Intelligence Hong Kong Stock Analysis | Hong Kong stock market remains calm despite the resurgence of the Israeli-Palestinian conflict, the real test lies ahead.
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The weekend news was somewhat negative, with the impressive September non-farm payroll data from the United States and the sudden escalation of the Israeli-Palestinian conflict. However, the Hong Kong stock market showed remarkable resilience, closing the day with a 0.18% increase. Although the trading volume was less than 46.9 billion, it can be considered as a significant increase given that trading only started at 14:00 due to the typhoon.
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- [Anatomy of the Market] * * Weekend news was empty. For example, the US non-agricultural data in September exploded again, and the Palestinian-Israeli conflict broke out. However, Hong Kong stocks were quite tenacious, up 0.18 all day. Although the turnover was less than 46.9 billion, the typhoon only started trading at 14 o'clock, which should be considered a heavy volume. The core of today's market focus is the Palestinian-Israeli conflict. According to CCTV News, the chief spokesperson of the Israel Defense Forces Daniel Hegri said that the conflict in six towns in southern Israel near the border of the Gaza Strip is still continuing, and they have been in the Gaza Strip. 1148 targets were hit in the air strike. On the 9th, the Israel Defense Forces said that 300000 reservists had been called up in the past 48 hours, an unprecedented mobilization in Israeli history. It can be seen that this is a national mobilization. US Secretary of Defense Austin announced on the 8th local time that the Pentagon is sending aircraft carriers and fighters to the area near Israel. The Middle East has always been a powder keg. The background of this conflict is complex. There are not only traditional historical issues, but also changes in the pattern brought about by the latest improvement in relations between Saudi Arabia and Israel. Obviously, in addition to a certain superpower, there are also Iran, Russia, etc. Fueling the flames. The impact of the conflict on the market, first of all oil and gas, is expected to directly hit Israel and the broader Eastern Mediterranean's ambitions to become a global gas export hub. Indirectly, if Israel believes that Iran is responsible for the escalation of the conflict, oil prices may rise sharply. If Israel or the United States launches an attack on Iran, the latter can retaliate by cutting production. Today, CNOOC (00883) and PetroChina (00857) both rose by more than 2 points. The second is the gold category, the so-called cannon, gold ten thousand two. At this point, the dollar will be stronger as the first circulating hard currency, while gold will be favored as the second best. Zhaojin Mining (01818), Zijin Mining (02899) and Shandong Gold (01787) are all at more than 3 points. The Ministry of Industry and Information Technology and other six departments jointly issued the Action Plan for the High-quality Development of Computing Infrastructure, proposing that by 2025, in terms of computing power, the scale of computing power will exceed 300 EFLOPS, the proportion of intelligent computing power will reach 35%, and the balanced and coordinated development of computing power between the east and the west. Lenovo Group (00992) Infrastructure Solutions Business Group (ISG) has obtained the ICE Laboratory ISO 27001:2022 Information Security Management System (ISMS) certification, which is the highest ISO level certification among the top five computing equipment companies in the world. Recently, Huawei's first Wi-Fi 7 single router product was released, with a model of "BE3 Pro" and a maximum speed of 3600Mbps. In addition, Intel has introduced the first Wi-Fi7 controllers and adapters, which will be available in various forms this year. ZTE (00763) released the industry's first new Wi-Fi 7 FTTR gateway product in June this year, including the master gateway ZXHN G7705 and the slave gateway ZXHN G1715. Musk once again made public the platform Smeaglutide, saying that the health risks posed by obesity certainly outweigh the risks of weight-loss drugs. Although Musk acknowledges that no drug is without side effects, he is convinced that the health risks of obesity almost certainly outweigh the risks of GLP-1 agonists. Laikai Pharmaceutical-B(02105) The world's first ActRIIA monoclonal antibody LAE102 can increase muscle and reduce fat, has the potential to be used in conjunction with GLP-1RA, has huge market potential and international value. Today, it rose nearly 10 points. Cinda Biology (01801) Masto Peptide (GLP1/GCGR) is the fastest-growing GLP1 double target drug in China. Up nearly 5 points. During the National Day medical award announced, mRNA technology won the Nobel Prize, Concino Biology (06185) and AstraZeneca reached an mRNA vaccine cooperation agreement. Up more than 6 points, other CXO categories are stimulated to strengthen. On the evening of October 6, Haitong International (00665) announced on the Hong Kong Stock Exchange that the offeror Haitong International Holdings Limited had privatized the company by agreement on September 26 after the preconditions were reached, with a cash of HK $1.52 per canceled planned share, which was about 114.08 per cent higher than the closing price of HK $0.710 per share on the last trading day. According to the premium guidelines, the theoretical maximum is HK $1.52, but it cannot be that high in practice. The final market price is around 1.40, that is, a premium of 97.18 per cent. The implied risk is that privatization will fail in the event that less than 90 per cent of shareholders agree, and the time will be longer, taking into account the time cost. Evergrande Auto (00708) resumed trading today and fell nearly 9 points. An announcement was issued on the evening of October 8: On September 29, the company received a letter from Newton Group, which included a series of changes in China Evergrande Group recently, with significant uncertainties. In this case, Newton The group suspends the performance of relevant obligations in the share subscription agreement. The failure of holding hands can be expected, because Evergrande Auto brought in Newton Group at that time in order to reorganize and negotiate to raise the consideration. Now Evergrande's main body has problems, and Evergrande Auto is even more difficult. The latter is estimated to be the trend of negative decline. Unless there is a major turnaround. The trend of Hong Kong stocks today does not fully reflect the impact of the Palestinian-Israeli conflict. Initially, the market believes that the impact is not significant. The short-term focus is the bipartisan delegation of the U.S. Senate led by Schumer, the majority leader of the U.S. Senate. The top leadership received the meeting, and the EU High Representative for Foreign Affairs and Security Policy Borrell will visit China from October 12 to 14. The market believes that the improvement of China-US-European relations is the key. However, it is necessary to further observe how the US stock market reacted to the matter in the evening. If the conflict intensifies, U.S. and European stock markets will suffer. So, in this context, whether Hong Kong stocks can withstand the pressure is the real touchstone. We will analyze it in detail tomorrow. [Plate Focus] Coal prices rose sharply around the National Day holiday. Shanxi has made it clear that the 4.3-meter coke oven will completely stop loading coal before October 20. If the plan is implemented, 15% of Shanxi's coking capacity will be eliminated. Abroad, Germany will put several mothballed coal-fired power plants back on the market this winter to ensure that Europe's largest economy can keep up and running. Looking ahead to the market, the winter storage coal procurement and the autumn start of the peak season non-electricity coal demand release, superimposed on the Daqin line maintenance supply marginal narrowing, spot shipment-based Tang call line traffic volume is still at a low level of 188200 tons, the port structural shortage phenomenon still exists. The structural contradiction between supply and demand may become increasingly severe, and coal prices are expected to rise more than expected. Coal is now superimposed on the Middle East conflict, such as the logic of alternative energy, multiple factors lead to a promising future, the main varieties are: Yanzhou Mining Energy (01171), China Coal Energy (01898), Shougang Resources (00639), China Shenhua (01088). * * [Individual Stock Nuggets] * * * China Shenhua (01088): The proposed Indonesian Energy Company will produce 27.3 million tons of commercial coal in August, up 7.5 year on year * * The company announced that on September 27, 2023, the board of directors of the company deliberated and passed the "Proposal on Joint Venture Establishment of National Energy Group Indonesia Energy Co., Ltd.". The company intends to sign the "Agreement on Joint Venture Establishment of National Energy Group Indonesia Energy Co., Ltd." with Guodian Power Development Co., Ltd. On September 28, the company was increased by 655000 shares by southbound funds, and the southbound funds continued to increase their holdings. In the first half of the year, the company's revenue was 169.442 billion yuan, a year-on-year increase of 2.3; the current profit attributable to the company's owners was 36.861 billion yuan, a year-on-year decrease of 13.3. * * Comments: * * The company announced that the output of commercial coal in August was 27.3 million tons, up 7.5 per cent year on year. Coal sales rose 14.5 per cent to 38.7 million tons. In the first eight months of this year, the output of commercial coal increased by 2.2 to 0.215 billion tons, and the sales volume of coal was 0.295 billion tons, an increase of 6.2 percent. The year-on-year increase in coal sales in August was mainly due to the increase in commercial coal production and purchased coal sales. China Shenhua power business profitability continued to improve. In the first half of the year, the scale of generating units increased year-on-year, and the sales of electricity increased by 18.4. In the first half of the year, the company's unit electricity sales cost was 367.7 yuan/MWh, down 3.4 percent from the same period last year, and the average electricity price increased 1.5 percent from the same period last year. Due to the increase in volume and price, the company's power generation business realized a profit of 5.8 billion billion yuan in the first half of the year, up 47.0 percent from the same period last year. As of the end of June 2023, the company has 7 coal-fired power generation projects and 2 gas-fired power generation projects under construction, with a total of 17 units of 11.75 million kilowatts installed. The projects under construction are expected to be completed and put into operation before 2025. Low coal-fired cost advantage overlay installation increment will support the future sales of electricity business earnings continue to improve. * * Luoyang Molybdenum Industry (03993): The production capacity and output of copper and cobalt in the eastern mixed ore production line of TFM mixed ore project have been successfully tested with materials. * * It is reported that on October 1, local time in Congo (DRC), the mixed ore production line of TFM East District successfully completed the test run with materials through the overall planning of leaders at all levels of Luoyang Molybdenum Industry Group and TFM Company. Comment: TFM mixed mine project is Luoyang molybdenum industry in the Congo (DRC) layout of the expansion of production efficiency key projects, but also Luoyang molybdenum industry in recent years the largest scale of mining construction projects. The project plans to build a total of 3 production lines, namely, 3.5 million tons/year mixed ore production line, 3.3 million tons/year oxide ore production line and 5.6 million tons/year mixed ore production line. Once the TFM mixed mine project is fully constructed and reaches production within the year, it is expected to increase the average annual output of copper by about 200000 tons and cobalt by about 17000 tons. In addition to the three production lines of the project, TFM has two production lines, 10K and 15K. A number of key construction projects of the company have been put into production one after another. The project in the central region of TFM mixed mine in Congo (DRC) has been put into operation smoothly. The production capacity and output of copper and cobalt have increased greatly. The output of copper in Congo (DRC) has increased by 25% year-on-year, and the output of cobalt has increased by 86% year-on-year. Australia's NPM copper and gold plate E26L1N ore body continued to exert force, helping NPM copper production increase by 12% year-on-year; molybdenum metal production increased by 8% year-on-year. The mining areas continue to strengthen process technology management, Brazil mining area niobium, China's Shangfanggou mining area molybdenum, Australia mining area copper and other metal recovery rate reached a new high in recent years. In addition, the company's joint venture Hua Yue nickel cobalt project, together with the Ningde era layout of Bolivia lithium salt production capacity, good long-term development. Gushang Tang (02273): Proposed Special Dividend Offline Stores Achieve Rapid Recovery Gushang Tang announces that it has resolved at its Board Meeting on October 7, 2023 to declare and pay a one-time special dividend of HK $0.41 per ordinary share of the Company to return to shareholders. In 2023 H1, the company achieved revenue of 0.986 billion billion yuan, up 40.3 percent year-on-year; net profit of 0.093 billion billion yuan, up 74.0 percent year-on-year; and adjusted net profit of 0.102 billion billion yuan, up 63.8 percent year-on-year. Comment: 1H23 Company's offline business rebounded strongly, with old stores maintaining solid endogenous growth. 2023H1 post-epidemic visit recovery to help the company's revenue 40% high growth, the company's operating capacity continued to improve, hospital preparations are progressing smoothly. In addition, the company through the acquisition of Shanghai Baozhong Laoshan, Shanghai Baozhong Eshan outpatient department, 2023 so far the company has added 6 outpatient department, currently has 56 outpatient department. Gushentang issued an announcement on August 29, granting options to 137 employee participants to subscribe for 4.4723 million shares, accounting for approximately 1.86 per cent of the total number of shares, and 7.0073 million restricted shares (new shares) to 193 management participants, accounting for approximately 2.91 per cent of the total number of shares. Including this incentive, the company announced two equity incentives in the past two months. The company's first share buyback since its listing and will be written off will help boost investor confidence. Since the beginning of this year, the company's store expansion is progressing smoothly. It is expected that 10 new stores will be added throughout the year, and it will continue to enter the new second-tier city market. The profit level is expected to further improve. **[Disclaimer] This VIP information product is for exchange and discussion only and does not constitute any investment advice. 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