Hong Kong Stock Market Closing (06.25) | Hang Seng Index rose by 0.25%, semiconductor and Apple concept stocks continued to decline, Chinese Estates Holdings surged by over 40% at one point

According to the information from Zhitong Finance and Economics APP, the three major Hong Kong stock indexes rose collectively in the morning session before falling back, with the Heng Seng Index dropping by 1.39% at one point. In the afternoon session, the decline further widened, but the indexes rebounded towards the end of the trading day, with the Hang Seng Index and the H-share Index turning positive. At the close, the Hang Seng Index rose by 0.25% or 45.19 points to 18072.9 points, with a total daily turnover of 93.743 billion Hong Kong dollars; the H-share Index rose by 0.36% to 6464.49 points; and the Hang Seng Tech Index fell by 0.6% to 3655.46 points.

Guoyuan International believes that although the Hong Kong stock market still lacks long-term stable support for an upward trend, the recent end of the U.S. interest rate hike process and the overall increase in risk appetite in overseas markets have alleviated the pressure on the Hong Kong stock market. In addition, the current domestic economy exhibits certain characteristics of "deleveraging," especially with the weak leverage willingness in the household sector influenced by factors such as real estate, which is expected to contribute to the restoration of confidence in leveraging in society and become an important support for the subsequent market.

Performance of Blue Chip Stocks

China Mengniu Dairy (02319) led the blue chips. At the close, it rose by 4.5% to 13.94 Hong Kong dollars, with a turnover of 5.03 billion Hong Kong dollars, contributing 3.08 points to the Hang Seng Index. China Mengniu Dairy recently held a strategic cooperation negotiation meeting with Daka International Food Co., Ltd. (a wholly-owned subsidiary of MXBC) in Jiaozuo City, Henan Province. The two parties reached multiple strategic cooperation intentions, including reaching consensus on the supply of production materials such as pasteurized milk, milk powder, and bulk milk.

In other blue chip stocks, Hansoh Pharmaceutical (03692) rose by 4.24% to 16.72 Hong Kong dollars, contributing 1.3 points to the Hang Seng Index; Longfor Group (00960) rose by 2.87% to 11.46 Hong Kong dollars, contributing 1.24 points to the Hang Seng Index; SMIC (00981) fell by 4.34% to 17.2 Hong Kong dollars, dragging down the Hang Seng Index by 5.24 points; and Alibaba Health (00241) fell by 3.77% to 3.32 Hong Kong dollars, dragging down the Hang Seng Index by 1.36 points.

Hot Sectors

On the market, large-cap technology stocks saw mixed movements, with Meituan rising by over 1%, while Alibaba, Baidu, Tencent, and others also saw gains. The industry policy is showing marginal improvement, with most education stocks rising today; new home and second-hand home transactions have increased compared to before, leading to a general recovery in real estate stocks; the penetration rate of new energy vehicles in June is expected to reach nearly 50%, with active performance in new energy vehicle stocks. On the other hand, Nvidia plunged by 6.7% overnight, marking a third consecutive day of decline, leading to a continued downturn in semiconductor stocks; Apple concept stocks, Bitcoin concept stocks, and others also declined.

1. Continued Decline in Semiconductor Stocks. At the close, SMIC (01347) fell by 6.22% to 21.85 Hong Kong dollars; SMIC (00981) fell by 4.34% to 17.2 Hong Kong dollars; and Shanghai Fudan (01385) fell by 2.12% to 12 Hong Kong dollars.

Nvidia plunged by 6.7% overnight, marking its largest single-day decline in two months, with a cumulative decline of nearly 13% over three consecutive trading days, resulting in a market value evaporation of approximately 430 billion U.S. dollars. A research report from TF Securities pointed out that the industry cycle is currently in a relatively low range, and in the short term, there should be increased sensitivity to changes in demand, with priority given to the improvement of financial statements for species that are expected to recover first In terms of innovation, it is expected that artificial intelligence/satellite communication/MR will be major industry trends, and individual stocks in the industry chain are expected to continue to reflect thematic opportunities as technological innovation progresses.

2. Bitcoin concept stocks fell all day. As of the close, OSL Group (00863) fell by 13.39% to HKD 5.24; Meitu Company (01357) fell by 3.37% to HKD 2.58; Blueport Interactive (08267) fell by 1.43% to HKD 0.345.

Bitcoin experienced its second largest weekly decline since 2024, falling below $60,000 last night for the first time since May 3, with a 24-hour decline of over 7%. Prior to this, the U.S. Bitcoin ETF was hit by six consecutive days of net outflows. Analysts point out that in addition to the risk of increased supply, the deeper reason for the Bitcoin correction may be that investors are reassessing the attractiveness of cryptocurrencies relative to other investment products.

3. Apple concept stocks generally fell. As of the close, Sunny Optical (02382) fell by 3.45% to HKD 47.55; Q Technology (01478) fell by 2.64% to HKD 4.05; BYD Electronics (00285) fell by 2.6% to HKD 37.45.

According to the Science and Technology Board Daily, Apple reportedly demanded that its assembly factories reduce manpower on iPhone assembly lines by 50% in the coming years as part of its goal to increase automation production. In addition, the European Commission preliminarily ruled on the 24th that U.S. Apple's online app store rules violated the EU's Digital Markets Act and launched a new investigation against Apple. Under the Digital Markets Act, if there is a violation, the European Commission can impose fines on Apple, with the fine amount potentially reaching 10% of the company's global turnover.

4. Education stocks mostly rose. As of the close, New Oriental-S (09901) rose by 5.06% to HKD 59.2; Excellent Education Group (03978) rose by 4.62% to HKD 3.4; China Kepei (01890) rose by 4% to HKD 1.56.

A research report from Cinda Securities emphasized three investment themes in the education industry: (1) Extracurricular training: policy marginal optimization, accelerated expansion, strong demand, supply clearance, recommended focus on Hong Kong-listed TAL Education, Excellent Education, U.S.-listed New Oriental, TAL Education; (2) Recruitment training: rapid growth in the number of public examinations, changes in examination times do not change the medium- to long-term high prosperity, recommended focus on Hong Kong-listed China Education Group; (3) Stable growth & high dividend yield: Hong Kong-listed China Education Holdings, New Higher Education Group.

5. New energy vehicle stocks rose across the board. As of the close, Great Wall Motors (02333) rose by 4.01% to HKD 12.46; Nio-SW (09866) rose by 2.84% to HKD 34.45; Leapmotor (09863) rose by 2.51% to HKD 26.55 According to the China Association of Automobile Manufacturers, in May 2024, the production and sales of new energy vehicles reached 940,000 and 955,000 respectively, with year-on-year growth of 31.9% and 33.3% respectively, and a market share of 39.5%. In addition, according to the China Passenger Car Association, the retail sales of narrow passenger cars in June are expected to be around 1.75 million, an increase of 2.3% month-on-month; the retail sales of new energy passenger cars are expected to be around 860,000, an increase of 6.9% month-on-month, with a new energy penetration rate reaching 49.1%. Tianfeng Securities believes that the policy of promoting the replacement of old cars with new ones led by the Central Financial and Economic Affairs Commission will correct the pessimistic expectations of demand under policy catalysis.

Hot Stocks

1. Chinese Estates (00127) surged on high volume, closing up 28.23% at HKD 1.59.

According to CCASS data, on June 19, 231 million shares or 12.1% of Chinese Estates shares were deposited into CCASS and transferred to the position of BNP Paribas, with a market value of approximately HKD 263 million based on the closing price of HKD 1.14 on that day. According to the annual report, Joseph Lau Luen Hung Investments Limited holds 2.31 billion shares of Chinese Estates, consistent with the number of shares deposited on that day.

2. Fosun Pharma Hanlin (02696) rose throughout the day, closing up 19.43% at HKD 22.5.

Fosun Pharma announced a proposal to privatize Fosun Pharma Hanlin through a merger by absorption, with a cash cancellation price of HKD 24.6 per H share, representing a premium of 30.57% over the closing price before the suspension of Fosun Pharma Hanlin. Upon meeting the conditions, Fosun Pharma Hanlin will apply to the Hong Kong Stock Exchange to voluntarily delist its H shares.

3. China Mengniu Dairy (00151) rose after earnings release, closing up 5.5% at HKD 4.41.

China Mengniu Dairy released its annual results for the year ended March 31, 2024, with revenue of RMB 23.586 billion, a year-on-year increase of 2.9%; net profit attributable to equity holders of the company was RMB 3.99 billion, an increase of 18.4% year-on-year; proposed final dividend of 3.3 US cents per share.

4. BaoNeng Group (01263) plummeted, closing down 12.25% at HKD 4.44.

BaoNeng Group announced that there have been recent market rumors circulating on a social media platform suggesting that the company may consider privatization and potential delisting. The board of directors hereby clarifies that as of the date of this announcement, even if the board decides to propose delisting, there is no intention to privatize the company