【True Insight Hong Kong Stock Masters】Hong Kong stocks are performing poorly, while PDD's international version Temu shows outstanding performance.

Hong Kong Stock Market Trends and Analysis

U.S. stocks rose initially on Thursday before retreating, with the market surging over 500 points early in the session before gains narrowed significantly. The three major indices closed mixed, with tech stocks remaining under pressure. The U.S. dollar weakened, and the 10-year Treasury yield fell to 4.24%. Gold prices were pressured, while oil prices stabilized at low levels. Hong Kong ADRs were mostly positive, suggesting a modestly higher open for the local market. Mainland stocks fell yesterday, with the Shanghai Composite opening lower and dropping below the 2,900-point level, closing down 0.5%. Trading volume in Shanghai and Shenzhen further declined. Hong Kong stocks remained weak, with the index hitting a new low in recent months and briefly falling below the 17,000-point level. Losses narrowed slightly by the close, and trading volume increased. Investors remain cautious about macroeconomic and corporate earnings prospects, while volatility in global markets also weighed on sentiment. The index is expected to test support at 16,800, with resistance at 17,500.$NASDAQ Composite Index(.IXIC.US) $Hang Seng Index(00HSI.HK)

Industry News

Temu, the international e-commerce platform under Pinduoduo, has expanded to over 70 countries and regions. Mainland media reported that Temu's GMV surged to $20 billion in the first half of this year, with $12 billion in Q2 alone, compared to $18 billion for the full year of 2023. Temu and SHEIN have benefited from the U.S. de minimis tariff exemption policy, which allows individual consumers to import goods valued at $800 or less duty-free. According to U.S. Customs data, over 1 billion packages were shipped to the U.S. under this policy last year, with one-third coming from Temu and SHEIN. As geopolitical tensions escalate, Temu aims to reduce reliance on a single market, targeting a decrease in U.S. GMV contribution from 60% to 30% this year. Platforms offering cost-effective products remain highly popular among consumers, and growth prospects are expected to continue.

Independent Stock Analyst Joseph Kwok, CFA

Date: Friday, July 26, 2024

(The author and related parties do not hold the aforementioned stocks)