The Zhitong Finance app learned that the three major indices of Hong Kong stocks fluctuated and declined after opening collectively low in early trading. Among them, the Hang Seng Index fell below the 16,000 mark in the intraday period and continued to hit a new low during the year; the decline narrowed in the afternoon. By the close, the Hang Seng Index fell 0.81% or 132.88 points to 16201.49 points, with a full day turnover of HK$98.728 billion; the Hang Seng State-owned Enterprises Index fell 1.17% to 5532.49 points; and the Hang Seng Technology Index fell 1.06% to 3666.51 points.

China Thailand International pointed out that the decline in China's CPI and PPI increased in November, and the core CPI remained at a low level, indicating that the recovery in domestic demand is still weak. US data indicates that the chances of the economy achieving a soft landing are high, and the macro conditions are more friendly to the financial markets. Since there is still a certain difference in fundamentals between China and the US, compounded by fluctuations in the exchange rate of the Japanese yen, it may affect the pace of the rebound in Hong Kong stocks. Overall, the investment sentiment and valuation of Hong Kong stocks are close to extreme levels, making it difficult for them to deteriorate significantly.

Blue chip stock performance

Li Ning (02331) led the decline in blue chips. At the close, it fell 14.29% to HK$18.3, with a turnover of HK$2,242 billion, dragging down the Hang Seng Index by 11.43 points. Li Ning purchased the entire “Hong Kong Hui East” commercial building in North Point from Hengji Real Estate. Some of the properties will be used to set up the Hong Kong headquarters, involving $2,208 million and undertaking transfer sales loans of $587.9 million. The total acquisition cost is about $2,796 million. The transaction is expected to be completed on or before January 28 next year. UBS pointed out that based on spending on non-core business this time, it is expected that this will have a negative impact on stock prices.

In terms of other blue-chip stocks, Lenovo Group (00992) rose 3.14% to HK$9.86, contributing 3.74 points to the Hang Seng Index; Henkel Properties (00012) rose 1.65% to HK$21.6, contributing 0.81 points to the Hang Seng Index; Zhongsheng Holdings (00881) fell 3.4% to HK$16.48, dragging down the Hang Seng Index by 0.78 points; and China Biopharmaceuticals (01177) fell 2.97% to HK$3.27, dragging down 1.79 points.

In terms of popular sectors

On the market, large technology stocks generally declined, with sporting goods, photovoltaic stocks, catering stocks, pork concepts, beer stocks, and non-ferrous sectors having the highest declines; on the other hand, some pharmaceutical stocks rose, and the semiconductor sector performed actively in the afternoon.

1. The trend of major consumer stocks is sluggish. By the close, Nai Xue's Tea (02150) fell 3.64% to HK$3.18; Helens (09869) fell 3.64% to HK$4.24; and China Resources Beer (00291) fell 2.53% to HK$32.8.

The CPI fell 0.5% year on year in November, continuing the downward trend and falling short of market expectations. The decline was 0.3 percentage points higher than the previous month. The month-on-month decline was 0.5%. Guojin Securities pointed out that at present, the fundamentals of the large consumer sector are still slowly recovering, and the valuation bubble has remained at the bottom after it has digested. Looking ahead to the future market, the bank believes that after the consumer cycle switch is completed, the overall valuation of the consumer sector is at a historically low level, and the accumulated valuation risk has been digested. The current performance growth in the consumer sector will drive the upward trend, and the direction will change to optimism. There is limited room for downturn. It is recommended to seize the layout opportunities under the downturn.

Furthermore, CICC pointed out that it is estimated that in the fourth quarter, there will be some pressure on the recovery of mainland restaurant stocks compared to 2019, but whether reasonable profit reduction and price reduction and continuous drainage will become a “litmus test” for brand resilience. It also believes that leading brands have the ability to adjust gross profit margins through new product research and development, product structure adjustments, etc. According to the bank, the recovery of most listed restaurant brands has been weaker since September compared to July to August. It is believed that this is mainly due to pressure on demand in the current consumption environment. In order to adapt to the current consumption environment, most listed restaurant brands have adopted price reduction promotions and sales promotion measures to boost sales.

2. Internal housing and property management stocks continued to decline. At the close, Zhongliang Holdings (02772) fell 12.5% to HK$0.28; Sunac China (01918) fell HK$8.94 to HK$1.63; Sunac Services (01516) fell 3.55% to HK$1.9; and Hejing Youhuo (03913) fell 3.37% to HK$0.43.

Guosheng Securities pointed out that the year-on-year decline in new housing transactions increased again this week. The transaction area of new housing transactions in 30 cities was 2.00 million square meters, down 20.6% from the previous month, down 31.0% from the previous year; the total second-hand housing transaction area of the 13 sample cities this week was 1.091 million square meters, down 3.8% from the previous month. Western Securities also pointed out that the year-on-year decline in new housing transactions increased this week, and the month-on-month growth rate changed from positive to negative; the year-on-year increase in second-hand housing transactions narrowed, and the month-on-month decline increased. Overall, the fundamentals of the industry are still fluctuating and bottoming out.

Morgan Stanley said that the profit reset of mainland property management stocks is largely complete, but the industry climate will improve until property market sales stabilize. It is estimated that the property market will be weak in the first half of next year and will remain flat in the second half of the year. First-hand property sales will increase 5% year on year throughout the year, and completion volume will decrease by 5%. The bank lowered the target price of property management stocks by an average of 17%, and the 2023-2024 profit forecast was lowered by 3% and 6% respectively to reflect the slowdown in the expansion of the area managed by third parties, the slowdown in the growth of value-added services in the community, and the stabilization of profit margins.

3. PV stocks continued to decline. At the close, Follett Glass (06865) fell 2.68% to HK$11.64; Kaisheng Xinneng (01108) fell 2.25% to HK$3.91; Xinyi Energy (03868) fell 1.56% to HK$1.26; and Xinte Energy (01799) fell 1.07% to HK$9.23.

According to data from the Silicon Industry Branch, the average transaction price of monocrystalline refeed and monocrystalline dense materials fell 0.63% and 0.98% from week to week, respectively; the average transaction price of monocrystalline cauliflower fell 1.89% from week to week, and the lowest transaction price has fallen to 56,000 yuan/ton. This is also the sixth week since October 18, where silicon prices have been falling for six consecutive weeks. A few days ago, Shouchuang Securities pointed out that prices in the photovoltaic industry chain are still continuing to find a bottom. As polysilicon production capacity is gradually crept up and released, it is expected that the prices in the industrial chain will still drop slightly. CITIC Futures believes that the new year's expectations for photovoltaic installations will not change, but expectations of excessive supply and demand in the industrial chain are difficult to change. The bank pointed out that in the context of excess supply and demand, prices of main materials fell across the board. After prices in the industrial chain continued to fall, some enterprises were close to losses, and some manufacturers began to actively adjust. In October and November, silicon wafer emission production all declined, and there was limited room for a further sharp drop in prices.

4. Lithium battery stocks generally declined today. At the close, Tianqi Lithium (09696) fell 3.75% to HK$38.45; China Innovation Airlines (03931) fell 0.98% to HK$18.18; and Ganfeng Lithium (01772) fell 0.75% to HK$26.6.

Lithium carbonate futures rose and stopped for 2 consecutive trading days until now, reaching the 100,000 yuan/ton mark again. Industry insiders believe that this rebound may be an act of repairing the base gap that was excessive in the previous period. Currently, market sentiment is too hot, and there is a high risk that prices will fall later. Investors should pay close attention to changes in warehouse inventory, market positions, and industry fundamentals. On Monday, the opening of the main lithium carbonate futures contract rose by more than 11%, then a rapid “decline” began. By the close, the main contract for lithium carbonate fell by more than 4.82% during the day and is currently reported at 96,800 yuan/ton. Zhang Weixin, an analyst at CITIC Construction Investment, said that the current rebound is more of a technical rebound, not a reversal, and the upward space is limited. Oversupply and demand in 2024 is a probable event, and the corresponding reasonable spot price is even lower. If future supply is released as scheduled, reasonable prices dominated by marginal costs can fall below 80,000 yuan/ton.

Popular volatile stocks

1. Clover Bio-B (02197) strengthened throughout the day. At the close, it rose 22.81% to HK$0.7.

When introducing the prevention of respiratory diseases in winter yesterday, the National Health and Health Commission said that influenza is not a common cold; it is an acute respiratory infectious disease caused by the influenza virus. According to reports, Clover Biotech focuses on developing novel vaccines and biotherapy candidate products for infectious diseases, cancer, and autoimmune diseases.

2. Kingdee International (00268) bucked the trend and rose 8.09% to HK$11.22 at the close.

Kingdee International and Qatar Investment Authority (“QIA”) announced that they have reached a final agreement. According to the agreement, QIA will invest approximately US$200 million as consideration to subscribe to common shares issued by Kingdee under a general mandate. After the transaction is completed, it will account for about 4.26% of Kingdee's total common stock (“strategic investment”), and the lockdown period will be 180 days.

3. Chinasoft International (00354) was significantly higher. At the close, it was up 6.78% to HK$6.3.

The company recently signed an open source Hongmeng cooperation agreement with Zhiwei Intelligence to collaborate to build open source Hongmeng IoT terminals and computer products. The two sides will jointly explore and promote application innovation, scenario design, and operational capacity building of open source Hongmeng in industries such as water conservancy, transportation, and urban lifelines.

4. Buck 1798 Group (01010) resumed trading and plummeted. At the close, it was down 47.15% to HK$0.65.

On November 23, the board of directors received a letter from an individual potential investor stating that it was considering making a voluntary conditional cash purchase offer to acquire all of the company's issued shares. In view of the uncertainty and failure to communicate with the alleged investors, after careful consideration, the directors concluded that the offer was not a real offer, so the company would not begin the offer period.