On Wednesday, the Hang Seng Index rebounded from the decline yesterday and the three major indices collectively rose.

As of press time, Hang Seng Tech Index rose by 3.58%, Hang Seng Index rose by 2.82%, returning above 18,000 points, and the Hang Seng China Enterprises Index rose more than 3%.

Among them, large technology companies, internal banks, internal insurance, and other financial stocks collectively boosted the market.

Medium-sized and high-dividend assets have rebounded. Sectors such as banks, telecom operators, electrical utilities, and coal and oil industries (the initials of these four industries are pronounced as "YYDS" in Chinese) have all been active.

It is worth noting that Bilibili surged strongly today, rising more than 19% to HKD 144.6 at one point, hitting a new high since August 2023.

On the news front, Morgan Stanley, Bank of America, and BOC International have all expressed bullishness toward Bilibili.

Among them, JPMorgan upgraded its rating on Bilibili to overweight, with a target price of HKD 165 and an ADR target price of USD 21. It is expected that the second-quarter results will become the next catalyst for the stock price.

Bank of America Securities also reiterated its "buy" rating on Bilibili-W. Due to the improvement of advertising and gaming businesses, Bank of America raised Bilibili's earnings per share expectation for this year and next year by 2% to 7%, raised the target price from HKD 140 to HKD 142, and at the same time raised the compound growth rate forecast from 26% to 27% for 2025 to 2030.

Bocom International is also optimistic about its revenue growth prospects. On June 13th, Bilibili's first SLG mobile game "Three Kingdoms: Strategy of the Universe" ("Three Strategies") was officially launched.

The bank expects that the first-month (estimated for 30 days) revenue of "Three Strategies" can reach CNY 500 million to 800 million. In the second half of the year, game revenue is expected to accelerate, driving the growth of annual game revenue by 12% to 20%, which is better than the current market's expectation of low to mid-single-digit growth. At the same time, maintain the target price of HKD 132 for Bilibili's Hong Kong stocks and maintain a "buy" rating.

What are the bullish factors?

Today's big news: The "National Team" has once again made a heavy move and subscribed to the first offering of three dividend ETFs by China New Investment.

According to the official website of the State-New, recently, the State-New Investment under the State-New subscribed for the first batch of Zhongzheng Guoxin HKEX State-owned Enterprises Dividend ETFs issued by fund companies such as Guangfa, Southern, and Invesco Great Wall.

It is reported that the product is linked to the constituent stocks of the index and selects listed companies with stable dividend levels and relatively high dividend yields from the list of central state-owned enterprises of the State Council's State Assets Supervision and Administration Commission within the scope of the Hong Kong stock exchange.

This move sends a strong bullish signal for the long-term value of state-owned enterprises listed on HKEX, while also demonstrating the responsibility of state-owned capital operation companies in maintaining the market value of central enterprises and enhancing the pricing power of state-owned enterprises listed on HKEX.

China Guoxin was established on December 22, 2010 and is one of the central enterprises under the supervision of SASAC (State-owned Assets Supervision and Administration Commission of the State Council).

Currently, China Guoxin has formed a comprehensive business sector covering fund investment, financial services, asset management, equity operations, overseas investment, direct investment, and securities businesses.

On the other hand, the 2024 Lujiazui Forum opened in Shanghai today. Speeches were given by Wu Qing, Chairman of the China Securities Regulatory Commission, Pan Gongsheng, Governor of the People's Bank of China, Li Yunze, Director of the China Banking and Insurance Regulatory Commission, and Zhu Hexin, Director of the State Administration of Foreign Exchange.

Wu Qing mentioned that we should actively embrace the development of new productive forces and attract more medium- and long-term capital into the capital market.

Li Yunze stated that he will study and introduce guidelines to promote the high-quality development of the insurance industry. Accelerating the development of the insurance industry is conducive to improving the structure of the financial market, optimizing the allocation of financial resources, and enhancing the stability of the financial system. He pointed out that opening up to the outside world is an important driving force for the reform and development of China's financial industry, insisting on both "bringing in" and "going out", continuing to create a first-class business environment, and firmly expanding the high-level opening-up of the financial industry to the outside world.

Pan Gongsheng talked about the current stance of monetary policy and gave an outlook on future monetary policy.

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Li Yunze stated that guidance will be researched and issued to promote the high-quality development of the insurance industry. Accelerating the development of the insurance industry is conducive to improving the structure of the financial market, optimizing the allocation of financial resources, and enhancing the stability of the financial system.

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The rise in Hong Kong stocks is mainly based on the logic of global risk assets catching up. With the further rise of global stock indices in June, it is expected that Hong Kong stocks may continue to catch up.

Tianfeng Securities stated that since Q1 2024, the bottom of the Hong Kong stock market has continued to rise. Since late April, internal and external factors have resonated, and the market has continued to rise significantly. In recent periods, under the impact of a series of China's real estate policy measures, the marginal improvement of China's economy is expected to continue. Compared with global markets, Chinese assets still have cost-effectiveness.

Based on the expectation of gradually improving prospects and expects gradual improvement in the underlying conditions, Hong Kong-listed Chinese concept stocks still have valuation attractiveness and high risk return ratios.

Horizontally, after a deep correction in the previous stage, Hong Kong stocks have continued to be at low value levels globally with outstanding valuation cost-effectiveness.

Looking forward, Tianfeng pointed out that in the background of the significant improvement of domestic and foreign sentiment, the rebound of Hong Kong stocks has already been promoted, and the sustainability and upward space in the future still need to be cooperated with more solid basic data, while maintaining a cautious and optimistic attitude during the period of economic repair verification.

In terms of allocation, on the one hand, industries with high dividend rates, such as utilities, energy, finance, telecommunications and other sectors, are expected to provide considerable relative returns in such an environment, even if the market volatility rises in the future; on the other hand, the technology industry represented by semiconductors and the Internet will still be the main driver of industrial transformation and is expected to benefit from government support and domestic upgrade.

CICC expects Hong Kong stocks to continue to rise in the third quarter of this year with increased volatility in the fourth quarter.

It is recommended to maintain interval trading in the second half of the year and adopt a dumbbell-type configuration strategy, but gradually shift to growth. On the one hand, continue to hold high-dividend blue chips and precious metal mining stocks, and on the other hand, pick out leading Chinese enterprises in the areas of the Internet, technology, consumption, and manufacturing going abroad, and there are trading opportunities for Chinese property stocks.

Edited by Jeffrey