Hong Kong Stock Market Closing (08.26) | Hang Seng Index rose by 1.06%, pharmaceuticals, real estate, non-ferrous stocks and others rose, with WuXi Biologics leading the blue chips

According to the Wise Finance APP, Federal Reserve Chairman Powell sent a strong interest rate cut signal, causing the Hong Kong stock market to fluctuate and rise today, with all three major indexes rising more than 1% at one point during the day. As of the close, the Hang Seng Index rose by 1.06% or 186.63 points to 17,798.73 points, with a total daily turnover of HKD 83.586 billion; the Hang Seng China Enterprises Index rose by 0.95% to 6,278.63 points; and the Hang Seng Tech Index rose by 0.98% to 3,502.96 points.

Guotai Junan International pointed out that the timing of the Fed's rate cut in September is ripe, with improvements in liquidity on the denominator side forming a positive factor for the Hong Kong stock market, and interest rate-sensitive industries having the greatest flexibility. On the domestic front, negative expectations on the numerator side have been fully priced in earlier, and after a sufficient pullback, the market's allocation cost-effectiveness is highlighted. Since 2024, the earnings expectations for the Hang Seng Tech Index have continued to rise, with continuous inflow of southbound funds and denominator-side support, showing confidence in growth resilience.

Performance of Blue Chip Stocks

WuXi Biologics (02269) led the blue chips. As of the close, it rose by 6.82% to HKD 10.96, with a turnover of HKD 7.04 billion, contributing 4.33 points to the Hang Seng Index. Federal Reserve Chairman Powell sent a strong interest rate cut signal last Friday, and institutions believe that under the expectation of rate cuts, global CXO leading new orders are expected to continue to improve. It is reported that as of the end of June 2024, WuXi Biologics' total outstanding orders have increased to USD 20.11 billion, with outstanding orders within 3 years of approximately USD 3.64 billion.

In other blue chip stocks, Wharf Real Estate Investment (01997) rose by 6.41% to HKD 22.4, contributing 3.61 points to the Hang Seng Index; Nongfu Spring (09633) rose by 6.13% to HKD 30.3, contributing 5.72 points to the Hang Seng Index; China Gas Holdings (00881) fell by 2.59% to HKD 8.66, dragging down the Hang Seng Index by 0.32 points; China Medical System Holdings (01099) fell by 2.48% to HKD 18.1, dragging down the Hang Seng Index by 1 point.

Hot Sectors

On the market, most large-cap technology stocks rose, with Bilibili leading the Hang Seng Tech Index components with a 7% increase, while Tencent, Baidu, and Meituan all rose by more than 1%. Under the expectation of rate cuts, global CXO leading new orders are expected to continue to improve, with CRO concept stocks performing well; the warming of rate cuts has led to increased trading in new listings, with most Hong Kong property stocks rising; non-ferrous metal stocks, property stocks, sports goods stocks, insurance stocks, wind power stocks, and oil stocks have all risen. On the other hand, highway and railway stocks, as well as high-speed rail infrastructure stocks, fell throughout the day, with Shenhighway falling by over 12% intraday.

1. Strong performance in the biopharmaceutical sector, led by CRO. As of the close, WuXi Biologics (02269) rose by 6.82% to HKD 10.96; WuXi AppTec (02359) rose by 5.41% to HKD 33.1; WuXi Biologics (02268) rose by 4.74% to HKD 19.88; Rongchang Biotech (09995) rose by 3.86% to HKD 12.38.

Minsheng Securities pointed out that with the catalysis of the WCLC (World Conference on Lung Cancer) in September, third-quarter performance continues to recover, focusing on investment opportunities in innovative drugs, innovative industry chains, orthopedics, scientific instruments, raw materials, medical equipment, and overseas pharmaceuticals. On the CXO side, Federal Reserve Chairman Powell sent a strong interest rate cut signal at the global central bank annual meeting, leaving room for larger policy adjustments, and under the expectation of rate cuts, global CXO leading new orders are expected to continue to improve In terms of innovative drugs, domestic innovative drug out-licensing upfront payments are gradually recognized as revenue, with companies such as Kelun-Biotech performing better than expected in the first half of the year.

2. Most Hong Kong property stocks are on the rise. At the close, Wharf Real Estate Investment (01997) rose by 6.41% to HKD 22.4; Swire Properties (01972) rose by 4.32% to HKD 14.96; Link Real Estate Investment Trust (00823) rose by 3.99% to HKD 36.45; New World Development (00017) rose by 3.84% to HKD 7.58.

Federal Reserve Chairman Powell clearly shifted to a dovish stance at the Jackson Hole Global Central Bank Annual Meeting, with a September rate cut now a certainty. Powell stated that the timing of policy adjustments has arrived. The policy direction is clear, and the timing and pace of rate cuts will depend on subsequent data, changes in outlook, and risk balance. The latest data from Midland Realty shows that the warming rate cut has boosted trading in new properties, with about 80 transactions recorded in the primary market over the past weekend, a 3-fold increase from the previous week and a new high for 4 consecutive weekends.

3. Non-ferrous metal stocks rose across the board today. At the close, Aluminum Corporation of China (02600) rose by 4.23% to HKD 4.93; Tianqi Lithium (09696) rose by 4.02% to HKD 20.2; Jiangxi Copper (00358) rose by 3.91% to HKD 13.82; Luoyang Molybdenum (03993) rose by 3.6% to HKD 6.62.

Federal Reserve Chairman hinted at an imminent rate cut, reigniting expectations for a September rate cut, with the US dollar index trading weakly and non-ferrous metals resonating upwards. Last week, precious metals COMEX gold rose by 0.10%, COMEX silver rose by 4.14%, and industrial metals LME aluminum, copper, zinc, lead, nickel, tin changed by 6.99%, 1.31%, 5.34%, 3.28%, 1.58%, 3.11% respectively. Pacific Securities pointed out that with support from soft landing data and strengthened expectations, they are optimistic about the continued rise in base metal prices. They firmly believe in the upward trend of gold prices.

4. Property stocks are generally on the rise. At the close, Country Garden Holdings Group (00884) rose by 5.81% to HKD 0.255; Shimao Group (00813) rose by 5% to HKD 0.63; New World Development (01030) rose by 4.86% to HKD 1.51; China Vanke (02202) rose by 3.96% to HKD 3.94.

On August 23, Vice Minister of Housing and Urban-Rural Development Dong Jianguo stated at a press conference that they are studying the establishment of three systems: housing inspection, housing pension, and housing insurance, to build a long-term housing safety management mechanism throughout the life cycle. Currently, 22 cities including Shanghai are conducting pilot projects. Among them, the individual accounts for housing pension have been established through the payment of special maintenance funds for residential buildings, with the focus of the pilot being the establishment of public accounts by the government.

According to relevant statistics, more than 80 cities have announced support for state-owned platform enterprises to acquire commercial housing for affordable housing, resettlement housing, talent housing, turnover housing, etc. Recently, successful land acquisitions have been completed in Fuzhou and Wuhan, indicating positive signals. Guojin Securities believes that the node of inventory reduction is approaching, with the successful land acquisitions in Fuzhou and Wuhan forming physical quantities, having certain benchmark effects and reference significance. If this model can be verified and proven effective, it is expected to be replicated and promoted in more cities, accelerating the overall stabilization process of first and second-tier cities In addition, the mid-term market remains hot, with related individual stocks active. As of the close, AHSAY Pharmaceutical-B (06855) rose by 12.89% to HKD 32.4; Goldwind Technology (02208) rose by 8.52% to HKD 4.46; Bilibili-W (09626) rose by 7% to HKD 114.6; Kintor Pharmaceutical (00148) rose by 4.76% to HKD 16.3. On the downside, Feitian Cloud Dynamics (06610) fell by 19.54% to HKD 0.35; Shenzhen Expressway (00548) fell by 11.41% to HKD 6.91; Times Electric (03898) fell by 6.08% to HKD 29.35; Everbright Environment (00257) fell by 4.09% to HKD 3.52.

Hot Stocks on the Move

1. XPeng Motors-W (09868) surged significantly, closing up by 7% to HKD 29.05 .

XPeng Motors announced that its co-founder, executive director, chairman, CEO, and controlling shareholder He Xiaopeng purchased a total of 1 million Class A ordinary shares in the company from August 21 to August 23 at an average price of HKD 27.13 per share, and also purchased a total of 1.4199 million American depositary shares through its wholly-owned subsidiary Galaxy Dynasty at an average price of USD 7.02 per ADS.

2. Nine Dragons Paper (02689) reported profit growth, closing up by 6.97% to HKD 3.07 .

Nine Dragons Paper reported profit growth, expecting a net profit of approximately RMB 700 million to RMB 800 million for the full year ending June, compared to a loss attributable to equity holders of the company of RMB 2.383 billion in the previous year. The company attributed the profit increase to higher sales volume and gross profit margin.

3. Dongfang Selection (01797) showed strength post-results, closing up by 6.25% to HKD 11.56 .

Dongfang Selection announced its financial results for the fiscal year ending in May, with total revenue of RMB 7.073 billion, a year-on-year increase of 56.8%; net profit of RMB 1.72 billion, a year-on-year growth of 77%. For the 2024 fiscal year, GMV increased by 43% to RMB 14.3 billion. Most of the GMV came from Douyin, with 8.4% from the app.

4. Nongfu Spring (09633) rose throughout the day, closing up by 6.13% to HKD 30.3 .

Nongfu Spring will announce its 2024 interim results on August 27. A Citigroup report stated that Nongfu Spring is expected to achieve high single-digit net profit growth in the first half of this year, far exceeding market expectations; it is expected that its tea beverage sales will grow by about 50% year-on-year, and juice sales in the first half of the year are expected to achieve high double-digit growth