The Zhitong Finance App learned that the market focused on the Federal Reserve's interest rate cuts and heating up. The US dollar index fell to a new five-month low, driving the RMB exchange rate to continue to strengthen. The three major Hong Kong stock indices collectively opened higher in early trading. Since then, the Hang Seng Index has successfully reached the 10,000 mark; Hengke Index once rose more than 4% in the intraday period. At the close, the Hang Seng Index rose 2.52% or 418.69 points to 17043.53 points, with a full-day turnover of HK$109.943 billion; the Hang Seng State-owned Enterprises Index rose 2.87% to 5764.77 points; and the Hang Seng Technology Index rose 3.41% to 3763.9 points.

Tianfeng Securities said that the current relative/absolute valuation level of Hong Kong stocks is less than 1% of the historical quartile. Domestic year-end meetings set fiscal policies to be strengthened, and Beijing and Shanghai have relaxed housing purchase policies. At the same time, long-term interest rates on the US dollar index/US debt are expected to peak and remain unchanged. The bank is optimistic about recovery opportunities under the undervaluation of Hong Kong stocks. According to Huaxi Securities analysis, the matching curve of market repurchase amounts since 2015 has certain signal characteristics on the trend of the Hang Seng Index. By comparing historical data, it can be seen that when the repurchase amount rises by a large and significant margin, it is more likely to correspond to the subsequent rise in the Hang Seng Index.

Blue chip stock performance

Country Garden Services (06098) led the blue chip increase. At the close, it rose 7.41% to HK$6.52, with a turnover of HK$117 million, contributing 1.48 points to the Hang Seng Index. CITIC Securities pointed out that the stock market in the property industry is basically stable, the pressure on the cost side is low, and the transparency of performance is high. If an enterprise can control the repayment risk in the process of growth and expansion, then it is entirely possible for the company to achieve a steady increase in performance. The bank believes that the property service industry is a Chaoyang industry with relatively little correlation with the economic cycle and a highly stable basic market.

Blue chip stocks rose almost across the board, with Zhongsheng Holdings (00881) rising 7.34% to HK$18.72, contributing 1.71 points; Geely Auto (00175) rose 6.69% to HK$8.45, contributing 5.01 points to the Hang Seng Index; Ali Health (00241) rose 6.6% to HK$4.2, contributing 2.19 points to the Hang Seng Index; and Dongfang Overseas International (00316) fell 0.18% to HK$109.4, dragging down the Hang Seng Index by 0.04 points.

In terms of popular sectors

On the market, large technology stocks strengthened across the board; PV stocks, automobile stocks, domestic housing stocks, property management stocks, big finance stocks, movie concept stocks, biomedical stocks, and catering stocks rose one after another. On the other side, port and transportation stocks and some coal stocks bucked the trend. Many small price stocks fell sharply again. Superstar Medical Holdings plummeted by nearly 67% and suspended trading, leading the market in terms of decline.

1. PV stocks have been strong throughout the day. At the close, GCL Technology (03800) rose 9.73% to HK$1.24; Xinte Energy (01799) rose 6.84% to HK$10.94; Xinyi Solar (00968) rose 6.51% to HK$4.58; and Follett Glass (06865) rose 6.47% to HK$13.5.

The China Photovoltaic Industry Association recently raised its 2023 installed capacity forecast for the second time. It is expected that the world's new PV installations will increase from 305-350 GW to 345-390 GW; China will increase from 120-140 GW to 160-180 GW, another record high. Furthermore, on December 20, the National Energy Administration released national electricity industry statistics. In January-November, 163.88GW of PV installed capacity was added, an increase of 149.4% over the previous year. In November, 21.32 GW was added in a single month, up 185.41% year on year and 56.53% month on month.

CITIC Securities pointed out that in a situation where excess photovoltaic production capacity intensifies supply-side competition, industrial chain profits may face significant contraction, and the industry will enter a new round of reshuffle. Facing the industry's acceleration of survival of the fittest, leading manufacturers in the industrial chain may rely on advantages in technology, cost, production capacity and market layout, as well as strong financial strength and hematopoietic capacity, and are expected to move steadily and far through the cycle. At the same time, driven by market orientation and corporate endogenous drive, it is expected that leading manufacturers will continue to promote technological upgrades, increase efficiency and reduce costs, further strengthen their competitiveness and consolidate their leading positions during the industry reshuffle period.

2. Domestic housing stocks picked up across the board. At the close, Longguang Group (03380) rose 8.77% to HK$0.62; Xuhui Holding Group (00884) rose 8.05% to HK$0.255; Sunac China (01918) rose 7.97% to HK$1.49; and Country Garden (02007) rose 6.94% to HK$0.77.

According to recent news from the China Index Research Institute, the overall property market rose year-on-year last week, with increases of 27.56% and 21.51 percent, respectively. All tier cities showed an overall month-on-month increase, with second-tier cities showing the biggest increase. Overall inventory declined slightly from month to month. The main types of financing for housing enterprises are ultra-short-term financing notes. The cities that housing enterprises acquire land are concentrated in cities such as Beijing, Tianjin, Guangzhou, Wuhan, and Xiamen. Dongwu Securities pointed out that in the short term, the continued relaxation of real estate demand-side and supply-side policies is expected to drive the moderate recovery of the market in 2024; in the medium cycle, urban village renovation and the gradual promotion of guaranteed housing will be a strong gripper to drive investment in real estate development; in the long term, even if housing prices do not rise significantly, housing enterprises that are the first to complete diversified asset-light transformation and have comprehensive development capabilities will be given the opportunity to repair their valuations as profit levels increase.

3. Auto stocks continued to rise. At the close, Geely Auto (00175) rose 6.69% to HK$8.45; Ideal Automobile-W (02015) rose 5.55% to HK$144.5; Great Wall Motor (02333) rose 4.5% to HK$10.22; and BYD shares (01211) rose 4.09% to HK$213.6.

According to data from the Passenger Federation, from December 1 to 24, the passenger car market retailed 1.55,000 vehicles, up 7% year on year and 20% month on month. Since this year, the total retail sales volume of 208.69 million vehicles has been sold, an increase of 5% over the previous year. Guohai Securities pointed out that the catalyst for a new wave of events at the end of December 2023 and the sales boom in January 2024 are expected to drive the automotive sector upward. In terms of sales volume, due to the possible peak season before the 2024 Spring Festival, sales are expected to be high in January 2024. At the event level, the M9 was officially launched (December 26), Xiaomi Technology Day (with the release of Xiaomi Auto on December 28), or another incident catalyst; at the financial level, the market may begin to choose a new direction in early 2024. The boom driven by improved supply in the total passenger car volume continues, there are many changes in opportunities such as independent structural rise and intelligent upgrades. Furthermore, on the evening of December 27, Extreme Krypton 007 was officially launched. It is divided into four versions, with a starting price of 209,900 yuan. Krypton CEO An Conghui revealed that the 40-day pre-sale of Krypton 007 recorded an order volume of 51,569 units.

4. Big consumer stocks had the highest gains. At the close, China Stock Exchange (01880) rose 11.05% to HK$76.35; Tsingtao Brewery shares (00168) rose 8.09% to HK$52.75; Capital Airport (00694) rose 6.48% to HK$2.3; Haidilao (06862) rose 6.3% to HK$14.5; and Ctrip Group-S (09961) rose 4.06% to HK$276.6.

As the New Year's Day holiday approaches, consumption potential in various regions is gradually being unleashed. According to Meituan and Dazhong Dianping data, as of December 27, the number of travel bookings (including accommodation, tickets, transportation, etc.) for the 2024 New Year's Day holiday increased by more than 500% year-on-year. According to big data from Air Travel, as of December 26, the number of domestic air ticket reservations for the New Year's Day holiday exceeded 2.7 million, an increase of about 1.6 times over the same period last year; the number of inbound and outbound air ticket reservations for domestic airlines exceeded 400,000. Furthermore, according to the Maw Eye Pro Edition, there is currently “The Annual Meeting Can't Be Stopped!” Fifteen movies, including “Stealth,” “One Twinkle, One Twinkle, One Shiny Star,” “Do Not Disturb Me 3,” and “The Golden Finger,” are scheduled for New Year's Day. The total pre-sale has already surpassed 440 million yuan.

Huajin Securities pointed out that the popularity of travel increased on New Year's Day, and the consumer market continued to recover. Duty-free sector: With the peak tourist season in Hainan, further increase in passenger flow is expected to drive the outlying islands duty-free market; travel chain sector: as the New Year's Day holiday approaches, the popularity of the winter travel market will gradually heat up; in the short term, the 2024 holidays will be extended, and demand for private travel is expected to continue to be released, compounded by macroeconomic recovery, and business demand is expected to improve. In the medium to long term, the chain rate of the hotel industry is expected to accelerate.

5. The big financial sector is improving collectively. At the close, CICC (03908) rose 6.4% to HK$11.3; Ping An of China (02318) rose 5.7% to HK$35.25; GF Securities (01776) rose 4.71% to HK$9.34; and China Merchants Bank (03968) rose 4.42% to HK$27.15.

In terms of domestic bank stocks, Zheshang Securities said that a reduction in deposit interest rates is expected to protect interest spreads and a win-win situation for banks and entities. Dama believes that more measures are needed to increase the net interest spread of the Bank of China in the future. It is expected that the Bank of China will still be able to outperform the market in a challenging situation next year. It also believes that this move shows that policy makers are committed to protecting the bank's net interest spreads. In terms of domestic insurance stocks, Guotai Junan believes that the five major state-owned banks and some joint stock banks have further lowered their medium- to long-term full deposit and withdrawal interest rates. Affected by this, it is expected that customer demand for insurance savings will further increase. Especially when insurance companies have not pre-paid 24-year opening bonus premiums, it is expected that lowering deposit interest rates will become an important catalyst for customers to buy good insurance products. In terms of brokerage stocks, BOC Securities said that in the context of continued strength in investment-side reforms, the brokerage sector is expected to rebound, and is expected to become the leading Chinese military sector when the market strengthens, and actively maintains continued attention to the brokerage sector. Focus on the range investment opportunities of leading brokerage firms and undervalued small to medium and flexible brokerage firms.

Popular volatile stocks

1. Gome Retail (00493) showed strong performance. At the close, it rose 11.48% to HK$0.068.

Gome Retail transferred nearly 21.65% of Shenzhen's share capital to JD at a cost of 105 million yuan, all of which will be used to settle the equivalent amount of matured and outstanding bonds.

2. China Free (01880) AH shares rose sharply. By the close, they had risen 11.05% to HK$76.35.

China Free China has signed a new supplementary agreement with Shanghai Airport and Capital Airport on the duty-free business contract, agreeing on the latest rent calculation method for airport duty-free shops. Among them, Shanghai Airport will implement it from December 1, 2023, and Capital Airport will implement it from January 1, 2024.

3. Hongqiang Holdings (08262) resumed trading and plummeted. At the close, it fell 39.53% to HK$0.052.

Hongqiang Holdings announced that the board of directors was informed by Guo Dongqiang, the controlling shareholder, that he has no intention of selling shares held by Best Brain Investments Limited to potential buyers. As a result, potential sales will not be implemented.

4. Dream Oriental (00593) fell sharply again. At the close, it fell 24.53% to HK$0.2.

Chuangsheng Holdings further sold a total of 4.4 million Dream Oriental shares at a total cost of about HK$9.06 million, with an average price of about HK$2.06 million per share. According to reports, Chuangsheng Holdings sold a total of 9.205 million shares of Dream Oriental on December 22.

The first IPO - Becker Micro (02149) stock price fell sharply. At the close, it was down 17.36% to HK$22.7.

Beckway issued approximately 15 million shares in this IPO, priced at HK$27.47 per share, 100 shares per lot, with a net proceeds of approximately HK$351 million. According to reports, Beckway is one of the suppliers of analog IC pattern wafers that enjoys an important market position in China.