Hong Kong Stock Market Closing (08.13) | Hang Seng Index rose by 0.36%, Apple concept stocks performed well, Tianjin Real Estate stock price halved during the day

According to the Wise Finance APP, the Hong Kong stock market rose in the morning session and then fell back, with the three major indexes subsequently turning downward, followed by repeated fluctuations and a rebound. As of the close, the Hang Seng Index rose by 0.36% or 62.41 points to 17,174.06 points, with a total daily turnover of HKD 70.846 billion; the Hang Seng China Enterprises Index rose by 0.33% to 6,049.41 points; and the Hang Seng Tech Index remained flat at 3,429.69 points.

Guotai Junan International pointed out that the risk premium in the current Hong Kong stock market has reached historical highs, which in the past has corresponded to the start of subsequent rebound trends. Considering the easing of overseas risk factors, the bank believes that the impact going forward is expected to be relatively limited. The bank considers that the Hong Kong stock market has entered the allocation range, and the potential for a rebound in the future is promising, particularly looking to invest in Hang Seng Tech.

Performance of Blue Chip Stocks

China Unicom (00762) led the gains in blue-chip stocks. At the close, it rose by 3.18% to HKD 6.16, with a turnover of HKD 3.53 billion, contributing 1.85 points to the Hang Seng Index. Jefferies previously pointed out that despite downward revisions in earnings forecasts, the strong and continuously rising free cash flow, ideal shareholder returns, and high yield continue to make the three major Chinese telecom stocks very attractive.

In other blue-chip stocks, XinAo Energy (02688) rose by 3% to HKD 55, contributing 2.05 points to the Hang Seng Index; Xiaomi Corporation-W (01810) rose by 2.67% to HKD 16.9, contributing 12.4 points to the Hang Seng Index; Alibaba Health (00241) fell by 4.94% to HKD 3.08, dragging down the Hang Seng Index by 1.69 points; Wharf REIC (01997) fell by 2.55% to HKD 21, dragging down the Hang Seng Index by 1.48 points.

Hot Sectors

On the market, large-cap tech stocks showed mixed movements, with Xiaomi rising by over 2% and Tencent rising by nearly 1%. Q TECH's strong performance post-results continued to drive the activity of Apple concept stocks; attractive levels of shareholder returns still exist, with the three major telecom operators collectively rebounding; geopolitical tensions stimulated a rise in international oil prices, leading to a general increase in oil stocks. On the other hand, concept stocks related to the COVID-19 pandemic that surged yesterday all retreated, with internet healthcare, home appliance, beer, catering, Chinese securities firms, and auto stocks all declining.

1. Strong Performance of Apple Concept Stocks. At the close, Q TECH (01478) rose by 17.28% to HKD 4.75; AAC Technologies (02018) rose by 3.83% to HKD 27.1; Sunny Optical (02382) rose by 2.54% to HKD 44.35; and GoerTek (01415) rose by 2.14% to HKD 21.45.

According to the Science and Technology Board Daily, well-known tech journalist Mark Gurman revealed in "Power On" that the Apple team is continuing to experiment and develop multiple smart glasses products, including the expected launch of the budget-friendly Vision Pro next year. Additionally, benefiting from the strong momentum in consumer electronics demand, Q TECH saw a 40% year-on-year increase in revenue and a 454% year-on-year increase in profit in the first half of the year. Morgan Stanley believes that Q TECH may achieve further profit recovery in the second half of the year. Huafu Securities pointed out that short-term consumer electronics terminal demand is picking up. In the medium to long term, AI-enabled smart terminals are driving the acceleration of phone/PC upgrades. The faster pace of innovation in consumer electronics is expected to lead the industry into a boom cycle, while upcoming events such as Apple's fall launch event/Windows system updates and other major updates are expected to catalyze further developments 2. Telecom stocks rebound collectively. As of the close, China Unicom (00762) rose by 3.18% to HKD 6.16; China Telecom (00728) rose by 1.9% to HKD 4.28; China Mobile (00941) rose by 1.48% to HKD 71.95.

Lyon believes that with the slowdown in depreciation and capital expenditure, the profit margin of Chinese telecom stocks should sustainably improve. It is expected that the net profit in the first half of the year will increase by 5% to 10% year-on-year, and dividends will also increase. Jefferies previously pointed out that despite the downward revision of performance forecasts, the strong and continuously rising free cash flow, ideal shareholder returns, and high yield make the three major Chinese telecom stocks, China Communications Services, and China Tower still very attractive.

It is reported that in the first half of this year, China Mobile achieved operating income of RMB 546.7 billion, a year-on-year increase of 3.02%; achieved a net profit attributable to equity holders of RMB 80.2 billion, a year-on-year increase of 5.29%, with a good level of profit growth. The company declared an interim dividend of RMB 2.6 per share, a 7% increase year-on-year. This is equivalent to a dividend yield of 63.3%, compared to 62.5% in the same period last year.

3. Oil stocks generally rise. As of the close, CNOOC (00883) rose by 1.57% to HKD 20.05; Kunlun Energy (00135) rose by 1.43% to HKD 7.82; PetroChina (00857) rose by 0.9% to HKD 6.73; Sinopec (00386) rose by 0.6% to HKD 4.99.

Geopolitical tensions have pushed up international oil prices. On Monday, WTI crude oil futures settlement price rose by 4.19% to USD 80.06 per barrel; Brent crude oil futures settlement price rose by 3.31% to USD 82.30 per barrel. US White House officials said Iran may launch a "major" attack on Israel as early as this week. In addition, OPEC's monthly report released on Monday expects global oil demand to increase by 2.11 million barrels per day in 2024, lower than the previous month's forecast of 2.25 million barrels per day. OPEC also lowered its demand growth forecast for next year from 1.85 million barrels per day to 1.78 million barrels per day. This is the first downward revision by OPEC since announcing oil demand growth forecasts in July 2023.

4. Beer stocks continue to decline. As of the close, CR Beer (00291) fell by 2.53% to HKD 23.1; Tsingtao Brewery (00168) fell by 1.93% to HKD 48.3; Budweiser APAC (01876) fell by 1.83% to HKD 9.13.

Guosen Securities research report stated that in July, the beer consumption demand improved structurally, and the industry continued a relatively smooth pace of high-end transformation. In July, the beer industry benefited from high temperatures in some regions, the opening of the Olympics, and other sports events, leading to structural improvements in demand. Tsingtao Brewery's sales volume in Shandong region increased rapidly, Yanjing Beer and Chongqing Beer's main sales areas are expected to continue to grow positively, but some regions are still affected by typhoons and floods, with demand awaiting recovery.

Furthermore, due to pressure on sales volume in the first half of the year, leading companies in the second half of the year are gradually adjusting market strategies. Budweiser and Tsingtao are moderately relaxing growth restrictions on mid-to-low-end products to alleviate the pressure of total sales volume growth. Considering that the high-end beer consumption scene still needs to be restored, it is expected that the beer industry will continue a relatively smooth pace of high-end transformation. Beer companies with higher product structures previously face a certain degree of pressure in product and channel structure adjustments, while regional beer companies have relatively stronger resilience

Hot Stock Movements

1. Beike-W (02423) rose throughout the day, closing up 7.67% at HKD 38.6.

Beike released unaudited financial performance for the second quarter ending June 30, 2024, with a total net revenue of RMB 23.37 billion, a year-on-year increase of 19.95%; net profit attributable to ordinary shareholders of Beike Holdings Limited was RMB 1.892 billion, a year-on-year increase of 44.57%; basic earnings per share was RMB 0.56.

2. Yuexiu Group (00551) significantly increased, closing up 6.3% at HKD 12.82.

Yuexiu Group released unaudited interim results for the six months ending June 30, 2024, with operating income of USD 4.015 billion, a year-on-year decrease of 3.36%; attributable profit to shareholders was USD 184 million, a year-on-year increase of 120.57%; proposed interim dividend of HKD 0.4 per share, compared to HKD 0.2 in the same period last year.

3. Tianjin Real Estate Development (02515) hit a new low, closing down 51.82% at HKD 0.53.

Tianjin Real Estate Development recently issued a profit warning, expecting a net profit of not less than RMB 10 million for the six months ending June 30, 2024, a decrease of not more than RMB 8.6 million or 46.2% compared to the net profit of approximately RMB 18.6 million for the same period in 2023.

4. Country Garden Services (06098) issued a profit warning, closing down 5.33% at HKD 4.44.

Country Garden Services announced that unaudited comprehensive income for the first half of the year is expected to be around RMB 20.9 billion to 21.2 billion, showing a net increase compared to the same period in 2023; net profit attributable to the company's shareholders is expected to be between RMB 1.36 billion and 1.55 billion, a year-on-year decrease of 33.7% to 40.1%.

5. Kingkey Holdings (03918) hit a new six-month low, closing down 4.78% at HKD 3.19.

Kingkey Holdings stated that for the six months ending June 30, 2024, the group is expected to achieve a profit of USD 3.1 million to a loss of USD 6.9 million, mainly impacted by an expected impairment of approximately USD 85 million to 95 million for the casino and resort project in Vladivostok, Russia