Hong Kong stock review: Hang Seng Index closed up 0.75%, domestic housing stock was booming, semiconductor stock performance was weak

The net daily inflow of capital from the South was HK$4.324 billion, with a market turnover of HK$126.8 billion

On April 11, Hong Kong stocks rebounded in the afternoon. The Hang Seng Technology Index fell to 1.4% and closed up 0.25%. The Hang Seng Index and China Index rose 0.76% and 0.82% respectively. The net daily inflow of capital from the South was HK$4.324 billion, and the market turnover was HK$126.8 billion.

On the market, large technology stocks partially turned up in the afternoon, with Xiaomi, Alibaba, and Meituan rising slightly, Baidu still falling more than 5%, and Tencent falling more than 2%; as the property market picked up, domestic housing stocks and property management stocks rose further in the afternoon, Longguang Group soared more than 26% and led the rise, followed closely by China's Jin Mao performance, which surged more than 19% after China's Jin Mao performance. Country Garden and others became popular; with the arrival of the peak electricity consumption season, power stocks rose significantly, and the industry continued to benefit well; Chinese brokerage stocks continued to benefit; Non-ferrous metal stocks such as building materials and cement stocks, domestic insurance stocks, and gold generally rose

Let's take a look specifically:

Technology stocks had mixed ups and downs. Baidu fell more than 5%, Tencent fell more than 2%, and JD closed down slightly; Xiaomi and Ali rose more than 1%, and Meituan and Bilibili closed slightly higher.

Domestic housing stocks and property management stocks joined forces to rise. Longguang Group rose more than 26%, China's Jinmao rose more than 19%, followed by Country Garden and Xincheng Development; Sunac Services rose more than 15%, and Xinchengyue Service rose more than 12%. Guojin Securities pointed out that the current industry basically has three major elements: policy easing, sales recovery, and profit level improvement, and there is a possibility that the sector will form a historical-level market. Looking at the medium to long term, historical market conditions require policy, sales, and performance to resonate. Real estate experienced two historic markets in 2008-09 and 2014-16, both with the introduction of support policies on both sides of supply and demand, a recovery in sales scale, and an increase in profit margins in reporting.

Gold stocks had the highest gains. Lingbao Gold rose more than 16%, China Gold International rose more than 8%, Zijin Mining rose more than 3%, and Shandong Gold and Zhaojin Mining followed suit. Haitong Securities said that the Fed's interest rate hike is nearing its end, and precious metals prices are expected to continue to improve. Against the backdrop of undecided banking events in the US and Europe, if the March inflation data cools down further, expectations of the Fed's interest rate hike may cool down further. Continue to be optimistic about investment opportunities in the precious metals sector, including gold.

Brokerage stocks strengthened. CICC had the best performance by rising more than 7%, Orient Securities rose more than 6%, CITIC Construction Investment and GF Securities rose more than 3%, and Shenwan Hongyuan, China Galaxy, and CITIC Securities all rose. According to the news, there have been many positive developments in the brokerage sector recently. Last Friday, the minimum ratio of brokerage settlement provisions was lowered from 16% to 15%, which is equivalent to a “downgrade” in the brokers' trend; yesterday, China Securities Finance lowered the ratio of securities companies' credit guarantee funds.

Power stocks showed strong performance. Huaneng International Power shares rose more than 8%, Huadian Power shares rose more than 7%, and China Resources Electric Power and Datang Power rose more than 5%. Galaxy Securities said that the continued decline in coal prices is conducive to a recovery in profits for power companies. In the short term, the decline in fuel costs is expected to improve the profitability of thermal power beyond expectations; in the long run, as the share of new energy sources continues to rise and the market-based reform of electricity continues to deepen, thermal power, as a regulated power source, is expected to receive additional benefits from participating in the capacity market or spot market, and is optimistic about the long-term investment value of the thermal power sector.

Semiconductor stocks had the highest declines, with Hongguang Semiconductor and Jingmen Semiconductor falling more than 7%, Mindong Technology falling more than 6%, and Huahong Semiconductor and SMIC followed suit. Guotai Junan believes that China's semiconductor production capacity cycle has basically bottomed out. First, the balance ratio of China's electronics industry has rebounded year on year, which means that a new round of debt cycle is beginning. Considering that the industry's balance ratio is at an all-time low (54.3%), there is plenty of room for future leverage; second, in the downward demand cycle of the past two years, the capacity utilization rate of China's electronics industry has basically bottomed out. Currently, there are signs that demand has picked up early, and the recovery in capacity utilization will drive the beginning of a new round of production capacity utilization cycles.

ChatGPT concept stocks fluctuated and declined. Baidu and Meitu fell more than 5%, Tencent fell more than 2%, and Shangtang and JD followed suit. According to the CMB International Development Research Report, due to AI/ChatGPT's impact on related concept stock prices in the past 3 months, the bank believes that the stock prices of most AI industry chain stocks have fully reflected their relevant positive expectations (chip/optical module/PCB/server have each risen 65%/146%/45%/62% since the beginning of the year). It is expected that around the end of April before the results of this year's first quarterly report are disclosed, the market will make a profit in this round of AI-themed markets.

Looking ahead to the future market, the Chinese economy is gradually recovering, compounded by marginal improvements in liquidity at home and abroad, and the Hong Kong stock market may have strong index performance. Judging from current economic data, China's economy is recovering clearly, and corporate profits in the Hong Kong stock market are expected to rise steadily. Furthermore, as the Federal Reserve's interest rate hike cycle comes to an end, China's overall macro-liquidity is stable, moderate and loose, and marginal easing of monetary policies at home and abroad is expected to create a favorable liquidity environment for the recovery of Hong Kong stocks. In the context of “rising east and west”, Chinese assets are expected to attract more overseas capital back in the future. Therefore, on the whole, the Hong Kong stock market may have strong index performance.