The Zhitong Finance app learned that Hong Kong stocks were unable to continue yesterday's rebound momentum today. The three major indices collectively opened lower in early trading. Since then, they have fluctuated and weakened throughout the day, and the decline widened further in the afternoon. By the close, the Hang Seng Index fell 0.89% or 145.75 points to 16228.75 points, with a full day turnover of HK$75.456 billion; the Hang Seng State-owned Enterprises Index fell 1.13% to 5550.90 points; and the Hang Seng Technology Index fell 1.18% to 3686.21 points.

Zheshang International believes that China's economic data released recently show that the momentum of domestic economic recovery is still worrying, and that the policy aspect is still the focus, focusing on the recent Central Economic Work Conference. In terms of capital, the US employment data exceeding expectations has disrupted the financial side of Hong Kong stocks, yet the general direction of the Fed's subsequent actions has not changed. The bank believes that the main reason for the continued sharp decline in Hong Kong stocks in the short term is the weakening of fundamentals again, and the further weakening of sentiment driven by it.

Blue chip stock performance

Xinyi Glass (00868) led the decline in blue chips. At the close, it fell 5.66% to HK$8.16, with a turnover of HK$145 million, dragging down the Hang Seng Index by 1.58 points. Lyon previously maintained the company's “outperform the market” rating and lowered the target price from HK$13.7 to HK$12 due to weak market sentiment. According to Bank of China International, the trading atmosphere in the float glass market improved this week. Most prices rose slightly, while some in central China had strong gains. In-week spot delivery led to an improvement in shipments in the main production areas of Shahe and Hubei. Combined with low inventory levels in the middle and lower reaches, the market transaction atmosphere improved, the market transaction atmosphere improved, float factories clearly removed warehouses, and inventory pressure was effectively relieved.

In terms of other blue-chip stocks, Xiaomi Group-W (01810) rose 2.51% to HK$15.54, contributing 10.46 points to the Hang Seng Index; Hanson Pharmaceuticals (03692) rose 2.12% to HK$15.42, contributing 0.59 points to the Hang Seng Index; Jiulongcang Real Estate (01997) fell 4.76% to HK$24, dragging down the Hang Seng Index by 3.12 points; Oriental Overseas International (00316) fell 4.16% to HK$93.2, dragging down the Hang Seng Index by 0.82 points.

In terms of popular sectors

On the market, most of the large technology stocks fell, with domestic housing stocks, property management stocks, film and television entertainment, photovoltaic stocks, heavy machinery, and automobile stocks having the highest declines. International oil prices fell, and the “three barrels of oil” fell again; on the other side, the coronavirus variant JN.1 accelerated its global spread, and some pharmaceutical stocks rose.

1. The domestic housing stock market fell collectively. At the close, Sunac China (01918) fell 15.03% to HK$1.3; Zhongliang Holdings (02772) fell 12.5% to HK$0.245; Ocean Group (03377) fell 8.51% to HK$0.43; and Yuexiu Real Estate (00123) fell 6.86% to HK$6.38.

At the 2023-2024 China Economic Conference held at the China Center for International Economic Exchanges today, Tung Jianguo, vice-minister of the Ministry of Housing and Urban-Rural Development, stated that he supports housing enterprises with temporary tight capital chains to resolve the short-term cash flow constraints; enterprises that are insolvent and lose their ability to operate due to illegal violations of laws and regulations should be cleared in accordance with the principles of legalization and marketization. J.P. Morgan pointed out that the Central Economic Work Conference came to an end on the 12th of this month, and there were no major changes in the policies proposed at this conference. According to the bank, stability will still be the priority in 2024, and further housing policies are unknown. There are no major surprises for the government's future real estate policy. It is not yet clear. It is just a summary of the policies made within a few months, such as meeting the reasonable capital needs of various types of ownership developers and resolving local debt risks in an integrated manner.

2. PV stocks fell again. At the close, Follett Glass (06865) fell 4.18% to HK$11; Kaisheng Xinneng (01108) fell 3.85% to HK$3.75; Xinyi Solar (00968) fell 3.4% to HK$3.98; and Xinte Energy (01799) fell 0.31% to HK$9.52.

According to the quotation from the Silicon Industry Branch on December 6, the transaction range for N-type silicon materials was 65,000 to 70,000 yuan/ton, with an average transaction price of 681,000 yuan/ton, a decrease of 0.15% over the previous month; the transaction range for monocrystalline dense materials was 59,000 to 62,000 yuan/ton, with an average transaction price of 60,400 yuan/ton, a decrease of 0.98% from the previous month. Haitong Securities believes that the continuous adjustment of the photovoltaic sector since the beginning of the year has fully responded to possible increased competition in the industry. The current valuation level is below the 18-year low; the bank believes that this year's PV industry chain experienced a significant price drop, which will help increase the yield of photovoltaic power generation, which will clearly stimulate terminal demand, and will have long-term sustainability in future industry growth. Capital Securities pointed out that prices in the industrial chain continue to bottom out, NP product differentiation is prominent, PERC products are about to be phased out, backward production capacity has begun to be cleared, and the photovoltaic industry is at an accelerated pace.

3. Auto stocks generally declined today. At the close, Xiaopeng Motor-W (09868) fell 6.27% to HK$59; Great Wall Motor (02333) fell 2.28% to HK$10.28; and Ideal Car-W (02015) fell 2.24% to HK$135.6.

As the end of the year approaches, car companies' sales have entered a “sprint” stage. According to incomplete statistics, from December to December 11, as many as 20 car companies have joined the promotion and price reduction campaign. Among them, there is no shortage of models from popular brands such as BYD, SAIC Volkswagen, and FAW Toyota, with discounts of up to 200,000 yuan. Huacheng Securities pointed out that there are currently three core influencing factors in the “price war”. Among them, since joint venture prices and electricity prices have not reached the end, and the scope is relatively large, it is expected that 2024 will continue the price pressure of 2023.

It is worth mentioning that behind the escalation of the price war between car companies is the anxiety of major car companies about the achievement rate of annual sales targets. According to the Economic Watch Network, the 17 car companies counted by the reporter include 6 automobile groups and 11 new energy brands (some brands belong to 6 automobile groups). Specifically, the completion rate of Lianghe and Rantu's annual sales target has exceeded 100%, achieving the target ahead of schedule; nine companies, including SAIC Motor Group and Great Wall Motor, all have completed annual sales targets below 80%.

4. The non-ferrous sector continues to be under pressure. At the close, China Aluminum (02600) fell 4.74% to HK$3.42; China Daye Nonferrous Metals (00661) fell 3.64% to HK$0.053; Lingbao Gold (03330) fell 3.05% to HK$1.27; and Luoyang Molybdenum (03993) fell 3.04% to HK$3.83.

According to data released by the US Bureau of Labor Statistics on December 12, the US CPI for November was 3.1%, and the core CPI was 4.0%, all in line with market expectations. After the data was released, the US dollar index declined slightly from 103.64 to 103.47, then rebounded to 104.08. CICC pointed out that this inflation data supports the Fed's continued suspension of interest rate hikes, but does not support interest rate cuts soon. Early this Thursday morning, the Federal Reserve will announce its latest interest rate decision. The bank expects the Fed to remain on hold and keep interest rates unchanged. Zhongtai Securities believes that the US employment data has exceeded expectations, indicating that the US job market is still showing resilience; the Eurozone's November service sector PMI was still below the boom-bust line, and GDP declined month-on-month in the third quarter, compounded by the European Central Bank's dovish remarks on interest rate cuts, supporting the strengthening of the US dollar, and the overall price of basic metals is under pressure.

5. Big consumer stocks had the highest declines. At the close, Helens (09869) fell 4.76% to HK$4; Tsingtao Brewery (00168) fell 4.59% to HK$48.8; Master Kong Holdings (00322) fell 3.89% to HK$8.89; and Cat's Eye Entertainment (01896) fell 3.86% to HK$8.71.

In November, CPI fell 0.5% year on year, continuing the downward trend and falling short of market expectations. The decline was 0.3 pct larger than the previous month. The month-on-month decline also increased by 0.4pct to -0.5%. Guojin Securities recently 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.

Popular volatile stocks

1. The volume of Baoguang Industrial (00084) soared. At the close, it had risen 40% to HK$0.091.

Baoguang Industrial announced the sale of its wholly-owned subsidiary Universal Geneve SA to Breitling, Switzerland, as a member company of the Breitling Group, at a total cost of 60 million Swiss francs (approximately HK$537.6 million). Upon completion, the Group expects to confirm sales proceeds of approximately HK$534.9 million.

2. Zaiding Pharmaceutical (09688) was higher in the afternoon. At the close, it was up 6.59% to HK$21.85.

Zaiding Pharmaceutical announced that Wei Weijia (agamod alpha injection) has been included in the national medical insurance drug catalogue to treat adult patients with systemic myasthenia gravis with positive acetylcholine receptor antibodies. Including Wei Weijia, a total of four products of the company are currently included in the national medical insurance drug catalogue.

3. Hygea Healthcare (06078) rebounded markedly. At the close, it was up 5.84% to HK$35.35.

In response to yesterday's abnormal stock price fluctuations, Hygea Healthcare announced that the Group's business operations are doing well, and there have been no major adverse changes in its business operations or financial conditions. The company remains optimistic about the Group's future business performance and is confident that its core business, the hospital business, will continue to develop.

4. The stock price of Keji Pharmaceutical-B (02171) fell sharply. At the close, it fell 30.4% to HK$6.57.

Koji Pharmaceutical announced that CarsGen Therapeutics Corporation, a subsidiary of the company in the US, received a notice from the US FDA on the evening of December 11 requesting the suspension of clinical trials of CT053, CT041, and CT071, pending the conclusion reached after testing the production site in Durham, North Carolina.

5. Oriental Selection (01797) declined throughout the day. At the close, it was down 12.96% to HK$27.2.

The incident of Dongfang's selection of “small essays” sparked a heated debate in public opinion. The reason is that under the “Trip to Jilin” video, Oriental Selection posted an answer comment on “Who wrote the promotional copy from”, saying that most of the classic short essays were written by copywriting teams, and not all of them were broadcast independently. The “Go to Dong Yu Huihua” phenomenon caused dissatisfaction among fans.