The Zhitong Finance App learned that UBS raised its Hong Kong stock rating to overrated, and that the China Securities Regulatory Commission's five measures against Hong Kong boosted the market. Hong Kong stocks strengthened for two consecutive days. Among them, the Hengke Index performed the strongest. By the close, the Hang Seng Index rose 1.92% or 317.24 points to 16828.93 points, with a full-day turnover of HK$116.06 billion; the Hang Seng State-owned Enterprises Index rose 2.12% to 5954.62 points; and the Hang Seng Technology Index rose 3.38% to 3449.1 points.

Cathay Pacific Junan International pointed out that in the four weeks since March 26, the net flow of southbound capital into the Hong Kong stock market has continued, with a cumulative total of more than HK$78.9 billion. Mainly, Hong Kong stocks have taken into account excessive risk premiums, and the cost performance ratio of high-quality assets has been highlighted. The bank believes that with the support of the five capital market cooperation measures with Hong Kong, southbound capital will continue to flow into the Hong Kong stock market, further increasing the voice of the Hong Kong stock market and enhancing the price stability and rationality of the Hong Kong stock market. Hong Kong stocks are expected to enter a volatile phase, but space is limited in the short term. It is recommended to focus on the high-dividend style and marginally increase the Hong Kong stock Internet industry.

Blue chip stock performance

Meituan-W (03690) led the blue chip increase. At the close, it rose 7.95% to HK$108.6, with a turnover of HK$7.171 billion, contributing 74.45 points to the Hang Seng Index. Tianfeng Securities previously stated that Meituan's core competitiveness lies in its strong merchant base and accumulated real reviews from users over decades. At this stage, its moat is still stable. Looking at this stage, barriers to the takeout business are stable, and the external competition pattern is gradually becoming clear. It is expected that the profitability of Meituan's core local businesses will continue to increase in the future.

In terms of other blue-chip stocks, JD Group-SW (09618) rose 6.07% to HK$106.6, contributing 16.73 points; Wanzhou International (00288) rose 5.84% to HK$5.8, contributing 4.14 points to the Hang Seng Index; Zijin Mining (02899) fell 3.08% to HK$16.34, dragging down the Hang Seng Index by 4.43 points; Shunyu Optical Technology (02382) fell 2.46% to HK$35.75, dragging down the Hang Seng Index by 35.1.01 points.

In terms of popular sectors

On the market, large technology stocks boosted the market. Among them, Kuaishou rose more than 8% to lead, DNF mobile games launched ahead of schedule, and Tencent's stock price once again reached HK$330; pork concept stocks were impressive, with first-quarter results exceeding expectations, and Wanzhou's international sales rose nearly 6% to a new high; the Beijing Auto Show was about to open, and auto stocks generally picked up; innovative drug policies were clearly improving. Pharmaceutical stocks strengthened in the afternoon; gaming stocks, beer stocks, and education stocks all flourished. On the other side, the situation in the Middle East has been suspended, gold and silver have collectively plummeted, and the non-ferrous metals sector continues to adjust; coal stocks, infrastructure stocks, etc. continue to decline.

1. TechNet stocks continue to be strong. At the close, Kuaishou-W (01024) rose 8.63% to HK$49.1; Meituan-W (03690) rose 7.95% to HK$108.6; JD Group-SW (09618) rose 6.07% to HK$106.6; and Tencent (00700) rose 3.75% to HK$332.4.

The China Securities Regulatory Commission issued the “5 Capital Market Cooperation Measures with Hong Kong”. Specifically, it includes easing the scope of eligible products for stock ETFs under the Shanghai-Shenzhen-Hong Kong Stock Connect, incorporating REITs into the Shanghai-Shenzhen-Hong Kong Stock Connect, supporting the integration of RMB stock trading counters into Hong Kong Stock Connect, optimizing mutual fund recognition arrangements, and supporting the listing of leading enterprises in the mainland industry on the Hong Kong Stock Exchange. Many institutions believe that these measures are conducive to boosting confidence in the Hong Kong stock market.

Furthermore, since 2024, Hong Kong stock listed companies have continued to increase their repurchases. During this period, Tencent Holdings repurchased more than HK$20 billion, ranking first in the Hong Kong stock repurchase list. Guotai Junan said that considering existing policy support in some fields and buybacks from companies such as Tencent and Ali, the Internet's low valuation and overly pessimistic risk premiums will usher in a major recovery. Furthermore, leading Internet companies continue to increase their investment in the AI field and have made effective progress, and profit expectations are expected to improve.

2. Pharmaceutical stocks strengthened in the afternoon. At the close, Laikai Pharmaceutical-B (02105) rose 12.92% to HK$6.03; Conoa-B (02162) rose 10.81% to HK$32.3; Tiger Pharmaceuticals (03347) rose 6.45% to HK$31.35; and Kangfang Biotech (09926) rose 5.86% to HK$46.95.

Recently, various departments such as the Beijing Municipal Medical Security Administration and the Beijing Drug Administration issued a number of measures to support the high-quality development of innovative medicines in Beijing (2024). The Donghai Securities Research Report pointed out that since this year, including clear support for innovative drugs and continuous optimization of procurement renewal terms, etc., there has been a clear positive trend in industry policies; the overall sector is expected to continue to warm up after the second quarter. In the medium to long term, we continue to be optimistic about investment opportunities such as innovative drugs and specialty devices representing the development direction of new quality productivity.

3. Auto stocks are generally picking up. At the close, NIO - SW (09866) rose 5.73% to HK$31.35; Zero Sports Auto (09863) rose 4.46% to HK$22.25; Great Wall Motor (02333) rose 4.26% to HK$10.78; and Xiaopeng Motor-W (09868) rose 3.58% to HK$27.45.

The Beijing Auto Show will open on April 25. It is expected that about 140 models will be exhibited at this auto show, and more than half to 85 new models. Independent brands will account for more than 65% of the models on display. Caitong Securities pointed out that the launch of multi-pound new energy models by traditional car companies is expected to drive the industry's prosperity to continue to rise and drive further increase in sales in the passenger car market. Everbright Securities said that the new models at the current auto show are expected to be launched before 1H24 and batch delivery will begin at 2H24E. It is optimistic that new energy sales will rise as a result of factors such as new models and the implementation of central/local subsidies.

4. Gold stocks continued to decline. At the close, China Gold International (02099) fell 5.21% to HK$45.5; Lingbao Gold (03330) fell 3.83% to HK$3.26; Zijin Mining (02899) fell 3.08% to HK$16.34; and Shandong Gold (01787) fell 2.61% to HK$16.4.

Gold prices pulled back for the second day in a row, and spot gold fell below the 2,300 mark, the first time since April 5. CITIC Futures pointed out that there are three main reasons for the sharp drop in gold and silver prices: first, the weakening of geographical risk, second, the tightening of liquidity in the early period, and third, the settlement of profits for bulls, and the overheated mood subsided. The bank believes that precious metals are expected to pull back to the end of the month to the beginning of next month, and there is still investment value in the future. That is, expectations for interest rate cuts within this year may be reversed again, bringing new opportunities for precious metals.

Popular volatile stocks

1. The stock price of Jiayi Holdings (01025) crashed. At the close, it fell 62.39% to HK$0.082.

Jiayi Holdings issued an announcement this afternoon saying that the company noticed unusual fluctuations in stock prices and trading volume recently, made reasonable inquiries and confirmed, and did not know any reason for the fluctuation in stock prices and trading volume. The company also confirmed that there have been no significant changes in business operations.

2. Tianjin C&D (02515) broke the first sale. At the close, it fell 39.2% to HK$1.52.

According to reports, Tianjin C&D is a construction group in Tianjin that provides comprehensive engineering construction services. According to Frost & Sullivan's report, there were 2,547 construction companies in Tianjin in 2022. Based on Tianjin's construction revenue in 2022, the company's market share in the overall engineering construction market was 0.1%.

3. Fosun Tourism & Culture (01992) rose again. At the close, it rose 5.12% to HK$3.49.

Fosun Tourism & Culture announced results for the first quarter of 2024. During the reporting period, Fosun Tourism's operating turnover was 7.158 billion yuan, an increase of 15.8% over the previous year. Thanks to core business growth contributions, the Group's unaudited profit attributable to the company's shareholders continued to increase in the first quarter of 2024 compared to the same period in 2023.

4. Li Ning (02331) rose significantly. At the close, it rose 5.71% to HK$18.5.

Jefferies pointed out that the increase in e-commerce sales in the first quarter of 2024 shows that the company has basically solved the resale problem, and the price reduction trend also shows that the company's e-commerce inventory has recovered to health. Investors are expected to refocus on Li Ning's value creation, and the company is expected to make more positive progress in 2024.