Hong Kong stocks surged today, with all three major indices rising throughout the day. The Hang Seng Index broke through the 18,000 mark at midday, while the Hang Seng Technology Index rose by more than 4% in the afternoon.
According to the Zhitong Financial App, Hong Kong stocks surged today, with all three major indices rising throughout the day. The Hang Seng Index broke through the 18,000 mark at midday, while the Hang Seng Technology Index rose by more than 4% in the afternoon. As of the close, the Hang Seng Index rose by 1.14% or 202.75 points to 17,989.07 points, with a total daily turnover of 173.499 billion Hong Kong dollars. The Hang Seng China Enterprises Index rose by 1.34% to 6,331.14 points, and the Hang Seng Technology Index rose by 2.87% to 3,560.61 points. Looking at the entire month, the Hang Seng Index has risen by 3.72%, the HSCEI has risen by 3.67%, and the Hang Seng Technology Index has risen by 1.24%.
China Tai International stated that the 20-day average trading volume of the main board of Hong Kong stocks has fallen below the rolling two-year average by one standard deviation. The HSI Volatility Index has also reached its lowest level since early 2022. Such a low volatility trend is not sustainable, and it is expected that the volatility of the Hang Seng Index will expand in the short term. If China's August manufacturing PMI improves, coupled with stronger central government efforts, Hong Kong stocks are expected to achieve sustainable upward momentum.
Blue chip performance
China Resources Mixc (01209) led the gains in blue chips. At the close, it rose by 8.82% to 25.9 Hong Kong dollars, with a turnover of 0.531 billion Hong Kong dollars, contributing 2.35 points to the Hang Seng Index. The company achieved a revenue of 7.957 billion yuan in the first half of the year, an increase of 17.13% year-on-year; and a net profit of 1.908 billion yuan, an increase of 36.04% year-on-year. It is proposed to distribute an interim dividend of 0.279 yuan per share and a special dividend of 0.575 yuan per share. HSBC Research believes that investors may reposition themselves in property management stocks that can provide outstanding shareholder returns, have sustainable growth prospects, and strong cash flow businesses, and are relatively optimistic about China Resources Mixc.
In other blue chip news, Li Auto Inc. (02015) rose by 7.79% to 78.85 Hong Kong dollars, contributing 12.61 points to the Hang Seng Index; BYD Company Limited (01211) rose by 5.98% to 241.2 Hong Kong dollars, contributing 22.85 points to the Hang Seng Index; China Merchants Bank Co., Ltd. (03968) fell by 4.29% to 32.35 Hong Kong dollars, dragging the Hang Seng Index down by 9.08 points; and the Industrial and Commercial Bank of China (01398) fell by 2.81% to 4.49 Hong Kong dollars, dragging the Hang Seng Index down by 16.36 points.
Hot sectors
On the market, large technology stocks collectively rose, with JD, Xiaomi, and Alibaba all up over 3%. Several car companies have outstanding interim results, with the effects of the old-for-new policy becoming evident, leading to a collective rebound in auto stocks; There are rumors that relevant parties are considering further reducing the interest rates on existing home loans, resulting in a surge in real estate and property management stocks; Brokerage and mainland insurance stocks are performing strongly; Home appliance stocks, theater stocks, education stocks, and holiday entertainment concept stocks are all on the rise.
1. Real estate and property management stocks surged. As of the close, Sunac China Holdings (00884) rose by 11.81%, closing at HK$0.265; Shimao Group (00813) rose by 10.53%, closing at HK$0.63; China Vanke (02202) rose by 9.89%, closing at HK$4.11; CG Services (06098) rose by 7.97%, closing at HK$4.47.
According to Guosen Securities, there are market rumors that relevant parties are considering further reducing the interest rates on existing home loans, allowing existing home loans totaling up to 38 trillion RMB to be converted to mortgage loans in order to reduce residents' debt burden and boost consumption. Under the related plan, existing mortgage clients can renegotiate their mortgage rates with banks without having to wait until January next year (the usual time for interest rate adjustments). In addition, residents can transfer their existing mortgage loans directly to other banks and sign contracts at the latest rates, marking the first time this operation called "mortgage transfer" has been allowed since the real estate market faced challenges.
2. Auto stocks rebounded collectively. As of the close, NIO-SW (09866) rose by 10.71%, closing at HK$33.6; Xpeng Motors-W (09868) rose by 8.33%, closing at HK$31.85; Li Auto-W (02015) rose by 7.79%, closing at HK$78.85; Great Wall Motor (02333) rose by 7.27%, closing at HK$11.22.
Several car companies have impressive interim results. Great Wall Motor achieved a net profit attributable to equity holders of 7.1 billion yuan in the first half, nearly four times higher year-on-year; Xpeng Motors narrowed its net loss in the first half to 2.65 billion yuan, a 48.44% reduction year-on-year, with its latest release of the MONA M03 achieving a sales break of 30,000 units within 48 hours of launch; BYD achieved a net profit of 13.631 billion yuan in the first half, a 24.14% increase year-on-year. Tianfeng Securities previously mentioned that with efforts from policy and supply sides, industry demand is expected to pick up in the second half of the year, and sector performance may gradually turn optimistic.
Additionally, the effects of the old-for-new policy are evident. Data released by the Ministry of Commerce shows that as of August 23, the cumulative registered users on the auto old-for-new platform exceeded 1.1 million, with over 700,000 applications received for car scrappage subsidy, including over 10,000 new submissions in a single day. This policy has stabilized retail sales of passenger vehicles, with the China Passenger Car Association reporting 1.305 million vehicles sold from August 1-25, a 5% year-on-year increase and a 9% month-on-month increase; The new energy vehicle market saw 0.718 million vehicle sales, a 48% year-on-year increase and an 18% month-on-month increase.
3. China-affiliated brokerage stocks show impressive performance. As of the close, China Galaxy (06881) rose by 7.55%, closing at HK$4.13; China International Capital Corporation (03908) rose by 4.36%, closing at HK$8.37; CITIC Securities (06030) rose by 2.61%, closing at HK$11.78; Guolian Securities (01456) rose by 2.15%, closing at HK$2.85.
On the evening of August 21, Guosen Securities announced plans to issue shares to acquire 53.09% of Wanhe Securities held by Shenzhen Capital Operation Group; Dongguan Financial Holdings and Dongguan Development formed a consortium to transfer 20% of Jinlong Stock held by Dongguan Securities, with a price of 2.27 billion yuan. China Merchants Securities pointed out that regulatory encouragement for securities industry mergers and acquisitions has led to a continuous stream of merger cases emerging, such as "Guolian + Minsheng", "Zhejiang Business + Guodu", and "Western Region + Guorong". With the emergence of the "Guosen + Wanhe" combination, the trend of securities industry mergers and acquisitions is expected to continue to heat up. GF Securities believes that as regulatory pressure on securities firms eases and growth-stabilizing measures are expected to boost market confidence, the industry's valuation and fund positions are both low, with potential for industry valuation recovery.
Insurance stocks continue to rise. As of the close, New China Life Insurance (01336) rose by 7.36%, reaching HK$16.92; China Pacific Insurance (02601) rose by 5.77%, reaching HK$20.35; China Life Insurance (02628) rose by 5.54%, reaching HK$11.82; Ping An Insurance (02318) rose by 3.6%, reaching HK$37.4.
As of the evening of August 29th, all five major listed insurance companies have completed the disclosure of their 2024 interim reports. In the first half of 2024, the five major listed insurance companies achieved a total net profit attributable to the parent of 171.799 billion yuan, an increase of approximately 13% year-on-year. Four listed insurance companies are planning for interim dividends, with a total planned dividend amount of approximately 27 billion yuan. Data shows that in the first half of the year, the five major listed insurance companies all achieved positive growth in revenue and net profit. As for investment income, the five major listed insurance companies collectively achieved a total investment income of 337.063 billion yuan in the first half of the year, an increase of over 30% year-on-year. Haitong International predicts that with the domestic economic recovery in the future, if long-term interest rates stabilize or rise, the pressure on insurance companies' additional income from fixed-income investments will be eased. At the same time, the continued implementation of favorable policies related to real estate is also conducive to alleviating concerns about the quality of insurance companies' investment assets.
China mainland banking continue to adjust. As of the close, China Merchants Bank (03968) fell by 4.29%, reaching HK$32.35; Industrial and Commercial Bank of China (01398) fell by 2.813%, reaching HK$4.49; Bank of Communications (03328) fell by 2.42%, reaching HK$5.65; Postal Savings Bank of China (01658) fell by 2.33%, reaching HK$4.19.
Market rumors about the reduction of existing home loan interest rates have put pressure on the banking sector again. In addition, based on the disclosed interim reports of listed banks, net profits have generally seen varying degrees of decline. Bank of China's net profit in the first half of the year was 118.601 billion yuan, a decrease of 1.24% year-on-year; China Merchants Bank's net profit in the first half of the year was 74.743 billion yuan, a decrease of 1.33% year-on-year; China Citic Bank Corporation's net profit in the first half of the year was 35.49 billion yuan, a decrease of 1.6% year-on-year; Bank of Communications' net profit in the first half of the year was 45.287 billion yuan, a decrease of 1.63% year-on-year.
However, JPMorgan believes that the long-term trend of capital flow into high-yield stocks, including banks, remains unchanged. The decline is due to the recent strong performance of bank stocks, investors locking in profits, lack of confidence, and slight disappointment with second-quarter earnings. Nevertheless, the bank believes that the fundamentals of the banks are good, with the bank reports showing improvement in net interest margin (NIM), management guidance indicating stable trends in net interest margin and asset quality.
Popular fluctuating stocks
Eggriculture (08609) resumed trading and soared, closing at an increase of 110.2%, at HK$1.03.
Eggriculture announced a plan to privatize the company with an offer from BETAGRO FOODS (SINGAPORE) PTE. LTD. at a planned share cancellation price of HK$1.103 per share, a premium of 125.1% over the pre-suspension price, with other planned shareholders being able to receive an additional HK$0.082 per share for other planned shares, amounting to a total of HK$1.185, a premium of 141.8% over the pre-suspension share price. The total cost of the privatization plan is HK$0.568 billion.
2. Dah Sing Holdings performed strongly, with Dah Sing Financial (00440) rising 10.29% to HKD 23.05 at the close; Dah Sing Banking Group (02356) rising 9% to HKD 6.78.
Dah Sing Holdings announced its 2024 interim results. Dah Sing Banking Group's operating income for the first half of the year was approximately HKD 3.287 billion, a year-on-year increase of 22.1%; net profit was HKD 1.396 billion, a year-on-year increase of 25.6%. It plans to distribute an interim dividend of HKD 0.27 per share, compared to HKD 0.11 in the same period last year.
Dah Sing Financial achieved a total operating income of HKD 3.3926 billion in the first half of the year, a year-on-year increase of 19.8%; net profit was HKD 1.112 billion, a year-on-year increase of 20.7%. It plans to distribute an interim dividend of HKD 0.92 per share, compared to HKD 0.36 in the same period last year.
3. Sinotrans Limited (00598) rebounded significantly, closing up 7.88% at HKD 3.56.
Sinotrans Limited released its 2024 interim results. Revenue was CNY 56.368 billion, a year-on-year increase of 17.19%; net profit attributable to shareholders was CNY 1.945 billion, a year-on-year decrease of 11.02%. It is worth mentioning that, despite the pressure on profits, the company still maintains a dividend of CNY 0.145 per share, with a payout ratio as high as 54.17% as in the same period last year.
4. MGM China Holdings (02282) rose throughout the day, closing up 6.06% at HKD 10.5.
MGM China Holdings announced a special dividend of HKD 0.353 per share, totaling approximately HKD 1.341 billion. JPMorgan's previous research report stated that it continues to rank MGM China as its top pick, with a target price of HKD 18.5 and a rating of 'overweight'. The bank stated that the company is the only Macau stock without downside risk in market consensus, trading at the lowest P/E ratio, and having the highest dividend payout ratio in Macau.
