Hong Kong stock market closed (10.02) | Hang Seng Index rose by 6.2% to surpass 22,000 points. Securities firms and property stocks surged throughout the day, with many stocks doubling in a single day

According to the Wisdom Financial APP, on the first trading day after the National Day holiday, the Hong Kong stock market continued to be catalyzed by favorable policies, with the market sentiment remaining bullish. The three major indexes surged, with the Hang Seng Index breaking through the 22,000 mark and the Hang Seng Tech Index briefly reaching 5200 points. At the close, the Hang Seng Index rose by 6.2% or 1310.05 points to 22443.73 points. Despite the absence of mainland Chinese investors, the total turnover for the day remained high at HKD 434.017 billion. The Hang Seng China Enterprises Index rose by 7.08% to 8041.27 points, and the Hang Seng Tech Index rose by 8.53% to 5157.08 points.

CICC International pointed out that with the Federal Reserve taking "big steps" into an interest rate cut cycle and timely introduction of a series of heavyweight monetary policy support measures domestically, it is expected that the Hong Kong stock market will benefit from both domestic and international liquidity improvements and global capital rebalancing, ushering in a phase of upward movement. BlackRock Investment Research Institute stated that it has upgraded its rating on Chinese stocks from neutral to overweight. The institution believes that given the discount of Chinese stocks relative to developed market stocks approaching record levels, and the potential catalysts that may stimulate investors to re-enter the market, there is still room for moderate increase in holding Chinese stocks in the short term.

Performance of Blue-chip Stocks

Longfor Group (00960) led the blue-chip stocks. At the close, it rose by 24.73% to HKD 18.76, with a turnover of HKD 25.77 billion, contributing 12.54 points to the Hang Seng Index. Guotai Junan Securities pointed out that the company focuses on development, operation, and service in three major businesses, covering a comprehensive layout of five major channels. Among them, real estate development focuses on core cities with abundant land reserves to meet development needs for over 3 years. By the end of 2023, it has entered more than 30 cities, with 141 shopping centers acquired and 88 opened; the long-term apartment business has opened over 300 stores, with a rental rate of 95.5%, totaling 123,000 rooms opened, ranking second in the industry; property management and agency business are accelerating expansion, helping the company achieve high-quality long-term development in the future.

In other blue-chip stocks, WuXi AppTec (02359) rose by 17.49% to HKD 64.15, contributing 5.54 points to the Hang Seng Index; WuXi Biologics (02269) rose by 15.14% to HKD 20.15, contributing 16.32 points to the Hang Seng Index; China Overseas Land & Investment (00688) rose by 15.08% to HKD 18.32, contributing 14.97 points to the Hang Seng Index; China Communications Construction (01038) fell by 1.6% to HKD 52.35, dragging down the Hang Seng Index by 0.88 points.

Hot Sectors

On the market, large-cap technology stocks continued to be strong, with Meituan rising by over 14% and JD.com closing up by over 10%. Major policies boosted the capital market, with strong willingness for funds to enter, leading to a surge in brokerage stocks throughout the day; first-tier cities loosened their policies, leading to a continuous outbreak in real estate and property management stocks, with many stocks doubling in a single day; in September, several automakers performed well, leading to a general rise in automotive stocks; pharmaceutical stocks, holiday concept stocks, insurance stocks, domestic bank stocks, and semiconductor stocks all strengthened. On the other hand, tensions in the Middle East intensified, leading to a sharp decline in the cryptocurrency market, with cryptocurrency ETFs and Bitcoin concept stocks falling, and OSL Group dropping by over 18% 1. Securities stocks lead the gains. As of the close, Shenwan Hongyuan Hong Kong (00218) rose by 206.02% to HKD 2.54; First Shanghai (00227) rose by 139.29% to HKD 0.67; China Merchants Securities (06099) rose by 81.32% to HKD 16.5; Guolian Securities (01456) rose by 39.76% to HKD 5.94.

Recently, favorable policies in the capital market have been frequent, with the China Securities Regulatory Commission and other relevant departments issuing the "Guiding Opinions on Promoting the Entry of Medium- and Long-Term Funds into the Market." The core content includes vigorously developing equity public funds, continuously increasing the scale and proportion of equity funds; implementing targeted measures to remove barriers for various types of medium- and long-term funds to enter the market. In addition, the CSRC stated that it will ensure the effective implementation of the newly released "Six M&A Measures," promptly introduce guidelines for market value management of listed companies, actively cooperate to promote the implementation of monetary policy tools such as securities, funds, insurance companies' exchange facilitation, and special refinancing for stock repurchases.

With the warming market sentiment, the willingness of clients to open accounts has significantly increased, with a sharp increase in the daily average number of account openings and online account openings experiencing queues. Both individual and institutional clients show a strong willingness to enter the market. Analysts point out that the A-share and Hong Kong stock markets are booming, with trading volume hitting record highs, and securities firms may be the first to benefit. The securities sector has been relatively suppressed before, with overall valuations on the lower side, leading to a relatively rapid rebound in this round of market rally. It is worth mentioning that today, the South China Science and Technology Innovation Board 50 index surged by over 230% at one point, hitting a historical high.

2. Property stocks and property management stocks surged throughout the day. As of the close, Country Garden Holdings (03383) rose by 160% to HKD 1.95; Shimao Group (00813) rose by 153.15% to HKD 2.81; Sunac China Holdings (03377) rose by 103.28% to HKD 0.62; Shimao Services (00873) rose by 58.25% to HKD 1.63.

Following Shanghai, Guangzhou, and Shenzhen, Beijing also issued a significant new real estate policy. On the evening of September 30, the Beijing Municipal Commission of Housing and Urban-Rural Development and 6 other departments jointly issued the "Notice on Further Optimizing and Adjusting the City's Real Estate Related Policies," proposing to shorten the years of social security or individual income tax payment required for non-Beijing residents to purchase homes. Among them, for non-Beijing residents purchasing homes within the Fifth Ring Road, the years of social security or individual income tax payment required have been reduced from 5 years to 3 years; those who have paid social security or individual income tax continuously for 2 years or more can purchase homes outside the Fifth Ring Road. The notice will be implemented from October 1, 2024.

Yang Kewei, Deputy General Manager of the Research Center at Ke Rui, believes that due to frequent favorable policies from the central government to local governments at the end of September, starting with the press conference on September 24 where multiple significant policies were introduced, followed by the Central Political Bureau meeting setting the tone to promote the stabilization of the real estate market, and then the continuous optimization and adjustment of the "Four Restrictions" policies in first-tier cities. Based on the expectation of policy benefits, overall transactions in October may stabilize after the decline, and first-tier cities, as direct beneficiaries of the new policies, still have room for increased volume in new home transactions.

3. Holiday concept stocks all rose. As of the close, Meituan-W (03690) rose by 14.65% to HKD 197.2; Zhou Hei Ya (01458) rose by 11.17% to HKD 2.09; Tsingtao Brewery (00168) rose by 7.24% to HKD 65.2; Meilan Airport (00357) rose by 6.46% to HKD 9.4; Huazhu Group-S (01179) rose by 5.25% to HKD 32.05.

Domestic policies to boost consumption are frequently introduced. Various regions across the country have successively launched a new round of consumer vouchers to stimulate service and goods consumption, mainly focusing on areas such as catering, accommodation, home furnishings, and decoration. Open Source Securities believes that since 2024, we have seen a series of consumption-boosting policies introduced by governments in Beijing, Sichuan, Hubei, and other regions, with consumer vouchers being the most direct measure, jointly stimulating residents' consumption power and confidence through government-led initiatives and public-private partnerships.

It is reported that on the first day of the National Day holiday, Ctrip data showed that tickets for many scenic spots were sold out, with domestic scenic spot ticket orders increasing by 37% year-on-year, and homestay bookings increasing by 55% year-on-year. At the same time, outbound tourism also saw a peak, with data showing that outbound travel orders on the first day of the National Day holiday increased by nearly 40% year-on-year. In addition, major tourist destinations across the country experienced a peak in bookings for travel agencies and hotels.

4. Automobile stocks generally rose. At the close, Li Auto-W (02015) rose by 12.4% to HKD 121.5; BYD Company (01211) rose by 5.5% to HKD 299.4; Nio-SW (09866) rose by 4.97% to HKD 59.15; Leapmotor (09863) rose by 4.48% to HKD 35.

On October 1st, several car companies released their new car delivery data for September. Among them, BYD's September car sales reached 419,426 units, a year-on-year increase of 45.9%; Li Auto delivered 53,709 new cars in September, a year-on-year increase of 48.9%, setting a new delivery record; Leapmotor delivered 33,767 new cars in September, a year-on-year increase of 113.7%; XPeng set a new monthly record with 21,352 deliveries in September, a 39% year-on-year increase; Nio delivered 21,181 cars in September, a 35.4% year-on-year increase. According to the China Passenger Car Association's previous forecast, the passenger car market was expected to see a 4% year-on-year increase in retail sales in September.

Guotai Junan Securities believes that the replacement of old cars with new ones in the automobile sector may be further intensified, coupled with the reduction of consumer loan interest rates to boost consumer confidence, abundant supply of new cars, and increased store traffic during the National Day holiday, showing optimism for the prospect of total volume recovery in 2H24E; the loosening of loan policies is expected to reduce financing costs, providing support for new energy vehicle companies going global and component enterprises, and showing optimism for the overseas layout prospects of leading new energy vehicle companies with strong cost reduction capabilities, rich imported models, and a leading pace of deep localization.

5. Oil stocks performed strongly. At the close, Sinopec (00338) rose by 7.5% to HKD 1.29; PetroChina (00386) rose by 7.44% to HKD 5.2; CNOOC (00883) rose by 5.05% to HKD 20.4; Sinopec (00857) rose by 4.89% to HKD 6.65.

Due to escalating tensions in the Middle East, overnight oil prices rose. WTI crude oil futures settlement price rose by 2.44% to USD 69.83 per barrel. Brent crude oil futures settlement price rose by 2.59% to USD 73.56 per barrel. According to CCTV News on October 2nd, Iranian Islamic Revolutionary Guard Corps commander Salami stated that in the action on the evening of October 1st, Iran launched 200 missiles at Israel Guangda Securities believes that the tense geopolitical situation in the Middle East and the expected tightening of oil supply and demand under the leadership of OPEC+ are likely to keep oil prices relatively high in 2024. The "Big Three Oil Companies" have shown strong performance resilience during oil price fluctuations, and their profit center is expected to further increase.

Hot Stocks

1. China Financial Investment Management (00605) surged more than 10 times at one point. As of the close, it rose by 730.77% to HKD 5.4.

China Financial Investment Management recently announced that its wholly-owned subsidiary, Gangjia Commercial, entered into cumulative put option contracts with Nomura on September 26, covering 31,900 shares of Alibaba, with a maximum nominal amount of approximately HKD 3.825 million. According to the cumulative put option contract, the spot price is HKD 99, the exercise price is HKD 119.59, the cancellation price is HKD 94.05, the term is 12 months, and the contract maturity date is September 29, 2025.

2. Zhongan Online (06060) rose throughout the day. As of the close, it increased by 16.14% to HKD 18.42.

The recent combination of policies has brought clear long-term benefits to the insurance industry. Soochow Securities believes that with the gradual recovery of macro expectations and the gradual warming of the equity market, listed insurance companies are expected to achieve quarterly repair and improvement in net profit and value growth, with valuation and performance expected to double. The market will comprehensively raise the profit growth rate for the third quarter of 2024. In the first half of this year, Zhongan Online achieved a total premium of RMB 15.238 billion, issued 9.133 billion insurance policies, and realized insurance service income of RMB 15.088 billion, a year-on-year increase of 19.0%.

3. Postal Savings Bank of China (01658) significantly rebounded. As of the close, it rose by 13.12% to HKD 5.26.

On the evening of September 30, Postal Savings Bank of China announced its plan to adjust the pricing scheme for the savings agency fees paid to China Post Group in the agency absorption of personal deposits. The savings agency fee rate has been significantly reduced, with the current account seeing the largest decrease of up to 33.8 basis points. According to Guosen Securities' calculation, if calculated according to the new agency fee rate, the comprehensive rate will decrease by 16 bps to 1.08%, the agency fee will decrease by 13% to RMB 100.6 billion (saving RMB 15.1 billion), significantly increasing profits by about 17%.

4. ASM Pacific Technology (00522) surged more than 10% in the afternoon. As of the close, it rose by 2.95% to HKD 97.8.

Market sources reported that the U.S. private equity fund KKR is considering making a takeover offer for ASM Pacific Technology. Previously, other bidders have attempted to acquire ASMPT. Informed sources indicated that KKR has submitted a non-binding preliminary proposal to privatize ASMPT, but this consideration is still in the early stages and may not ultimately result in a deal, while ASMPT may also attract interest from other companies

New Stock Debut

Carote (02549) performed well. As of the close, it rose by 58.3%, reaching HKD 9.15.

Carote was priced at HKD 5.78 per share, with a total issuance of 129.9 million shares, 500 shares per lot. The net proceeds are expected to be approximately HKD 693 million, with a Hong Kong public offering oversubscribed by 1347.27 times. Founded in 2007, Carote is an emerging global lifestyle kitchenware brand that has established a prominent position in the online kitchenware segment in major markets such as China, the United States, Western Europe, Southeast Asia, and Japan. It has become one of the fastest-growing kitchenware brands globally. As of June 5, 2024, the company's online business has expanded to cover 19 online markets in 19 regional markets, totaling 48 self-operated online stores.

According to the ZHISHI Consulting report, based on the 2023 retail sales, Carote ranks fourth in China, second in the United States, third in Western Europe, second in Southeast Asia, and third in Japan. Financial data shows that from 2021 to 2023, the company's revenue increased from RMB 670 million to RMB 1.58 billion, and net profit increased from RMB 31.7 million to RMB 230 million. In the first quarter of this year, the company's revenue reached RMB 500 million, with a net profit margin of 17.6%