The Zhitong Finance App learned that the three major indices of Hong Kong stocks were weak and fluctuated in early trading. They all rose and turned red in the afternoon, but then the rise was weak. The Hang Seng Index and the National Index fell one after another. Only the Hengke Index closed higher. At the close, the Hang Seng Index closed flat at 17523.23 points, with a full day turnover of HK$94.333 billion; the Hang Seng State-owned Enterprises Index fell 0.14% to 6275.64 points; and the Hang Seng Technology Index rose 0.96% to 3600.90 points.

Tianfeng Securities pointed out that market sentiment is tending to be flat, and the short-term index rebound is high or limited. Since peaking in stages on May 20, the Hang Seng Index has maintained a downward trend. Looking back, Hong Kong stocks have contributed to a round of significant rebound against the backdrop of a sharp improvement in domestic and foreign investment sentiment. Continued sustainability and room for growth are yet to be matched by more consolidated fundamental data, and they have maintained a cautious and optimistic attitude during the economic recovery verification period.

Blue chip stock performance

Shunyu Optical Technology (02382) led the blue chip increase. At the close, it rose 7.76% to HK$46.5, with a turnover of HK$0.892 billion, contributing 3.81 points to the Hang Seng Index. Industry chain sources revealed that Apple raised the iPhone 16 series's stocking target this year to around 90 million units. CMB International previously stated that considering Shunyu's leading technical position, strong product roadmap and customer base, it believes the company will benefit from the next AI-driven regulatory upgrade cycle.

In terms of other blue-chip stocks, BYD Electronics (00285) rose 6.38% to HK$36.7, contributing 2.79 points to the Hang Seng Index; Zhongsheng Holdings (00881) rose 5.99% to HK$11.68, contributing 0.84 points to the Hang Seng Index; Master Kong Holdings (00322) fell 4.24% to HK$9.71, dragging down 1.34 points; Sinopharm Holdings (01099) fell 2.22% to HK$19.8, dragging down the Hang Seng Index by 0.97 points.

In terms of popular sectors

On the market, large technology stocks had mixed ups and downs, announcing an automatic HK$6 billion repurchase plan, and Kuaishou rose by more than 4%; as a result of raising the iPhone 16 series stocking target this year, Apple concept stocks were strong throughout the day; semiconductor foundry prices rose, semiconductor stocks generally strengthened; and construction machinery stocks, aluminum stocks, and photovoltaic stocks rose. On the other side, China's building materials surged, and cement stocks were under significant pressure. Sporting goods stocks, petroleum stocks, electricity stocks, and some pharmaceutical stocks declined. Today, Rongchang Biotech fell sharply by 20%.

1. Apple concept stocks strengthened throughout the day. At the close, Sunyu Optical Technology (02382) rose 7.76% to HK$46.5; Gaowei Electronics (01415) rose 7.03% to HK$24.35; BYD Electronics (00285) rose 6.38% to HK$36.7; and Qiutai Technology (01478) rose 6.3% to HK$4.05.

Overnight, Apple's stock price continued to hit a record high, with a total market capitalization of close to 3.5 trillion US dollars, returning to the top position in US stocks. Earlier, some people in the industry chain said that Apple raised the iPhone 16 series's stocking target this year to around 90 million units. Furthermore, during the 618 e-commerce promotion period this year, Apple's sales volume increased markedly, which may have boosted Apple's sales expectations for the iPhone 16 series. Cinda Securities believes that the Apple industry chain harbors investment opportunities and continues to recommend high-quality consumer electronics companies. The bank pointed out that as a benchmark enterprise in the consumer electronics industry, Apple is expected to once again lead the AI growth wave in the consumer electronics industry. After entering the second half of the year, Apple's new phone is about to be released, and the impact on sales in China may be more moderate than last year. The current fruit chain opportunities are worth paying attention to.

2. Semiconductor stocks showed strong performance. At the close, Huahong Semiconductor (01347) rose 7.8% to HK$22.8; Shanghai Fudan (01385) rose 6.38% to HK$12.68; Hongguang Semiconductor (06908) rose 6.1% to HK$0.435; and SMIC (00981) rose 3.44% to HK$18.04.

Driven by strong demand for AI servers, computing power chips, etc., the semiconductor industry continues to grow in popularity, and recently the price increase in the industry has become more intense. According to supply chain surveys, most TSMC customers have agreed to increase their OEM prices in exchange for reliable supply. In addition, manufacturers such as Qualcomm, Huahong, and Samsung have also made price adjustments, covering IC design, chip foundry, and memory chips. Morgan Stanley previously said that Huahong Semiconductor's fab utilization rate has exceeded 100%, so it may increase wafer prices by 10% in the second half of the year.

Also, according to SIA data, global semiconductor industry sales reached 49.1 billion US dollars in May 2024, up 19.3% year on year and 4.1% month on month. The year-on-year growth rate of sales in May recorded the biggest increase since April 2022. Ping An Securities said that currently, semiconductor manufacturing is showing signs of improvement, domestic substitution is in full swing, orders from semiconductor equipment companies are abundant, and the upward trend in the industry is being maintained.

3. Construction machinery stocks rebounded today. At the close, Zoomlion Heavy Industries (01157) rose 6.14% to HK$4.84; Sinotruk (03808) rose 4.4% to HK$16.6; Morimatsu International (02155) rose 3.39% to HK$5.19; and Sany International (00631) rose 1.73% to HK$4.7.

According to data from the China Construction Machinery Industry Association, in June 2024, the manufacturing enterprises included in the statistics sold a total of 16,603 excavators, up 5.31% year on year; their domestic market sales volume in China was 7,661 units, up 25.6% year on year; export sales volume was 8,942 units, down 7.51% year on year. Dongwu Securities pointed out that looking ahead to the second half of the year, domestic downstream infrastructure investment continues to improve, and domestic sales of construction machinery are clearly at an upward inflection point, which is expected to begin a new upward cycle. Looking at overseas markets, export growth was phased under pressure due to last year's high base+high short-term inventory, and the overseas high base effect disappeared in the second half of the year, and dealers went to warehouses to end. The overseas growth rate is expected to pick up in the second half of 2024.

4. Cement stocks are generally under pressure. At the close, China Building Materials (03323) fell 13.77% to HK$2.63; Western Cement (02233) fell 4.5% to HK$1.06; and China Resources Building Materials Technology (01313) fell 3.57% to HK$1.62.

According to CementNet, from January to May this year, production of 19 types of products, including cement, commercial concrete, marble panels, and insulation and sound insulation products, declined year-on-year. Among them, cement production was 0.69 billion tons, down 9.8% year on year. The operating income of large-scale building materials companies decreased by 11.6% year on year, and total profit decreased by 58.7% year on year. Among them, the cement industry lost about 3.4 billion yuan, a decrease from the previous period's loss amount, and the company lost more than 55%.

China Building Materials recently issued a profit warning. It is expected that the first half of the year's results will go from profit to loss to about 2 billion yuan. UBS Research reports that despite the company's efforts to raise prices in North China and Northeast China, the cement business still experienced huge losses. According to reports, cement in the Beijing-Tianjin-Tang and Yangtze River Delta regions began rising last week, with a margin of about 50 yuan/ton. The price increase was mainly supported by industry self-discipline and the development of false peak production.

Popular volatile stocks

1. Hongteng Precision (06088) rebounded sharply. At the close, it rose 21.31% to HK$3.7.

Hongteng Precision expects to achieve net profit of 2,800 to 33 million US dollars in the first half of the year, reversing losses from the previous year. CICC said that its performance forecast is basically in line with expectations. It believes that this year's R&D investment will drive the company's AI connectivity products and headphone products to major customers one after another next year, which will raise the company's valuation level to a certain extent and raise the target price by 46% to HK$3.62.

2. ZTE (00763) hit an 8-month high. At the close, it rose 9.83% to HK$19.

ZTE said on an interactive platform that in terms of mobile phone products, it is expected that generative AI will gradually have an impact from quantitative to qualitative changes in the future. The company actively promotes the “AI FOR ALL” product strategy and concept, and firmly believes that AI technology should not be limited to flagship models, but should be widely used in all kinds of devices. It is also expected that a new mobile phone with new AI features will be launched in July of this year.

3. Kuaishou-W (01024) rose significantly. At the close, it rose 4.04% to HK$47.6.

Kuaishou announced the HK$6 billion automatic repurchase plan. The plan will take effect on August 8 this year and end on May 30 next year. Citigroup released a research report saying that with the continuous improvement of financial performance and prospects for sustainable profit growth, it believes that its current valuation is equivalent to 8 times the projected price-earnings ratio in 2025 and is not high. It first gave Kuaishou a “buy” rating, with a target price of HK$69.

4. Hengyu Group (02448) volume collapsed. At the close, it fell 77.08% to HK$0.204.

Hengyu Group is an investment holding company mainly engaged in decoration projects. On July 8, the company issued an announcement stating that Chen Xiaohua had resigned as company secretary, effective the same day. According to Hengyu Group's 2023 results, the company achieved revenue of MOP 0.273 billion during the period, a year-on-year decrease of 42.72%; the owner of the company should have accounted for a loss of MOP 0.126 billion, which turned profit and loss over the previous year.

Initial listing of IPOs

1. The stock price of Ark Kenker (06086) has plummeted. At the close, it fell 44.62% to HK$4.53.

Ark Jianke is priced at HK$8.18 per share. A total of 23.8 million shares were issued, with a net proceeds of approximately HK$67.09 million in each lot. According to Insight Consulting, with an average monthly active user count in 2023, Ark Biker is the largest online chronic disease management platform in China. The business focuses on chronic disease management to meet the needs of patients with chronic diseases (such as hypertension, chronic cardiovascular and respiratory diseases). According to reports, the company's current listing did not introduce any cornerstone investors, and the company's public shareholders held only 1.78% of the shares, making it known as a “bully.”

2. Baiwang shares (06657) turned up in the afternoon. At the close, it was up 8.06% to HK$38.9.

Priced at HK$36 per share, Baiwang shares issued a total of 9.262 million shares, 100 shares per lot, with a net proceeds of approximately HK$0.229 billion. Baiwang Co., Ltd. focuses on providing SaaS fiscal digitization and data-driven intelligent solutions through the Baiwang Cloud platform. The IPO introduced a cornerstone investor, Jiangsu Yuanli, a state-owned capital equity investment platform in Huishan District of Wuxi City, to subscribe for 7.2222 million shares, accounting for 77.98% of the shares offered, 7.95% of all issued H shares, and 3.20% of the total shares of the company after listing.