Hong Kong Stock Market Closing (09.23) | Hang Seng Index fell by 0.06%, power stocks performed well, China Aoyuan surged by 148% intraday

According to the Wisdom Financial APP, the Hong Kong stock market rose in the morning session, with the Hang Seng Index and the Heng Seng Technology Index both rising more than 1% at one point. However, the market lacked momentum in the afternoon, with the Hang Seng Index and the Heng Seng Technology Index turning down. As of the close, the Hang Seng Index fell by 0.06% or 11.46 points to 18,247.11 points, with a total daily turnover of HKD 124.289 billion; the Hang Seng China Enterprises Index rose by 0.12% to 6,389.08 points; and the Hang Seng Technology Index fell by 0.15% to 3,698.27 points.

CICC stated that in the short term, due to sensitivity to external liquidity and Hong Kong following interest rate cuts, the flexibility of Hong Kong stocks is still greater than that of A-shares. At the industry level, attention can continue to be paid to interest rate-sensitive growth stocks, local dividends and real estate in Hong Kong, as well as the export chain driven by U.S. real estate demand. However, in the medium term, it is not advisable to overly extrapolate short-term flexibility, similar to the rebound logic in April-May. Until more significant fiscal support is seen, a structural market with wide-ranging fluctuations (high dividends + technological growth) remains the main theme.

Performance of Blue Chip Stocks

Xiaomi Corporation-W (01810) led the blue chips with its stock price hitting a new high in nearly three years. By the close, it rose by 3.37% to HKD 20.55, with a turnover of HKD 40.24 billion, contributing 19.14 points to the Hang Seng Index. Xiaomi's founder, Chairman, and CEO Lei Jun announced on Weibo today that the Note 14 series is scheduled for September 26th at 7 p.m.

In other blue chip stocks, CHINA RES POWER (00836) rose by 3.33% to HKD 19.84, contributing 2.01 points to the Hang Seng Index; Lenovo Group (00992) rose by 2.56% to HKD 9.63, contributing 3.17 points to the Hang Seng Index; China Shenhua Energy (00881) fell by 4.64% to HKD 9.04, dragging down the Hang Seng Index by 0.59 points; WuXi AppTec (02359) fell by 3.65% to HKD 40.95, dragging down the Hang Seng Index by 0.87 points.

Hot Sectors

On the market, most large-cap technology stocks were trading lower, with Alibaba and Tencent both slightly down, while Xiaomi bucked the trend with a more than 3% increase. The year-on-year growth rate of electricity consumption in the first eight months increased, leading to a strong performance of electricity stocks today; coal prices continued to rebound, pushing coal stocks higher; home appliance stocks, Apple concept stocks, heavy machinery stocks, and gold stocks all generally rose. On the other hand, the Biosecurity Act was not included in the U.S. Senate NDAA, making it unlikely to be implemented this year. As a result, CRO concept stocks that surged in the last trading session on Friday all fell today, with car dealers, biopharmaceutical stocks, and entertainment stocks leading the declines.

1. Strong Performance of Electricity Stocks. By the close, CGN Power (01816) rose by 5.24% to HKD 3.01; China Power International (01071) rose by 4.62% to HKD 4.08; China Huaneng Group (00902) rose by 3.52% to HKD 4.41; CHINA RES POWER (00836) rose by 3.33% to HKD 19.84.

On September 20th, the National Energy Administration released data on total electricity consumption for August. In August, total electricity consumption was 964.9 billion kilowatt-hours, an 8.9% year-on-year increase. From January to August, total electricity consumption accumulated to 65,619 billion kilowatt-hours, a 7.9% year-on-year increase. Compared to the 7.7% year-on-year growth rate in January to July 2024, the growth rate slightly increased. Dongxing Securities Co., Ltd. stated that the year-on-year growth rate of electricity consumption in January to August 2024 increased, with higher growth rates in the tertiary industry and urban and rural residents' electricity consumption In addition, thermal power stocks have turned from decline to increase in August, and it is recommended to pay attention to investment opportunities in thermal power.

2. Coal stocks continue to rise. As of the close, China Qinfa (00866) rose by 8.7% to HKD 1.25; Powerlong Development (01277) rose by 7.35% to HKD 1.46; Nangobi (01878) rose by 4.33% to HKD 2.41; China Coal Energy (01898) rose by 2.81% to HKD 8.78.

Last week, the price of Qin Port power coal was 866 yuan/ton, up 9 yuan/ton from the previous period, an increase of 1.05%, rebounding for four consecutive weeks. Kaiyuan Securities pointed out that from the supply side, the frequent and strong rainfall in the main producing areas since August, continuous rainy weather has disrupted coal production and sales activities. In addition, factors such as the reverse flow of shipments from production areas to ports, continuous inflow less than outflow, and shortage of some varieties have led to an increase in price sentiment among port traders, resulting in a recent rebound in coal prices. The bank believes that the current domestic coal prices are gradually returning to a relatively high level of narrow fluctuations, and coal is gradually transitioning to a reasonable and sustainable high-profit transformation, with high dividends still sustainable.

3. Home appliance stocks rise again. As of the close, Midea Group (00300) rose by 5.63% to HKD 67.6; TCL Electronics (01070) rose by 2.94% to HKD 5.25; Hisense Home Appliances (00921) rose by 1.75% to HKD 23.2; Haier Smart Home (06690) rose by 1.74% to HKD 26.25.

Huafu Securities pointed out that since August, various regions have successively introduced detailed rules for the implementation of the old-for-new policy. According to Aowei's weekly retail data, since late August, the retail growth of major categories of home appliances has significantly boosted. From August 26 to September 15, the year-on-year sales of air conditioners offline/online increased by +50%/+113%, refrigerators offline/online increased by +28%/+47%, washing machines offline/online increased by +21%/+25%, color TVs offline/online increased by +22%/+34%, and range hoods offline/online increased by +53%/+49%. With the continuous advancement of policies in various regions, the effects of the old-for-new policy are expected to continue to show, and the performance of the home appliance sector in the second half of the year is promising.

4. Gold stocks rose across the board today. As of the close, Zhaojin Mining (01818) rose by 3.89% to HKD 13.88; Zijin Mining (02899) rose by 0.5% to HKD 16; China Gold International (02099) rose by 0.45% to HKD 33.7.

Affected by further bets on US interest rate cuts and escalating tensions in the Middle East. The international gold price hit a new high again, with spot gold briefly rising above $2630 per ounce. Last week, the Federal Reserve cut interest rates by 50 basis points, and the dot plot shows that the Fed will cut interest rates by another 50 basis points this year and another 100 basis points next year. In addition, the Middle East situation has once again become tense, with the Israeli military launching airstrikes on Lebanon, causing casualties.

Macquarie pointed out that the expectation of strong gold prices will continue. In addition to benefiting from rate cuts, weak economic data will further heat up expectations of rate cuts. Although there is a short-term divergence between gold prices and gold mining stocks, the long-term correlation remains high, so gold mining stock prices are currently weak, making it a better buying point. Based on the expectation of continued strength in gold prices, the target price of gold mining stocks listed in Hong Kong has been raised, with Zhaojin Mining being the preferred choice due to its strong production growth prospects, with the target price raised from HKD 21 to HKD 21.3

Hot Stock Movements

1. CHINA AOYUAN (03883) surged by 148% at one point. As of the close, it rose by 126.89% to HKD 0.27.

China Aoyuan announced that on September 20, the company's major shareholder Ace Rise entered into an agreement with Multi Gold Group Limited, whereby Ace Rise agreed to transfer approximately 622 million ordinary shares of the company to Multi Gold. Following the completion of the transfer, Multi Gold will become the largest single shareholder of the company. It is reported that Multi Gold Group is a professional investment institution in the UAE, with influential local family members participating in its management structure.

2. CHIZICHENG Technology (09911) saw a significant increase. As of the close, it rose by 6.5% to HKD 2.95.

Recently, FTSE Russell released the latest FTSE Global Equity Index Series (FTSE GEIS) semi-annual review report, announcing the adjustment of the constituents of the China region index (GEIS China). CHIZICHENG Technology has been included in the FTSE All-Cap (LMS) and FTSE Global Small Cap indices, which officially took effect today.

3. Midea Group (00300) hit a new high in the market. As of the close, it rose by 5.63% to HKD 67.6.

A Citigroup research report pointed out that Midea Group has been included in the list of short-term upward trends for the next 90 days, expecting the company to benefit more from the "old-for-new" policy implemented by the mainland government from September to December. The bank initiated a "buy" rating for Midea Group, anticipating that home appliances will be the most benefited consumer industry in the second half of the year as the central government accelerates the implementation of the "old-for-new" policy for consumer goods. The group's sales growth in the second half of the year is also expected to accelerate, with a target price of HKD 90.08.

4. Gaodi Group (01676) experienced a sharp decline during trading hours. As of the close, it fell by 67.86% to HKD 0.54.

Gaodi Group will hold a board meeting on September 30 to approve the annual performance. The interim results released by the company in February showed that driven by the recovery of the group's food business, the group's income increased to approximately RMB 196 million during the reporting period, a year-on-year growth of 60.93%.

China Shenghai Group announced in March this year that its stock abbreviation has been changed to "Gaodi Group." China Shenghai Group is a company mainly engaged in the sales of dried seafood, algae, fungi, seafood snacks, and frozen seafood products, with products covering major chain supermarkets and convenience stores in 9 provinces and 3 municipalities in China