The Zhitong Finance App learned that Hong Kong stocks rose strongly today, and both the Hang Seng Index and China Index hit new highs in the new year. Among them, the Hengke Index had the strongest performance, surging more than 5% during the intraday period. At the close, the Hang Seng Index rose 2.12% or 366.61 points to 17651.15 points, with a full day turnover of HK$157.242 billion; the Hang Seng State-owned Enterprises Index rose 2.44% to 6269.76 points; and the Hang Seng Technology Index rose 4.61% to 3718.27 points. This week, the Hang Seng Index rose 8.8%, the National Index rose 9.1%, and the Hengke Index rose 13.43%
CITIC Construction Investment pointed out that the core reason for the recent rise in Hong Kong stocks is an improvement in capital. The biggest suppression of Hong Kong stocks in the second half of last year was a shift in the systemic outflow of foreign capital to Japan. Recently, the focus of foreign capital allocation in the Asia-Pacific region has shifted again from Japan to Hong Kong stocks, and the liquidity of Hong Kong stocks has improved dramatically. In terms of domestic investment, driven by favorable policies and a high dividend market, southbound capital has recently increased dramatically, further consolidating the upward trend of Hong Kong stocks. The bank believes that the best long window for Hong Kong stocks this year has arrived.
Blue chip stock performance
Longhu Group (00960) led the blue chip increase. At the close, it rose 12.24% to HK$11, with a turnover of HK$769 million, contributing 4.44 points to the Hang Seng Index. UBS has turned optimistic about the Chinese real estate market. John LaMJ, an analyst in charge of real estate research at UBS Greater China, who was bearish on Evergrande three years ago, said in a recent interview: “After three years of bearishness, we have become more optimistic about the Chinese real estate industry for the first time due to government aid.”
In terms of other blue-chip stocks, China Overseas Development (00688) rose 8.22% to HK$13.96, contributing 6.39 points to the Hang Seng Index; Shunyu Optical Technology (02382) rose 7.46% to HK$38.15, contributing 2.97 points to the Hang Seng Index; Sinopharm Holdings (01099) fell 0.92% to HK$21.55, dragging down 0.41 points; China Resources Electric (00836) fell 0.91% to HK$19.64, dragging down the Hang Seng Index by 0.55 points.
In terms of popular sectors
On the market, large technology stocks rose across the board, Kuaishou rose more than 7%, and JD rose more than 5%; UBS turned optimistic about the Chinese real estate market, and domestic housing stocks were once again strong; the State Council proposed concentrating on building a national financial team, industry mergers, acquisitions and restructuring expectations resurfaced. Chinese brokerage stocks exploded across the board, led by the League of Nations Securities surged 25%; PV stocks, pharmaceutical stocks, non-ferrous metals, and catering stocks all improved. On the other side, power stocks, wind power stocks, coal stocks, etc. bucked the trend; the performance of the wind power sector was briefly under pressure, and Longyuan Electric Power fell by more than 4%. In addition, Acer Group Holdings dived more than 70% in the afternoon, and its total market capitalization fell below HK$100 million.
1. Domestic housing stocks continue to be strong. At the close, Xuhui Holdings Group (00884) rose 15.38% to HK$0.3; Sunac China (01918) rose 15.31% to HK$1.13; Longhu Group (00960) rose 12.24% to HK$11; and COSCO Group (03377) rose 9.62% to HK$0.285.
Foreign giants rarely talk about the Chinese real estate market, drawing attention. John LaMJ, an analyst in charge of real estate research at UBS Greater China, said in a recent interview: “After three years of bearishness, we have become more optimistic about the Chinese real estate industry for the first time due to government aid.” He pointed out that under the support of factors such as 1) strong government policies, 2) China's leverage being lower than the current scenario in the US and Japan, and 3) the possibility of a reversal in supply and demand next year, real estate supply and demand will reach a historical average in 2025, and real estate company stocks with heavy land storage will rise in 21 major cities. Notably, the analyst shocked the market by downgrading Evergrande's rating to a sale in January 2021.
According to the China Real Estate Industry Association, in the first quarter of this year, the property market has experienced partial recovery. Looking at first-tier cities, the northern Guangshen, Shenzhen, and Shenzhen performed best. After the Spring Festival, whether it was second-hand housing transactions or new housing project visits or removals, all showed a recovery. In addition, according to a recent report by the Financial Federation, Xuhui completed 24 “white list” projects in the first quarter of this year, with an equity rollover amount of 5.06 billion yuan, and a post-equity financing replacement amount of 508 million yuan. The annualization of equity can save 120 million yuan in interest.
2. Chinese brokerage stocks exploded across the board. At the close, Guolian Securities (01456) rose 25.08% to HK$3.69; CICC (03908) rose 10.48% to HK$9.8; China Galaxy (06881) rose 9.56% to HK$4.24; and CITIC Construction Investment Securities (06066) rose 7.2% to HK$6.25.
The State Council recently issued a report proposing that the proportion of state-owned financial capital in banking, insurance, securities and other industries should be adjusted in due course, and that efforts should be concentrated on building a “national team” for the financial industry. Furthermore, Guolian Securities announced that the company plans to issue shares to acquire 95.48% of Minsheng Securities held by 45 counterparties. This indicates that the restructuring and integration of the two securities companies has entered a substantial stage.
Guotai Junan Securities previously stated that industry integration is expected to accelerate, and it is expected that the introduction of policies will be more beneficial to leading brokerage firms that operate in a professional and compliant manner. The “Nine Rules of the New Country” will strengthen supervision, push the securities fund industry back to its roots, and support leading institutions to enhance their core competitiveness through mergers, acquisitions, restructuring, and organizational innovation. Industry integration is expected to accelerate, which will further benefit leading brokerage firms with specialized capabilities and compliant management.
3. Auto stocks have generally strengthened. At the close, Xiaopeng Motor-W (09868) rose 8.8% to HK$30.3; Zero Sports Auto (09863) rose 8.48% to HK$24.95; NIO - SW (09866) rose 7.24% to HK$34.8; and BYD shares (01211) rose 4.42% to HK$212.8.
According to data from the Passenger Federation, passenger car terminals in the narrow sense of the word retailed 1.69 million vehicles in March, up 6.2% year on year and 52.8% month on month. As temperatures picked up and terminal prices dropped sharply, the NEV market recovered at an accelerated pace. In March, the NEV market sold 714,000 vehicles, up 30.5% year on year, with a penetration rate of 42.3%. The Passenger Federation pointed out that as the Beijing Auto Show approaches the end of the month, various manufacturers have begun to work hard. Since the middle of the month, new brands and models have been introduced one after another. Consumer attention to the car market has increased dramatically, which is expected to stimulate the accelerated release of demand for car purchases that were suppressed earlier. A national-level car trade-in policy is ready to be launched, and the overall car market is ready to move forward.
Dongguan Securities pointed out that the price war in the auto market continued in April, and car trade-in rules were gradually introduced in various regions, and downstream demand is expected to continue to grow. Driven by a recovery in demand, the industrial chain production schedule showed a month-on-month upward trend. Recently, overall prices in the industrial chain have remained stable, and industry sentiment is improving. It is expected that Q1 industry chain profits will set a year-round low, and Q2 is expected to recover marginally.
4. The colored sector performed brilliantly. At the close, Luoyang Molybdenum (03993) rose 6.71% to HK$7.63; Shandong Gold (01787) rose 4.35% to HK$17.76; Jiangxi Copper (00358) rose 3.66% to HK$16.42; and China's Hongqiao (01378) rose 2.6% to HK$11.06.
The real GDP growth rate of the US in the first quarter fell far short of expectations, recording the lowest growth rate since Q1 last year. US stocks fell sharply overnight, US bond yields collectively closed higher, and the weakening US dollar index stimulated a slight rise in gold prices. Spot gold closed at $2,330 per ounce; COMEX gold futures rose 0.27% to $2344.60 per ounce. Furthermore, driven by the continued rise in international gold prices, copper prices continued to rise. The price of the main LME (London Metal Exchange) copper contract once hit 9,900 US dollars/ton, a new high since the end of April 2022. The main contract for Shanghai Copper also broke through the 80,000 yuan/ton mark at one point, setting a new high of nearly 18 years. In addition to copper metals, aluminum prices continued to fluctuate and rise. On April 15, domestic spot aluminum prices once hit a 22-month high, reaching 20,750 yuan/ton. On April 16, the latest price of spot aluminum was 20110 yuan/ton, up 7.71% from the February low.
Popular volatile stocks
1. Shangtang-W (00020)'s stock price doubled during the week. By the close, it had risen 43.37% to HK$1.19.
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.
2. Tourover-W (09690) was strong throughout the day. At the close, it rose 16.1% to HK$23.15.
On April 26, an announcement published on the Shenzhen Stock Exchange website showed that according to the relevant provisions of the “Shenzhen Stock Exchange Shenzhen-Hong Kong Stock Exchange Business Implementation Measures”, the Hong Kong Stock Exchange's securities list was adjusted and will take effect on April 26, 2024, and Tourover W was transferred to the Hong Kong Stock Exchange securities list.
3. Yuyuan Group (00551) announced that Yingxi rose 15.83% to HK$14.34 by the close.
Yuyuan Group expects profit attributable to company owners to increase by about 95% to 100% year-on-year in the first quarter. Profit for the same period last year was $50.8 million. It has mainly benefited from the gradual recovery of the global footwear industry and the normalization of orders, which have led to improvements in capacity utilization and production efficiency, as well as support from the low base period effect. In addition, the one-time income from the sale of part of an associated company's equity during the period was approximately USD 12.6 million.
4. Fuyao Glass (03606) was higher after the results. At the close, it rose 11.57% to HK$47.25.
Fuyao Glass released its report for the first quarter of 2024, with operating revenue of 8.836 billion yuan (RMB, same below), up 25.29% year on year; net profit attributable to shareholders of listed companies was 1,388 billion yuan, up 51.76% year on year.