Hong Kong Stock Market Closing (09.09) | Hang Seng Index fell by 1.42%, resource stocks, property stocks, etc. declined, while Nio-SW surged by 13% against the market trend

According to the Wise Finance APP, the August non-farm data in the United States fell short of expectations, once again triggering concerns about economic recession. The Hong Kong stock market fluctuated and fell throughout the day, with all three major indexes falling by more than 2% at one point. As of the close, the Hang Seng Index fell by 1.42% or 247.34 points to 17,196.96 points, with a total daily turnover of HKD 133.665 billion; the Hang Seng China Enterprises Index fell by 1.68% to 6,002.91 points; and the Hang Seng Tech Index fell by 1.46% to 3,436.75 points.

Galaxy Securities believes that in the short term, investors are worried about the impact of the U.S. economy and the expectation of a rate hike by the Bank of Japan. External market sentiment disturbances still exist, and the overall Hong Kong stock market may remain volatile. As the timing for the Fed's rate cut in September approaches, attention is focused on the technology sector benefiting from the rate cut expectations. In the medium to long term, the fundamentals of the Hong Kong stock market rely more on the domestic economy, with a focus on positive signals from domestic policies.

Performance of Blue-chip Stocks

PetroChina (00857) led the decline in blue-chip stocks. As of the close, it fell by 6.17% to HKD 5.93, with a turnover of HKD 2.349 billion, dragging the Hang Seng Index down by 13.24 points. Morgan Stanley lowered its Brent crude oil target price for the second time in weeks, as demand continues to slow amid ample supply. Morgan Stanley's latest forecast for the fourth quarter Brent crude oil target price is $75 per barrel, lower than the previous forecast of $80.

In other blue-chip stocks, WuXi AppTec (02359) rose by 3.9% to HKD 35.95, contributing 0.75 points to the Hang Seng Index; JD Health (06618) rose by 2.56% to HKD 24, contributing 1.07 points to the Hang Seng Index; Orient Overseas International (00316) fell by 5.76% to HKD 93.3, dragging the Hang Seng Index down by 1.21 points; Sinopec (00386) fell by 5.59% to HKD 4.39, dragging the Hang Seng Index down by 10.24 points.

Hot Sectors

On the market, large-cap technology stocks all traded lower, with Alibaba down by 1.88% and Tencent down by 0.59%; concerns about demand prospects weighed on oil prices again today; real estate developers' sales fell short of expectations, with property stocks collectively under pressure, and China Evergrande Group fell by nearly 18% on ex-dividend day; coal stocks, home appliance stocks, non-ferrous metal stocks, infrastructure stocks, and industry stocks all fell. On the other hand, some biopharmaceutical stocks rose against the trend, with I-Mab outperforming K drugs, and Kangfang Biotech soaring by over 15%.

1. Oil stocks lead the decline. As of the close, PetroChina (00857) fell by 6.17% to HKD 5.93; CNOOC (02883) fell by 5.92% to HKD 6.36; Sinopec (00386) fell by 5.59% to HKD 4.39; and CNOOC (00883) fell by 3.83% to HKD 19.08.

On Friday, the U.S. Bureau of Labor Statistics released data showing that the U.S. added 142,000 non-farm jobs in August, below the expected 165,000, while the additional employment figures for June and July were revised down by 61,000 and 25,000 respectively. Market concerns about economic recession and the outlook for oil demand have put pressure on oil prices. WTI crude oil futures for October fell by 2.14%, accumulating a 7.99% decline last week. Brent crude oil futures for November fell by 2.21%, accumulating a 9.82% decline last week 2. Real estate stocks collectively declined. As of the close, China Evergrande Group (03990) fell by 17.88% to HKD 2.48; Country Garden Holdings (02777) fell by 9.21% to HKD 0.69; Shimao Group (00813) fell by 7.69% to HKD 0.6; and China SCE Group Holdings (01030) fell by 6.92% to HKD 1.48.

Guotai Junan Securities pointed out that the overall recovery progress of the real estate market in the first half of 2024 was lower than expected, and the decrease in sales receipts also suppressed the land acquisition motivation of real estate companies. Major real estate companies saw significant year-on-year declines in both sales and land acquisition data. Under the pressure of declining gross profit margin and increasing sales expenses, the profitability of real estate companies has decreased, and performance has been under pressure to decline. However, during the industry consolidation process, high-quality real estate companies have optimized their debt structures and reduced financing costs, leading to optimism about future market share increases. The loose real estate policies in the first half of the year are expected to continue, and it is predicted that the decline in real estate sales data in the second half of the year will continue to narrow on a low base.

3. Non-ferrous metal stocks are generally under pressure. As of the close, Luoyang Molybdenum Co., Ltd. (03993) fell by 5.34% to HKD 5.5; Zijin Mining Group Co., Ltd. (02899) fell by 3.63% to HKD 13.82; Jiangxi Copper Company Limited (00358) fell by 3.56% to HKD 11.92; and Aluminum Corporation of China Limited (02600) fell by 3.23% to HKD 4.49.

The U.S. added 142,000 non-farm jobs in August, lower than the market's expected 161,000. The significant downward movement in non-farm employment once again triggered market recession sentiment, leading to a significant cooling of global risk appetite, causing a resonance decline in the non-ferrous metal sector. Guohai Securities previously pointed out that non-ferrous and precious metals have experienced significant volatility due to expectations of liquidity rotation. Since June, speculative activities in non-ferrous metals have significantly eased, prices have fallen significantly from the highs in the first half of the year, and downstream processing fees have also increased. As speculative positions return to a healthy range, the bottom of non-ferrous metal prices is becoming clearer.

4. Chinese banking stocks continue to decline. As of the close, China Merchants Bank (03968) fell by 3.8% to HKD 29.15; Bank of Communications (03328) fell by 2.24% to HKD 5.23; Bank of China (03988) fell by 1.47% to HKD 3.34; and Industrial and Commercial Bank of China (01398) fell by 1.19% to HKD 4.16.

Recently, there has been renewed calls in the market for a reduction in existing home loan interest rates. Tianfeng Securities analysts believe that from the perspective of institutional behavior, a reduction in existing home loan interest rates will to some extent affect the bank's existing business, potentially further exacerbating asset shortages and profit shortages. Morgan Stanley believes that the stock prices of Chinese banks will fall after the news is released, as the market will calculate the value based on the worst-case scenario. If the actual announcement is an across-the-board reduction of 80 basis points, this will impact their view on the stabilization of net interest margins.

Hot Stocks on the Move

1. Kangfang Biotech (09926) remained strong throughout the day. As of the close, it rose by 15.77% to HKD 55.8.

Kangfang Biotech announced at the 2024 World Lung Cancer Congress the results of the Phase III AK112-303 (HARMONi-2) study comparing Ivosidenib with Pembrolizumab (K drug) monotherapy in first-line treatment of locally advanced or metastatic non-small cell lung cancer (NSCLC) with PD-L1 expression positivity (PD-L1 TPS≥1%) Positive data from research. CICC stated that AK112 is superior to Keytruda and is expected to become the cornerstone drug for the next generation of IO therapy.

2. Nio-SW (09866) soared after earnings. As of the close, it rose 13.05% to HKD 38.55 .

Nio achieved a record high revenue of RMB 17.446 billion in the second quarter, a year-on-year increase of 98.9%; among which, the revenue from the automotive business was RMB 15.68 billion, a year-on-year increase of 118.2%; the gross profit margin for the vehicle was 12.2%, an increase of 6 percentage points year-on-year. The net loss narrowed by 16.7% year-on-year. In the second quarter, Nio delivered a total of 57,400 vehicles, a year-on-year increase of 143.9% and a quarter-on-quarter increase of 90.9%.

3. Huaxing Capital Holdings (01911) plummeted after resumption of trading, closing down 66.3% at HKD 2.45 .

Huaxing Capital announced that major shareholder Bao Fan's wife, Xu Yanqing, has been appointed as a non-executive director, while Sun Qianhong resigned as a non-executive director, both effective from September 6. In addition, Huaxing Capital announced that four executive directors (holding a total of 2.2% of shares) have committed not to sell any company shares or equity rights from September 8 to March 7, 2025. Each executive director may terminate the lock-up commitment by giving the company a written notice five days in advance.

4. Sino Energy International (02459) significantly declined, closing down 23.08% at HKD 0.6 .

On September 9, Hang Seng Indexes Company Limited announced that Sino Energy International will not be included in the relevant indexes in the quarterly index review effective September 10 due to its high concentration of shareholding listed by the Securities and Futures Commission of Hong Kong. Originally, the market expected that if not included in the high concentration of shareholding list, Sino Energy International would be included in the Stock Connect this month.

New Listing Debut

China State Construction International (08629) opened high and closed low . It closed down 4.04% at HKD 9.5 .

China State Construction International priced its shares at HKD 9.9 per share, issuing a total of 10.179 million shares, with 500 shares per board lot, resulting in a net amount of approximately HKD 59.4 million. It is reported that China State Construction International is mainly engaged in construction engineering testing and inspection services. The company provides a range of construction engineering testing and inspection services, covering different types of testing and inspection processes in the industry. According to the Zacks Consulting report, China State Construction International ranks at the forefront in terms of technology and service level in the field of construction engineering testing in the western part of Guangdong Province