US stocks are speculating on Christmas consumption and the three major indices are all doing well, but have little connection to Hong Kong. Hong Kong stocks yesterday were mainly driven by the continued growth of state-owned enterprises and the rebound in technology stocks. Large SOEs have always been slow to warm up, so the market rose moderately: the Hang Seng Index closed at 17,523 points, an increase of 99 points, the State Index closed at 5,945 points, an increase of 43 points;
Shares of large-scale state-owned enterprises continued to speculate and appreciate
Yi Huiman, who is believed to have the opportunity to take over as the next chairman of the People’s Bank of China, suggested that the valuation of state-owned enterprises is relatively low, and the mainland should form a valuation system with its own characteristics, which has made state-owned enterprises do well for two consecutive days. Mainland China believes that state-owned enterprises and private enterprises have different operating styles. The former is conservative, while the latter is aggressive. Those who buy stocks naturally want to be aggressive. Therefore, the valuation of private enterprises is dominant. Especially in the early years when technology and Internet stocks exploded, Internet finance leveraged the capital market and even challenged the status of state-owned banks, but with the fall of the regulatory baton, the situation has reversed in past two years and advanced country theory and private retreat is back.
The motivation for economic development in the mainland is different from that of capitalism. When self-confidence is getting stronger, they want to have their own evaluation methods to match the development model. However, Yi Huiman did not explain in detail how the concept can be implemented. The market speculates first. Also, don’t dare to put too much effort. Large state-owned enterprises such as telecommunications, China Bank and Sanbarrel generally performed well, and Chinese infrastructure stocks still posted the biggest gains. China Zhongzhi (1618) climbed 2.6% to close at 1.61 yuan; China Railway Group (390) climbed 3.7% to close at 4.16 yuan; China Railway Construction (1186) climbed 4% to close at 4.49 yuan; China CRRC (1766) rose 2%, to close at 3.02 yuan; China Communications Construction (1800) rose 3%, to close at 3.73 yuan. This sector was once hyped during the heyday of high-speed rail expansion, but is now believed to be difficult to reach the old peak.
Link REIT (823) announced that it issued convertible covered bonds with a maturity in 2027 and a fixed annual interest rate of 4.5%, raising 3.3 billion yuan. The share price fell nearly 5% compared to the market and closed at 50.65 yuan, making it the worst-performing blue-chip stock. When Link REIT announced its results earlier, it revealed that it had halted the pace of mergers and acquisitions. We are now pumping cash to raise funds, reflecting the impact of interest spikes on the company in recent months.
Under the terms of this bond issue, the holders can receive 4.5% interest, and when the maturity expires in 2027, they can trade shares at 61.92 yuan, which can have a 16% premium to the price of the bonds. shares at the time of the announcement. In other words, the holder can collect interest first and only see if the stock price is above this level when it expires before trading the stock at a profit. Link’s current interest rate is 6%. There are two reasons why bondholders don’t buy Link to collect the interest rate: one is that the bond’s interest rate of 4.5% is stable, and the other is that Bo’s share price rises and there is no loss. Otherwise, if you buy the underlying stock, you risk the downside risk of the stock price.
Looking at it from another angle, this time Link REIT didn’t issue bonds with a specific acquisition target, for example looking for an asset that could deliver a 4.5% yield and over 16% appreciation. the value of the company’s assets. Seeing that the management is willing to issue shares at 61.92 yuan in 2027 to raise funds, the market immediately sells it out of respect, so many investors who are intoxicated by the long-term increase in Link REIT’s share price should take the edge off time to review this idea.
The main shareholder of Tencent’s son-in-law has a heart like iron
Stock valuation will change with the objective environment, and you can’t just read a book and get old. This kind of thinking of looking forward and not clinging to the past is the path to success for many big investors. It seems that Tencent (700) is the same as Warren Buffett, they can sit and make money all the time while holding stocks, but they are cruel to the end when selling assets, and will not lose the past glory of the stock price. Tencent distributed the main shares of Meituan (3690), and the share price rose another 1.6%, closing at 282 yuan. The main shareholder in South Africa appeared to be determined as iron and insisted on breaking with Tencent , indicating that Meituan would not stay after receiving it. After receiving Meituan’s shares, they will consider selling them. As a result, Meituan’s stock price first soared and then recovered, closing at 138.4 yuan, down 1%.
Similarly, BYD (1211) was again reduced by Berkshire Hathaway, the flagship investment of equity god Buffett, and grossed 630 million yuan. BYD reversed the trend and fell by 1.8%. to close at 175 yuan. Weilai (9866), which has no big sellers, rose 4.6% to close at 79.8 yuan; Ideal Automobile (2015) rose 2.6% to close at 67.2 yuan.
In any case, the market is a bit boring, with little ups and downs, and some cowhide waiting for change.
Jin Riku
