Hong Kong Stock Market Closing (08.22) | Hang Seng Index rose by 1.44%, technology stocks performed strongly, Xiaomi Corporation-W surged by 9% after its performance report

According to the Wise Finance APP, the three major Hong Kong stock indexes rebounded today after hitting a low, with further gains in the afternoon. Hang Seng Index performed the best, rising over 2% in the final hour. As of the close, the Hang Seng Index rose by 1.44% or 249.99 points to 17,641 points, with a total daily turnover of HKD 97.408 billion; the Hang Seng China Enterprises Index rose by 1.34% to 6,224.24 points; and the Hang Seng TECH Index rose by 2.16% to 3,508.61 points.

Galaxy Securities pointed out that internet companies' performance boosted market confidence. With the Fed's rate cut approaching, attention is on the technology sector expected to benefit from the rate cut, especially sub-industries with dual improvements in both the denominator and numerator expectations. In the medium to long term, the fundamentals of the Hong Kong stock market rely more on the domestic economy, focusing on positive signals from domestic policies.

Blue Chip Performance

Xiaomi Corporation-W (01810) led the blue chips. By the close, it rose by 9.02% to HKD 19.1, with a turnover of HKD 81.9 billion, contributing 44.38 points to the Hang Seng Index. Citigroup's research report stated that Xiaomi's second-quarter performance exceeded expectations. The management emphasized that the company's market share of smartphones in various regions continues to grow, and the growth in IoT shipments, average prices, and profits will be a long-term trend.

In other blue chips, AIA Group (01299) rose by 5.93% to HKD 54.45, contributing 55.51 points to the Hang Seng Index; Orient Overseas International (00316) rose by 5.61% to HKD 114.8, contributing 1.27 points to the Hang Seng Index; GCL-Poly Energy (00968) fell by 2.83% to HKD 3.09, dragging the Hang Seng Index down by 0.69 points; Sunny Optical Technology (02382) fell by 1.52% to HKD 48.5, dragging the Hang Seng Index down by 0.87 points.

Hot Sectors

On the market, most large technology stocks were in the green, with JD.com up over 3%, NetEase and Alibaba up over 2%. The continuous implementation of the home appliance replacement policy boosted home appliance stocks; total electricity consumption in July increased by 5.7% year-on-year, leading to a rise in power stocks in the afternoon; new energy vehicle stocks, insurance stocks, and shipping stocks led the gains. On the other hand, the pressure of declining volume and prices in the property market continued, leading to a continued weakness in property stocks; CRO concept stocks, vocational education stocks, pharmaceutical stocks, and beer stocks all declined.

1. Property stocks continued to be weak. By the close, China Overseas Land & Investment (02772) fell by 3.03% to HKD 0.096; China Vanke (02202) fell by 2.84% to HKD 3.76; Agile Group Holdings (02777) fell by 2.6% to HKD 0.75; Yuexiu Property (00123) fell by 1.9% to HKD 4.12.

Recently, listed property companies in Hong Kong have successively disclosed performance forecasts for the first half of the year, with most facing losses or expanding losses. Specifically, Sunac China expects a loss attributable to owners of the parent company of between RMB 2.2 billion and RMB 2.4 billion for the first half of the year, with a loss of approximately RMB 1.464 billion in the first half of 2023; China Overseas Land & Investment's profit turned into a loss of over RMB 1.5 billion year-on-year in the first half; Sunac China, Country Garden, and Future Land Development have all issued profit warnings.

In addition, Caxin Securities pointed out that with the concentrated release of demand in the previous period and the impact of high temperatures since August, recent seasonal declines in housing demand have occurred. Last week (8.12-8.18), the sales of commercial housing continued to weaken, with a 3.74% decrease in the transaction area of commercial housing in the 30 major cities compared to the previous week and a 29.44% decrease year-on-year 2. Concept stocks related to CRO lead the decline. As of the close, Tasly Pharmaceutical (03347) fell by 5.14% to HKD 28.6; Kanglong Chemical (03759) fell by 3.74% to HKD 8.24; WuXi AppTec (02359) fell by 1.41% to HKD 31.55; CStone Pharmaceuticals (06821) fell by 1.13% to HKD 39.55.

Xiangcai Securities research report pointed out that the current period is in the midst of the semi-annual report disclosure period. From the disclosed annual reports, CRO companies are generally under pressure due to the decline in pharmaceutical industry investment and financing. However, some CRO companies are relatively optimistic about the improvement in pharmaceutical investment and financing. According to the annual report of WuXi AppTec citing data from Pharmaceutical Intelligence, in the first half of 2024, there were a total of 412 financing events in the global innovative drug field, a year-on-year decrease of 12.5%; in terms of financing amount, the global financing amount totaled USD 15.161 billion, a year-on-year increase of 15.3%. Overseas investment in innovative drugs has gradually shown an upward trend.

3. Home appliance stocks generally rose. As of the close, TCL Electronics (01070) rose by 4.93% to HKD 4.68; Haier Smart Home (06690) rose by 3.49% to HKD 23.7; Skyworth Group (00751) rose by 1.44% to HKD 2.81; Hisense Home Appliances (00921) rose by 0.82% to HKD 19.72.

Following the issuance of the notice "Several Measures to Strengthen Support for Large-scale Equipment Renewal and Trade-in of Consumer Goods" by the National Development and Reform Commission and the Ministry of Finance on July 25, various regions across the country have gradually begun to implement the above policies. According to announcements from various provincial departments of commerce, Hubei Province has issued detailed rules for the implementation of the trade-in of consumer goods (draft for soliciting opinions), Qinghai Province has issued relevant notices, Henan Province has started the selection of service platforms for the trade-in of consumer goods, and Tianjin has started the selection of units to undertake the subsidy activities for the trade-in of consumer goods.

In addition, in July, China's domestic retail sales of home appliances decreased by 2.4% year-on-year, with a narrowing decline compared to the previous month. Exports continued to show high growth, with China's home appliance exports in July increasing by 16.8% year-on-year, including a 45.4% increase in air conditioner exports, maintaining strong growth. Guosen Securities pointed out that in July, domestic retail sales of home appliances showed signs of stabilization. With the continuous implementation of the trade-in policies for home appliances in various regions, retail demand for home appliances is expected to see a significant rebound.

4. Power stocks rose in the afternoon. As of the close, CGN Power (01816) rose by 5.31% to HKD 3.57; China Huadian (01071) rose by 4.28% to HKD 4.14; China Resources Power (00836) rose by 1.58% to HKD 22.5; China Power International (02380) rose by 0.87% to HKD 3.48.

Information released by the National Energy Administration on the 22nd showed that the total electricity consumption in the whole society in July was 939.6 billion kilowatt-hours, a year-on-year increase of 5.7%. Jiang Debin, Deputy Director of the Statistics and Data Center of the China Electricity Council, stated that since the beginning of summer, many parts of the country have experienced sustained high temperatures, leading to a rapid increase in maximum electricity load, breaking historical records multiple times. In July, the national peak electricity load reached 1.451 billion kilowatts, setting a new historical high. Under the guidance of relevant national departments, enterprises in the power industry have actively responded to the challenges of peak summer electricity demand, ensuring effective and strong power supply guarantees CICC Securities previously pointed out that the thermal power sector can expect multiple positive factors in the third quarter, with overall improvements in electricity prices, electricity consumption, and coal prices, making it worth considering a bullish stance.

Hot Stocks

1. Wanguo Data-SW (09698) showed strong performance throughout the day, closing up by 13.94% at HKD 14.22.

Wanguo Data announced its second-quarter results, with net income increasing by 14.3% year-on-year to RMB 2.8264 billion; gross profit of approximately RMB 638 million, a 15.76% year-on-year increase. Net loss was around RMB 232 million, with adjusted EBITDA (non-GAAP) increasing by 6.2% year-on-year to RMB 1.312 billion.

2. Miniso (09896) significantly rose, closing up by 6.9% at HKD 31.75.

According to late reports, Miniso launched a new format this year called "24-hour Superstore," internally referred to as a superstore, which only serves the immediate needs of consumers within 3-10 kilometers by ordering online and delivering within one hour. Currently, over 200 stores have been opened.

3. AIA Group (01299) opened low and rose high, closing up by 5.93% at HKD 54.45.

AIA Group released its 2024 interim results, with new business value increasing by 25% year-on-year to USD 2.455 billion, reaching a historical high. During the period, the group achieved a 47.3% year-on-year increase in net profit to USD 3.314 billion. Post-tax operating profit under IFRS increased by 3.5% year-on-year to USD 3.386 billion, while the interim dividend increased by 5.2% year-on-year to 44.5 HK cents.

4. Far East Consortium International (00316) rose ahead of its results, closing up by 5.61% at HKD 114.8.

Far East Consortium International will release its interim results today. HSBC Research released a report stating that the group's EBIT profit margin is expected to improve by 14.6 percentage points to 16.3% in the half-year, and recurring profit is expected to increase by 2.3 times to USD 792 million. The rating was upgraded from "Underweight" to "Hold," with the target price raised from HKD 85 to HKD 115.

5. Greater China Financial (00431) plummeted on high volume, closing down by 87.18% at HKD 0.01.

Greater China Financial announced that it received a letter from the Stock Exchange, stating that under Rule 13.24 of the Listing Rules, the company failed to maintain sufficient business operations and possess assets of sufficient value to support its operations to allow its shares to continue trading. Trading of the company's shares will be suspended on September 2nd