Zhitong Hong Kong Stock Early Knowledge | Powell emphasizes again that there is no need for rapid interest rate cuts, and all three major U.S. stock indices hit new highs

【Today's Headlines】

Powell Emphasizes Again That There Is No Need for Rapid Rate Cuts and a More Cautious Approach Can Be Taken

According to Zhitong Finance APP, Federal Reserve Chairman Powell delivered his public remarks before this year's final interest rate decision meeting at the New York Times DealBook Summit. This interview provided investors with an opportunity to gain deeper insights into his policy views and marked the beginning of the upcoming Federal Open Market Committee (FOMC) meeting scheduled for December 17-18.

Powell reiterated that due to the uncertain inflation outlook and the current robust economic performance, the Federal Reserve does not feel an urgency for rapid rate cuts. He stated that the current economic conditions are strong, the downside risks to the labor market are minimal, economic growth is stronger than expected, and inflation is slightly above previous estimates. Powell pointed out that the Federal Reserve can adopt a more cautious approach in seeking a "neutral interest rate"—the level of interest rates that neither stimulates nor restricts economic activity.

Since September, the Federal Reserve has cumulatively cut rates by 0.75 percentage points, with the current target range for the federal funds rate at 4.5% to 4.75%. Nevertheless, Powell stated, "The economy has not signaled a need for urgent rate cuts. The strong performance of the current economy allows us to make decisions more cautiously."

St. Louis Fed President Alberto Musalem indicated that, with inflation above expectations and concerns about the labor market easing, it may be time for policymakers to slow the pace of rate cuts. Musalem noted that continuing to cut rates over time may be appropriate, but a patient approach should be maintained, as the risks of cutting rates too quickly outweigh the risks of insufficient easing. He stated on Wednesday, "Maintaining policy selectivity seems important, and the timing for slowing the pace of rate cuts or pausing rate cuts is approaching, allowing for a careful assessment of the current economic environment, upcoming information, and changing outlooks." Musalem also reiterated that the Federal Reserve is close to achieving its dual mandate of maximum employment and price stability, with monetary policy in a favorable position.

Federal Reserve officials will update their quarterly economic forecasts at the December meeting, including the interest rate policy path for 2025 and beyond. According to the September forecast, the median expectation shows a 1 percentage point rate cut in 2024 and another 1 percentage point cut in 2025. Powell stated that decisions will be based on the latest data and economic trends, aiming to create conditions for the long-term stability of the U.S. economy.

【Market Outlook】

U.S. Stock Indices Hit New Highs, Dow Jones Closes Above 45,000 for the First Time

As of the close of trading overnight, the Dow Jones Industrial Average rose by 308.51 points, an increase of 0.69%, closing at 45,014.04 points; the Nasdaq rose by 254.21 points, an increase of 1.30%, closing at 19,735.12 points; the S&P 500 index rose by 36.61 points, an increase of 0.61%, closing at 6,086.49 points. Nvidia (NVDA.US) closed up 3.48%, Amazon (AMZN.US) rose 2.21%, Tesla (TSLA.US), Google A (GOOGL.US, GOOG.US), and Microsoft (MSFT.US) rose between 1.85% and 1.44%, Apple (AAPL.US) rose 0.15%, and Meta Platforms (META.US) rose 0.02% The Nasdaq China Golden Dragon Index closed down 1.38%, with most popular Chinese concept stocks declining. Gaotu fell over 10%, and TAL Education Group fell over 3%. The Hang Seng Index ADR fell, closing at 19,555.01, down 187.45 points or 0.96% compared to the Hong Kong closing.

Federal Reserve Chairman Jerome Powell stated that the U.S. economy is performing stronger than it did when the Fed began cutting interest rates in September last year, which may lead policymakers to be more cautious about further rate cuts.

【Hot Topics Preview】

Japan May Relax Visa Requirements for Chinese Citizens

According to a report by the Nikkei on December 4, the Japanese government has begun coordinating to relax visa application conditions for Chinese citizens traveling to Japan, with some procedures set to be simplified. The report states that Japan's Ministry of Foreign Affairs, Ministry of Justice, and National Police Agency will hold consultations soon to finalize some new measures, including a review of the documents required for visa applications. Additionally, Japanese Foreign Minister Yoshimasa Hayashi is considering visiting China within the year to discuss visa issues with Chinese officials, which involves the tourism sector.

Guangzhou Launches 18 Measures to Support Hydrogen Energy Industry Development

On December 4, Guangzhou City released several measures to accelerate the high-quality development of the hydrogen energy industry, introducing 18 measures to support the industry's growth, including increasing financial support, enhancing hydrogen supply capacity, supporting hydrogen station construction, supporting hydrogen station operations, supporting vehicle demonstration operations, and implementing green transportation alternatives.

China Index Research: TOP 50 Property Service Companies Added Approximately 89.99 Million Square Meters of New Contracts in November, Leading Companies Continue to Expand

According to data released by China Index Research, in November, the TOP 50 property service companies in China added approximately 89.99 million square meters of new contract area, with leading companies continuing to expand. The average new contract area was 1.8 million square meters. Among them, Longfor Intelligent Living, Greentown Property Service Group Co., Ltd., and Country Garden Life Service Group Co., Ltd. rapidly expanded, with new contract areas exceeding 4.9 million square meters.

Securities Firms Officially Launch Cross-Border Wealth Management Pilot, with Several Firms Including China Merchants Securities, CICC Wealth, and GF Securities Completing First Transactions

At 0:13 on December 4, GF Securities completed its first cross-border wealth management transaction. At 0:25, CICC Wealth completed its first cross-border wealth management transaction in Shenzhen. On the same morning, Galaxy Securities successfully completed two cross-border wealth management transactions. Industry insiders reported that on the first day of operations, several securities firms, including China Merchants Securities, Industrial Bank Securities, Guotai Junan Securities, and Zhongtai Securities, successfully completed their first transactions. GF Securities stated that the "Cross-Border Wealth Management Connect" connects three regions, which is a significant benefit for promoting the development of the Guangdong-Hong Kong-Macao Greater Bay Area. The pilot opening of the "Cross-Border Wealth Management Connect" business through securities firms is of strategic importance for the development of cross-border wealth management in the securities industry. The opening of the "Cross-Border Wealth Management Connect" business has opened the door to convenient cross-border wealth management, providing domestic and foreign investors with more diversified investment channels and products, which greatly aids in providing quality asset allocation solutions and enhancing investor experience. Specifically regarding the products favored by clients, relevant personnel from CICC Wealth revealed that "clients of the southbound connect mainly focus on low-risk products such as bond funds and money market funds." The Northbound Trading focuses on products in the CICC Public Fund 50 brand product pool in terms of subjective products, and in terms of index products, it focuses on broad-based or industry-themed products that align with current policy directions.

Dongfeng Motor: Dongfeng Nano 01 has received over 6,000 overseas orders

On December 4th, according to Dongfeng Motor, as of this year, the main model for Dongfeng's right-hand drive vehicle exports—the Dongfeng Nano 01—has received over 6,000 overseas orders. According to Dongfeng, the overseas version of Nano 01, DONGFENG BOX, made its debut at the 37th Zurich Motor Show on November 7th, where several local dealers expressed their intention to cooperate, and business negotiations are currently underway with Dongfeng. This involves the Hong Kong-listed Dongfeng Motor Group Co., Ltd. (00489).

New Stock News | Xiaocaiyuan passes Hong Kong Stock Exchange hearing, ranking first in 2023 store revenue in China's popular casual Chinese dining market

According to Zhitong Finance APP, on December 4th, the Hong Kong Stock Exchange disclosed that Xiaocaiyuan International Holdings Limited (referred to as: Xiaocaiyuan) has passed the hearing of the Hong Kong Stock Exchange, with Huatai International and UBS Group as joint sponsors. The brand "Xiaocaiyuan" under Xiaocaiyuan International Holdings Limited was established in 2013 and is one of the well-known direct chain restaurants in China's popular casual Chinese dining market. The prospectus shows that as of the last practical date, the company has 663 operating direct stores covering 146 cities or counties in 14 provinces in China. Currently, the company's main store operating areas are located in East China. According to data from Frost & Sullivan, in terms of store revenue for 2023, Xiaocaiyuan ranks first among all brands in China's popular casual Chinese dining market, with an average customer spending between 50 yuan and 100 yuan.

Furuire Medical Technology (01696): Alma has received medical device regulatory certification for its quality management system and two dermatological medical products

Zhitong Finance APP reports that Furuire Medical Technology (01696) announced that in the second half of 2024, Alma Lasers Ltd. (Alma, the company's main operating subsidiary) has received certification under the European Union Medical Device Regulation (EU) 2017/745 for its quality management system and two dermatological medical products, Alma Harmony™ and Alma Hybrid™. The medical device regulatory certification was granted to Alma by GMED SAS (GMED), which is a designated and certification body wholly owned by the French National Metrology and Testing Laboratory (LNE).

Xinhua Insurance continues to buy 8 million shares of Haitong Securities H-shares on December 3rd, increasing its shareholding ratio to 5.7192%

Haitong Securities announced on the evening of December 4th that Xinhua Insurance Asset Management Co., Ltd. increased its holdings by purchasing 8,000,000 shares on December 3rd at a price of HKD 7.0674 per share. After this equity change, the total shares held amount to 195,000,000, accounting for 5.7192% of the company's H-shares. On the same day, Xinhua Insurance announced that it had increased its holdings of Haitong Securities H-shares to 5.02% through centralized bidding trading in the secondary market on November 28, 2024 This is the first time in five years that insurance capital has taken a stake in brokerage stocks. On November 28, Xinhua Insurance increased its holdings in Haitong Securities H shares to the threshold for a stake and continued to buy more.

Meitu (01357) has sold all its cryptocurrency holdings, realizing a profit of approximately $79.63 million

According to Zhitong Finance APP, Meitu (01357) announced that on December 4, 2024, Meitu Investment sold a total of approximately 15,703.94 units of Ethereum and 470.19 units of Bitcoin in the market, with total cash consideration of approximately $55.49 million and $44.85 million, respectively. Based on the cryptocurrency sales (including previous sales in November 2024 and the aforementioned sales on December 4, 2024), the group has sold a total of approximately 31,000 units of Ethereum and 940 units of Bitcoin, with total cash consideration of approximately $100 million and $80 million, respectively. The group achieved substantial gains from the cryptocurrency sales, realizing a profit of approximately $79.63 million (equivalent to about RMB 571 million).

【Stock Highlights】

Midea Group (00300): Double Eleven sales increased by over 30% year-on-year

Midea released an investor relations activity record, mainly covering the company's performance in the first three quarters of 2024 and sales performance during Double Eleven. The company's total operating revenue in the first three quarters reached RMB 320.2 billion, a year-on-year increase of 10%; net profit attributable to the parent company was RMB 31.7 billion, a year-on-year increase of 14%. In the business segments of smart home, new energy, and industrial technology, the revenue from the smart home business was RMB 215.4 billion. During Double Eleven, driven by the trade-in policy, the company achieved a year-on-year sales increase of over 30%, with retail sales generated from trade-ins exceeding RMB 10 billion.

In addition, the company's OBM business performed strongly in overseas markets, with cumulative revenue increasing by over 25% year-on-year. The company expanded channels in North America and established partnerships with several retail giants, with overseas e-commerce sales increasing by 50% year-on-year. To enhance brand influence, Midea Group announced its sponsorship of the Copa Sudamericana and the Copa Libertadores women's tournaments. In terms of ESG, the company received water footprint verification certification from TV South Germany, marking further progress in sustainable development.

In the first three quarters of 2024, Midea Group achieved revenue of RMB 320.35 billion and net profit attributable to the parent company of RMB 31.699 billion.

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