Hong Kong stocks fell along with the external market today, and the three major indices fell all day. The afternoon decline further expanded. The Hang Seng Index once fell below the 17,000 mark during the day and the current level hit a new low in three months.
According to the Futu Securities app, Hong Kong stocks fell in line with the external market today, and the three major indices fell all day. The afternoon decline further expanded. The Hang Seng Index once fell below the 17,000 mark during the day and the current level hit a new low in three months. At the close, the Hang Seng Index fell 1.77% or 306.08 points to 17,004.97 points, with a total turnover of HKD 105.734 billion; the Hang Seng China Enterprises Index fell 2.05% to 6016.51 points; the Hang Seng Tech Index fell 2% to 3421.26 points.
Tianfeng Securities pointed out that the rebound of Hong Kong stocks has been put on hold, and cyclical sectors have adjusted significantly. The bank believes that although there is a stage rebound in Hong Kong stocks, it is still suppressed by fundamental factors. Looking ahead, Hong Kong stocks have ushered in a significant rebound against the backdrop of a significant improvement in domestic and foreign sentiments, and the sustainability and upward space in the future still need more solid basic data to match it. During the period of economic recovery verification, it is still necessary to maintain a cautious and optimistic attitude.
Blue chip performance
Hisense Home Appliances (0921.HK) led the blue chips. As of the close, it rose 5.13% to HKD 24.6, with a turnover of HKD 0.748 billion, contributing 4.7 points to the Hang Seng Index. The National Development and Reform Commission and the Ministry of Finance have issued several measures to support large-scale equipment updates and the replacement of old products with new ones. Institutions believe that the central government's increased support for household appliances and other consumer goods to be replaced by old ones is expected to further stimulate the potential of domestic demand, drive the renewal and replacement of white goods, kitchen appliances and other products, and promote the growth of domestic sales of household appliances.
In terms of other blue chips, Xinyi Solar (0968.HK) rose 3.04% to HKD 3.73, contributing 0.89 points to the Hang Seng Index; WuXi AppTec (2359.HK) rose 1.58% to HKD 29, contributing 0.25 points to the Hang Seng Index; Zijin Mining (2899.HK) fell 5.1% to HKD 14.9, dragging down the Hang Seng Index by 7.06 points; China Unicom (762.HK) fell 4.42% to HKD 7.13, dragging down the Hang Seng Index by 3.22 points.
Hot sectors
On the market, large technology stocks continued to fall, with Tencent falling more than 3% and Alibaba falling more than 1%. The price of gold once fell below $2,370 per ounce, and gold stocks fell sharply all day; overseas policies affected market sentiment, and semiconductor stocks continued to fall; demand concerns suppressed oil prices, and petroleum stocks were under significant pressure; nonferrous metals, film and television entertainment, and heavy infrastructure all fell. On the other hand, two departments issued policies to support the replacement of old household appliances with new ones, and the stocks of household appliances rose in the afternoon; some photovoltaic stocks rose against the trend.
1. Home appliance stocks rose in the afternoon. As of the close, Hisense Home Appliances (0921.HK) rose 7.49% to HKD 24.4; Haier Smarthome (669.HK) rose 5.13% to HKD 24.6.
The National Development and Reform Commission and the Ministry of Finance have issued several measures to support large-scale equipment updates and the replacement of old products with new ones, which includes supporting the replacement of old household appliances with new ones. Subsidies will be given to individuals who purchase refrigerators, washing machines, televisions, air conditioners, computers, water heaters, household stoves, range hoods and other 8 types of household appliances with a second-grade or higher energy efficiency or water efficiency standard. In addition, support will be given to local areas to improve their capacity to replace old products with new ones. Directly arranged super-long-term special national bond funds will be used to support local autonomous upgrading of old products with new ones.
2. Some photovoltaic stocks rose against the trend. As of the close, flat glass (6865.HK) rose 5.98% to HKD 11.34; Xinyi Solar (0968.HK) rose 3.04% to HKD 3.73; Triumph New Energy (1108.HK) rose 0.99% to HKD 4.09.
At the Photovoltaic Industry Development Review and Outlook Symposium for the first half of 2024 held today, Wang Bohua, Honorary Director of the China Photovoltaic Industry Association, said that the adjustment of the photovoltaic industry should be heavy and fast. Currently, the competition inside and outside the industry is fierce, and the industry needs to be "lightly armed". The integration time should not be too long.
Wang Bohua stated that it is necessary to promote the elimination of backward production capacity, encourage enterprise mergers and reorganizations, and that the management department needs to strengthen the guidance of advanced production capacity construction and local governments should strictly control unreasonable market rescue actions. Enterprises should be cautious in new investments. Financial institutions should avoid providing funding to the production capacity that will be eliminated.
3. Gold stocks fell the most. As of the close, China Gold International (2099.HK) fell 11.74% to HKD 40.6; Lingbao Gold (3330.HK) fell 6.61% to HKD 3.11; Shandong Gold (1787.HK) fell 5.93% to HKD 15.86; Zijin Mining (2899.HK) fell 5.1% to HKD 14.9.
On Thursday, the gold price continued to decline significantly, and the spot gold once fell below $2370. CITIC Futures pointed out that the recent significant decline in precious metal prices is mainly due to Trump's trade. Trump's policy of supporting the continued levy of tariffs overseas and implementing anti-globalization policies while lowering domestic taxes and expanding fiscal policies will lead to slow US service inflation and affect subsequent interest rate cuts (although it supports low interest rates). The tax cuts and expansion of fiscal policy will make the U.S. dollar index and U.S. bonds go up. Last Thursday, Trump publicly suggested cutting interest rates again in November, making the market uncertain about the interest rate cut in September. The resonance of long-term and short-term policies caused all risk assets and safe-haven assets such as gold, U.S. stocks, non-ferrous metals, and energy to fall sharply.
4. Semiconductor stocks continued to fall. At the close, Hua Hong Semiconductor (01347) fell 5.16% to HKD 20.2; Fudan Shanghai (01385) fell 3.72% to HKD 11.38; and SMIC (00981) fell 2.8% to HKD 16.66.
Overseas chip stocks have become more volatile due to news of the U.S. government considering strengthening chip trade controls and recent interview remarks by U.S. presidential candidate Trump. Most of the semiconductor stocks in the U.S. fell overnight, with Broadcom, Nvidia, Qualcomm, and Advanced Micro Devices all falling more than 6%. Recently, Morgan Stanley adjusted its AI chip stocks, removing companies including SK Hynix and Taiwan Semiconductor from its focus list and issuing a warning that it may be time to consider taking profits.
Institutions are bullish on the future performance of the semiconductor industry. Although recent external news has caused concerns about the semiconductor industry in the market, some institutions still hold optimistic attitudes towards the future reversal of the semiconductor market. According to the International Semiconductor Industry Association's forecast, global semiconductor equipment sales in 2024 will increase by 3.4% year-on-year, reaching $109 billion. In addition, the association predicts that the semiconductor industry will experience stronger growth in 2025, with sales expected to increase by 17% year-on-year, reaching $128 billion. Some brokerages have pointed out that in recent years, China's emphasis on industry chain security and independent controllability has been increasing. In terms of equipment, according to data from SEMI and the Head Leopard Research Institute, lithography, etching, and film deposition, these three categories of equipment have a higher value proportion in wafer processing equipment, accounting for more than 60% together. However, the localization rate of these fields is still relatively low. With the continuous improvement of the independent controllability of the domestic industry chain and the continuous breakthrough of product technology, domestic semiconductor equipment manufacturers are expected to achieve significant improvements in market share.
5. Petroleum stocks are under pressure. At the close, CNOOC (00883) fell 3.88% to HKD 19.8; Sinopec (00857) fell 3.67% to HKD 6.82; and PetroChina (00386) fell 1.82% to HKD 4.85.
Overnight oil prices rebounded after falling, due to a drop in U.S. crude and fuel inventories and increasing risks to crude oil production from Canada's wildfires. However, due to concerns about weak global demand, oil prices are still close to their lowest level in six weeks. In addition, a new round of refined oil price adjustments will open at 24:00 on July 25th. According to the monitoring model of Zhuochuang Information, as of the close of July 23rd, the reference crude oil change rate for the 9th working day in China is -2.87%, and it is expected that the price of gasoline and diesel will be reduced by 125 yuan/tonne, and the prices of No. 92 gasoline and zero-emission diesel will be reduced by 0.1 and 0.11 yuan, respectively.
Popular fluctuating stocks
1. Meitu (01357) rose all day, closing up 7.52% at HKD 2.43.
Meitu announced that according to non-international financial reporting standards, it is expected that the adjusted net profit attributable to owners in the first half of 2024 will increase by no less than 80% year-on-year. The announcement stated that the revenue of the imaging and design product business, which is mainly charged through the membership subscription model and has a high gross margin rate, continues to grow rapidly. Its rapid growth drives the operating leverage effect, resulting in higher profit growth.
2. ASMPT (00522) fell again, closing down 10.57% at HKD 78.7.
China Construction International research report pointed out that due to the weak surface mount technology (SMT) business and increased capital expenditures, ASMPT's second-quarter performance was lower than expected; based on the continued weakness of the SMT market, ASMPT's outlook for the third quarter is lower than market expectations, with revenue guidance ranging from 0.37 billion to 0.43 billion U.S. dollars, which means a year-on-year decline of 10%, as opposed to the market's generally expected 12% growth.
3. China Cinda (01359) issued a profit warning, closing down 4.55% at HKD 0.63.
China Cinda announced that net profit for the first half of the year is expected to decrease by about 40% to 50% year-on-year. This is mainly due to the influence of the changing market environment, the reduction of income from bad debt assets measured at amortized cost, and the increase in credit risk provisions to cope with the pressure on the quality of some financial assets measured at amortized cost.
