[Editor-in-chief Guan Shi]

The Hong Kong stock market had ups and downs last week. It surged for a while after the Federal Reserve's interest rate meeting was settled last Thursday, but since then Switzerland took the lead in cutting interest rates, which directly led to a weakening of the exchange rate. Coinciding with other bearish Hang Seng Index being accurately blocked, the index retracted from the 30-day EMA.

In terms of fundamental preferences this week, the National Standing Committee will once again discuss optimizing real estate policies. The meeting will listen to reports on optimizing real estate policies and promoting the steady and healthy development of the real estate market. The China Development High-Level Forum has increased its openness, sending a signal that the game of major powers is warming up.

Considering that this week has reached the end of the month, the capital game tends to be intense, the 60-day EMA should have strong support in the downside. However, the upward trend mainly depends on the attitude of the real estate side and this week's March PMI data.

In the hot direction, AI news was released intensively, and Caiyue Star released the first 100 billion parameter multi-model financial model in China; according to another report, Apple and Baidu held preliminary talks on the former's use of Baidu's artificial intelligence generation technology in Chinese devices. Media and IP categories related to Baidu, Ali, Shangtang, and vertical models and corpus are expected to be catalyzed.

Overseas, according to news, OpenAI will meet with Hollywood studios and recommend Sora. OpenAI plans to hold meetings with Hollywood studios, media executives, and talent agencies in Los Angeles next week. This is estimated to have given a positive boost to AI film and television applications.

This week, the Tesla team will be visiting domestic companies related to the robot supply chain. It will directly determine which companies will enter the Tesla robot supply chain in the future, and also indirectly determine the future global robot supply chain pattern. Robots are worth tracking.

At the level of computing power policy, Shanghai issued the “Computing Power Pujiang” Intelligent Computing Action Implementation Plan (2024-2025)” for the high-quality development of intelligent computing power infrastructure. Related computing power and chip categories are also worth paying attention to.

[This week's gold stocks]

Kanayama Software (03888)

State-owned enterprises are required to “eliminate A” (replace foreign software in IT systems) by 2027, which is estimated to bring in 5 billion yuan in license revenue, 8 billion yuan in subscription revenue, and 16 billion yuan in revenue from private enterprises from 2023 to 2027. In the fourth quarter of last year, Jinshan Software's revenue increased 10% year-on-year to 2.33 billion yuan, operating profit of 530 million yuan, and operating profit increased by 5 percentage points to 23% quarterly. The company's subsidiary Jinshan Office Software recorded net profit attributable to shareholders of 1,319 billion yuan last year, an increase of 18.03% over the previous year.

Comment: The company's subsidiary Jinshan Office will be the main beneficiary and may account for half of the above revenue, increasing its market share from the current 30% to about 40% in 2027. The company mainly benefits from the steady performance of Lao You's “Sword Net 3” and the continuous growth of domestic office software individual and institutional user subscriptions.

WPS subscription performance is still strong, and AI provides new impetus for growth. WPSAI has entered the overseas public beta phase, and its enhanced product features are expected to provide a lasting increase in value for the office business, and the number of paying users and ARPU may double.

Old travelers have stable and excellent performance, new tours expand their overseas customer base, and have an adequate pipeline in the future. The online game business's 23Q2 revenue was 1.07 billion yuan (yoy +18%, qoq +17%), mainly benefiting from the year-on-year increase in DAU and total sales of the old game “Sword Net 3”. The two-dimensional shooter mobile game “Dust White Forbidden Zone” was released in July and expanded overseas to expand its customer base. The company's future pipeline mainly includes the launch of the self-developed mobile game “World of Sword Man: Origins” on 23Q4, and the new “Sword Man Affair 3” mobile game and sci-fi mecha mobile game “CodeB.R.E.A.K.” will be launched in '24.

[Industry Watch]

In the field of AI text, Kimi's number of visits grew rapidly, and a breakthrough in ultra-long context technology. According to the AI product list, the domestic model company Dark Side of the Moon saw a rapid increase in visits to the conversational AI assistant product “Kimi Smart Assistant” based on the self-developed 100 billion parameter model, and the number of visits on the February list increased by 108% over the previous month. Furthermore, on March 18, Dark Side of the Moon announced a new breakthrough in large model long context window technology, and Kimi Smart Assistant's 2 million word ultra-long context function officially launched closed beta.

In the field of AI video, PixVERSE completed financing. The number of visits to the overseas edition exceeded one million in February, and the domestic registration was approved. The development team of Wensheng Video and PixVerse Video Model PixVerse recently completed a billion-level A1 round of financing, and the Aishi Big Model for domestic users has also passed the filing. Pixverse supports the generation of video content at 4K resolution. According to the overseas traffic detection website similarweb, the number of visits in February currently exceeded one million, which is growing rapidly.

The continuous development of large domestic model teams marks the consolidation of technology, or application, of the foundation. The technical capabilities of domestic AI teams have actually reached the “easy to use” stage, and domestic application teams have always surpassed the exploration of C-side segmentation scenarios. Hong Kong stocks focus on potential AI application revenue directions: Reading Group (00772), Alibaba Pictures (01060), and Zhihu (02390) for corpus and video IP libraries; Jinshan Cloud (03896), Mingyuan Cloud (00909), and Bairong Cloud (06608) for MaaS.

[Data Watch]

According to data released by the Hong Kong Stock Exchange, the total number of outstanding contracts in the Hang Seng Futures Index (March) was 12,1547, and the net number of outstanding positions was 4,7058. Hang Seng Futures refers to the settlement date of March 27, 2024. This period refers to settlement.

Judging from the distribution of Cow and Bear Street goods in the Hang Seng Index, at 16,499 points, the concentration area of Bull and Bear Certificates is close to the central axis. The US Federal Reserve maintained the forward guidance of cutting interest rates three times this year in the interest rate bitmap. Powell made it clear that interest rate cuts are not far off; the Bank of Japan announced that it will abandon the yield curve management policy and adjust the official interest rate above zero. The Hang Seng Index adjusted to be bearish this week.

[Editor-in-Chief's Testimonial]

The news that sparked the media over the weekend was that Suno's v3-second hit song, and AI music is officially here. For the music industry, this means a further increase in productivity. Everyone knows that the rise in US stocks was supported by the “Seven Sisters of Technology”. Can this upward trend continue? Historical data shows that in the past 100 years, US stocks have been highly concentrated 7 times, and 5 of these 7 times concentration peaked and then continued to rise.

Recent market hot topics focus on the KIMI+ low-altitude economy concept. At the same time, we should also note that the performance of TMT giants - Internet giants, which were revealed one after another last week, may have fallen slightly below expectations, but net profit margins have all remained at a good level. NetEase, Byte, Pinduoduo, and Ctrip are over 20%, Tencent and Baidu are close to 20%, and JD, Ali, and Kuaishou also have single-digit net profit margins. Seen this way, everyone “lives a very nourished life.”

At this point in time, there is no need to be pessimistic about Hong Kong and US stocks.