Zhitong Financial APP learned that Federal Reserve Chairman Powell Powell said that the recent inflation data shows that it may take longer for the central bank to be confident enough to cut interest rates. The three major indexes of Hong Kong stocks bottomed out and rebounded in early trading, and then fluctuated weakly again, and all turned slightly red at the end of the session. At the close, the Hang Seng Index rose 0.02% or 2.87 points to 16,251.84 points, with a full-day turnover of HK$99.191 billion, the Hang Seng China Enterprises Index rose 0.1% to 5,749.69 points, and the Hang Seng Tech Index rose 0.07% to 3,340.22 points.
Guoyuan International pointed out that based on the judgment of the market environment, the bank believes that the current investment tone should be based on looking for structural opportunities. In terms of plate allocation, it is recommended to have both offense and defense, but it needs to be mainly defensive. In terms of sector allocation, certain traditional defensive sectors such as energy, communications, and public utilities can be allocated to obtain certain benefits through dividends, and the offensive direction can be dominated by hardware technology such as semiconductors, and sectors with better overseas capabilities such as photovoltaics and new energy vehicles can also be appropriately concerned.
Blue chip performance
WuXi AppTec (02359) led the blue-chip gains. As of the close, it rose 4.88% to HK$34.4, with a turnover of HK$195 million, contributing 0.87 points to the Hang Seng Index. WuXi AppTec's involvement in the U.S. healthcare sector is reportedly far deeper than Congressional discussion. Some of the country's top brass in the biotech industry have explicitly opposed the bill, trying to make Congress aware that a sudden "decoupling" could delay the development of some drugs for years.
In terms of other blue-chip stocks, Li Auto-W (02015) rose 3.98% to HK$114.9, contributing 9.51 points to the Hang Seng Index, China Resources Power (00836) rose 2.71% to HK$19.68, contributing 1.59 points to the Hang Seng Index, Galaxy Entertainment (00027) fell 7.07% to HK$34.2, dragging the Hang Seng Index by 8.95 points, and Xinyi Solar (00968) fell 3.57% to HK$5.4, dragging the Hang Seng Index by 1.51 points.
In terms of popular sectors
On the market, most of the large technology stocks continued to decline, the gaming law may put pressure on the intermediary business, and the gaming stocks continued to fall, and oil stocks and photovoltaic stocks were generally green. On the other hand, the growth rate of infrastructure is still high, infrastructure stocks generally rose, policy to promote or release the demand for renewal, heavy machinery stocks collectively rose, hydrogen energy to meet the policy support, related concept stocks significantly strengthened, Yihuatong rose 44% in the afternoon, wind power stocks, CRO concept stocks, telecommunications stocks and so on all rose high.
1. Gaming stocks were among the top decliners. At the close, Galaxy Entertainment (00027) fell 7.07% to HK$34.2, Sands China (01928) fell 3.35% to HK$19.04 and Wynn Macau (01128) fell 1.48% to HK$7.33.
According to reports, the Second Standing Committee of the Macau Legislative Assembly recently completed its discussion and signed a written opinion, and the bill on the "Legal Regime for Casino Lucky Games Credit" will be submitted to the General Assembly for detailed review and voting in the middle of this month, and the latest text proposes that the new bill will come into effect in August this year. One of them is that only gambling companies can borrow chips from customers. This means that the role and scope of junkets are limited, leading to a curtailment of the junket business, which in turn affects the performance of gaming stocks related to the junket business.
Citi issued a report saying that through industry channels, Macau's total gaming revenue in the first 14 days of April may reach 8.3 billion patacas (the same below), which means that the average daily gaming revenue during the period is about 586 million yuan. Compared with the average daily income of 600 million yuan in the first 7 days of April, it was about 2% lower. In addition, the Macau VIP room betting volume decreased by 6% to 7% month-on-month, while the mass market betting volume decreased by 4% to 5% month-on-month, and the VIP room win rate may be lower than normal. As a result, the bank maintained its forecast for Macau's gaming revenue of 18.5 billion yuan in April this year.
2. Heavy machinery stocks are collectively higher. At the close, China Lonking (03339) rose 4.76% to HK$1.54, China National Heavy Duty Truck (03808) rose 4.17% to HK$22.5, and Sany International (00631) rose 3.73% to HK$5.29.
SDIC Securities previously pointed out that in the short term, according to the China Construction Machinery Industry Association, the domestic sales of excavators in March increased by 9.27% year-on-year, and the industry has achieved a positive increase in a single month since the downward cycle in 2021 without the disturbance of the national standard switching factor, which is directly related to the centralized issuance of trillions of national bonds in the first quarter of 2023, which has promoted the construction of water conservancy, municipal, transportation, agriculture and other related projects. According to the average duration of the start of construction of excavators in Komatsu China, it was still -10.8% year-on-year in March, and the subsequent recovery of construction performance may support the phased stabilization of equipment demand.
In the medium and long term, SDIC Securities believes that the renewal demand may be the main driving force for a new round of economic recovery, in the future, the local government special bonds, special treasury bonds as the leading infrastructure investment is expected to continue to play a supporting effect, real estate gradually through the bottom repair stage, the stabilization and recovery of the project volume superimposed equipment renewal policy traction, the stock of old equipment to accelerate the clearance, may speed up the pace of industry recovery to a certain extent.
3. Infrastructure stocks were mostly higher. At the close, China Railway (00390) rose 3% to HK$4.12, China Communications Construction (01800) rose 2.98% to HK$4.15, and China Metallurgical (01618) rose 2.68% to HK$1.53.
From January to March, infrastructure investment in the broad and narrow senses was 8.8% and 6.5% year-on-year respectively, a change of -0.2 and 0.2 percentage points respectively from the previous value, and the overall remained high. Tianfeng Securities pointed out that infrastructure investment maintained good growth in the first quarter. Combined with the two sessions proposed to issue additional special treasury bonds, the bank believes that the trend of central leverage in 24 years is expected to continue, and the capital level may form a strong support for infrastructure investment. From the perspective of the demand side, railway investment is expected to maintain a high boom in 24-25 years, and at the same time, equipment renewal plans in the fields of industry and construction have been introduced in the near future, and it is expected that the demand for equipment renewal in transportation, construction and other fields is also expected to accelerate the release.
In addition, the State Council recently issued the new "National Nine Articles", which again proposed to formulate market value management guidelines and dividend requirements for listed companies. SDIC Securities believes that the dividend rate of some construction central enterprises has increased in 2023, such as China Railway Construction (14.27% in 22 years, 18.21% in 23 years), China Communications Construction (20.00% in 22 years, 18.37% in 23 years), and China Metallurgical Corporation (16.74% in 22 years and 17.21% in 23 years). At present, the fundamentals of construction central enterprises are stable, and it is expected that the follow-up dividend rate is expected to improve and the market return will increase.
4. Domestic property stocks generally rebounded. At the close, Zhongliang Holdings (02772) rose 7.14% to HK$0.18, Yuexiu Real Estate (00123) rose 5.03% to HK$3.76, and CIFI Holdings Group (00884) rose 3.88% to HK$0.241.
As of the end of March, commercial banks have completed the review of all the first batch of "white list" projects pushed by the urban real estate financing coordination mechanism, of which more than 2,100 projects have been approved and approved, with a total amount of more than 520 billion yuan, and some projects that do not meet the requirements have been fed back to the coordination mechanism. Morgan Stanley reported that a survey of more than 2,000 residents living in first- to fourth-tier cities conducted by the bank at the end of March showed that mainland residents' willingness to buy homes was weak, but their bearishness on property prices was slightly reduced. The bank believes that this will weaken the pass-through effect of property easing measures and drag down the recovery of home sales, maintaining the view that property prices will basically stabilize by the end of the third quarter.
5. Hydrogen energy stocks strengthened. At the close, Sinohytec (02402) rose 17.38% to HK$34.1, Jingcheng Electromechanical (00187) rose 13.17% to HK$2.32, Shanghai Electric (02727) rose 10.19% to HK$1.73, and Dongfang Electric (01072) rose 8.3% to HK$10.7.
According to a report by Sichuan Daily today, the Sichuan Provincial Research Conference on Further Promoting the Development and Promotion of the Whole Green Hydrogen Industry Chain was held on April 16. At the meeting, a signal was revealed that Sichuan will take unconventional maximum and precise support for the hydrogen energy industry, be application-oriented, give full play to resource advantages, solve stuck points and blockages, and promote the high-quality development of the whole green hydrogen industry chain. According to incomplete statistics from the Financial Associated Press, many cities such as Meishan, Zigong and Deyang in Sichuan have issued hydrogen energy industry support policies, focusing on the construction of hydrogen energy transportation infrastructure and hydrogen energy equipment manufacturing.
Popular abnormal stocks
1. Q Technology (01478) rose significantly, up 6.73% to HK$3.33 as of the close.
According to Citi, Huawei's Pura 70 official debut in April could have a positive impact on Q Tech's share price, including the launch of flagship models that could lead to an increase in mainland smartphone shipments and trigger a shift in capital to the smartphone supply chain, and Q Tech should be one of the potential beneficiaries as Q Tech pivots its product mix to high-end HCM products and gain more share from Huawei phones.
2. Shi Si Pharmaceutical Group (02005) rose after the results, as of the close, up 4.78% to HK$4.82.
SSY Pharmaceutical Group announced that for the three months ended March 31, 2024, the Group's unaudited profit attributable to shareholders of the Company increased by approximately 14.6% year-on-year to approximately HK$416 million. According to the announcement, the group's sales are mainly carried out in China and denominated in RMB, which depreciated by about 3.6% against the Hong Kong dollar during the period compared with the same period in 2023. As a result, in Hong Kong dollar terms, the unaudited turnover increased by only 2.9% over the same period in 2023 to approximately HK$1,799 million.