Hong Kong Stock Market Review: Beyond Expectations
The Hong Kong stock market has benefited from domestic targeted easing, especially companies with high dividends and stable fundamentals, such as Alibaba, whose stock price hit a 52-week high. The market is anticipating more economic stimulus policies. Despite doubts raised by the acquisition of Yonghui by Miniso, its main business still holds value, with a maintained 50% dividend ratio and a 2 billion repurchase plan
Domestic targeted easing, taking into account both the stock market and stimulating domestic demand, can be said to be very comprehensive.
However, in terms of the stock market, whether it is exchange-traded instruments or repurchase loans, only those with stable fundamentals and high dividends benefit. Especially for insurance companies, which mortgage high-credit government bonds, naturally cannot buy into low-quality and low-dividend companies.
Therefore, encouraging institutions to leverage up also depends on the specific implementation afterwards. Still, like Alibaba mentioned earlier, entering the Hong Kong Stock Connect provides an additional source of liquidity, increasing the upside potential, especially with global liquidity increasing. Amidst the company's buybacks, entry into the Hong Kong Stock Connect, peripheral interest rate cuts, and domestic policy releases, Alibaba's stock price has smoothly hit a 52-week high.
Of course, unless the stock market continues to rise like in the United States, solving any economic problems, the issues are not over. Even with today's positive news, the market will expect more follow-up policies to stimulate the economy. Domestically, there is no shortage of money, otherwise savings would not be at a new high.
Furthermore, the news about Miniso yesterday also shocked the market, mainly because the acquisition of Yonghui does not seem to have any synergies, more like spending all the cash held. This situation is worse than Beike, as Beike is seeking additional growth, but Miniso can still focus on its core business, with significant overseas opportunities. Investing in Yonghui seems more like a sentimental decision, almost forced.
Yonghui has too many stores, requiring a long time for restructuring, but optimistically, this investment can be seen as an investment return for Miniso. Despite its many flaws, as long as the core business is not affected, and with a dividend payout ratio of no less than 50% and an unchanged 2 billion repurchase plan, Miniso still holds certain value