The Zhitong Finance app learned that Hong Kong's Hang Seng Index opened down 0.65%, and the three major indices collectively opened lower in early trading. At the beginning of the session, they surged higher for a while, but then the upward trend was weak. Since then, it has fluctuated and weakened throughout the day. By the close, the Hang Seng Index fell 1.65% or 296.43 points to 17670.16 points, with a full day turnover of HK$89.629 billion; the Hang Seng State-owned Enterprises Index fell 1.54% to 6087.1 points; and the Hang Seng Technology Index fell 1.04% to 4055.84 points.

Guotai Junan pointed out that the current market environment is similar to the “mini version” of the 2022 Q4, 2023Q4. The direction of breaking the game in 2023Q4 is that interest rates on US bonds will fall, and the profit side still needs more policy support. It is expected that the rebound in this round may be weaker than the former. The Federal Reserve continued to suspend interest rate hikes in November. The market may begin to rush ahead with pricing and interest rate hikes at the end of the cycle, and the US dollar index and US bond yields have declined. From the perspective of win rate and odds, Hong Kong stocks in turn recommend liquidity-sensitive sectors such as pharmaceuticals, electronics, semiconductors, automobiles, and internet retail.

Blue chip stock performance

Shenzhou International (02313) was sluggish throughout the day. At the close, it fell 4.86% to HK$81.2 million, with a turnover of HK$597 million, dragging down the Hang Seng Index by 5.59 points. Jefferies pointed out that the US apparel industry has been affected by macroeconomics and warm winter expectations, and demand has slowed this winter. According to inventory data, the US apparel industry has not made inventory replenishment. It is estimated that Shenzhou International (02313) production in the fourth quarter may begin to fall short of expectations. The slowdown in orders has also weakened profit margin forecasts, mainly due to reduced capacity utilization and operating leverage. Under Shenzhou's high valuation, the rating was downgraded from “buy” to “hold”, and the target price was lowered from HK$88 to HK$80.

In terms of other blue-chip stocks, China Hongqiao (01378) rose 2.72% to HK$7.18, contributing 0.88 points to the Hang Seng Index; Xiaomi Group-W (01810) rose 1.8% to HK$15.82, contributing 7.99 points to the Hang Seng Index; Jiulongcang Real Estate (01997) fell 4.91% to HK$27.1, dragging down the Hang Seng Index by 3.79 points; and Zhongsheng Holdings (00881) fell 4.71% to HK$19, dragging the Hang Seng Index by 1.27 points.

In terms of popular sectors

On the market, large technology stocks are generally under pressure today. Real estate trusts, Hong Kong real estate stocks, beer, domestic insurance stocks, and domestic housing stocks had the highest declines; on the other hand, biomedical stocks bucked the trend, and aluminum stocks and coal stocks rose ahead.

1. Domestic insurance stocks had the highest decline.At the close, China Taibao (02601) fell 7.26% to HK$17.64; Xinhua Insurance (01336) fell 3.37% to HK$17.2; China Life (02628) fell 3.02% to HK$10.92; and China Financial Insurance (02328) fell 0.85% to HK$9.35.

On November 6, the supervisory authorities issued the “Notice on Further Accomplishing Matters Relating to Short-Term Health Insurance Business” to various insurance companies. The notice pointed out that in their daily supervision, the supervisory authorities recently discovered that some insurance companies operate short-term health insurance business and have problems such as careless product design, weak sales management, and inadequate customer service. The notice stated that product pricing should be scientific and reasonable, that the premium rate for each insurance period should be determined in strict accordance with the pricing data base, that the rate structure of the product must not be changed through arbitrary adjustments to actuarial assumptions, etc., and that “0” rates and other types of situations that clearly do not comply with actuarial principles are strictly prohibited.

2. Housing stocks declined collectively.At the close, Jinhui Holdings (09993) fell 7.14% to HK$3.12; Yuexiu Real Estate (00123) fell 4.92% to HK$7.92; China Evergrande (03333) fell 4.8% to HK$0.238; and Sunac China (01918) fell 3.83% to HK$1.76.

Vanke held a meeting with financial institutions yesterday. During this time, the Shenzhen State-owned Assets Administration Commission and Shenzhen Railway Group, the majority shareholder, expressed support for Vanke. In response, UBS pointed out that although Vanke has support from the major shareholder Shenzhen Metro Group, due to the potential risk of a mixed ownership structure, investors expect market confidence to recover only if they see that Shenzhen Railway actually provides unconditional support. Shengang Securities pointed out that the cumulative year-on-year equity sales of the top 100 housing enterprises continued to decline in October, and the year-on-year decline in monthly sales increased further. Judging from the sales rankings on the housing enterprise side, the current sales market is still under downward pressure.

3. Hong Kong real estate stocks are under pressure.At the close, Wharf Real Estate (01997) fell 4.91% to HK$27.1; Swire Properties (01972) fell 4.77% to HK$15.18; Hang Lung Properties (00101) fell 3.83% to HK$10.56; and Changshi Group (01113) fell 2.96% to HK$39.35.

On November 6, the US property price index was last reported at 143.01 points, down 0.43% on a weekly basis, for 12 weeks; down 2.02% from four weeks ago; property prices have fallen 2.07% so far this year, hitting a new low of more than six and a half years; the decline in policy reports, and the maintenance of interest rates in the US and interest rates of major banks in Hong Kong have not yet been reflected in the property price index. Chen Haichao, head of Li Jia Ge's Real Estate Research Department, said earlier that the “Policy Address” will ease the decline in property prices. However, high interest rates and slow economic recovery during the year will still plague the property market, and property prices may not escape falling throughout the year. He estimated that in November and December for the remainder of the fourth quarter, there is still little chance for property prices to rebound. It is expected that they will tend to fluctuate in a narrow range of about 0.5%. It is estimated that reducing the increase will only ease the decline in property prices.

4. Some pharmaceutical stocks bucked the trend and became active.Clover Bio-B (02197) rose 18.31% to HK$0.84; Pioneer Pharmaceutical-B (09939) rose 11.18% to HK$3.38; Jianshi Technology-B (09877) rose 11.01% to HK$18.76; Pharmaceutical-B (02126) rose 5.98% to HK$2.48.

Recently, at the “15th China Pharmaceutical Entrepreneurs, Scientists and Investors Conference”, Weng Linjia, Deputy Director of the Pharmaceutical Prices and Bidding and Procurement Department of the National Medical Security Administration, revealed during a keynote speech that the National Health Insurance Administration is adjusting the pricing policy for innovative drugs and is adopting relatively relaxed management of prices in the early stages of marketing of innovative drugs based on the “Guidelines for the Formation of Prices for COVID-19 Therapeutics”. According to the report, industry insiders affirm the positive guiding effect of this signal and believe that the innovative drug price protection mechanism is more likely to be implemented, which is a true reflection of further deepening the reform of the pharmaceutical system and can bring “a ray of sunshine” to the current pharmaceutical winter period.

hotChange of shares

1. Hefu is brilliant(00733)The amount of emissions has skyrocketed,At the close, it rose 49.46% to HK$1.39.

Country Garden Service and Hefu Huihuang jointly announced that the two sides have signed a strategic cooperation agreement. Country Garden Property plans to acquire 71.64 million shares of Hefu Huihuang (equivalent to about 10.63% of Hefu Huihuang's issued share capital). Country Garden Properties' Hong Kong shareholding ratio will increase from about 25% to about 35.63%. The total cost of shares sold will be HK$115 million, which is equivalent to HK$1.61 per share sold.

2. China Securities International(00943)The resumption of trading has soared,At the close, it rose 30% to HK$0.013.

China Securities International reissued its annual results for the year ended June 30, 2023, and obtained revenue of HK$870 million during the period; profit attributable to shareholders of HK$69.131 million; and basic profit of HK$0.64 cents per share. According to the announcement, the company's revenue during the reporting period increased by about 317.7% compared to HK$209 million in the 18 months ended June 30, 2022, mainly due to project delivery and confirmation of pre-sale proceeds in July 2022 in Nancheng District, Dongguan, Guangdong Province.

3. Zero-run car(09863)It bucked the market and strengthened,At the close, it rose 7.89% to HK$34.2.

CICC said that the three major inflection points depend on changes in the company's fundamentals: the inflection point in sales volume, the inflection point in the business model, and the inflection point of intelligence. Since its establishment, the company has always adhered to a global self-research strategy. This is the core cornerstone for the continuous deepening of the company's product capabilities and the introduction of Stenllantis to achieve external export of products and technology. At this point, we are actively reminding investors to pay attention to the company's multiple inflection points or bring about a new growth curve for the company.

4. Corning Jerry Pharmaceuticals-B(09966)It hit a new high in nearly half a year.At the close, it was up 5.36% to HK$12.58.

Corning Jerry Pharmaceuticals announced that KN026 (a type of human epidermal growth factor receptor 2 (HER2) targeting bispecific antibody) chemotherapy has been awarded by the National Drug Administration's Drug Evaluation Center (CDE) as a breakthrough treatment for patients with HER2 positive gastric cancer (GC) (including gastroesophageal junction cancer (GEJ)) who have failed first-line standard treatment (trastuzumab combined chemotherapy).

5. Zhejiang Shanghai-Hangzhou(00576)It hit a new low during the year,At the close, it was down 6.38% to HK$5.58.

Zhejiang, Shanghai, Hangzhou, and Ningbo announced that the China Securities Regulatory Commission has agreed to register domestic stocks for stock offering. The stock offering price of HK$4.06 per H share was reduced by about 32.11% from the closing price of HK$5.98 per H share on November 3, 2023, based on the issuance of 3.8 H-shares for every 10 existing H shares. The stock offering (including domestic shares and H shares) is estimated to raise approximately RMB 6.15 billion, with a net amount of approximately RMB 6.12 billion.