Hong Kong stocks close (11.08) | Hang Seng Index falls 1.07%, brokers and domestic property stocks lead the decline. P7 + explosive orders, XPeng-W surges 14%

According to Zhitong Finance APP, Hong Kong stocks were unable to continue yesterday's strong performance today, with the three major indices opening high and then collectively declining. The Hang Seng Index turned negative in the afternoon after initially rising over 3% in the early session. By the close, the Hang Seng Index fell 1.07% or 225.15 points, closing at 20,728.19 points, with a total turnover of HKD 233.096 billion; the Hang Seng China Enterprises Index fell 1.13%, closing at 7,461.44 points; the Hang Seng Tech Index fell 0.2%, closing at 4,668.26 points. For the week, the Hang Seng Index rose a cumulative 1.08%, the China Enterprises Index rose a cumulative 1.62%, and the Hang Seng Tech Index rose a cumulative 4.11%.

Ping An Securities (Hong Kong) pointed out that since late September, incremental policies in finance, development and reform, enterprises, finance, and real estate have been continuously deployed, with significant efforts and determination to stabilize growth and boost the macro economy and equity markets. Since mid-October, Hong Kong stocks have entered a phase of volatility as expected, making it a good time to actively select relevant sectors and companies for investment. The significant rise in Hong Kong stocks on Thursday has been further validated. The relevant policies from the Standing Committee of the National People's Congress on Friday are expected to further boost the risk appetite of the Hong Kong stock market.

Blue Chip Performance

ZHONGSHENG HLDG (00881) saw a significant increase in volume. By the close, it rose 25.81%, closing at HKD 15.6, with a turnover of HKD 1.631 billion, contributing 4.33 points to the Hang Seng Index. Recently, a blogger known as "Electric Box Principal" posted on Weibo that ZHONGSHENG Group is fully embracing new energy and has secured 50 (some say 48) Huawei Smart Selection Car authorizations. It is reported that ZHONGSHENG currently has a brand portfolio that includes luxury brands such as Mercedes-Benz, Lexus, BMW, and Audi, as well as mid-to-high-end brands like Toyota, and holds a leading position in each core brand's market segment.

In other blue chip stocks, Sunny Optical Technology (02382) rose 3.98%, closing at HKD 56.15, contributing 2.67 points to the Hang Seng Index; Geely Automobile (00175) rose 2.79%, closing at HKD 14.74, contributing 3.97 points to the Hang Seng Index; China Overseas Development (00688) fell 3.76%, closing at HKD 15.36, dragging down the Hang Seng Index by 3.78 points; Haidilao (06862) fell 2.9%, closing at HKD 17.4, dragging down the Hang Seng Index by 1.64 points.

Popular Sectors

On the market, most large technology stocks were under pressure, with Tencent falling 1.77% and Alibaba falling 1.73%. After its listing, XPeng saw a surge of nearly 20%, leading the new energy vehicle stocks for the day; automotive dealers rose, with ZHONGSHENG HLDG rising over 25%; medical insurance negotiations supporting innovative drugs led to some pharmaceutical stocks strengthening; leading companies reported impressive third-quarter results, boosting chip stocks, with SMIC rising over 5% during the session. On the other hand, brokerage stocks and domestic property stocks that performed well yesterday all retreated, with Sunac China falling over 9% and CITIC Securities falling nearly 6%; coal stocks, rare earth concept stocks, CRO concept stocks, infrastructure stocks, and restaurant stocks all fell.

1. Automotive stocks generally rose. By the close, XPENG-W (09868) rose 14.7%, closing at HKD 57.35; Nio-SW (09866) rose 3.74%, closing at HKD 41.6; Geely Automobile (00175) rose 2.79%, closing at HKD 14.74; Leapmotor (09863) rose 1.1%, closing at HKD 32.05 On the evening of November 7, XPeng held a press conference to officially launch the XPeng P7+. As of 24:00 on November 7, there were 31,528 pre-orders for the XPeng P7+. Morgan Stanley's research report pointed out that the XPeng P7+ is redefining expectations for AI cars with its ambitious pricing, and it is expected to become a strong sales driver and stock price catalyst. Additionally, the recovery of MONA M03 orders, a solid order backlog, and a potentially more meaningful increase in supply starting in November should support sales momentum for the fourth quarter and the first quarter of next year.

China Galaxy stated that the local replacement subsidy policy took effect in October, leading to a hot sales market for cars. Leading new energy vehicle companies achieved good results, with several companies' new energy vehicle sales continuing to hit new highs after September. In the peak consumption season of the car market, competitively priced new products have become the core means for car companies to increase market share, helping leading companies continue to outperform the overall market and driving the continuous increase in new energy penetration rates.

2. Semiconductor stocks opened high but closed low. As of the close, SMIC (00981) rose 1.06% to HKD 28.55. On the downside, China Electronics Huada Technology (00085) fell 3.42% to HKD 1.41; Shanghai Fudan (01385) fell 2.44% to HKD 16.78; Hua Hong Semiconductor (01347) fell 1.29% to HKD 22.9.

On November 7, the two major foundries, SMIC and Hua Hong Semiconductor, released impressive third-quarter results. SMIC's third-quarter revenue reached USD 2 billion for the first time, setting a historical high; Hua Hong Semiconductor's third-quarter profit was USD 44.82 million, a year-on-year increase of 222.6% and a quarter-on-quarter increase of 571.6%. Both companies expect further revenue growth in the fourth quarter.

Guotai Junan Securities pointed out that the semiconductor industry has completed a relatively thorough destocking and supply-side clearing during the past two years of downturn, and is now entering a strong upward cycle driven by marginal demand for AI computing power and new expectations for terminal AI innovation. Huafu Securities stated that the localization of key links in the semiconductor industry chain has entered a critical phase and deep water zone, with domestic manufacturers accelerating the process of self-control.

3. Domestic property stocks fell sharply. As of the close, Sunac China (01918) fell 9.42% to HKD 3.27; Ronshine China (03301) fell 8.33% to HKD 0.66; New World Development (01030) fell 5.45% to HKD 2.43; Shimao Group (00813) fell 4.4% to HKD 1.52.

The market is focused on the National People's Congress Standing Committee, as domestic property stocks had a strong bullish sentiment yesterday, with several stocks soaring over 20% during the day, but today they all retreated. Guotai Junan Securities pointed out that the real estate market rebounded significantly in October, and the subsequent performance of the real estate sector will depend on the implementation progress of relevant policies and whether the fundamental rebound can be sustained. Although from the perspective of real estate company valuations, the fundamentals cannot support a trend in the real estate sector until housing prices stop falling and the industry truly recovers. However, from the perspective of policy games, the weaker the current fundamentals and the more general the past policy effects, the stronger the expectations for the introduction of significant policies, and the gaming market will continue to exist 4. Chinese brokerage stocks fell across the board. As of the close, CITIC Securities (06030) fell 5.78% to HKD 25.25; CITIC Construction Investment Securities (06066) fell 5.45% to HKD 11.8; Huatai Securities (06886) fell 4.16% to HKD 15.22; Everbright Securities (06178) fell 4.15% to HKD 8.55.

On the evening of November 7, Western Securities announced that on November 6, the company held the 16th meeting of the sixth board of directors, which reviewed and approved the proposal for the company to acquire the controlling stake in Guorong Securities. Previously, on November 5, the Shanghai Municipal Government issued a reply agreeing to the merger and reorganization of Guotai Junan Securities Co., Ltd. and Haitong Securities Co., Ltd. Additionally, speculation about the merger of the two major brokerages, CITIC Securities and CITIC Construction Investment, continues to ferment.

Popular Active Stocks

1. Kintor Pharmaceutical-B (02171) rose again. As of the close, it increased 12.67% to HKD 7.56.

On November 6, Kintor Pharmaceutical announced that data for Saiqiaze® (Zevoracil injection), CT071, and CT0590 will be presented in poster form at the 66th American Society of Hematology ("ASH") Annual Meeting, which will be held from December 7 to 10, 2024. Summaries of the above products have been published on the ASH official website. Among them, preliminary results of the CT0590 study indicate that the safety of the CT0590 universal CAR-T cell therapy is controllable, while achieving deep and durable clinical remission.

2. Fourth Paradigm (06682) rose throughout the day. As of the close, it increased 10.46% to HKD 40.65.

On November 7, MSCI announced the results of the semi-annual review of the MSCI series indices, with relevant adjustments to take effect after the close on November 25. The MSCI Global Small Cap Index included 11 stocks from the China region, including Fourth Paradigm. Notably, southbound funds have continuously increased their holdings in Fourth Paradigm recently, with the Hong Kong Stock Connect holding ratio rising rapidly from less than 1% on September 30 to 23.92% on November 7.

3. Shanghai Electric (02727) rebounded significantly. As of the close, it increased 10% to HKD 3.74.

Shanghai Electric plans to spend HKD 3.082 billion to acquire a 50% stake in Fanuc Robotics held by the holding platform Ningsheng Industrial. Shanghai Electric Chairman Wu Lei previously stated at a communication meeting that this acquisition of Fanuc Robotics is an important measure to actively respond to the new "National Nine Articles" to optimize and strengthen the main responsibilities and businesses of state-owned enterprises, and to improve development quality through mergers and acquisitions.

4. Jintai Holdings Group (01943) crashed at the end of trading. As of the close, it fell 77.42% to HKD 0.14. In mid-July this year, Silver Tide Holdings announced that the company's board of directors proposed to change the company's English name from "Silver Tide Holdings Limited" to "King’s Stone Holdings Group Limited," and to change the company's Chinese and English dual name from "银涛控股有限公司" to "金石控股集团有限公司." The relevant changes took effect on September 25 this year.

5. Café de Coral Group (00341) issued a profit warning. As of the close, it fell 7.68%, closing at HKD 7.69.

Café de Coral Group issued a profit warning, expecting that the profit attributable to shareholders for the six months ending September 30, 2024 (review period) will decrease by no more than 30% year-on-year. The announcement stated that the decline in profit during the period was mainly due to a more severe downturn in the overall catering industry in the first quarter of this fiscal year than expected, coupled with the high base effect brought about by the strong recovery in sales after the pandemic-related restrictions were lifted in the same period last year.

New Stock Listing

Jinko Electronics Co., Ltd. (02551) performed strongly. As of the close, it rose 47.65%, closing at HKD 5.33.

Jinko Electronics priced its shares at HKD 3.61, issuing a total of 38.64 million shares, with a minimum trading unit of 1,000 shares, and the net proceeds will be approximately HKD 82.25 million. It is reported that Guangdong Jinko Electronics is a leading provider of smart visual products and system solutions that integrate "LED+" technology in China, and is also a candidate supplier for the "Geely" automotive production line. According to data from ZhiShi Consulting, based on revenue, the company ranks third among domestic component and module manufacturers in China's high-end lighting industry and fifth among all component and module manufacturers in the same industry, with a market share of 5.3% in 2023