China Fund News reporter Guo Minjun
On May 14, Hong Kong's three major stock indexes opened high and moved low, closing mixed. The Hang Seng Index closed down 0.22% at 19,073.71 points. The Hang Seng Tech Index rose 0.57% to 4,041.45 points. The Hang Seng China Enterprises Index fell 0.3% to 6,741.41 points. The market turnover was 143.085 billion Hong Kong dollars. The net selling of southbound funds was HK$115 million.
Technology stocks are higher. WuXi AppTec rose 3.77%, and Xiaomi Group rose 3.20%, leading the blue-chip gains.
Pharmaceutical stocks rose, with WuXi Biologics up 2.55% and Sinopharm up 1.35%. Dingdang Health rose 71.54%, leading the rise in the constituents of the Hang Seng Hong Kong-listed biotechnology index.
Xinyi Glass fell 9.59%, Galaxy Entertainment fell 3.92%, and Hang Lung Properties fell 3.62%, leading the blue chips.
Energy stocks fell, with Yankuang Energy down 7.28%, China Coal Energy down 3.50% and CNOOC down 2.30%.
Real estate stocks were lower, with Agile Group down 12.86%, Hang Lung Properties down 3.62%, and New World Development down 2.46%.
According to Wind Information, the Goldman Sachs trading team recently pointed out in a research report that Hong Kong stocks may soon be boosted by the maturity of South Korean structured notes related to it. As long as the Hang Seng China Enterprises Index rises by about 3%, it will rise to the key level of 7,000 points. And this level is the knockout barrier for most Korean structured products that are about to expire. If this level is reached, it could force traders to cover short positions in order to hedge more upside risk. Korean banks and brokerages sold billions of dollars worth of equity-linked notes due to mature in May and June at the height of Hong Kong's stock market in early 2021.
From the perspective of industry performance, the Hang Seng Industry Index mostly fell during the day. The energy index fell 2.1%, the composite index fell 1.13%, and the real estate and construction index fell 0.82%. In terms of gains, the information technology index rose 0.98%, the raw materials index rose 0.59%, and the healthcare index rose 0.57%.
Judging from the disk, the Wind concept sector was mixed. The online education index led the rise by 10.08%, the education index rose 4.31%, the CAR-T index rose 4.02%, the sapphire index fell 4.49%, the liquor index fell 3.87%, and the photovoltaic solar index fell 2.87%.
Tencent Holdings' first-quarter profit surged 66%
On May 14, Tencent Holdings disclosed its results for the first quarter of 2024 after the market closed, with earnings per share of 4.386 yuan, a year-on-year increase of 66%, and a profit of 41.898 billion yuan, a year-on-year increase of 62%. On May 14, Tencent Holdings rose 1.75% and closed at HK$381.80 for the day, up 0.95%.
According to Tencent Holdings' first quarterly report, the company's diluted earnings per share in the first quarter of 2024 were 4.386 yuan, a year-on-year increase of 66% and a quarter-on-quarter increase of 56%. Profit attributable to equity holders reached RMB41.898 billion, up 62% year-on-year and 55% month-on-month.
According to the first quarterly report, in the first quarter of 2024, Tencent Holdings has achieved initial results in the adjustment of the team of several top games in the domestic market and the international market, and the total game turnover has increased, laying the foundation for the recovery of game revenue growth in the next few quarters. Tencent Holdings continued to cultivate high-quality revenue streams, including WeChat Channels and Soyisou advertising, Mini Game Platform Service Fees, and Channels Merchant Technical Service Fees, which drove Tencent Holdings' gross profit and operating profit growth to outpace revenue growth. Committed to returning surplus capital to shareholders, Tencent Holdings has stepped up its buyback efforts, executed a share repurchase of over HK$100 billion in 2024 as planned, increased dividends, and is committed to continuing to invest in AI technology, enhance its platform and produce high-value content.
The following are the key performances of Tencent Holdings' major products and services in the first quarter of 2023:
‧ The total time spent by Channels users increased by more than 80% year-on-year. Tencent Holdings has strengthened the live streaming ecosystem of Channels by expanding product categories and incentivizing more content creators to participate in live streaming.
‧ The total user time spent by Mini Programs increased by more than 20% year-on-year. Among them, the average daily usage of non-game Mini Programs achieved a double-digit percentage increase year-on-year, and the turnover of Mini Games increased by 30% year-on-year.
‧ Tencent Video released a number of popular self-produced TV series and animation series, such as "Flowers", "Ice Hunting" and "Perfect World Season 4", which drove the number of paid members of Long-form Video to increase by 8% year-on-year to 116 million.
TME strengthened its cooperation with Tencent Video and released the soundtrack of the popular drama "Walking with the Phoenix". The number of paid music memberships increased 20% year-on-year to 114 million.
‧ The two flagship games in the local market, Honor of Kings and Peace Elite, began to benefit from the new pace of commercialization and the improvement of game content design, and achieved year-on-year growth in revenue in March 2024.
‧ A number of local market games, such as "Golden Shovel", "CrossFire Mobile" and "Dark Zone Breakout", hit a record high this season.
‧ Supercell's games have achieved user growth and turnover; Brawl Stars has more than twice the number of daily active accounts and four times the turnover in the international market.
‧ Tencent Holdings upgraded its ad tech platform to help advertisers deliver ads more effectively, and launched generative AI-powered creative tools for all advertisers.
‧ Benefiting from the distribution of low-risk money market funds, the number of users and the per capita investment scale of our wealth management business have achieved rapid growth.
‧ Tencent Cloud's audio and video solutions have attracted more local and international customers, especially in the media, entertainment and live streaming industries. For the sixth year in a row, the International Data Corporation (IDC) has ranked Tencent Cloud as the leader in the Chinese market for audio and video solutions.
Oriental selection soared by nearly 16%!
On May 14, driven by multiple positives, Oriental Selection climbed all the way after the opening, with a maximum increase of 15.89%, and the late increase narrowed, closing at HK $18.40, up 12.47%.
Zhang Guofu, deputy general manager of BAIC Blue Valley, revealed at a recent media communication meeting that he has recently cooperated with Dong Yuhui's "Walking with Hui", and the current feedback is very good, and the in-depth cooperation between the two sides will be implemented in May. The leaders of many teams such as intelligence and chassis are already doing live broadcasts, and they are also continuing to pay attention to and learn the communication methods of senior executives of friends on social platforms.
Previously, BAIC Polar Fox had appeared in the live broadcast room with Hui many times. In March this year, during the Hubei trip with Hui, Dong Yuhui's car was Jihu Automobile. In April this year, Dong Yuhui also took a Jihu car in the live broadcast room. In the middle of the rear seat, there is also a billboard of Jihu Motors.
In addition, according to the April work report released by Oriental Selection, on the second anniversary of the launch of Oriental Selection's self-operated products, the cumulative sales of self-operated products in Douyin stores exceeded 100 million orders, and Oriental Selection also launched a total of 48 self-operated products in April this year. In addition, the Hunan special event held by Oriental Selection a few days ago had a cumulative sales volume of 110 million yuan in two days, and the number of orders exceeded 1.8 million.
Xinyi Glass fell nearly 12%
On May 14, Xinyi Glass's share price opened low and went low, once falling 11.82%, and the decline narrowed before the close, closing at HK$9.33, down 9.59%. This is mainly due to Morgan Stanley downgrading its rating to "underweight" and lowering its target price to HK$7.8.
According to Hexun.com, Morgan Stanley issued a report to downgrade the investment rating of Xinyi Glass from "keeping pace with the market" to "underweight", the target price was lowered from HK$9.5 to HK$7.8, and the earnings per share forecast for 2023-2026 was also lowered to 6%-17%.
Morgan Stanley believes that despite the impact of property policy easing, low valuations and relatively high dividend yields, the outlook for property completions remains unpromising, with relatively high valuations at the moment. The fundamentals of the industry continued to decline, and the prices and profits of Xinyi glass products were under pressure. Morgan Stanley predicts that although the recent policy measures introduced in the mainland are expected to boost domestic property sales, it will take a lot of money to digest the stock of real estate, and the government is expected to allocate about 300 billion yuan of destocking funds, accounting for only about 4% of second-hand housing sales. In addition, it will take 6 to 12 months to formulate the policy, and the policy is expected to be phased in by the first half of 2025. New starts have fallen sharply over the past two years, and housing completions will continue to decline. Factory order days were 11 days, well below the 16.5 days at the end of April 2023. The overall demand is sluggish, and the market is cautious about the prospects of Xinyi Glass.
Editor: Xiao Mo
Review: Muyu