HK Stock Market Move | Concept stocks collectively lower, Lyon says the United States has not clearly defined key software, does not currently affect the fundamentals of software companies.

The concept stocks collectively fell, as of the time of publication, KINGSTOFT (03888) fell by 7.44% to HK$33.84; Chinasoft International (00354) fell by 4.75% to HK$5.81; INSPUR DIGI ENT (00596) fell by 4.94% to HK$8.09. On the news front, US President Trump recently announced that key software exports to China will be restricted starting from November 1st. A research report by Lyon stated that this event has triggered strong market sentiment in the China National Software & Service industry about the "domestic substitution". As the "key software" has not been clearly defined and negotiations between China and the US have yet to be determined, Lyon does not expect the fundamentals to change immediately. Lyon stated that Trump's announcement did not clearly define "key software", and it is expected that negotiations between China and the US will take place on this issue. "Domestic substitution" has been ongoing since 2018; therefore, it is believed that its impact will not immediately reflect on the fundamentals of China National Software & Service companies. If the US does indeed implement export controls starting from November 1st, it is believed that Chinese industrial software, office software, and Enterprise Resource Planning (ERP) software companies will benefit.