The Zhitong Finance App learned that after a brief two-day correction, Hong Kong stocks were once again strong, and the three major indices all closed up more than 1%. At the close, the Hang Seng Index rose 1.22% or 223.95 points to 18537.81 points, with a full day turnover of HK$123.694 billion; the Hang Seng State-owned Enterprises Index rose 1.61% to 6560.67 points; and the Hang Seng Technology Index rose 1.95% to 3947.41 points.

GF Securities pointed out that under an optimistic scenario, favorable capital conditions for Hong Kong stocks will continue + policy expectations will continue to improve—> Hong Kong Stock ERP is expected to reach the level of a reduced version of “the end of January last year.” Under this assumption, taking into account the Hang Seng Index forward ERP which was high at the end of January last year and the current 4.5% US bond interest rate, the bank determined that there is still some room for growth in the Hang Seng Index forward PE.

Blue chip stock performance

Lenovo Group (00992) led the blue chip increase. At the close, it rose 8.72% to HK$10.22, with a turnover of HK$1,136 billion, contributing 10.22 points to the Hang Seng Index. According to the Lyon Research Report, Lenovo Group is expected to have stable financial results for the final fiscal quarter ending the end of March this year, and indicates that its personal computer business performance is strong. The bank raised Lenovo Group's target price from HK$9.6 to HK$10.8, and raised the rating from “outperforming the market” to “buy”. It is optimistic that the company will streamline the server business, and expects the company to disclose more details about AI PCs in the second half of this year.

In terms of other blue chips, Orient Overseas International (00316) rose 6.12% to HK$128.3, contributing 1.57 points to the Hang Seng Index; Xinyi Solar (00968) rose 5.78% to HK$5.86, contributing 2.43 points to the Hang Seng Index; Ideal Automobile-W (02015) fell 2.01% to HK$107.2, dragging down 4.75 points; Hang Seng Bank (00011) fell 0.38% to HK$106.2, dragging down the Hang Seng Index by 0.48 points.

In terms of popular sectors

On the market, rising large technology stocks helped the market recover. Meituan closed up nearly 4% and Tencent rose more than 2%; the property market loosened up domestic housing stocks, and Shimao Group once soared more than 42%; the European shipping index continued to reach new highs, and shipping stocks performed brilliantly; pharmaceutical stocks continued to pick up; Apple concept stocks, semiconductor stocks, paper stocks, wind power stocks, heavy machinery stocks, consumer stocks, etc. rose one after another. On the other side, coal stocks, pork concept stocks, etc. are turning green.

1. Domestic housing stocks were strong throughout the day. At the close, Shimao Group (00813) rose 33.33% to HK$0.6; Agile Group (03383) rose 13.46% to HK$0.59; Xuhui Holding Group (00884) rose 12.5% to HK$0.36; and Sunac China (01918) rose 10% to HK$1.32.

Following Hangzhou, Xi'an announced the complete lifting of housing purchase restrictions. The notice mentioned that households purchasing newly built commercial housing and second-hand housing throughout the city will no longer be examined for eligibility to buy homes. According to Central Plains Real Estate statistics, in the past year or so, all parts of the country have issued more than 80 loosening purchase restrictions. Currently, apart from Hainan and the four first-tier cities, the only second-tier cities left are Xi'an and Tianjin, which maintain purchase restrictions in core areas. Chen Wenjing, director of market research at the China Index Research Institute, predicts that the pace of adjustment of purchase restriction policies in second-tier cities may accelerate, while policies such as reducing down payment ratios, lowering mortgage interest rates, and lowering transaction taxes are also expected to be adjusted in core cities.

2. Shipping stocks performed brilliantly. At the close, COSCO Haifa (02866) rose 15.85% to HK$0.95; Orient Overseas International (00316) rose 6.12% to HK$128.3; Pacific Shipping (02343) rose 5.32% to HK$2.97; and COSCO Marine (01138) rose 3.46% to HK$10.16.

On May 9, the daily trading price of European shipping skyrocketed. The main contract closed up nearly 12%, and the price reached a record high of 3,500 points. Everbright Futures pointed out that judging from market conditions, the increase in liner companies successfully implemented in the first half of May, and major liner companies announced two rounds of increases one after another. Strong spot prices may have boosted the market. June is the transition month of the low season for shipping routes. Currently, the European economy is recovering at a low level, and many ECB officials have announced interest rate cuts in June. Shipments in June may be stronger than in May, and the market is positive about the implementation of the June price increase. Geographically, Houthi attacks may escalate, causing European shipping to continue to be strong in the short term.

3. Semiconductor stocks were generally higher. At the close, Huahong Semiconductor (01347) rose 8.81% to HK$17.04; SMIC (00981) rose 4.71% to HK$16.02; Shanghai Fudan (01385) rose 4.5% to HK$11.62; and CLP Huada Technology (00085) rose 2.92% to HK$1.41.

According to the latest data from the Semiconductor Industry Association, global semiconductor revenue for the first quarter of 2024 was US$137.7 billion, up 15.2% year on year and down 5.7% month on month. The SIA estimates that the year-on-year increase in the second to fourth quarter will reach double digits. Tianfeng Securities pointed out that benefiting from semiconductor cycle recovery and AI and other applications combined with long-term domestic substitution trends, some semiconductor manufacturers ushered in high profits and are optimistic that the semiconductor industry will achieve a high growth rate in the second quarter. Nomura analyst David Wong and others said in the latest report that March will be the seasonal bottom of the 3-month rolling average, and global chip sales are expected to grow strongly in the next few months.

4. Apple concept stocks had the highest gains. At the close, BYD Electronics (00285) rose 9.22% to HK$32; Qiu Titanium Technology (01478) rose 6% to HK$3.71; Sunyu Optical Technology (02382) rose 5.54% to HK$42.9; and Gaowei Electronics (01415) rose 3.5% to HK$18.94.

Apple recently officially launched the new iPad Pro/Air tablet. Industry analysts said that this is the first time in the past two years that Apple has updated the iPad, which will give a certain incentive to buy a device. This time, the new iPad was officially launched on domestic e-commerce platforms at 9:00 a.m. on May 8. According to reports, on the evening of May 8, the number of people who ordered and purchased the new Apple iPad on an e-commerce platform reached 30,000. The new iPad will go on pre-sale today and officially go on sale May 15. Everbright Securities previously stated that the company's iPad business is expected to recover along with new product sales, and in response to the company's guidelines, iPad revenue will achieve double-digit year-on-year growth in the next fiscal quarter.

5. Lithium battery stocks rebounded collectively. At the close, China Airlines (03931) rose 10.23% to HK$15.3; Ganfeng Lithium (01772) rose 7.62% to HK$26.85; and Tianqi Lithium (09696) rose 4.15% to HK$32.65.

The Ministry of Industry and Information Technology publicly solicited opinions on the lithium battery industry specifications and administrative measures (draft for comments). The draft for solicitation of comments mentions that guide enterprises to reduce manufacturing projects that simply expand production capacity, strengthen technological innovation, improve product quality, and reduce production costs; in addition, lithium battery companies spend no less than 3% of their main business revenue every year on R&D and process improvement. Dongguan Securities pointed out that in the current context of overcapacity in the lithium battery industry, the Ministry of Industry and Information Technology is revising industry regulations to guide technological innovation, transformation and upgrading, and promote high-quality and healthy development. It will speed up the clearance of backward production capacity, prevent disorderly competition at low prices, and facilitate capacity utilization and profit recovery for leading enterprises with technical advantages and high-quality production capacity.

Popular volatile stocks

1. Zaiding Pharmaceuticals (09688) strengthened after the closing. At the close, it rose 20.82% to HK$15.9.

Zaiding Pharmaceutical announced that total net product revenue for the first quarter of 2024 was US$87.1 million, up 39% year on year; 43% year on year based on fixed exchange rate (CER); R&D expenses were US$54.6 million, up 12.58% year on year; and cash reserves as of March 31, 2024 were US$750.8 million.

2. Sinochem Fertilizer (00297) hit an 8-month high. At the close, it rose 11.36% to HK$0.98.

Sinochem's first quarter turnover was approximately RMB 6.639 billion, and net profit was approximately RMB 499 million, an increase of about 1.63% over the previous year, mainly due to the Group's unswerving promotion of the “Bio+” strategic transformation, focusing on core biological products, and continuing to develop biotechnology products to drive steady growth in sales and gross profit levels to withstand the impact of market fluctuations on performance.