Northbound Funds Update | Northbound Funds' net buying reached HKD 6.635 billion, Hong Kong Stock ETFs increased holdings, Tencent received over HKD 800 million in additional holdings after performance announcement

According to the Zhitong Finance and Economics APP, on August 15th, in the Hong Kong stock market, Beishui had a net purchase of HKD 6.635 billion. Among them, the net purchase of the Shanghai-Hong Kong Stock Connect was HKD 4.474 billion, and the net purchase of the Shenzhen-Hong Kong Stock Connect was HKD 2.161 billion.

The stocks with the highest net purchases by Beishui were Yingfu Fund (02800), Tencent (00700), and China Mobile (00941). The stocks with the highest net sales by Beishui were CNOOC (00883), China Construction Bank (00939), and SMIC (00981).

Active trading stocks in the Shanghai-Hong Kong Stock Connect

Active trading stocks in the Shenzhen-Hong Kong Stock Connect

Beishui funds re-entered the Hong Kong stock ETFs, with Yingfu Fund (02800), Southern Heng Seng Technology (03033), and Heng Seng Chinese Enterprises (02828) receiving net purchases of HKD 2.559 billion, HKD 0.378 billion, and HKD 0.375 billion respectively. On the news front, Zhongtai International believes that the stabilization of overseas markets and the historically low valuation of Hong Kong stocks are conducive to the gradual stabilization of the market, while the extremely low trading volume of Hong Kong stocks may also indicate an imminent change in the market. Guotai Junan International stated that it remains optimistic about the short-term performance of Hong Kong stocks, as the expectation of a U.S. rate cut heats up, and the positive information brought by the performance and outlook of Hong Kong's internet leaders.

Tencent (00700) received a net purchase of HKD 0.837 billion. In terms of news, Tencent released its performance, with second-quarter revenue of HKD 161.117 billion, an 8% year-on-year increase; adjusted net profit of HKD 57.313 billion, a 53% year-on-year increase. Citi expects that Tencent's performance is mainly benefiting from a high-profit revenue stream business mix and strict cost control, and believes that the recovery of local games will bring sustainable profit growth. It is expected that Tencent's mainland game business revenue will further accelerate to low double-digit growth in the third and fourth quarters of this year, while international game business revenue will maintain resilient growth.

China Mobile (00941) received a net purchase of HKD 0.612 billion. In terms of news, CITIC Securities pointed out that China Mobile's overall operations remain stable. In the personal market, against the backdrop of slowing traffic growth, the company strengthens the integration of applications, equity, and terminal operations, striving to maintain stability in the personal market; in the home market, while promoting the continuous penetration of gigabit broadband, it enhances "smart home + content" drive to increase comprehensive home broadband ARPU In terms of the government-enterprise market, continue to deepen industry expertise, accumulate core capabilities, and enhance the profitability of B-end projects. Calculated at a dividend payout ratio of 72%, the current dividend yield of the company's H shares is about 7%, and A shares are about 4.5%, making the dividend return still attractive.

China Shenhua (01088) received a net purchase of HKD 63.23 million. On the news front, Open Source Securities pointed out that as a leading state-owned enterprise in the coal industry, China Shenhua has a strong profit stability due to its high proportion of annual long-term coal contracts and the integrated operation model of "coal-electricity-chemicals-ports-shipping". With continuous high dividends and potential incremental growth in coal and electricity in the future, the valuation level is expected to continue to rise. The company's profit only slightly decreased and can still support high dividends, maintaining a "buy" rating.

Kuaishou-W (01024) received a net purchase of HKD 48.58 million. On the news front, Kuaishou will announce its second-quarter performance next Tuesday (the 20th). Bank of America Securities predicts that Kuaishou's second-quarter revenue will increase by 9.4% year-on-year to RMB 30.4 billion; adjusted net profit is expected to increase by 63% year-on-year to RMB 4.4 billion. Meanwhile, Guotai Junan Securities expects Kuaishou's second-quarter revenue to increase by 10% year-on-year to RMB 30.4 billion; the expected gross profit margin for the quarter is 54.2%, up 4 percentage points year-on-year.

China Construction Bank (00939) suffered a net sale of HKD 86.67 million. On the news front, UBS released a report stating that domestic bank stocks will successively announce their second-quarter results. According to data from the China Banking and Insurance Regulatory Commission, the net profits of state-owned banks, joint-stock banks, and city commercial banks have respectively declined by 1%, increased by 1.7%, and increased by 4.6% year-on-year. CICC Securities pointed out that the current valuation of the banking sector is still at a low level. In the context of a shortage of assets, high dividend absolute returns remain the long-term investment logic for the sector. As the US dollar gradually enters a rate-cutting cycle, it may increase attractiveness to foreign capital, focusing on core assets in the banking sector.

In addition, Xiaomi Corporation-W (01810) received a net purchase of HKD 122 million. Meanwhile, CNOOC (00883) and SMIC (00981) suffered net sales of HKD 161 million and HKD 5.29 million respectively