China Fund News reporter Yao Bo
Affected by the external market, Hong Kong stocks fell on April 19, and once as low as 16,044 points in the intraday session and closed at 16,224 points, the decline narrowed to 0.99%. The Hang Seng Tech Index retreated 2.35% to close at its lowest level since February.
In terms of sectors, the energy sector was the strongest due to the rise in oil prices, while the more resilient information technology, healthcare and discretionary consumption fell the most.
Shipping stocks performed strongly, with Pacific Basin announcing buybacks and being bullish by institutions on the back of its past high dividend performance, and its stock prices rose against the market. In addition to being affected by the broader market, Li Auto's stock price fell 7.4% after the release of the new car L6, which was accused of a lack of surprises.
Shipping bucked the market
Affected by the situation in the Middle East, on April 19, the main contract of the container shipping index (European line) rose sharply, continuing to hit a new high since its listing, closing up 11%, and has risen for three consecutive trading days, with a cumulative increase of nearly 60% since March. As a result, Pacific Basin's share price surged 7.85%, close to the year's high.
In addition, Pacific Basin announced on April 18 that it will implement a share repurchase program worth $40 million, which represents a total of 2.45% of the total issued share capital.
Jefferies noted that Pacific Basin's management expressed optimism about the company's future operating prospects in a conference call with investors. They believe that the fundamentals of the industry are attractive and expect further increases in freight rates for dry bulk. Jefferies maintains a "buy" rating on Pacific Basin and lists it as a top pick in the shipping industry.
CICC released a research report that raised Pacific Basin's profit in 2025 by 38% to US$350 million in view of the expected upward trend in the dry bulk transportation market cycle, while maintaining its 2024 profit unchanged. CICC raised its target price by 10.5% to HK$3.15.
In addition, CICC assumes that Pacific Basin will pay dividends in 2024 at the minimum dividend rate of 50%, corresponding to a dividend yield of 7.9%. If the dividend yield in 2024 remains at last year's level of 75%, the corresponding dividend yield will reach 12.2%, which will make the company's dividend more attractive.
Li Auto fell
Li Auto recently released a new model L6, its first model below 300,000 yuan, but the agency pointed out that the market response was flat, and the stock price fell.
According to a research report released by Morgan Stanley, the new model L6 launched by Li Auto-W did not bring the expected market surprises. The report points out that the price positioning of the L6 is comparable to that of similar local products, and does not form a clear advantage. Li Auto's additional incentives for early car buyers and the competitive configuration of the L6 show that the model still has a certain degree of market competitiveness. Based on these factors, Morgan Stanley predicts that Li Auto is expected to achieve its monthly sales target of more than 15,000 to 20,000 units, and annual sales are expected to be between 560,000 and 640,000 units.
In addition, Wang Xing, founder and director of Meituan, pointed out in his circle of friends that the L6 is likely to become the model with the highest proportion of employee purchases. The ideal employee should know this during the design and manufacturing process.
It is understood that Wang Xing and Meituan are both important investors in Li Auto. Wang Xing is also a shareholder of Li Auto, and the disclosure of interests of the Hong Kong Stock Exchange shows that from March 26 to March 28, he sold Li Auto shares for three consecutive days, with a total of 4.1623 million shares sold with a total amount of more than HK $500 million.
Editor: Captain
Review: Muyu