Saola's wind speeds topped 200 kilometres (125 miles) per hour by 6 pm (1000 GMT) on Thursday, with the storm around 370 kilometres southeast of the Chinese finance hub, according to the Hong Kong Observatory.
It will bring "heavy squally showers and violent winds" on Friday, the observatory said, adding that the threat level was expected to be upgraded to "T8" -- the city's third-highest -- early in the morning.
On the mainland, China issued the most severe warning in its four-tiered system, with the National Meteorological Centre predicting the typhoon would make landfall "somewhere in the coastal areas stretching from Huilai to Hong Kong" by Friday afternoon at the earliest.
But there was also a possibility it could move west and "pass through the waters of eastern Guangdong without making landfall".
Train services have been suspended across Guangdong, state news agency Xinhua said, while various cities in the southern province -- including Shantou, Shanwei, Jieyang and Chaozhou -- have pushed the start of the academic year to Monday.
Budget airline HK Express announced it was cancelling 70 flights in and out of Hong Kong on Friday and Saturday, while its parent company Cathay Pacific said an unspecified number of its flights would also be affected by the storm.
Hong Kong Airlines said it had cancelled more than 30 flights and start-up carrier Greater Bay Airlines said it was calling off 12.
Hong Kong's low-lying areas could see "serious flooding", its observatory said, and the storm surge may be similar to that seen during the 2018 Super Typhoon Mangkhut if Saola skirted the south of the territory.
Mangkhut -- which triggered Hong Kong's maximum "T10" typhoon alert -- caused severe damage to the city and injured more than 300 people.
Saola displaced thousands earlier this week as it passed the northern Philippines but no direct casualties have been reported from it so far.
Authorities in Hong Kong's neighbouring casino hub of Macau said they were eyeing the possibility of issuing its third-highest typhoon warning on Saturday.
Southern China is frequently hit in summer and autumn by typhoons that form in the warm oceans east of the Philippines and then travel west.
While they can cause temporary disruption to cities like Hong Kong and Macau, fatalities have become much less common thanks to stronger building codes and better flood management systems.
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