[Anatomy Board]

After the Federal Reserve's interest rate meeting was settled, the backward Hong Kong stock market finally rebounded and went short. It remained above the gap throughout the day, and closed up 1.93%. The volume increased to 118.1 billion.

At 2 a.m. on March 21, Beijing time, the Federal Reserve announced that it would keep the federal funds rate target range unchanged at 5.25% to 5.5%. This is the fifth time in a row since September of last year that the “pause button” has been pressed. The latest bitmap released by the Federal Reserve predicts that interest rates will be cut three times this year for a total of 75 basis points. Powell said that it is appropriate to slow down the pace of contraction soon. His views on the economic outlook are a strong labor market, steady consumer spending, and better-than-expected economic performance. They look like hawks but are actually partial pigeons. After the interest rate decision was announced, the three major US stock indexes and spot gold prices rose rapidly. Spot gold prices once surpassed 2,200 US dollars/ounce during the intraday period.

The rise in international gold prices is due, on the one hand, to the weakening of the US dollar; on the other hand, it is a rise in risk aversion in the market caused by Fitch downgrading the ratings of some New York banks. At the same time, central banks continue to buy gold and continue to raise the gold price center. China Gold International (02099) reached a record high, and Shandong Gold (01787) also hit a high during the year. From an operational perspective, investors need to grasp the pace without chasing higher levels.

On the domestic side, combined with the MLF and LPR being on hold in March, some market opinions worry that the domestic loose monetary policy is showing signs of withdrawal. However, on March 21, Xuan Changneng, Deputy Governor of the People's Bank of China, stated at a press conference held by the Information Office of the State Council that China's monetary policy has sufficient policy space and rich instrument reserves, and that there is still room for a decline in the statutory reserve ratio. The market is once again beginning to expect an easing policy to be introduced in the future. Recently, second-hand housing transactions in Beijing, Shanghai, Shenzhen, Nanjing, and Zhengzhou have all been recovering weakly. Naturally, the strong response was in the real estate category, such as Longhu Real Estate (00960), China Overseas Development (00688), and China Resources Land (01109). Unruly real estate, on the other hand, needs no attention.

Under loose expectations, commodity opportunities have emerged. Currently, catalysts come more from the supply side. Domestic bauxite supply in places such as Shanxi and Henan is still affected by environmental protection and other factors. The price of bauxite remains high, causing insufficient supply at the mine side while also driving up alumina production costs. China Aluminum (02600) and China Hongqiao (01378) both boosted strongly.

Local real estate in Hong Kong is also being driven. Hong Kong Midland Property Director Chen Guangming said at a press conference on March 20 that the sales situation of new listings was intense after the “withdrawal”. It is expected that Hong Kong will sell about 4,500 first-hand transactions throughout the month, which will reach a new high since November 1998. In addition, Hong Kong's Central Plains Real Estate data also shows that since March, Hong Kong has sold more than 2,000 first-hand new homes. It is expected that 4,000 to 5,000 units will be sold in March, which is expected to hit a new high after November 1998. Among them, the number of inquiries from mainland buyers about buying property in Hong Kong has increased 40 to 50 times, and leading company Hengji Properties (00012) has increased by nearly 5 points.

Yesterday, I mentioned that the market is betting on economic recovery. This line is actually gradual. Investors prefer to trust intuitive reports. For example, the Bubble Mart (09992) mentioned will be highly sought after reaching a record high in revenue. Today, it has once again surged nearly 16 points. Guo Chao Apparel, China's Lilang (01234) is once again profitable. Last year's net revenue and profit both increased. Today, it surged 6.81%. Let's see what Anta (02020) annual report looks like later. Expectations are also strong in the restaurant sector. Haidilao (06862), Yihai International (01579), and Jiumaojiu (09922) are all coming out of the bottom.

The overall performance of the games mentioned in yesterday's section was good. Xindong (02400) surged by more than 5 points, NetEase (09999) also had more than 2 points, while Tencent (00700)'s earnings report had no bright spots, but what surpassed expectations was that the repurchases and dividends were blind. The repurchase of 100 billion dollars plus 32 billion in dividends this year is considered a patch.

The AI boom is still booming. Benefiting from the demand for AI servers, the US stock Micron Technology's earnings report greatly exceeded expectations. Nvidia continues to launch new products, and demand for optical modules continues to rise. Changfei Optical Fiber (06869) has both domestic 5G acceleration demand and overseas optical fiber export expectations. At the same time, its optical module is also a new catalytic factor. Changfei's subsidiary Bochuang Technology's 10G PON OLT-optical module is leading the domestic shipment volume. The 25G LR silicon optical module for 5G fronthaul and the 50G PAM4 optical module for 5G backhaul have been sold on a large scale. Today, it also surged more than 6 points.

On the pig cycle issue mentioned to everyone on Tuesday, the current market consensus is that the pork industry has basically cleared up, and pork prices are expected to reach the bottom. If they survive, they will fully enjoy the dividends of the industry's reversal. Today, COFCO Jiajiakang (01610) once again rebounded by more than 5 points.

Auto stocks have entered a phase of differentiation. Xiaopeng (09868) fell by more than 6 points due to Alibaba's plan to reduce its holdings of Xiaopeng Auto ADS by 33 million, with a total value of about US$314 million. Ideal (02015) continues to observe MEGA's sales volume. Currently, the most valuable automobile for investors is the March gold stock Geely Auto (00175). The annual report greatly exceeded expectations. The revenue and gross profit performance was impressive, and the profit inflection point was rising. Total revenue in '23 was 179.2 billion yuan, up 21% year on year, a record high; net profit to mother reached 5.308 billion yuan, up 51% year on year. In terms of sales, the sales target was exceeded, with cumulative sales volume of 1.687 million units throughout the year, of which 487,000 NEV units were sold. Annual sales reached a record high at the same time as NEV sales. Several major brands go hand in hand. The Lynk & Co brand adheres to the domestic and international dual cycle and promotes the “European Strategy” and “Asia Pacific Strategy”. Sales in Asia Pacific, Middle East and other regions increased 150% in 2023; Extreme Krypton: striving to turn losses into profits in 024; the listing of sub-brands including Lotus has important positive and positive significance in consolidating Geely Holdings' core business. Geely is up more than 5 points today, and an upward channel has already been opened.

[Sector Focus]

According to data released by the Statistics and Census Bureau of the Macao SAR Government on March 20, the number of inbound visitors in February this year was 3.293,600, an increase of 1.1 times over the previous year, returning to 92.9% in the same period in 2019, up 15.1% compared with January. According to the data, there were 6.155 million inbound visitors in the first two months of 2024, an increase of 1.1 times over the previous year.

The Macau Tourism Board previously announced that from March 6, the Mainland will add Xi'an in Shaanxi Province and Qingdao in Shandong Province as “individual tourist” cities for Hong Kong and Macao. The purpose of this adjustment is to actively expand the number of visitors, expand the mainland market, and accelerate the recovery of the tourism economy.

As can be seen from February data, visitors entering Macau have recovered to over 90%. Combined with the March 6 New Deal, it is expected that the March data will be even more beautiful. The overall adjustment of individual gaming stocks is relatively adequate, and it is worth looking forward to generally positive expectations.

In terms of variety, MGM China (02282) is the first choice; others include Wynn Macau (01128) and Sands China (01928).

[Individual Stock Nuggets]

Gaoxin Retail (06808): The opening of the first Da Runfa Super in Zhuhai is likely to move towards a divestment

On March 17, Gaoxin Retail revealed that Da Runfa Super Zhuhai Rongde officially opened offline. This is the first store of Da Runfa Super, a medium-sized supermarket owned by Gaoxin Retail, in Zhuhai, and the third store in this business format in South China. According to reports, since January of this year, Gaoxin Retail has accelerated store opening. Various business formats such as Da Runfa, Da Runfa Super, and M member stores will open 21 stores across the country this year.

Comment: Gaoxin Retail estimates this move is also aimed at further increasing its valuation. Currently, the retail industry is struggling under the impact of Pinduoduo. The businesses of several giants, such as Ali and Jingdong, have been encroached upon, and Gaoxin's retail future is likely to be divested by Ali. Alibaba Group Chairman Cai Chongxin said at an earnings conference last month: “Currently, there are still some traditional physical retail businesses on Ali's balance sheet. They are not the core focused businesses, and it is reasonable for Ali to withdraw. But given the current market conditions, the exit may take time to materialize.”

There are rumors in the market that Ali has basically decided to sell Da Runfa and Hema to COFCO, of which Da Runfa estimates about 10 billion yuan. The current valuation is undervalued because net cash and the overall value of investment properties is $20 billion. If the acquisition is beneficial to the transformation of the company, it will increase profit margins.