Hong Kong Stock Market Closing (08.16) | Hang Seng Index rose by 1.88%, mid-year performance is hot, "JD Group" collectively surged, while "Hutchison Related" weakened after earnings

According to the Wisdom Financial APP, the US July retail data has boosted expectations of a "soft landing", with all three major Hong Kong stock indices showing strong performance throughout the day, each rising by over 2%. As of the close, the Hang Seng Index rose by 1.88% or 321.02 points to 17430.16 points, with a total daily turnover of 101.405 billion Hong Kong dollars; the Hang Seng China Enterprises Index rose by 2.1% to 6161.9 points; and the Hang Seng Tech Index rose by 2.21% to 3459.09 points. Looking at the whole week, the Hang Seng Index accumulated a 1.99% increase, the China Enterprises Index accumulated a 2.39% increase, and the Hang Seng Tech Index accumulated a 0.65% increase.

Galaxy Securities pointed out that August is the period of concentrated disclosure of interim reports in the Hong Kong stock market, and the catalytic effect brought by positive performance is worth paying attention to. With the Fed's rate cut approaching, attention should be paid to the technology sector benefiting from rate cut expectations, especially sub-industries with expectations of dual improvement in the denominator and numerator. In the medium to long term, the fundamentals of the Hong Kong stock market rely more on the domestic economy, focusing on positive signals from domestic policies.

Performance of Blue Chip Stocks

JD.com-SW (09618) led the blue chips. As of the close, it rose by 8.91% to 108.2 Hong Kong dollars, with a turnover of 2.258 billion Hong Kong dollars, contributing 22.71 points to the Hang Seng Index. JD.com announced its second quarter and interim performance for 2024. In the second quarter, revenue reached 291.4 billion Chinese yuan (about 40.1 billion US dollars); the net profit attributable to common shareholders of the listed company under non-US GAAP reached 14.5 billion Chinese yuan, a year-on-year increase of 69.0%; the net profit margin reached 5.0% for the first time, both significantly exceeding market expectations.

In other blue chip stocks, JD Health (06618) rose by 8.22% to 21.45 Hong Kong dollars, contributing 2.95 points to the Hang Seng Index; Galaxy Entertainment (00027) rose by 5.58% to 31.2 Hong Kong dollars, contributing 5.83 points to the Hang Seng Index; CK Hutchison (00001) fell by 3.67% to 39.35 Hong Kong dollars, dragging down the Hang Seng Index by 6.47 points; China Shanshui Investment (00881) fell by 2.74% to 9.59 Hong Kong dollars, dragging down the Hang Seng Index by 0.37 points.

Hot Sectors

On the market, large-cap technology stocks generally rose, with JD.com rising by nearly 9% after its results, Meituan rising by over 5%, and Alibaba rising by over 4%. The interim report market is hot, with the "JD.com series" collectively strengthening, JD Logistics soaring by nearly 22%; in the first 7 months, the number of international visitors to Macau doubled, leading to a general rise in casino stocks; sports goods stocks, automobile stocks, Apple concept stocks, beer stocks, oil stocks, non-ferrous metal stocks, etc., all performed well; on the other hand, the performance of the "CK Hutchison series" was poor, generally weak after the results, with CK Hutchison falling by over 5% in early trading; automobile dealers, power stocks, photovoltaic stocks, etc., performed poorly.

1. The interim report market is hot, with the "JD.com series" strengthening after the results. As of the close, JD Logistics (02618) rose by 21.98% to 9.49 Hong Kong dollars; TAL Education (01769) rose by 11.11% to 5.7 Hong Kong dollars; GoerTek Electronics (01415) rose by 10.87% to 23.45 Hong Kong dollars; Kangji Medical (00867) rose by 8.72% to 7.23 Hong Kong dollars. On the downside, BOC Aviation Leasing (02588) fell by 7.88% to 63.75 Hong Kong dollars; CK Hutchison (00001) fell by 3.67% to 39.35 Hong Kong dollars; Cheung Kong Group (01113) fell by 2.53% to 30.8 Hong Kong dollars Listed companies are entering the period of intensive disclosure of semi-annual performance reports. Specifically, JD Logistics achieved an adjusted net profit of 3.12 billion yuan in the first half of the year, a year-on-year increase of 2631.2%, reaching a new high in profitability. JD Health achieved a net profit margin of 9.3% in the first half of the year, setting a new half-year performance record since its listing. Kangji Medical's first-half profit was approximately 903 million yuan, an increase of 92.8% compared to the previous period. TAL Education Group achieved a net profit of 82.652 million yuan in the first half of the year, a year-on-year increase of 92.5%. MTR Corporation recorded a net profit of 6.044 billion Hong Kong dollars in the first half of the year, an increase of 44.7% year-on-year.

On the other hand, the "Hutchison Related" companies generally experienced a decline. Hutchison's first-half net profit decreased by 8.9% to 10.205 billion Hong Kong dollars, with an interim dividend reduction of 9% to 0.688 Hong Kong dollars. Cheung Kong Group's first-half revenue was 22.008 billion Hong Kong dollars, a decrease of 10.55% year-on-year; net profit was 8.603 billion Hong Kong dollars, a decrease of 16.73% year-on-year; it plans to distribute an interim dividend of 0.39 Hong Kong dollars per share, a decrease of 9.3% year-on-year. In addition, institutional delays in delivery have dragged down the performance of operating leases, with BOC Aviation's performance continuing to decline.

2. Casino stocks generally rose. At the close, Galaxy Entertainment (00027) rose by 5.58% to 31.2 Hong Kong dollars; Sands China (01928) rose by 4.53% to 14.76 Hong Kong dollars; Melco International Development (00200) rose by 2.71% to 4.17 Hong Kong dollars; Wynn Macau (01128) rose by 1.91% to 5.34 Hong Kong dollars.

Temporary data provided by the Macau Government Tourism Office shows that from January to July, there were approximately 1.3416 million international visitors to Macau, an increase of 122.0% year-on-year, reaching 68.1% of the level in the same period in 2019. According to data released by the Macau Government Statistics and Census Bureau, the number of inbound tourists to Macau in the first half of this year exceeded 16 million, a year-on-year increase of 43.6%. In addition, during the peak summer vacation period in August, temporary data shows that from August 1st to 12th, there were already over 1.48 million visitors, with a daily average of about 124,000 visitors, and the highest single-day number on August 10th reached 154,542 visitors.

A Citigroup research report pointed out that based on industry data, Macau's casino revenue in the first eleven days of August may reach about 7.1 billion Macau dollars, indicating an average daily casino revenue of 657 million Macau dollars over the past week. The bank stated that due to the summer vacation, the number of visitors to Macau seems to be continuing to increase. The bank maintains its forecast of 20 billion Macau dollars in casino revenue for August, implying that the average daily casino revenue for the remaining days of August is expected to remain stable at around 645 million Macau dollars.

3. Oil stocks continued to rebound. At the close, CNOOC (00883) rose by 3.41% to 20.6 Hong Kong dollars; PetroChina (00857) rose by 1.93% to 6.88 Hong Kong dollars; Sinopec (00338) rose by 0.96% to 1.05 Hong Kong dollars.

Improvement in U.S. monthly retail sales data is favorable for the outlook of oil consumption growth. On Thursday, WTI September crude oil futures closed up 1.18 US dollars, an increase of over 1.53%, at 78.16 US dollars per barrel. Brent October crude oil futures closed up 1.28 US dollars, an increase of over 1.60%, at 81.04 US dollars per barrel. Huatai Futures believes that recent oil prices have been driven by geopolitical and macroeconomic data. On the one hand, the ceasefire agreement in Gaza is still under negotiation, and the uncertainty in the Middle East remains significant. On the other hand, last night's release of U.S. retail sales and unemployment rate data has rekindled market confidence in the U.S. economy The prospect of a soft landing for the economy is being re-evaluated, boosting risk assets including crude oil.

4. Most automotive stocks are up. At the close, Li Auto-W (02015) rose by 3.51% to HKD 76.6; BYD Company (01211) rose by 2.7% to HKD 220.4; Nio-SW (09866) rose by 2.35% to HKD 30.45; XPeng-W (09868) rose by 0.95% to HKD 26.6.

According to the China Association of Automobile Manufacturers, in July 2024, the sales of new energy vehicles maintained rapid growth year-on-year. In July 2024, the production and sales of new energy vehicles reached 984,000 and 991,000 respectively, with year-on-year growth of 22.3% and 27% respectively. From January to July 2024, the production and sales of new energy vehicles reached 5.914 million and 5.934 million respectively, with year-on-year growth of 28.8% and 31.1% respectively. Institutions point out that the sales growth of new energy vehicles remains at a high level. With the continuous manifestation of various stimulus policies, car sales are expected to continue to rise, with full-year sales expected to reach a historical high.

Hot Stocks on the Move

1. Sing Ho Global (01094) surged again, closing up by 61.76% to HKD 0.55.

Sing Ho Global announced last night that the Board confirmed that they are not aware of any reason for the recent fluctuations in share prices and trading volumes. The company is exploring and considering the possibility of potential fundraising activities; and establishing a joint venture (which may constitute a discloseable transaction of the company). As of the date of this announcement, the company has not reached or entered into any binding terms or formal agreements.

2. China Traditional Chinese Medicine (00570) rose throughout the day, closing up by 8.44% to HKD 4.11.

China Traditional Chinese Medicine released an announcement disclosing the latest situation regarding privatization. The announcement stated that the necessary notifications, filings, or applications related to overseas direct investment approvals have been submitted to the State-owned Assets Supervision and Administration Commission, the Ministry of Commerce, and the National Development and Reform Commission for review and approval; and the necessary notifications, filings, or applications related to anti-monopoly approvals have been submitted to the State Administration for Market Regulation for review and approval