The Zhitong Finance App learned that the three major indices of Hong Kong stocks had mixed ups and downs. The Hang Seng Index rebounded for four consecutive trading days. After opening slightly lower in early trading, it quickly rose and turned red. The intraday high was 17,434 points to a new high during the new year, then the increase narrowed, showing a volatile adjustment trend. At the close, the Hang Seng Index rose 0.48% or 83.27 points to 17,284.54 points, with a full-day turnover of HK$119.12 billion; the Hang Seng State-owned Enterprises Index rose 0.33% to 6120.37 points; and the Hang Seng Technology Index fell 0.54% to 3554.3 points.
CCB International previously stated that as the Hang Seng Index rebounded after stabilizing its previous low in late January (October 2022 low), a consensus is being formed on the end of the bear market in Hong Kong stocks. Since February, net purchases of southbound capital have continued to increase, foreign-traded capital has also gradually returned to the Chinese and Hong Kong stock markets, and the resilience of Hong Kong stocks has continued to increase. Taking into account the internal and external environment, it is expected that Hong Kong stocks will generally show a fluctuating W-shaped trend in the second quarter, with a fluctuation range between low and high. The Hang Seng Index fluctuates between 16,000 and 18,000 points.
Blue chip stock performance
China's overseas development (00688) led the blue chip increase. At the close, it rose 6.26% to HK$12.9, with a turnover of HK$506 million, contributing 4.52 points to the Hang Seng Index. In the first quarter, the company achieved revenue of 36.5 billion yuan, an increase of 14.4% year on year; achieved operating profit of 6.65 billion yuan, and operating profit after net profit and loss on exchange increased 22.2% year on year. According to Guojin Securities, the company's sales are resilient, and the land acquisition is focused on core areas of core cities, and the margin of safety is high. As high-margin projects gradually enter the carry-over cycle, future performance is expected to continue to grow.
In terms of other blue-chip stocks, CSPC Group (01093) rose 4.82% to HK$6.52, contributing 4.23 points to the Hang Seng Index; China Hongqiao (01378) rose 3.85% to HK$10.78, contributing 1.79 points to the Hang Seng Index; Ideal Automobile-W (02015) fell 3.16% to HK$93.5, dragging down the Hang Seng Index by 6.57 points; and Sands China (01928) fell 1.41% to HK$18.2, dragging down the Hang Seng Index by 1.16 points.
In terms of popular sectors
On the market, technology stocks, which had previously been rising for 3 days, recovered today. Among them, Tencent fell more than 1%; Bilibili, Alibaba, and Jingdong continued to rise; many cities promoted housing “trade-in”, and “white list” projects progressed smoothly, and domestic housing stocks showed strong performance; aluminum stocks fluctuated at a high level, and aluminum stocks had the highest gains; pharmaceutical stocks, coal stocks, petroleum stocks, and domestic insurance stocks all flourished. On the other side, education stocks fell significantly, and profit margins may be under pressure in the short term. New Oriental's results later fell by more than 12%; Oriental Choice fell by more than 9%. Furthermore, auto stocks had mixed ups and downs. Ideal Auto fell by more than 3%, while Great Wall Motor, BYD shares, and Geely Auto all rose.
1. Domestic housing stocks showed strong performance. At the close, Metro Development (01030) rose 9.8% to HK$1.12; Agile Group (03383) rose 9.3% to HK$0.47; R&F Properties (02777) rose 6.41% to HK$0.83; and Longhu Group (00960) rose 3.7% to HK$9.8.
Shenzhen was the first to launch a “trade-in” housing. Currently, 21 agencies and 13 real estate projects have participated in the “Happy Home Exchange”. According to statistics from the China Index Research Institute, over 30 cities have now expressed support for “trade-in.” More than 10 cities, including Xuzhou, Zibo, and Nanjing, have implemented this policy. Dongwu Securities said that real estate enterprise-side and resident-side policies are progressing steadily, and it looks forward to the gradual opening of real estate policies in more core cities in April and May, boosting market demand and confidence.
Furthermore, by the end of March, commercial banks had completed the review of all the first batch of “white list” projects promoted by the coordination mechanism. Of these, the number of approved projects exceeded 2,100, and the total amount exceeded 520 billion yuan. China Post Securities believes that part of the reason why new home sales continue to be weak is that residents are worried that new housing plans will not be delivered on time. Under the impetus of the coordination mechanism, “white list” project funding has been put in place one after another to help restore residents' confidence in buying homes.
2. Pharmaceutical stocks were mostly higher. At the close, Keji Pharmaceutical-B (02171) was up 5.54% to HK$5.33; Pharma Plus (02268) rose 5.37% to HK$20; Gacos-B (01167) rose 5.26% to HK$1.6; and Junshi Biotech (01877) rose 5.24% to HK$10.24.
The 2024 American Society of Clinical Oncology Annual Meeting (ASCO 2024) will be held at the end of May this year. ICBC Credit Suisse Fund pointed out that recent pharmaceutical investment has been disrupted by various reasons such as overseas events and another delay in interest rate cuts from the Federal Reserve. However, considering that the American Society of Clinical Oncology Annual Meeting (ASCO) to be held in the second quarter will read out a large amount of ADC data, it will catalyze innovative drugs at that time, compounding the industry's own policy benefits, and the innovative drug sector is still worth paying attention to in the long term.
Yongxing Securities pointed out that the health insurance fund is generally running smoothly in 2023. The bank believes that with the establishment of an innovative drug support mechanism covering the entire process of declaration, review, calculation, and negotiation, more new drugs and good drugs are expected to be included in medical insurance, and enterprises related to innovative drug research and development are expected to benefit. Donghai Securities said 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 policy; the overall sector is expected to continue to warm up after the second quarter.
3. Aluminum stocks had the highest gains. At the close, China Aluminum (02600) rose 5.87% to HK$5.23; China Hongqiao (01378) rose 3.85% to HK$10.78.
On April 24, the latest price of spot aluminum was 20110 yuan/ton, up 7.71% from the February low. CITIC Securities believes that the apparent decline in inventories under short-term supply shocks validates the resilience of demand. It is expected that although there will still be an increase in the supply of electrolytic aluminum during the year, the growth rate will decline. It is expected that the domestic electrolytic aluminum industry will show a tight balance during the year, and aluminum prices and profits per ton of aluminum will remain high. Goldman Sachs pointed out that similar to copper, the global aluminum market will also transition into a continuous supply shortage phase starting in the second quarter. The global aluminum market is expected to experience a supply and demand gap of 7.24 million tons this year. This trend will support aluminum prices on the London Stock Exchange to reach 2,600 US dollars/ton by the end of this year.
4. Some coal stocks are impressive. At the close, South Gobi (01878) rose 12.79% to HK$6.26; Mongolian coking coal (00975) rose 6.67% to HK$9.92; Yankuang Energy (01171) rose 2.87% to HK$17.2; and China Coal Energy (01898) rose 2.36% to HK$7.81.
On April 25, the main coking coal futures contract fluctuated upward, reaching a high of 18,36.0 yuan. Okoshi Futures pointed out that mainstream coal companies have maintained normal shipments, and currently they are still mainly stockpiled. Currently, downstream demand for raw coal is fair. Procurement is still quite active. Coal mine orders are good, stocks are at a low level, and the second round of coke has been fully implemented. Profits of coking companies have improved, boosting sentiment in the coking coal market and supporting the continued rise in some coal prices. Great Wall Securities also believes that market sentiment will continue to improve, and coking coal prices may continue to rise.
Popular volatile stocks
1. Great Wall Motor (02333) was higher after the results. At the close, it rose 5.35% to HK$11.82.
Great Wall Motor achieved total operating revenue of about 42.86 billion yuan in the first quarter, an increase of 47.6% year on year; net profit attributable to shareholders of listed companies was about 3,228 billion yuan, an increase of 1752.55% year on year.
2. Trading of Shangtang-W (00020) continued to rise. At the close, it rose 3.75% to HK$0.83.
On April 23, Shangtang Technology held a technical exchange day event at AIDC in Lingang, Shanghai. Among them, the company launched the 600 billion parameter model “Nishi-Nissin 5.0,” which greatly improved knowledge, mathematics, reasoning and coding capabilities, and comprehensively benchmarked GPT-4Turbo.
3. The stock price of New Oriental-S (09901) fell sharply. At the close, it fell 12.27% to HK$62.2.
According to BOC International, New Oriental's adjusted net profit for the 3rd quarter of fiscal year 2024 was US$105 million, lower than the bank's forecast of US$120 million. The net interest rate was 8.7%, compared with 13% in the same period last year, mainly hampered by Oriental selection expansion, supply chain construction, and discounts on proprietary products.