Hong Kong's late-October earnings season has exposed a sharp divide between companies delivering stronger operational signals and those whose results have failed to overcome a fast retreat from risk assets. The Hang Seng Index fell 4.52% between Oct. 20 and Oct. 23, while the Hang Seng Tech Index dropped 5.76%, as southbound Stock Connect flows recorded roughly HK$17.05 billion in net selling over four consecutive trading days.
The selling accelerated on Oct. 22, when the Hang Seng Index lost 3.03% and the Hang Seng Tech Index fell 5.03%. The deeper decline in technology shares placed additional pressure on companies tied to electric vehicles, semiconductors and other higher-volatility growth themes, even where quarterly revenue growth remained strong.
Corporate results have therefore produced sharply different market reactions. HSBC Holdings and battery maker Contemporary Amperex Technology both faced heavy share-price declines after reporting earnings, while pharmaceutical groups Jiangsu Hengrui Pharmaceuticals and WuXi AppTec gained following results that included stronger profit growth, rising order backlogs or upgraded guidance.
HSBC falls despite higher reported profit
HSBC reported third-quarter pre-tax profit of $9.632 billion, up 32% from a year earlier, while post-tax profit rose 38% to $7.6 billion. Net interest income increased 6% to $9.3 billion, according to the lender's quarterly report.
The bank declared a third interim dividend of $0.10 per share and said it planned share buybacks of up to $1 billion. Its reported net interest margin was 1.57%, while annualised return on tangible equity reached 17.7%.
The headline profit comparison benefited from a lower prior-year base. HSBC had booked $1.421 billion in legal provisions during the year-earlier quarter over a Luxembourg claim linked to Bernard Madoff's fraud case. On a constant-currency basis and excluding major items, pre-tax profit was about $10.021 billion, representing roughly 10% growth.
Revenue rose 4.7% to $18.62 billion but came in below the $18.93 billion market estimate cited in the supplied figures. Wealth management revenue was about $2.7 billion, broadly unchanged from the previous year.
HSBC's Hong Kong-listed shares closed down 5.56% at HK$134.30 after the release. The response suggests that capital-return measures and strong reported earnings did not fully offset concern about the revenue shortfall and the slower pace of growth in wealth management.
CATL's cash flow becomes a market focus
Contemporary Amperex Technology, widely known as CATL, reported third-quarter revenue of RMB165.221 billion, a 58.58% increase from a year earlier and 11.8% above the second quarter. Net profit attributable to shareholders rose 14.54% year on year to RMB21.246 billion, though it fell 5.77% from the preceding quarter.
For the first nine months, CATL said revenue climbed 56.19% to RMB442.137 billion and attributable net profit rose 31.60% to RMB64.53 billion. Operating cash flow over the same period declined 23.60% to RMB61.625 billion.
The more difficult figure for traders was the third-quarter cash-flow calculation implied by CATL's half-year and nine-month reports. Operating cash flow for the quarter was about RMB1.409 billion, down 93.59% from a year earlier and the weakest quarterly level since the second quarter of 2018.
That gap between rapid revenue expansion and weaker cash conversion drew attention in a market already reducing exposure to growth shares. CATL's H shares dropped 6.58% on Oct. 20, followed by declines of 11.41% on Oct. 21 and 7.24% on Oct. 22. By 3:45 p.m. on Oct. 28, the shares traded at HK$346.80, about 0.5% below the previous close.
CATL also disclosed an A-share repurchase plan worth about RMB800 million. The proposed buyback provides a capital-return measure, though the immediate market focus remained on the unusually sharp quarterly decline in operating cash flow.
Drugmakers find support in recurring operations
Jiangsu Hengrui Pharmaceuticals reported third-quarter revenue of RMB8.953 billion, up 20.55% year on year. Attributable net profit surged 88.92% to RMB2.458 billion, while profit excluding non-recurring items rose 90.93% to RMB2.514 billion.
Operating cash flow increased 21.76% to RMB5.857 billion, offering a cleaner contrast with CATL's cash-flow weakness. Hengrui said higher out-licensing revenue contributed to its profit increase, showing the growing financial contribution from licensing drug-development rights to partners.
Its innovative drug sales reached RMB13.871 billion in the first nine months, up 17.05% from a year earlier and accounting for 64.59% of drug sales revenue. Research and development spending totaled RMB7.146 billion over the period.
Hengrui's H shares rose more than 12% at one point on Oct. 28 and were up about 10.9% at HK$49.58 by 3:45 p.m. The move reflected a market preference for earnings growth supported by operating cash generation and expanding innovative-drug revenue.
WuXi AppTec also received a more favorable response after raising its annual outlook. The contract research and manufacturing company reported first-nine-month revenue of RMB45.537 billion, up 38.59%, and attributable net profit of RMB19.398 billion, up 60.64%. Net profit excluding non-recurring items rose 73.03%.
Third-quarter attributable profit jumped 136.67% to RMB8.318 billion, although that figure included approximately RMB3.102 billion in one-off gains from selling part of its stake in associate WuXi XDC. Excluding non-recurring items, third-quarter net profit increased 49.85%.
WuXi AppTec reported backlog orders of RMB76.74 billion at the end of September, up 36.4% from a year earlier, with a net increase of about RMB10.3 billion during the quarter. It lifted full-year revenue guidance to RMB61.0 billion-RMB61.9 billion from RMB58.5 billion-RMB60.5 billion and raised its adjusted free-cash-flow outlook to RMB14.5 billion-RMB15.5 billion.
The shares opened more than 4% higher after the Oct. 27 results and traded about 2.2% higher by mid-afternoon on Oct. 28. The backlog and revised outlook gave traders measures of future demand beyond a quarter boosted by disposal gains.
Orders support ASMPT while coal prices aid Shenhua
Semiconductor equipment maker ASMPT reported third-quarter sales revenue of HK$5.247 billion, up 48.7% year on year. New orders reached a record HK$8.845 billion, up 137.9%, producing a book-to-bill ratio of 1.69, its highest since the first quarter of 2021.
The company guided for fourth-quarter revenue of $670 million to $730 million. At the midpoint, that would represent about 4.6% sequential growth and 37.5% year-on-year growth. Yet its shares reversed an initial gain of nearly 5% and traded 3.2% lower at HK$117.30 by 3:45 p.m., illustrating the limited protection that strong order data offered during the technology selloff.
China Shenhua Energy provided a more defensive earnings profile. Third-quarter attributable profit rose 3.2% to RMB15.688 billion, while profit excluding non-recurring items increased 10.6%. Nine-month operating cash flow climbed 23.1% to RMB92.7 billion.
The company's results coincided with higher coal prices. Qinhuangdao 5,500 kcal spot coal prices rose 31.3% year on year during the period cited, while contract coal prices increased 5.0%. Based on its 2025 payout ratio, China Shenhua's dividend yield was estimated at about 4.52% as of Oct. 26.
The earnings season has left Hong Kong traders sorting companies less by headline profit growth than by the durability of orders, cash conversion and the composition of earnings. That distinction has been most visible in the different reactions to CATL, Hengrui and WuXi AppTec, even as the broader market remained under sustained selling pressure.
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