Hong Kong’s Hang Seng Index opened up 0.27%. The Hang Seng Index rose significantly in early trading. It once rose by more than 260 points and stood at the 19,000 mark in the intraday session. Afterwards, the rise was weak, and the Hang Seng Index fluctuated and fell back to green. As of the close, the Hang Seng Index fell 0.13% or 24.29 points to 18928.02 points, with a full-day turnover of HK$104.858 billion; the Hang Seng China Enterprises Index fell 0.28% to 6364.12 points; the Hang Seng Technology Index fell 1.24% to 4063.74 points.
Zhongtai International pointed out that it is not pessimistic about Hong Kong stocks in the second half of the year. With the support of the global Kitchin (inventory) cycle, policy effects and the service industry, the Chinese economy is expected to gradually enter a passive destocking cycle in the third quarter of 2023. In terms of liquidity, the U.S. 10-year bond yield will be in a downward trend due to the peaking of policy interest rates, the slowdown of U.S. economic growth and the gradual decline in inflation, easing the valuation of Hong Kong stocks and the squeeze on liquidity. The profit forecast of Hong Kong stocks has already reflected the moderate economic recovery in China, and there is an opportunity for upward revision in the future.
blue chip performance
Sunny Optical Technology (02382) led the decline in blue chips. As of the close, it fell 13.65% to 67.35 Hong Kong dollars, with a turnover of 1.766 billion Hong Kong dollars, dragging down the Hang Seng Index by 12.16 points. Citigroup pointed out that the company issued a profit warning and estimated that the interim net profit will drop by 65% to 70% year-on-year, mainly due to the decline in shipments of the group’s mobile phone lenses and mobile phone camera modules, as well as intensified market competition, resulting in pressure on product average selling prices and profit margins. Taking into account the long-term weak outlook of the smartphone market, the bank downgraded Sunny Optical to “neutral” and lowered the target price from HK$110 to HK$80.
As for other blue chips, Country Garden Services (06098) rose 3.7% to HK$9.25, contributing 1.19 points to the Hang Seng Index; Country Garden (02007) rose 3.55% to HK$1.46, contributing 1.01 points to the Hang Seng Index; China Resources Power (00836) fell 2.07% to HK$17.02, dragging down the Hang Seng Index by 1.1 points; Sands China (01928) fell 1 .78%, at 27.65 Hong Kong dollars, dragging down the Hang Seng Index by 2.26 points. UBS pointed out that the company’s Macau property EBITDA reached US$541 million in the second quarter, and the adjusted property EBITDA rose 38% quarter-on-quarter to US$530 million, reaching 71% of the level in 2019, roughly in line with market expectations, but 5% lower than the bank’s expectations.
Popular sectors
On the disk, auto dealers, chemical fertilizers, domestic real estate stocks, property management stocks, and education stocks were among the top gainers; most large-scale technology stocks fell, and electronic components, agricultural products, power stocks, and SaaS concepts were among the top losers.
1. Inland housing and property management rose against the trend. As of the close, Wanwu Cloud (02602) rose 5.15% to HK$24.5; Country Garden Services (06098) rose 3.7% to HK$9.25; Country Garden (02007) rose 3.55% to HK$1.46; Yuexiu Properties (00123) rose 3.17% to HK$8.79.
Haitong Securities pointed out that the amount of real estate sales from January to June 2023 will maintain positive growth, maintaining the judgment of the industry’s gradual recovery. From January to June 2023, the year-on-year decline in real estate development investment expanded, while the year-on-year increase in commercial housing sales narrowed during the same period. The bank believes that the total shrinkage is coming to an end, and the follow-up will remain generally stable and gradually loosen; the stabilization of the industry, the stabilization of enterprises, and the stabilization of confidence will start simultaneously, and continue to be optimistic about the revaluation of the overall value of real estate. In addition, the central bank authorized the National Interbank Funding Center to announce today that the loan market quotation rate (LPR) on July 20, 2023 is: 1-year LPR is 3.55%, and 5-year-plus LPR is 4.2%. Both rates were left unchanged.
2. The education sector was the biggest gainer. As of the close, Tianli International Holdings (01773) rose 16.28% to HK$2.5; China Xinhua Education (02779) rose 6.67% to HK$0.8; South China Vocational Education (06913) rose 6.38% to HK$1; China Eastern Education (00667) rose 1.32% to HK$3.07.
A few days ago, the General Office of the Ministry of Education issued the “Notice on Accelerating the Key Tasks of the Reform of the Construction of the Modern Vocational Education System”, and released 11 key tasks of the reform of the construction of the modern vocational education system. Guosen Securities previously pointed out that with the continuous deepening and implementation of policies in the field of vocational education and the continuous improvement of school-running quality, the bank believes that the structural contradiction between the supply side of talent training and the industry demand side is expected to gradually improve, and this will be of great benefit to opening up vocational education training paths (secondary vocational-higher vocational/undergraduate), the attractiveness of high-quality vocational education resources will continue to increase, and the gross enrollment rate of higher education can be expected to increase. The bank believes that private higher education in Hong Kong stocks and the layout targets in the field of higher education will directly benefit. Private colleges and universities are generally positioned as application-oriented undergraduate courses, and the curriculum is also oriented to employment. However, affected by the liquidity and policies of Hong Kong stocks, the PE valuation of the sector in 2023 will be as low as 4-7x.
3. Some apparel stocks moved higher. As of the close, MBV INTL (01957) rose 26.76% to HK$0.9; JNBY (03306) rose 4.57% to HK$9.15; Fast Retailing (06288) rose 3.31% to HK$19.96; Cosmo Lady (02298) rose 2.5% to HK$0.41.
Cinda Securities pointed out that it will continue to pay attention to the downstream demand and inventory performance of clothing companies. After the adjustment of the epidemic prevention policy, the stock prices of high-quality clothing companies in Hong Kong stocks will take the lead in rebounding, and the short-term valuation will be the first to recover. Focus on the turning point of fundamentals in 2023. The bank suggested grasping two main lines: the clothing sector. On the one hand, the clothing industry has strong refined operation capabilities, a high proportion of direct sales channels, and high-quality companies with flexible supply chains. Strong management capabilities are expected to take the lead in restoring growth; on the other hand, benefiting from the continuation of the high prosperity and the rise of the national tide, the sports shoes and clothing subdivision track is expected to be the first to resume performance growth.
4. Power stocks continue to adjust. As of the close, Huaneng Power (00902) fell 5.3% to HK$4.65; Huadian Power (01071) rose 2.16% to HK$3.62; Datang Power (00991) fell 2.11% to HK$1.39; China Resources Power (00836) fell 2.07% to HK$17.02.
Tianfeng Securities pointed out that with the announcement of Q2 performance forecasts of major thermal power companies, market funds have withdrawn, and the trend of the sector is relatively weak. Looking forward to the follow-up, on the one hand, the utilization hours of coal-fired power in Q3 are generally at a high level throughout the year, and the overall electricity price level is expected to maintain a high proportion of rising in 2023; on the other hand, considering the coal inventory situation of power plants and the trend of coal prices, the fuel cost pressure of thermal power in Q3 may continue to decrease.
Popular stocks
1. Superstar Legend (06683) continued to rise. As of the close, it rose 17.42% to HK$7.75.
On July 18th, tickets for Jay Chou’s concert in Tianjin will be issued. According to the Damai platform, nearly 130,000 tickets were released on Damai’s single platform for this concert in Tianjin. There were four rounds of ticketing, and more than 5.2 million people marked “want to watch”. The topic of “Jay Chou’s concert is priced at 150,000 for two joint tickets” rushed to the top of the hot search. It is reported that the superstar legend business is divided into new retail, IP creation and operation, all of which are deeply bound to Jay Chou. In addition, the company is gradually expanding its artist resource pool.
2. Ascletis Pharmaceuticals-B (01672) hit a new high in the past two months. As of the close, it rose 6.6% to 2.26 Hong Kong dollars.
The phase II clinical trial of ASC42, a novel farnesoid X receptor (FXR) agonist of the drug candidate of Ascletis Pharmaceuticals’ wholly-owned subsidiary Ganlai Pharmaceutical Co., Ltd. (Ganlai), has completed the enrollment of 98 patients with primary biliary cholangitis (PBC). It is reported that ASC42 is a new high-efficiency selective non-steroidal FXR agonist that is completely independently developed by the company, has global intellectual property rights, and is expected to become the best-in-class (best-in-class).
3. Nayuki’s Tea (02150) went up. As of the close, it rose 10.46% to HK$6.02.
Nayuki’s Tea officially launched the “Partnership Program” to accelerate market expansion and brand coverage. In the detailed rules published by Naixue’s Tea, the requirements for the store area are clearly limited to the range of 90-170 square meters. Naixue said that the purpose of the various requirements is very clear-there must be zero difference between partner stores and direct sales.
4. Sunny Optical Technology (02382) issued a profit warning. As of the close, it fell 13.65% to 67.35 Hong Kong dollars.
Sunny Optical Technology announced that the group expects to obtain a profit attributable to shareholders of the company for the six months ended June 30, 2023 of approximately RMB 407.4 million to RMB 475.3 million, a decrease of approximately 65% to 70% from approximately RMB 1.3579 billion for the six months ended June 30, 2022.
5. Jieli Trading (08017) plummeted on a heavy volume. As of the close, it fell 73.16% to HK$0.73.
Jieli Trading Bao is an investment holding company that mainly provides integrated securities trading platform services for Hong Kong brokerages and their clients. Its main services include front-end trading system services, market data services and value-added services. The company released its annual results for the year ended March 31, 2023 last month. During the period, it achieved a revenue of HK$97.9798 million, an increase of 19.08% year-on-year; the profit attributable to the parent company increased by 4.2% year-on-year to HK$26.3187 million.
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2023-07-20 08:44:55
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