Zhitong Financial APP learned that the U.S. non-farm payrolls data in December strongly suppressed the expectation of interest rate cuts, and the three major indexes of Hong Kong stocks collectively fell, and the Hang Seng Index fell more than 3% intraday to refresh the stage low. At the close, the Hang Seng Index fell 1.88% or 310.88 points to 16,224.45 points, with a full-day turnover of HK$84.442 billion, the Hang Seng China Enterprises Index fell 2.25% to 5,480.82 points, and the Hang Seng Tech Index fell 2.99% to 3,484.75 points.
CICC pointed out that Hong Kong stocks and A-shares performed poorly in the first week of the new year due to unfavorable overseas factors (rising interest rates on 10-year US bonds) and concerns about domestic growth and policy prospects. While it is true that the sharp drawdown in the market, especially in the growth sector, can be partly attributed to higher Treasury rates, the bank believes that domestic factors are still the main reason for the rapid decline in the rebound. The bank reiterated its previous view that further policy support, especially fiscal policy support, remains crucial for the Hong Kong stock market to turn around the current situation. Otherwise, even if the Fed cuts interest rates, it may still be a short-term rebound that is unsustainable.
Blue chip performance
Xinyi Glass (00868) led the decline in blue chips. As of the close, it fell 7.58% to HK$7.93, with a turnover of HK$91.3786 million, dragging down the Hang Seng Index by 2.13 points. Huatai Futures pointed out that, on the whole, the domestic glass market in December showed obvious differences between the north and the south, the north entered the cold winter, the demand declined significantly, and the performance of the demand for rush work in the south was stronger, and the price began to show a trend of falling north and rising south after the middle of the year. At present, the supply of glass is close to the highest level in history, and in the context of the traditional off-season, low inventory gives the upstream and downstream a certain profit. In the upcoming winter storage market, the spot price of glass is difficult to have upside.
Blue chips were almost wiped out, and only 3 stocks were in the red. Zhongsheng Holdings (00881) fell 6.22% to HK$15.38, dragging down the Hang Seng Index by 1.34 points, Li Ning (02331) fell 4.46% to HK$18, dragging the Hang Seng Index by 3.1 points, CNOOC (00883) rose 0.74% to HK$13.68, contributing 2.45 points to the Hang Seng Index, and HSBC Holdings (00005) rose 0.48% to HK$62.65, contributing 6.99 points to the Hang Seng Index;
In terms of popular sectors
On the market, large technology stocks collectively fell, and semiconductor stocks, automobile stocks, domestic real estate stocks, property management stocks, and catering stocks fell one after another. On the other hand, some coal stocks bucked the trend and strengthened, and most copper stocks rose.
1. Semiconductor stocks were among the top losers. At the close, Shanghai Fudan (01385) fell 5.63% to HK$12.08, SMIC (00981) fell 3.47% to HK$17.82, Solomon Systech (02878) fell 3.23% to HK$0.3, and Hua Hong Semiconductor (01347) fell 1.51% to HK$18.22.
The Dutch government has partially revoked the export license previously issued for ASML's DUV immersion lithography machines. ASML said this will have an impact on the company's individual customers in China. CITIC Securities pointed out that ASML previously announced that the license was extended until the end of 2023, so the event was overall in line with expectations. In addition, TrendForce estimates that the revenue of global foundry capacity will decline by 12.5% in 2023, and is expected to recover by 6.4% in '24. According to the SEMI WeChat official account, as semiconductors are still at the bottom of the cycle, global semiconductor equipment sales are expected to reach $100 billion in 2023, a year-on-year decline of 6.1%, and believe that 2024 is a transition year, and there will be a strong rebound in 2025.
2. Domestic real estate and property management stocks generally fell. At the close, Evergrande Property (06666) fell 5.32% to HK$0.445, Seazen Development (01030) fell 4.31% to HK$1.11, Midea Real Estate (03990) fell 4.13% to HK$4.88, and Country Garden Services (06098) fell 2.71% to HK$6.11.
Kaiyuan Securities pointed out that according to the data of the Housing Authority, in the first week of 2024, the transaction area of commercial housing in 64 cities across the country was 1.98 million square meters, down 37% year-on-year and 57% month-on-month, and in terms of cumulative value, the transaction area of 64 cities reached 1.98 million square meters year-on-year, a cumulative year-on-year decrease of 37%. The transaction area of second-hand houses in 17 cities across the country was 1.15 million square meters, with a year-on-year growth rate of -4% and the previous value of 41%, and the cumulative transaction area since the beginning of the year was 1.15 million square meters, with a year-on-year growth rate of -4% and the previous value of 30%. The bank believes that the general tone of the market of "housing for living, not speculation" remains unchanged, adapts to the new situation, and promotes the "stability" of the market with policy "advancement". In the future, the real estate policy will remain moderate and positive, and megacities are actively and steadily promoting the transformation of urban villages, and more counter-cyclical adjustment measures are expected to accelerate the implementation. There are still good investment opportunities in the sector, and the industry is maintained with a "bullish" rating.
3. Auto stocks are under pressure again. At the close, Xpeng Motors-W (09868) fell 7.78% to HK$48.6, Great Wall Motor (02333) fell 3.85% to HK$9 and Li Auto-W (02015) fell 2.45% to HK$131.6.
According to incomplete statistics, since January 1, seven car companies, including Tesla, have officially announced that they will lower the prices of their models or launch promotional policies for limited-time cash discounts. The industry generally believes that the "price war" will not end in 2024, and the knockout round will continue. Everbright Securities pointed out that the adjustment of the auto sector may still be related to factors such as intensified competition in the industry and the decline in new car prices. In view of the fact that the total demand is still to be recovered in an orderly manner and the product matrix of Tesla/BYD's main price band has been relatively perfect, the bank expects that the growth rate of domestic new energy vehicle sales in 2024E may decline, and the market competition is expected to further intensify. Da Mo said that due to the reduction in market expectations, the recent correction in automobile-related stock prices, the bank said that it will maintain a flat industry view, believing that the strong sales of passenger cars last year will not destroy the cyclical nature of the industry.
4. Some coal stocks bucked the trend and strengthened. At the close, Mongolian Energy (00276) rose 80% to HK$0.9, South-South Resources (01229) rose 19.12% to HK$0.162, and SouthGobi (01878) rose 11.05% to HK$4.22.
SDIC Securities pointed out that the cost performance of plate allocation is still good. On the one hand, the tight balance between coal supply and demand continues to exist under the background of "dual carbon", and the coal price center has support. Under the background of "dual carbon", the willingness and motivation of coal enterprises to build mines are insufficient, and the instability of wind and solar power generation makes the subsequent economic development still need to rely on traditional energy power generation to achieve, and there is a certain energy inertia, resulting in a situation of insufficient coal supply and strong demand in the short and medium term. At the same time, it cannot be ignored that since the second half of 23 years, accidents have occurred frequently in the main producing areas, and the pressure of safety supervision has continued to increase, or the further release of coal mining energy may be restricted.
On the other hand, the significant upward shift in coal prices since 2021 has enabled companies in the sector to improve profitability and repair their balance sheets in the process, and coal companies have stable fundamentals and the ability to pay dividends. At present, the coal industry has entered a mature stage of development, the company pattern in the industry is stable, the high-level operation and supported coal price center superimposed long-term sales model for most coal enterprises to enhance the stability of performance, coupled with the gradual reduction of capital expenditure and effective control of debt burden, so that the company has a stable and abundant cash flow while laying the foundation for the follow-up continuous dividends.
Popular abnormal stocks
1. TV Broadcasting (00511) rose at the end of trading, up 11.75% to HK$3.52 as of the close.
The company recently held a New Year Poon Choi banquet for employees, and Executive Chairman Xu Tao announced in his speech that employees would receive salary increases, and pointed out that the TV industry was difficult to operate last year, but the company still delivered brilliant results, and was confident that this year would be "a year for TVB to turn over"; General Manager Zeng Zhiwei said that the company will not have any more layoffs, and is expected to increase manpower in order to meet the production needs.
2. Zhejiang Shibao (01057) AH shares rose together, up 8.25% to HK$2.23 as of the close.
Three U.S. companies, Aurora Innovation Inc., Kodiak Robotics Inc. and Gatik AI Inc., said that after years of testing, driverless trucks will soon be on Texas highways, with the earliest expected to hit the road by the end of this year, according to the Financial Associated Press. Haitong Securities previously pointed out that the process of high-level autonomous driving on the road is expected to accelerate, which will drive the performance of autonomous driving software and hardware suppliers to continue to grow.
3. Minimally Invasive Brain Science (02172) released Yingxi, as of the close, up 7.55% to HK$10.26.
MicroPort Brain Science announced that it is expected to record an adjusted net profit of no less than RMB 178 million in 2023, a year-on-year increase of at least 36%. Compared with the net loss of 24.68 million yuan in the previous year, it is expected to turn losses into profits during the year. It mainly benefited from the significant increase in revenue of a number of market-leading products, and the newly approved products in 2022 accelerated hospital access and contributed to the Group's revenue increase.
4. Evergrande Automobile (00708) resumed trading and fell hard, down 6.02% to HK$0.39 as of the close.
Evergrande Automobile announced that the company learned that Liu Yongzhuo, executive director, had been criminally detained in accordance with the law on suspicion of violating the law and committing crimes. It is reported that Liu Yongzhuo began to work in China Evergrande in 2003 and served as vice president of China Evergrande, in charge of Guangzhou Evergrande Taobao Football Club, Evergrande Cultural Industry Group, Evergrande Agriculture and Animal Husbandry Group, Evergrande Internet Finance Group, Evergrande High-tech Group, and is currently the president of Evergrande New Energy Automobile Group and chairman of Evergrande New Energy Technology Group.
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