Zhitong Financial APP learned that strong non-farm work suppressed interest rate cut expectations, and the market is waiting for this week's U.S. inflation data. The three major indexes of Hong Kong stocks opened under pressure in early trading, and then fluctuated and fell throughout the day, among them, the National Index and the Hang Seng Index continued to brush new lows. At the close, the Hang Seng Index fell 0.57% or 92.74 points to 16,097.28 points, with a full-day turnover of HK$74.514 billion, the Hang Seng China Enterprises Index fell 0.52% to 5,421.23 points, and the Hang Seng Tech Index fell 0.76% to 3,428.2 points.
Zheshang International pointed out that from a fundamental point of view, the current domestic and foreign demand are under pressure, and the domestic economic data may continue to be under pressure, and the further development of the policy side is the focus. From a capital perspective, the market has adjusted its expectations for an overly optimistic interest rate cut in the early stage, but it is still relatively optimistic overall, so it is still necessary to be wary of further expected pullbacks caused by data fluctuations. In terms of allocation, the bank continues to emphasize maintaining a diversified and balanced allocation of industry sectors. In the current weak market environment, focus on sectors with relatively stable performance, stock prices and dividends.
Blue chip performance
Haidilao (06862) led the blue-chip gains. As of the close, it rose 8.41% to HK$14.44, with a turnover of HK$467 million, contributing 2.99 points to the Hang Seng Index. According to the data, during the three-day New Year's Day holiday in 2024, Haidilao received more than 6 million customers across the country, an increase of about 70% compared with last year's New Year's Day. Among them, December 31, New Year's Eve, was the peak of passenger flow, and Haidilao received a total of more than 2.4 million customers across the country on this day, setting a new high in single-day passenger flow and turnover rate since 2019. Macquarie raised Haidilao's FY2023 and FY2024 net profit forecasts by 2% and 6.4%, respectively, to reflect healthy same-store sales recovery and higher gross margins.
In terms of other blue-chip stocks, WuXi Biologics (02269) rose 6.26% to HK$28, contributing 9.93 points to the Hang Seng Index, Hansoh Pharmaceuticals (03692) rose 2.35% to HK$13.92, contributing 0.61 points to the Hang Seng Index, Master Kong Holdings (00322) fell 4.44% to HK$8.6, dragging the Hang Seng Index by 1.22 points, and Li Auto-W (02015) fell 4.43% to HK$125.2, dragging the Hang Seng Index by 12.54 points.
In terms of popular sectors
On the market, most of the large technology stocks fell, the main contract of the European line fell by more than 17% in early trading, and shipping stocks continued to decline; semiconductor stocks, automobile stocks, domestic insurance stocks, and paper stocks were all weak. On the other hand, pharmaceutical stocks continued to be strong, led by CRO, and most of the catering stocks recovered, and home appliance stocks and clothing stocks rose.
1. Pharmaceutical stocks continue to be strong. At the close, BeiGene (06160) rose 7.18% to HK$110.4, WuXi Biologics (02269) rose 6.26% to HK$28, WuXi XDC (02268) rose 3.65% to HK$29.85 and Akeso Biologics (09926) rose 2.67% to HK$48.1.
BOCOM International said that since 2024, the BD transactions of domestic innovative drugs have continued, which fully proves the R&D strength of China's innovative drug companies and shows that the ecological pattern of China's biopharmaceutical industry is being reshaped. Considering that the current valuation of China's pharmaceutical sector is still at a low level, the bank continues to be optimistic about more opportunities for innovative drugs to go overseas, as well as the relative market performance of the pharmaceutical sector in 2024 under the continuous landing of sentiment recovery and catalysts. Everbright Securities pointed out that the overall external demand for CXO is stable, due to the more mature development of the overseas innovative drug industry, the performance of "macro factors→ biomedical technology stocks→ the transmission path of investment and financing →CXO performance" is more rapid, and the warming of overseas financing in 23Q3 has led to the improvement of overseas CRO order indicators. Domestic demand is still bottoming out, and in the context of the increasingly mature policy framework for innovative drugs and leapfrog breakthroughs in going overseas, high-quality supply is the key factor that determines domestic biotech financing in addition to macro factors. In the process of establishing the inflection point of demand, the warming of macro factors, the improvement of Sino-US relations, and the acceleration of the upgrading of domestic downstream industries are expected to catalyze the release of optimistic expectations in the market, and CXO stock prices reacted in advance.
2. Most of the restaurant stocks have recovered. At the close, Haidilao (06862) rose 8.41% to HK$14.44, Xiabu Xiabu (00520) rose 3.13% to HK$2.31, Helens (09869) rose 3.08% to HK$3.35, and Nai Xue's Tea (02150) rose 2.1% to HK$3.4.
Zheshang Securities said that from the perspective of recovery compared with 2019, the zero recovery rate of restaurants above designated size from January to November 2023 exceeded 120%, which was better than that of the company as a whole. The bank believes that the active price decline of various catering brands is mainly due to the rising price sensitivity of consumers, which is the general trend and will continue in 2023H2. The bank pointed out that store opening is still the main source of growth for some catering enterprises. Combined with the willingness and ability to expand stores, the bank expects that enterprises such as Helens, Jiumaojiu, and Naixue's tea are expected to achieve a slightly better performance level than in 2023H1 through store expansion in 2023H2.
3. Shipping stocks extended their decline. At the close, SITC International (01308) fell 5.79% to HK$12.7, COSCO SHIPPING Holdings (01919) fell 5.24% to HK$7.6, COSCO SHIPPING Energy (01138) fell 2.79% to HK$7.33, and Orient Overseas International (00316) fell 1.39% to HK$106.8.
Yesterday, all the contracts of the container shipping European line fell to the limit, and the main 2404 contract fell by more than 17% today. Earlier, it was reported that the Houthis had reached agreements with some shipping companies on the Red Sea route, allowing their ships to safely pass through the Red Sea, an important shipping route in the world. However, Maersk and Hapag-Lloyd later denied it, saying that no agreement had been reached with the Houthis. Yamato believes that it is unlikely that the leading shipping companies will reach an agreement with the Houthis, because if the Houthis' demands are to be met, it will be equivalent to imposing sanctions on Israel, which will pose obvious operational risks to shipping companies in developed countries, especially since the main income of these companies comes from European and American countries. The agreement could also indirectly violate the US-led Prosperity Guardian initiative, and a detour would allow the market to absorb excess capacity, putting upward pressure on freight rates.
4. Auto stocks are generally under pressure. At the close, Li Auto-W (02015) fell 4.43% to HK$125.2, Xpeng Motors-W (09868) fell 1.02% to HK$48.45 and Great Wall Motor (02333) fell 0.77% to HK$8.97.
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. Ping An Securities expects that in 2024, the "price war" led by the head new energy vehicle companies will continue, especially in the mainstream price band of 100,000~200,000 yuan. In addition, the decline in battery costs also provides room for car companies to cut prices for new energy vehicles. Competition in China's auto market will continue to intensify in 2024 as domestic auto brands accelerate the promotion of high-level autonomous driving and global auto brands accelerate electrification, according to rating agency Fitch. Fitch believes that intensified competition is likely to weigh on OEMs' market share and profitability in the near term, weakening their ability to generate cash in the face of higher investment demand.
Popular abnormal stocks
1. BC Technology Group (00863) was lower throughout the day. As of the close, it fell 8.99% to HK$8.
The U.S. Securities and Exchange Commission (SEC) issued a document saying that the spot bitcoin ETF was approved, and then the chairman of the SEC refuted rumors that the account was compromised, and the bitcoin ETF was not approved on Tuesday. The oolong news caused bitcoin to trade above $48,000 for a while, and then the price of the currency plunged, quickly falling below $46,000 and back below $45,600.
2. COSCO Shipping Holdings (01919) issued a profit alarm. As of the close, it fell 5.24% to HK$7.6.
COSCO SHIPPING Holdings issued a profit warning announcement, expecting the group to achieve a net profit of about 28.389 billion yuan in 2023, a year-on-year decrease of about 78.40%, which means that the recurring net profit in the fourth quarter of last year was 1.8 billion yuan, a significant decrease from 5.5 billion yuan in the third quarter, and the profit before interest and tax was 3.4 billion yuan, which was also lower than 8.5 billion yuan in the third quarter.
3. Xtep International (01368) rose significantly. As of the close, it rose 8.66% to HK$4.14.
For the three months ended December 31, 2023, the retail sales of Xtep's main brand (including online and offline channels) recorded a year-on-year increase of more than 30%, with a retail discount level of approximately 7%. In 2023, the retail sales of Xtep's main brands (including online and offline channels) achieved a year-on-year growth of more than 20%, and the channel inventory turnover was four months to four and a half months.
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