Today, the performance of the three major A-share indexes is average, but individual stocks have risen more and fallen less, and theme stocks have performed very actively. Among them, online games have sprung up, and the sector once rose nearly 6% intraday, and as of press time, the increase was still more than 4%, and nearly 10 stocks rose by more than 10%. So, why are gaming stocks so strong?
Hong Kong stocks also continued to rise, with the Hang Seng Tech Index rising more than 2% at one point. So far, the Hang Seng Tech Index is up 1%. Penny stocks broke out again, and Huayin International Holdings soared 200% in the afternoon. Why did this stock move?
And last night, Chinese assets moved more strongly in the U.S. stock market, with the Nasdaq China Golden Dragon Index surging 3.7%.
Gaming stocks soared
On May 14, the three major A-share indexes collectively fluctuated, but individual stocks performed actively, and the market money-making effect was not bad. As of press time, nearly 10 shares such as Zhongke Cloud Network, Caesar Culture, Dasheng Culture, Hongbo Shares, and Tom Cat rose by more than 10%. In addition, concept stocks such as humanoid robots and multimodal AI have also collectively strengthened.
Analysts pointed out that the rise of game stocks was mainly stimulated by two aspects, one was the overnight surge in the U.S. stock game station, and the other was the opportunity for the game industry to go overseas.
On Monday, local time, the game station suddenly moved in the U.S. stock market, and the circuit breaker was triggered many times due to excessive gains in the intraday, and the stock rose by 199% at its peak, and the stock price touched $38.2 per share. As of the close, GameStation rose 74.4% to $30.45 per share, with the latest market capitalization of $9.3 billion. In addition, AMC closed up 78%, the best performance in the past three years.
On Monday, the "leading big brother" of American retail investors who had promoted the "retail vs. Wall Street" in 2021 and speculated on the stock price of Game Station returned to X (username Roaring Kitten) after three years.
Roaring Kitty is known as the "leading big brother" of retail investors in the United States, and he has promoted the popularity of retail investors for the game station by constantly posting orders and commenting on predictions. A large number of retail investors then began to flock to the derivatives market and "huddle" on social media, especially in the WallStreetBets section of the Reddit forum, where people urged each other to buy call options on a certain stock, especially hedge funds and institutions that were heavily shorted, and always stick to the trading principle: never sell, never surrender.
In early 2021, retail investors pushed GameStop shares from $3 to $483 in three months, forcing brokerages, including Robinhood, to limit trading in heavily short stocks to control risk. In the process, several institutions suffered huge losses, including the hedge fund Melvin.
In addition, the overseas expansion of domestic games is also considered to be one of the reasons for the strength of the A-share game sector on May 14. In March, the actual sales revenue of China's self-developed games in overseas markets was US$1.427 billion, up 5.98% month-on-month and 11.34% year-on-year. Guotai Junan said that it is optimistic about the opportunities for the game industry to go overseas, and some companies have accumulated sufficient experience in overseas product development and distribution, which is expected to continue to promote business growth and profit realization. In addition, the follow-up market valuation of companies with excellent R&D strength and rich product scheduling is also expected to be restored.
Wanlian Securities pointed out that in 2024, the game version number will continue to be issued, the head manufacturers will continue to launch high-quality popular new games, the overall market of Chinese games is expected to improve, the head products in overseas markets will perform well, and the overseas revenue of China's self-developed games will grow steadily, and on the whole, the game market is expected to show a growth trend. It is recommended to pay attention to the head companies with rich edition reserves, strong R&D capabilities and high-quality products.
Hong Kong stocks also continue to be high
Recently, the Hong Kong stock market has continued to rise. On May 14, Hong Kong stocks continued to rise, with the Hang Seng Index rising nearly 1% in early trading and the Hang Seng Technology Index rising more than 2%. In the afternoon, the rise of Hong Kong stocks retreated, as of the time of the brokerage China reporter, the Hang Seng Technology Index rose 1%, and the Hang Seng Index rose 0.01%.
Penny stocks broke out again, and Huayin International Holdings soared 200% in the afternoon. As of press time, Huayin International Holdings rose 150%, Guangdong-Hong Kong-Macao Holdings rose 126%, Fuyang rose 61%, Dingdang Health rose more than 60%, and Xinnew Technology rose nearly 40%.
Huayin International Holdings announced at noon today that it intends to place 5.06 billion shares at a placing price of HK$0.05 per share (a premium of about 19%), raising a total of HK$253 million. The company resumed trading after 1pm today. Huayin International Holdings announced that on April 25, 2024, the company entered into a loan capitalization agreement with the subscriber, pursuant to which the company conditionally agreed to allot and issue to the subscriber and the subscriber conditionally agreed to subscribe for a total of 5.06 billion capitalized shares, at a capitalized price of HK$0.05 per share, for a total consideration of HK$253 million. The aggregate capitalization price of all Capitalized Shares payable by the Subscriber will be repaid by capitalising and setting off the Loan in full on an equal basis upon completion of the Loan Capitalization Agreement.
According to public information, Huayin International Holdings Limited (formerly known as Ground International Development Limited) was established in 1990 and listed on the Main Board of The Stock Exchange of Hong Kong Limited in 1997. The Company's business covers three major areas: property development management, property investment and retail management services. According to the company's previously disclosed financial report, the company's operating income from April 1, 2023 to September 30, 2022 was 44.25 million yuan, a year-on-year decrease of 86.83%, and the net profit loss was 79.92 million yuan.
Technology stocks continued to be strong, with Oriental Selection up nearly 14%, Bilibili and NIO up more than 5%, Xiaomi Group up more than 3%, Kuaishou and Alibaba up more than 2%, and Tencent Holdings up nearly 1%.
Last night, Chinese assets in the U.S. stock market trended strongly, Chinese concept stocks collectively rose, the Nasdaq China Golden Dragon Index rose 3.7%. In terms of individual stocks, Bilibili rose more than 12%, Kingsoft Cloud rose more than 11%, Tencent Music rose nearly 11%, NIO rose more than 6%, Alibaba rose 5.70%, JD.com rose 4.91%, and Baidu rose nearly 3%.
Tencent Music once rose more than 12% in intraday trading, and is now up nearly 9%. On the news side, Tencent Music announced its unaudited financial results for the first quarter of 2024. In the first quarter, the company's total revenue was 6.77 billion yuan, a year-on-year decrease of 3.4%; Online music subscription revenue was 3.62 billion yuan, a year-on-year increase of 39.2%. The number of online music paying subscribers increased 20.2% year-on-year to 113.5 million, a net increase of 6.8 million quarter-on-quarter, the largest net increase in a single quarter to date.
In the first quarter, Tencent Music's net profit reached 1.53 billion yuan, a year-on-year increase of 27.5%. The net profit attributable to equity holders of the company was 1.42 billion yuan, a year-on-year increase of 23.9%. Non-IFRS net profit and net profit attributable to equity holders increased by 23.9% and 20.8% year-on-year, respectively. At the same time, Tencent Music announced that it will pay its first annual dividend, which is expected to pay an annual cash dividend of approximately US$210 million, or approximately RMB1.516 billion, to shareholders of record as of the record date.
CICC gave a positive assessment of Tencent Music's performance, and the brokerage maintained Tencent Music's "outperform" rating. According to the report, Tencent Music's performance in the first quarter of 2024 exceeded CICC's and the market's expectations, showing the company's leading position in the industry and strong growth potential. Tencent Music raised its 2024 and 2025 non-IFRS net profit forecasts, and raised the target price of Hong Kong stocks to HK$65.4 and US stocks to US$17.
In addition, Daiwa Securities issued a research report and adjusted the target share price of Tencent Music to HK$60. The report from Daiwa Securities mentioned that Tencent Music's revenue forecast and earnings per share forecast for fiscal 2024 to 2026 were raised by 3% to 5% and 8% to 12%, respectively. At the same time, Tencent Music announced its first annual dividend of $0.0685 per common share, or $0.137 per ADS.
Editor-in-charge: Yang Yucheng
Proofreading: Zhao Yan