[Editor-in-chief Guan Shi]

I mentioned last week: “By the end of the month, the capital game will be intense, and the 60-day EMA should have strong support in the downside.” The trend of Hong Kong stocks is seeking support downward, and stabilized almost above the 60-day EMA.

Some people think that last Friday's rise was the result of the Chinese version of the QE rumor. In fact, many things look at cycles; they must follow this rule at some critical points.

From a spatial perspective, the current position is almost in place. What we will look at next is the economic recovery situation. The latest data is quite strong. The manufacturing PMI for March was 50.8%, up 1.7 percentage points from the previous month. After 5 consecutive months of less than 50%, it finally returned to the expansion range, and the manufacturing boom rebounded. The Caixin PMI was 51.1, the previous value was 50.9, rising at the same time. This will inevitably lead to a further increase in short-term market trends. However, in the medium term, other data is still needed to support it.

It should be noted that some foreign media hyped up the so-called “Chinese pharmaceutical companies are transferring US intellectual property rights to China without consent,” and the varieties involved include the drug Ming Kang De. Pharmaceuticals may be impacted.

Having withstood the impact of the end of the month, and with PMI exceeding expectations, the market will be in agreement this week. In a hot direction, the Xiaomi car press conference brought in hot orders and the beginning of a second order tracking, which is expected to stimulate the related automobile industry chain, including lithium batteries and glass.

In the direction of the panel, it is rumored that Sharp's 10th generation factory in Japan will stop production in June, and the market is beginning to expect a reversal in the panel cycle. Other popular ones include gold and consumer goods.

[This week's gold stocks]

Xiaomi Group-W (01810)

The Xiaomi SU7 went on sale for 24 hours, with a maximum of 88898 units. At the 2024 Spring Festival event, the Xiaomi SU7 car became the most popular model at the event, surpassing the AITO Challenge M9, which was jointly built by Huawei and Cyrus.

The company set up a fund to focus on venture capital opportunities for a new round of industrial transformation and deepening technological innovation. Using the rich coverage and portfolio management resources of general partners, the company is seeking financial returns and better capital utilization. The choice is probably related to the release of the new car on the eve of the launch of the Xiaomi car.

The development progress of Xiaomi cars has exceeded expectations. The SOP was completed at the Beijing Automobile Plant in January '24 and mass production is underway; according to reports, according to the current schedule, Xiaomi cars are expected to mass-produce around 4,000 units in March, and it is predicted that Xiaomi will mass-produce about 70,000 units in 2024. The key to whether the automobile business can break out depends on pricing. The number of first orders and user feedback are critical.

The core business is growing steadily. The market unanimously expects that the Xiaomi 4Q23 smartphone/internet business will record year-on-year growth in revenue and gross margin, mainly due to falling parts costs and strong advertising business, but IoT business revenue/gross margin will decline year on year, mainly due to fluctuations in home appliance sales.

[Industry Watch]

According to the Macau Gaming Inspection and Coordination Bureau, in March 2024, Macau Lucky Gaming's gross revenue was 19.50 billion yuan, +53% year-on-year, +6% month-on-month. In nominal terms (same below), monthly revenue accounted for 75% of the same period in '19.

Since the beginning of 2023, Macau's gaming industry has continued to recover. Monthly revenue has gradually increased from 46% in January '23 compared to the same period in '19, and has now remained stable at over 70%. Previously, the HKSAR Government estimated that Lucky Gaming's gross revenue for 24 years would be MOP 216 billion, corresponding to a full recovery of 74% in 2019. At present, the cumulative data for January-March accounts for 75% of the same period in '19, which has exceeded expectations for the whole year.

According to the Macau Statistics and Census Bureau, the number of visitors entering Macau reached 3.29 million in February 2024, +107% over the same period, and has recovered to 93% in the same period in '19. The total number of inbound visitors in January-February was 6.16 million, +106% year-on-year, recovering to 88% in the same period in '19. This year marks the 25th anniversary of Macau's return. Many large-scale cultural and sports events have been scheduled one after another, and tourism in Macau is expected to continue to flourish.

Follow Sands China (01928), Galaxy Entertainment (00027), MGM (02282), and Wynn Macau (01128).

[Data Watch]

According to data released by the Hong Kong Stock Exchange, the total number of outstanding contracts in the Hang Seng Futures Index (April) was 12,2542, and the net number of outstanding positions was 35,551. Hang Seng Futures refers to the settlement date of April 29, 2024.

Judging from the distribution of Cow and Bear Street goods in the Hang Seng Index, at 16541 points, the concentration area of Bull and Bear Certificates is close to the central axis. The US economy made a soft landing, China's latest manufacturing purchasing managers' index returned to the expansion range, and the positive trend of economic recovery was further strengthened. The Hang Seng Index is bullish this week.

[Editor-in-Chief's Testimonial]

Looking at the market as a whole, there are still plenty of opportunities.

Due to the situation on the other side of the ocean, the timing and frequency of interest rate cuts may fall short of expectations at the beginning of the year. US investors' sentiments about Chinese stocks ranged from “like to buy low-priced stocks” in 2020-21, to “hate, they don't work” in the third quarter of 2022/23, to “I'd better spend my time/money elsewhere” in the fourth quarter of 2023, to the recent “tell me what happened”. Many Wall Street “Chinese experts” have moved to cover artificial intelligence supply chains in Japan and India. Bank of America said that nearly half of the New York investors it met had no positions in Chinese stocks. Despite this, investor sentiment has improved slightly, particularly from emerging market funds. Fund managers believe the worst period has ended in January and are trying to make up positions at a low level.

The country is already close to Qingming. Investors are reminded that the number of travelers during the Qingming and May Day holidays this year is more certain than in 2019. Well, the revenue and profits of leading tourism companies should increase well. It was also a double festival. After rising until March of last year, it continued to fall until the end of the year. However, after the fall in January of this year, it is expected that there will be a relatively long period of valuation repair and resolution.