Intelligent Hong Kong Stock Analysis | Waiting for US CPI Data, New Trends in Norway Government Pension Global Fund

[Market Analysis]

Generally, there is no market performance when trading volume shrinks. A-shares had a turnover of 477.5 billion today. For several consecutive days, it has been below 500 billion, and the same goes for Hong Kong stocks, with a turnover of 68 billion today, decreasing more and more. The closing price fell by 0.35%.

The latest financial data is not very encouraging. In July 2024, new RMB loans amounted to 260 billion, lower than the expected 456.1 billion and lower than the 345.9 billion in the same period last year; new social financing reached 770.8 billion, lower than the expected 1.02 trillion and higher than the 536.6 billion in the same period last year; the growth rate of existing social financing was 8.2%, up from the previous 8.1%; M2 year-on-year growth was 6.3%, lower than the expected 6.4% and higher than the previous 6.2%; M1 year-on-year growth was -6.6%, lower than the previous -5%. All figures are below expectations, especially M1, which represents the most dynamic funds in the economy with direct purchasing power, experiencing such a large decline, and crucially, it is still in a continuous downward trend. The weakness in the stock market is closely related to M1, as the Shanghai and Shenzhen 300 Index and M1 data were highly correlated after 2018. Under this data, to change the current situation, policy changes become particularly urgent, and monetary easing is the general direction. Considering the high probability that the Federal Reserve will start the interest rate cut path in September, this month is an important observation window, and the upcoming reserve requirement ratio cut and interest rate cut are worth looking forward to. From this perspective, the activity in real estate stocks today also makes sense. For example, recently very active Zhu Guang Holdings (01176) rose by 5.71%, along with others like China South City (01668) and Swire Properties (01972).

There was a sudden development today: Japanese Prime Minister Fumio Kishida announced that he will no longer run for the position of President of the Liberal Democratic Party. This means that after the new President of the Liberal Democratic Party is elected, Fumio Kishida will resign from the position of Prime Minister. The main reason is the continuously declining approval rating and increasing public dissatisfaction. The parliament will be dissolved next, and a general election will be held in October or November. Currently, former Defense Minister Shigeru Ishiba, Minister of Digital Transformation Taro Kono, heavyweight party members Toshimitsu Motegi and Minister of Economic Security Sanae Takaichi are among the most hopeful candidates to become the new party leader. None of them have an absolute advantage, and for now, the Nikkei 225 is relatively stable. The impact will be seen later.

Tencent (00700) released its second-quarter report: in Q2 of 2024, revenue was 161.117 billion yuan, an 8% year-on-year increase and a 1% increase from the previous quarter, in line with the expected 161.35 billion yuan; adjusted net profit was 57.313 billion yuan, a 53% year-on-year increase and a 14% increase from the previous quarter, exceeding the expected 48.67 billion yuan. Overall, it meets expectations, with the highlight being the growth rate of the gaming business exceeding the revenue growth rate. Today, there were some unfavorable rumors: in response to the information circulating online that "hackers claim to have stolen a large amount of Tencent data," Tencent's QQ Security Center responded on the 14th that over the past two years, similar false information has been repeatedly hyped by overseas hackers, with the data size continuously expanding, with versions ranging from 700 million to 1.4 billion, maliciously associated with multiple domestic internet products. The above information is not true, but rather fabricated by the black market using historical data and misleading the public to a great extent On August 13th, according to media reports, Huawei is about to launch a new generation AI chip "Ascend 910C". The chip's performance is said to be comparable to NVIDIA's "H100", with plans to deliver to customers as early as October. Companies such as ByteDance, Baidu, and China Mobile are interested in purchasing, with expected orders exceeding 70,000 units. This should be a significant breakthrough, as the domestic substitution process continues to accelerate, benefiting higher-end semiconductor companies like SMIC (00981), and also stimulating packaging companies like ASMPT (00522).

Li Ka-shing's Cheung Kong Infrastructure (01038) has shown strong performance recently, as it was revealed to have acquisition activities: the company announced today that a consortium led by the group has reached an agreement on August 13th to acquire Aviva Investors' operational onshore wind power asset portfolio in the UK, with a transaction value of approximately GBP 350 million (about HKD 3.5 billion), subject to certain adjustments at the time of completion. The acquisition is expected to be completed in late September. Previously, there were rumors of Li Ka-shing withdrawing from the UK, but it seems that he is continuously seeking stable investment opportunities, which is considered quite good in terms of creating value for shareholders compared to many other companies that are just raising funds.

On August 13th, according to media reports, Chinese autonomous driving startup WeRide has recently obtained a permit from the California Public Utilities Commission to conduct manned tests of autonomous vehicles in the state. The test vehicles can have drivers or be driverless. However, WeRide is still not allowed to provide ride-hailing services to the public or charge any fees. This indicates that industries that are not currently perceived as threats or that the US is also keen on developing will see relaxed policies, but this does not mean a complete relaxation. Today, CXO stocks are falling again, and it's unclear what negative factors are behind this.

Today, the market has shifted its focus to performance-based sectors. Wan Zhou International (00288), which was highlighted in yesterday's sector focus, has performed well, with a significant 78.4% increase in mid-term operating profit to USD 1.14 billion. The board has recommended a mid-term dividend of HKD 0.10 per share (2023: HKD 0.05 per share). The stock surged over 8% today, likely due to improving fundamentals and the spin-off of Smithfield Foods' operations in the US and Mexico. Urban Revivo (02298) announced a profit increase, expecting a year-on-year increase of no less than 200% in net profit for the mid-year period ending June this year, compared to approximately HKD 26.129 million in the same period last year. Chairman and CEO Zheng Yaonan stated that considering the group's return to profitability in 2022 and continued profitability, the board will actively consider resuming dividend payments to shareholders to share the results. The stock also surged over 24% today.

Looking at the movements of the Norwegian Government Pension Fund Global, the world's largest sovereign wealth fund with assets totaling USD 1.7 trillion, the latest investment list was released today. Microsoft, Apple, and NVIDIA remain its top three holdings; while reducing holdings in Meta, ASML, Novo Nordisk. The fund increased its holdings in three major energy stocks, including ExxonMobil, Shell, and BP. This portfolio structure is somewhat similar to Warren Buffett's holdings, leaning towards traditional energy sectors, emphasizing safety and hedging Market is waiting for the US CPI data tonight. Whether there will be a 25 basis point cut or a 50 basis point cut in September is almost evenly split in market forecasts. The outcome of tonight's CPI data will have a significant impact. According to market forecasts, core CPI in July is expected to rise by 0.2% month-on-month (higher than the previous increase of 0.1%) and rise by 3.2% year-on-year (lower than the previous increase of 3.3%). The potential changes in the US stock market are also a focus for investors.

[Sector Focus]

According to TF Securities: Emphasize the value of the publishing sector's configuration, mainly based on the industry's stable main business + orderly expansion of new businesses + potential external mergers and acquisitions + increased dividend ratio. The industry has high entry barriers, with deep barriers to publishing licenses, regional monopoly in textbooks and teaching aids, and rigid market demand. Contributions from basic textbooks and market-oriented teaching aids; opportunities in post-school services, digital education, and research-related industries around the main business to promote the extension of the education industry chain and drive the transformation and upgrading of traditional cultural businesses; AI + graphics: large-scale models in China are gradually being implemented, and the value of AI language data is expected to be highlighted. Publishing companies have rich electronic graphic resources and are expected to circulate important data sets for domestic and foreign large-scale model training through exploration and integration.

The most authentic stock in the Hong Kong stock market is New China Bookstore (00811), many others have no trading volume at all, and another related stock is the copyright company China Literature (00772).

[Stock Analysis]

Gogovan-W (01519): Signs a global strategic cooperation agreement with Three Sheep Group, early layout to reap rewards

On August 12, Gogovan signed a global strategic cooperation agreement with Three Sheep Group in Hefei. According to the agreement, Gogovan will further consolidate and develop its business foundation in China and explore new business cooperation models in Southeast Asia and globally with Three Sheep Group.

Analysis: Three Sheep has established a matrix with Big and Little Yang as the core, along with Little Huang, Boss Qi, Brother Zui, Sister Qiao, and Zuo Shilin as top anchors. According to public data, the estimated value of live streaming sales in 2023 exceeds 30 billion yuan, operating service revenue reaches 1.5 billion yuan, and tax revenue is expected to exceed 450 million yuan. This strong cooperation brings a win-win situation for Gogovan. The company originated in Southeast Asia, with Gogovan holding a market share of 22.5% in the region. In 2023, the company's market share in Southeast Asia increased by 2.9 percentage points from 22.5% to 25.4%, maintaining the top position for four consecutive years. Compared to China, the gross profit per ticket in Southeast Asia remains at a high level. The express delivery market in Southeast Asia continues to grow at a medium to high speed. In emerging markets such as the Middle East and South America, in 2023, Gogovan achieved triple growth, with its market share in new markets increasing from 1.6% in 2022 to 6.0% in 2023, parcel volume reaching 230 million pieces, a year-on-year growth of 369.0%, and annual revenue increasing by 299.7% year-on-year to 327 million US dollars. In terms of parcel volume, in 2023, Gogovan ranked among the top five in the local markets of Brazil, Mexico, Saudi Arabia, and Egypt. As an early entrant, with the gradual completion of Gogovan's layout, increased penetration rates, and business volume growth, new markets are expected to become sources of growth. In the Chinese market, the company entered the Chinese market in 2019, continuously investing in logistics network construction, and acquiring Fengwang and Best Logistics for resource integration The unit cost is relatively high. With the gradual improvement of the ZEEKR network layout and the increase in business volume, the scale effect is expected to show, and the unit cost is expected to decrease. In the future, the profitability in the domestic market is expected to improve. Overall, the early layout of ZEEKR is entering a stage of harvest.

[Disclaimer] This VIP information product is for communication and discussion purposes only and does not constitute any investment advice. Reproduction without authorization is strictly prohibited. For more high-quality information and data products, please log in to theZhitong FinanceAPP for inquiries.