a larger falling wedge, followed by an upward trend. A bullish crossover between the 20 and 50 EMAs further reinforces the upside potential.
• Ichimoku indicators signal a clear bullish stance with prices trending above all key levels.
• MACD histogram is in positive territory, and both MACD and signal lines remain well above the zero line.
• The Stochastic Oscillator has crossed above its 50-midpoint level, supporting the bullish case.
• The 23-period Rate of Change (ROC) is above zero, confirming upward momentum.
• The Directional Movement Index points to robust bullish strength.
• Trading volume is expanding healthily, supporting the price trend.

With technical indicators aligned, China Youran Dairy Group is well-positioned for further gains. Investors may consider entry at the specified price levels, with clear support and stop-loss guidance.

NIO Inc (HKG: NIO): Profitability Pressured Amid Intensifying Competition

NIO Inc, a key player in the electric vehicle (EV) sector, is facing growing profitability challenges due to heightened competition. The company reported a first-quarter 2025 non-GAAP net loss of RMB 6.3 billion, widening from an RMB 4.9 billion loss in the first quarter of 2024, largely driven by elevated operating expenses.

• NIO’s strong product pipeline—including the NIO, ONVO, and Firefly brands—holds promise to boost future sales.
• Despite this, fierce competition is expected to temper shipment growth in the near term.
• The broker reiterates a Hold rating on NIO, with a lowered DCF-based target price of HK\$30.62.

Although NIO is innovating and expanding its model lineup, investors should be mindful of persistent margin pressures and the challenging competitive environment in China’s EV market.

Broker Ratings and Methodology

Stock and Sector Rating Definitions

• 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 weightings are also provided, helping investors calibrate their portfolios relative to benchmarks.

As of March 31, 2025, the broker covers 551 companies.

Conclusion: Key Opportunities and Risks for Investors

Hong Kong’s equity market is a landscape marked by sectoral divergence and shifting macroeconomic expectations. China Youran Dairy Group stands out with a strong technical buy signal and robust momentum, offering multiple target price opportunities for bullish investors. NIO Inc, while demonstrating innovation and brand expansion, faces ongoing profitability pressures amid fierce EV market competition.

Investors are advised to weigh these sector and company-specific dynamics carefully, align entry and exit points with technical and fundamental signals, and remain attentive to global macroeconomic triggers that could influence market direction in the months ahead.