Hong Kong Stock Market Closing (04.23) | Hang Seng Index rose by 1.92%, technology and internet stocks surged again, with Meituan-W rising nearly 8% leading the blue chips

According to the financial news app Zhitong Finance, UBS has upgraded its rating on Hong Kong stocks to overweight. The China Securities Regulatory Commission has introduced five measures to boost the market, leading to two consecutive days of strength in the Hong Kong stock market. Among them, the Hang Seng Index performed the strongest. As of the close, the Hang Seng Index rose by 1.92% or 317.24 points to 16828.93 points, with a total daily turnover of 116.06 billion Hong Kong dollars; the Hang Seng China Enterprises Index rose by 2.12% to 5954.62 points; and the Hang Seng Tech Index rose by 3.38% to 3449.1 points.

Guotai Junan International pointed out that in the four weeks since March 26, southbound funds have continued to flow into the Hong Kong stock market, totaling over 78.9 billion Hong Kong dollars. This is mainly due to the excessive risk premium priced into Hong Kong stocks, highlighting the cost-effectiveness of high-quality assets. The bank believes that with the support of the 5 capital market cooperation measures for Hong Kong, southbound funds will continue to flow into the Hong Kong stock market, further enhancing the market's influence, price stability, and rationality. It is expected that the Hong Kong stock market will enter a volatile phase, but with limited short-term space. It is recommended to focus on high dividend styles and gradually increase exposure to the Hong Kong internet industry.

Performance of Blue Chip Stocks

Meituan-W (03690) led the gains in blue-chip stocks. At the close, it rose by 7.95% to 108.6 Hong Kong dollars, with a turnover of 7.171 billion Hong Kong dollars, contributing 74.45 points to the Hang Seng Index. TF Securities previously pointed out that Meituan's core competitiveness lies in its strong merchant base and the accumulation of real user reviews over decades. At present, its moat remains solid. Currently, the barriers to the food delivery business are solid, the external competitive landscape is gradually clear, and Meituan's core local business profitability is expected to continue to strengthen.

In other blue-chip stocks, JD.com Group-SW (09618) rose by 6.07% to 106.6 Hong Kong dollars, contributing 16.73 points to the Hang Seng Index; Sunac China Holdings (00288) rose by 5.84% to 5.8 Hong Kong dollars, contributing 4.14 points to the Hang Seng Index; Zijin Mining (02899) fell by 3.08% to 16.34 Hong Kong dollars, dragging down the Hang Seng Index by 4.43 points; Sunny Optical Technology (02382) fell by 2.46% to 35.75 Hong Kong dollars, dragging down the Hang Seng Index by 1.01 points.

Hot Sectors

On the market, large-cap technology stocks surged, driving the market higher. Among them, Kuaishou rose by over 8%, leading the gains, Dungeon & Fighter mobile game launched ahead of schedule, and Tencent's stock price returned to above 330 Hong Kong dollars. Pork concept stocks shone with first-quarter results exceeding expectations, with Sunac China Holdings rising nearly 6% to a new high. With the Beijing Auto Show approaching, automotive stocks rebounded across the board. The positive trend in innovative drug policies was evident, with pharmaceutical stocks strengthening in the afternoon. Gaming stocks, beer stocks, education stocks, and others all traded in the green. On the other hand, the situation in the Middle East eased temporarily, leading to a collective decline in gold and silver, while non-ferrous metal sectors continued to adjust; coal and infrastructure stocks continued their decline.

1. Tech stocks remain strong. At the close, Kuaishou-W (01024) rose by 8.63% to 49.1 Hong Kong dollars; Meituan-W (03690) rose by 7.95% to 108.6 Hong Kong dollars; JD.com Group-SW (09618) rose by 6.07% to 106.6 Hong Kong dollars Tencent (00700) rose by 3.75% to HKD 332.4.

The China Securities Regulatory Commission issued the "5 Measures for Capital Market Cooperation with Hong Kong". Specifically, it includes expanding the scope of stock ETF qualified products under Shanghai-Hong Kong Stock Connect, including REITs in Shanghai-Hong Kong Stock Connect, supporting RMB stock trading counters to be included in Hong Kong Stock Connect, optimizing mutual recognition arrangements for funds, and supporting leading mainland industry companies to list on the Hong Kong Stock Exchange. Many institutions believe that these measures are conducive to boosting confidence in the Hong Kong stock market.

Furthermore, since 2024, Hong Kong-listed companies have continued to increase their buybacks, with Tencent Holdings repurchasing over HKD 20 billion during the period, ranking first in Hong Kong stock buybacks. Guotai Junan Securities stated that considering the policy support in certain areas and the buybacks of companies such as Tencent and Alibaba, the undervaluation of internet stocks and excessively pessimistic risk premiums are expected to see significant corrections. In addition, leading internet companies continue to increase their investments in the AI field and make effective progress, with profit expectations expected to improve.

2. Pharmaceutical stocks strengthened in the afternoon. By the close, Laike Medicine-B (02105) rose by 12.92% to HKD 6.03; Connoah-B (02162) rose by 10.81% to HKD 32.3; Tiger Medicine (03347) rose by 6.45% to HKD 31.35; Kangfang Biotech (09926) rose by 5.86% to HKD 46.95.

Recently, the Beijing Municipal Medical Security Bureau, Beijing Municipal Drug Administration, and other departments issued several measures to support the high-quality development of innovative medicine in Beijing (2024). Donghai Securities research report pointed out that this year, including clear support for innovative drugs and continuous optimization of centralized procurement renewal terms, the industry policy has shown a clear positive trend; the sector as a whole is expected to continue to warm up and improve after the second quarter. In the medium to long term, there is a positive outlook for investment opportunities in innovative drugs, characteristic devices, and other representative new productive forces.

3. Automotive stocks generally rebounded. By the close, Nio-SW (09866) rose by 5.73% to HKD 31.35; Leapmotor (09863) rose by 4.46% to HKD 22.25; Great Wall Motors (02333) rose by 4.26% to HKD 10.78; XPeng Motors-W (09868) rose by 3.58% to HKD 27.45.

The Beijing Auto Show will open on April 25th, with an expected 140 exhibited models, over half of which are new models totaling 85, with domestic brands accounting for over 65% of the exhibited models. CICC pointed out that the release of numerous heavyweight new energy vehicle models by traditional car companies is expected to drive the industry's prosperity further upwards, boosting passenger car market sales. Everbright Securities stated that the new models from this auto show are expected to be launched before 1H24 and start mass deliveries in 2H24E, optimistic about the prospects of new energy sales driven by factors such as new models + implementation of central/local subsidies.

4. Gold stocks continue to decline. By the close, China Gold International (02099) fell by 5.21% to HKD 45.5; Lingbao Gold (03330) fell by 3.83% to HKD 3.26 Zijin Mining (02899) fell by 3.08% to HKD 16.34; Shandong Gold (01787) fell by 2.61% to HKD 16.4.

The price of gold has fallen for the second consecutive day, with spot gold breaking below the key level of 2300, the first time since April 5. CITIC Futures pointed out that there are three main reasons for the sharp drop in gold and silver prices: geopolitical risks have eased, previous loose liquidity has tightened, and long positions have been profit-taking, leading to a cooling of sentiment. The bank believes that precious metals are expected to pull back until the end of the month or early next month, still offering investment value, as the expectation of interest rate cuts later this year may once again reverse, bringing new long opportunities for precious metals.

Top Movers

1. Jiayi Holdings (01025) experienced a flash crash, closing down by 62.39% at HKD 0.082.

Jiayi Holdings issued an announcement this afternoon stating that the company noticed unusual fluctuations in its stock price and trading volume recently. After conducting a reasonable inquiry, it confirmed that it was not aware of any reasons causing the fluctuations in stock price and trading volume. The company also confirmed that there have been no significant changes in its business operations.

2. Tianjin Development (02515) debuted below its IPO price, closing down by 39.2% at HKD 1.52.

Tianjin Development is a construction group in Tianjin, providing comprehensive engineering construction services. According to a Frost & Sullivan report, in 2022, there were 2547 construction enterprises in Tianjin, and based on Tianjin's construction revenue in 2022, the company's market share in the entire construction market was 0.1%.

3. Fosun Tourism & Culture (01992) continued to rise, closing up by 5.12% at HKD 3.49.

Fosun Tourism & Culture released its first-quarter 2024 performance report. During the reporting period, the operating revenue of Fosun Tourism & Culture reached 7.158 billion yuan, a year-on-year increase of 15.8%. Thanks to the contribution of core business growth, the unaudited profit attributable to the company's shareholders in the first quarter of 2024 continued to increase compared to the same period in 2023.

4. Li Ning (02331) significantly rose, closing up by 5.71% at HKD 18.5.

Furui pointed out that the growth in e-commerce sales in the first quarter of 2024 indicates that the company has basically solved the resale problem, and the downward trend in prices also shows that the company's e-commerce inventory has returned to a healthy state. It is expected that investors will refocus on Li Ning's value creation and anticipate more positive progress for the company in 2024