The Zhitong Finance App learned that the three major indices of the Hong Kong stock market collectively opened lower in early trading, but immediately broke out of the one-sided surge. Among them, the Hang Seng Technology Index had the strongest performance. At one point, the intraday increase was close to 5%; the three major stock indexes declined somewhat in the afternoon. At the close, the Hang Seng Index rose 1.57% or 255.59 points to 16503.1 points, with a full day turnover of HK$122,444 billion; the Hang Seng State-owned Enterprises Index rose 2.24% to 5642.78 points; and the Hang Seng Technology Index rose 2.66% to 3351.22 points.
Guotai Junan International pointed out that looking ahead, steady domestic growth policies have been introduced one after another to enhance the prospects for economic growth. In terms of liquidity, US inflation and labor market data both exceeded market expectations, and strong fundamentals made it difficult for the Federal Reserve to cut interest rates early. Uncertain risk events such as geopolitical risks and overseas economic prospects increase the risk premium of dividend assets. Until the risk events are resolved, the bank believes that dividend assets will still prevail in the short term.
Blue chip stock performance
Longhu Group (00960) led the blue chip increase. At the close, it rose 9.49% to HK$10.04, with a turnover of HK$434 million, contributing 3.08 points to the Hang Seng Index. Galaxy Securities pointed out that the five-year LPR exceeded expectations by 25 bp to 3.95%, falling within 4% for the first time since May 2019, and the minimum loan interest rate for first-tier cities all fell within 4%. The reduction exceeded market expectations, and the cost of buying a home fell sharply, which may have a positive impact on property market demand. Leading housing enterprises have shown excellent operation and management capabilities and have a financial advantage. The market share is expected to rise further, and supply-side policies will continue to relax or have a large marginal impact on some housing enterprises. Optimistic about the Longhu Group, etc.
In terms of other blue-chip stocks, Hang Seng Bank (00011) rose 9.1% to HK$89.3, contributing 9.02 points to the Hang Seng Index; Ping An of China (02318) rose 6.37% to HK$35.9, contributing 22.67 points to the Hang Seng Index; HSBC Holdings (00005) fell 3.83% to HK$60.25, dragging down the Hang Seng Index by 55.88 points; Chow Tai ?$#@$ (01929) fell 2% to HK$11.74, dragging down the Hang Seng Index by 0.75 points.
In terms of popular sectors
On the market, all large technology stocks flourished. Among them, Shangtang closed up more than 7% and Meituan closed up nearly 5%; market rumors suggest that an assessment plan for state-owned enterprises is about to be introduced, state-owned central enterprise shares have risen strongly. At one point, China Alcoa International has surged 44%; domestic housing stocks, large financial stocks, and CRO concept stocks have shown strong performance. On the other hand, the performance of Hong Kong retail stocks was weak; stocks such as Sa Sha Sa International, Chow Tai Fu, and Prada all fell; penny stocks declined across the board, and China's financial investment management closed down nearly 40%.
1. Domestic housing stocks rose across the board. At the close, Shimao Group (00813) rose 10.42% to HK$0.53; Longhu Group (00960) rose 9.49% to HK$10.04; Metro Development (01030) rose 5.5% to HK$1.15; and Agile Group (03383) rose 4.05% to HK$0.77.
According to the Ministry of Housing and Construction, as of February 20, 214 cities in 29 provinces across the country have established real estate financing coordination mechanisms, proposed a “white list” of real estate projects that can be supported by financing in batches and promoted to commercial banks, involving a total of 5,349 projects. Under the coordination of this mechanism, banks have granted more than 160 billion yuan in credit to real estate projects. Furthermore, the central bank recently announced that the 1-year LPR will remain unchanged at 3.45%, and the 5-year LPR will be lowered from 4.20% to 3.95%. Tianfeng Securities believes that with the 1-year LPR unchanged, interest rate cuts are asymmetrically exceeding expectations. The aim is to stimulate the release of residents' demand for medium- and long-term housing mortgage loans and stabilize the real estate market through loose monetary policies. It is highly directional and strong.
2. CRO concept stocks continued to rebound. At the close, Pharmaceuticals (02269) rose 5.11% to HK$18.1; Pharmaceuticals (02359) rose 4.75% to HK$47.4; Tiger Pharmaceuticals (03347) rose 4.05% to HK$27; and Gloria Ying (06821) rose 4% to HK$67.65.
On the afternoon of February 18, Yao Ming Kang issued another clarification notice, reaffirming that it “did not have, does not pose a national security risk to the United States in the past, now, and in the future.” The industry believes that although the follow-up actions of US politicians hyping up the drug system will not stop, investors may gradually enter the “desensitization” stage of news related to the US. Xiangcai Securities pointed out that although CXO's performance is currently being pressured by the decline in domestic and foreign pharmaceutical investment and financing, given the gradual weakening of expectations of the Federal Reserve's interest rate hike and the clearing of the global biotech sector valuation bubble in the past two years, the cost performance ratio of the global biotech industry has become prominent, and the investment and financing environment for innovative drugs is expected to gradually pick up, and they are optimistic about the short-term improvement of CXO over the long term.
3. Major financial stocks strengthened, and domestic insurance stocks led the way. At the close, Ping An of China (02318) rose 6.37% to HK$35.9; China Taiping (00966) rose 5.71% to HK$7.03; China Merchants Bank (03968) rose 5.36% to HK$31.45; and CICC (03908) rose 3% to HK$9.95.
The central bank recently announced that the 1-year LPR will remain unchanged at 3.45%, and the 5-year LPR will be lowered from 4.20% to 3.95%. CITIC Construction Investment pointed out that the “1 year no change+5-year reduction” policy package reflects the policy attitude of caring for bank interest spreads. The negative sentiment in the market has been greatly dispelled, favoring bank valuations and embracing the targets of high-performing banks. In addition, some analysts said that due to the arrival of interest rate cuts, insurance funds need to cover 4% of annualized costs on the debt side, and demand for allocation of high-yield stocks has increased; today, the banking sector, led by Ping An Bank, has changed drastically, precisely because of the need to allocate insurance funds.
Great Wall Securities pointed out that Wu Qing is the new chairman of the Securities Regulatory Commission, and the market is paying great attention. After Chairman Wu took office, the Securities Regulatory Commission imposed administrative penalties on illegal acts of fraudulent distribution of Shanghai Silxin Technology. The market needs to focus on the subsequent introduction of relevant policies to guide the restoration of market confidence. Nanjing Securities, on the other hand, pointed out that recently, regulations have been intensively voiced, and there have been frequent actions related to strengthening market supervision and boosting market confidence. Subsequent market confidence can be expected to recover, and the brokerage and insurance sectors are expected to show beta attributes and usher in a rebound.
4. Semiconductor stocks generally rose today. At the close, SMIC (00981) rose 4.88% to HK$15.04; Shanghai Fudan (01385) rose 3.96% to HK$11.02; Huahong Semiconductor (01347) rose 2.02% to HK$16.14; and Jingmen Semiconductor (02878) rose 1.96% to HK$0.26.
According to media reports, the wholesale price of the indicator product DDR4 8Gb rose 9% month-on-month in January, and the price of 4Gb products rose 8% month-on-month due to Chinese customers accepting price increases from memory chip manufacturers. Furthermore, the three major original memory chip manufacturers, Samsung Electronics, SK Hynix, and Micron Technology, all control supply, and have a firm stance on price increases. Industry insiders also pointed out that price increases in the storage market in the first quarter of 2024 have become a trend, and the superposition of emerging scenarios such as smart cars and AI models will also spawn more storage demand. Furthermore, Guoxin Securities pointed out that due to continued strong demand for advanced AI chip packaging, the CAGR for advanced packaging is expected to exceed 50% in the next few years. The bank believes that the upward semiconductor cycle resonates with innovation and growth.
5. Auto stocks are generally picking up. At the close, Great Wall Motor (02333) rose 4.27% to HK$8.55; Ideal Automobile-W (02015) rose 4.06% to HK$130.7; Sport Auto (09863) rose 3.12% to HK$23.15; and BYD shares (01211) rose 2.25% to HK$186.3.
On February 19, BYD announced the official launch of the Qin PLUS Honor Edition under Dynasty Network. The official guide price starts at 79,800 yuan. Meanwhile, car companies such as Wuling, Changan, Nezha, Beijing Hyundai, and SAIC-GM joined the price war and collectively announced major price cuts for various models. According to incomplete statistics, up to now, the number of car companies that have launched a new round of price reduction activities has exceeded 20. Dongguan Securities pointed out that due to the impact of the Spring Festival holiday, car market sales are expected to be lackluster in February. After the Spring Festival holiday, car companies started price reduction promotions one after another, which is expected to drive a gradual recovery in the NEV market. As battery costs fall, supply continues to be abundant, and new technologies such as fast charging and intelligent driving are being applied at an accelerated pace, sales of new energy vehicles are expected to maintain rapid growth throughout the year.
Popular volatile stocks
1. HSBC Holdings (00005) dived back in the afternoon. At the close, it fell 3.83% to HK$60.25.
According to a report issued by Morgan Stanley, the core performance of foreign exchange control in the fourth quarter of last year was stable, but net interest spreads in Hong Kong weakened, and final interest rates fell short of expectations, affecting today's stock price performance. The bank lowered FOC's earnings forecast for this year and next by 4.3% and 5% respectively, which is still slightly higher than market expectations. The dividend payout ratio remains at a high level, and the repurchase of US$2 billion will be completed by the end of April.
2. Hang Seng Bank (00011) rallied after the results. At the close, it rose 9.1% to HK$89.3.
Hang Seng Bank announced at noon that profit due to shareholders in 2023 was HK$17.848 billion, up 58% year on year; profit before tax was HK$20.05 billion, up 57% year on year; profit per share was HK$897 million. Notably, the bank announced the fourth interim interest rate of HK$3.2 per share, with a total annual dividend of HK$6.5 per share, an increase of nearly 59% over HK$4.1 per share in 2022.
3. ESR (01821) was higher throughout the day, up 9.09% at the close to HK$10.2.
Some media quoted sources as saying that ESR's majority shareholders are studying different options for the company's future development. Some major shareholders are seeking opinions from consultants on options such as privatizing the company. Furthermore, the company has also aroused initial interest from some potential acquirers in the company or some of its major assets. According to reports, the shareholders' evaluation of the company is still in the preliminary stages. A foundation has not yet been formed, and there is no guarantee that shareholders will continue to trade in the end.