Hong Kong Stock Market Closing (07.12) | Hang Seng Index rose by 2.59%, with strong performance from technology and property stocks. Longfor Group led the blue chips

According to the Wise Finance APP, the June CPI data in the United States boosted expectations of a rate cut in September, and the three major Hong Kong stock indices showed strong performance today, with the Hang Seng Index successfully breaking the 18,000 mark. As of the close, the Hang Seng Index rose by 2.59% or 461.05 points to 18293.38 points, with a total daily turnover of 119.432 billion Hong Kong dollars; the Hang Seng China Enterprises Index rose by 2.52% to 6532.63 points; and the Hang Seng Tech Index rose by 2.32% to 3782.08 points. Looking at the whole week, the Hang Seng Index rose by 2.77%, the China Enterprises Index rose by 2.36%, and the Tech Index rose by 5.15%.

Amber Hill International pointed out that the encouraging inflation data released by the United States last night did not benefit the U.S. stock market. Looking ahead, based on the "sector rotation" phenomenon in the U.S. stock market last night and the warming expectations of a rate cut, funds may also rotate to the lagging Hong Kong stocks. Guotai Junan believes that with the decrease in economic policy uncertainty and the confirmed trend of rate cuts overseas, Hong Kong stocks will fluctuate upwards.

Performance of Blue Chip Stocks

Longfor Group (00960) led the blue chips. As of the close, it rose by 8.39% to 11.52 Hong Kong dollars, with a turnover of 171 million Hong Kong dollars, contributing 3.44 points to the Hang Seng Index. In the first half of this year, Longfor delivered a total of 121 projects in 43 cities nationwide, with about 50,000 quality residential units, and 20% of the projects were delivered more than a month ahead of schedule. China Everbright International pointed out that the real estate market has entered a period of policy effect realization. In the short term, with the frequent introduction of policy relaxations, there may be trading opportunities for revaluation.

In other blue chip stocks, Henderson Land Development (00012) rose by 7.59% to 23.4 Hong Kong dollars, contributing 3.92 points to the Hang Seng Index; Li Ning (02331) rose by 7.42% to 16.22 Hong Kong dollars, contributing 4.23 points to the Hang Seng Index; China Resources Power (00836) fell by 2.61% to 22.4 Hong Kong dollars, dragging down the Hang Seng Index by 1.86 points; and Orient Overseas International (00316) fell by 1.12% to 115 Hong Kong dollars, dragging down the Hang Seng Index by 0.28 points.

Hot Sectors

On the market, most large technology stocks rose, with Meituan and JD.com up nearly 5%, and Alibaba up nearly 4%. The "Olympic effect" is expected to catalyze sports apparel consumption; sports goods stocks are performing strongly; the real estate market has entered a period of policy effect realization, with property stocks strong throughout the day; benefiting from the increased expectations of a Fed rate cut, most Hong Kong property stocks rose; pork concept stocks, catering stocks, pharmaceutical stocks, and domestic bank stocks all rose. On the other hand, Hamas preliminarily accepted a ceasefire proposal, shipping stocks continued to decline; gold stocks fell after opening high; semiconductor, Apple concept stocks, and power stocks were weak.

1. Property stocks were strong throughout the day. As of the close, Shimao Group (00813) rose by 14.29% to 0.8 Hong Kong dollars; New World Development (01030) rose by 9.35% to 1.52 Hong Kong dollars; Longfor Group (00960) rose by 8.39% to 11.52 Hong Kong dollars; and Country Garden Services (03383) rose by 7.84% to 0.55 Hong Kong dollars The China Real Estate Enterprises Delivery Scale Ranking for the first half of 2024 was recently released by the China Index Research Institute. The list shows that 15 enterprises delivered more than 20,000 units, with Country Garden, Greenland Holdings, Vanke, China Overseas Land & Investment, Greentown China, Sunac China, New World Development, and Longfor Group delivering over 50,000 units. The top-ranked Country Garden delivered a scale of 154,500 units. The top ten real estate companies delivered a total of over 676,000 units. Fangzheng Securities pointed out that the May 17th New Policy clearly demonstrates the central government's determination to stabilize the real estate market, with various tier cities accelerating their follow-up, and the policy effects have been reflected in transaction volume. Looking ahead, the pace of delivering houses has entered a critical moment, and achieving the target urgently requires multi-faceted policy support. A new round of policy releases has begun, and the real estate market is expected to continue to recover.

2. Medical stocks continue to rise. By the close of trading, CanSino Biologics-B (02162) rose by 5.85% to HKD 34.4; Innovent Biologics (09969) rose by 5.2% to HKD 5.06; Kangfang Biotech (09926) rose by 4.96% to HKD 40.2; and GenScript Biotech Corporation (01548) rose by 4.38% to HKD 10.

The U.S. June CPI slowed more than expected, with a probability of a rate cut in September surging to nearly 90%. Pacific Securities pointed out that as the Fed's rate hike cycle ends, gradually easing liquidity is expected to bring about a revival in investment and financing, with overseas demand improving ahead of domestic demand. In addition, the recent release of the "Implementation Plan to Support the Development of Innovative Drugs throughout the Entire Chain" has sent positive signals. Dongwu Securities believes that specific terms are expected to be implemented soon, coupled with the innovative drug sector being at a historically low position, with multiple catalysts such as the ESMO Congress, WCLC Congress, medical insurance negotiations, and expectations for innovative drug overseas expansion in the second half of the year, the innovative drug sector is expected to strengthen.

3. Performance of domestic bank stocks shines. By the close of trading, China Merchants Bank (03968) rose by 4.71% to HKD 35.6; Agricultural Bank of China (01288) rose by 2.96% to HKD 3.48; Industrial and Commercial Bank of China (01398) rose by 2.75% to HKD 4.48; and Bank of China (03988) rose by 2.57% to HKD 3.59.

According to announcements from several listed banks, this week will see 12 banks including Bank of Communications, Postal Savings Bank of China, China Construction Bank, and China Merchants Bank distributing dividends, with a total cash dividend of over 130 billion yuan for A-shares. Overall, most of the 41 listed banks with dividend plans are expected to complete distribution in June and July, and based on previous annual report disclosure data, the dividends of the six major state-owned banks this year will amount to as much as 413.341 billion yuan.

Huafu Securities pointed out that there are three driving factors for the bank sector's performance this year. Firstly, the logic of stock selection based on dividend yield has spread within the sector, with high dividend strategies expanding from state-owned banks to medium and small banks. Secondly, relaxation of real estate policies. Thirdly, the market's expectation for a slowdown in the decline of net interest margins for banks and the anticipation of the fundamentals bottoming out. Looking ahead, the bank sector will need to further test the effects of previous policies and the future trend of fundamentals 4. Shipping stocks continue to decline. As of the close, COSCO Shipping Energy Transportation (01138) fell by 3.72% to HKD 9.07; COSCO Shipping Holdings (01919) fell by 3.52% to HKD 11.5; COSCO Shipping Development (02866) fell by 1.96% to HKD 1; and Orient Overseas International (00316) fell by 1.12% to HKD 115.

On July 11th, the main 08 contract and sub-main 10 contract of the European line futures opened low and continued to fall, with multiple contracts hitting the limit down. Daiwa's research report pointed out that Hamas accepting a ceasefire agreement will improve the situation in the Middle East in the short term. Market expectations suggest that if successful, shipping prices may recover to levels before the disruption of the Red Sea route. Daiwa mentioned that as shipping stocks have been supported by a significant increase in freight rates, although shipping prices may not immediately fall back, the latest developments are expected to exert significant pressure on the stock prices of shipping companies. Investors are expected to take profits first, with COSCO Shipping Holdings, Orient Overseas, and Sinotrans Shipping International likely to face further pressure.

5. Gold stocks surged and then fell back. As of the close, Shandong Gold Mining (01787) fell by 2.59% to HKD 16.54; China Gold International (02099) fell by 2% to HKD 51.45; and Zijin Mining (02899) fell by 0.23% to HKD 17.58.

Last night, the US released inflation data for June, with both overall and core CPI significantly lower than market expectations. After the data was released, interest rate futures fully priced in a rate cut in September. Overnight, gold and silver rose in the short term, with spot gold breaking through the $2400 per ounce mark for the first time since May 22. Stimulated by this news, gold stocks opened higher collectively in the morning, but then plummeted, with Shandong Gold Mining leading the decline in the sector.

Shandong Gold Mining announced yesterday that it expects to achieve a net profit attributable to the owners of the parent company of RMB 1.25 billion to RMB 1.45 billion in the first half of 2024, an increase of 42.07% to 64.81% year-on-year. Morgan Stanley pointed out that excluding one-time impacts, core net profit will increase by 45% to 68% year-on-year, reaching RMB 1.28 billion to RMB 1.48 billion, indicating that second-quarter profits will be between RMB 550 million and RMB 750 million, flat or slightly lower year-on-year, a performance that is disappointing.

Hot Stocks on the Move

1. China Yangtze Power (01038) significantly surged. As of the close, it rose by 6.37% to HKD 49.25 .

China Yangtze Power announced that the company constantly considers and evaluates different strategic opportunities to create maximum value for shareholders. One of the opportunities currently being considered is a potential secondary and additional listing of the company's shares on overseas stock exchanges (such as the London Stock Exchange) without any fundraising.

2. Sunny Optical Technology (02382) rose against the trend , closing up by 3.84% to HKD 50.05 ** **

Lion stated that in the first half of this year, Sunny Optical Technology's main shipments of mobile phone and automotive products remained stable. At the same time, the product mix and gross profit margin of the mobile phone camera module business, which is highly sensitive to profitability, have improved. Looking forward, the company anticipates stable mid-term performance and expects to announce a profit.

3. Aluminum Corporation of China (02600) Announces Profit Surge, closing up 3.77% at HKD 5.5.

Citigroup released a research report stating that the company forecasts a net profit of RMB 6.5 billion to 7.3 billion for the first half of this year, representing a year-on-year growth of 90% to 114%. This surpasses the bank's full-year forecast of 72% to 81%, as well as the market's general expectation of 71% to 80%. The report recommends a "buy" rating with a target price of HKD 7.88