The Hang Seng Index has risen for ten consecutive years (2024.4.22-2024.5.6), setting a record for the longest consecutive increase since 2018.
The Hang Seng Index regained its foothold at 19,000 points for the first time in 9 months.
Since April, Hong Kong stocks have significantly outperformed major global markets.
Data source: Wind, time statistics range: 2024.4.1-2024.5.14
Hong Kong stocks seem to have rejuvenated.
Recently, CICC shouted: Under the optimistic scenario, Hong Kong stocks still have about 20% room to rise. CICC said that after the recent rapid rise, it has been significantly overdrawn in the short term. If the risk premium falls back to the levels of the middle and early years of last year, it corresponds to about 2-7% of the space, respectively. If the follow-up policy continues to exert force, it will promote 10% earnings growth in the optimistic scenario, corresponding to about 20% upside.
Hong Kong stocks, which have been in the dark for three years since the beginning of 2021, have the "crisis of confidence" been lifted?
The water is coming!
This wave of Hong Kong stocks rebounded mainly driven by the capital side. Southbound funds have been flowing into Hong Kong stocks for more than a month, with a cumulative net inflow of 108.9 billion yuan in the last 30 trading days. This amount of funds is more than twice that of the same period last year.
Southbound capital flows in the past 30 trading days
Data source: Wind, time statistics period: 2024.3.25-2024.5.14
On the other hand, foreign capital is also piling up to return to Hong Kong stocks. At present, the accelerated depreciation of the yen has led to a correction in the Japanese stock market, and the foreign capital that has flowed into the Japanese stock market significantly in the early stage is gradually flowing out. As a global valuation depression, Hong Kong stocks, in the context of improved domestic policy expectations, directly benefited from the current round of global stock market switching.
To paraphrase the classic lines in the drama "Teahouse": The north water goes south to Hong Kong, and foreign capital is also accelerating its return, and two living waters nourish a Hong Kong stock, is this blessing still small?
Obviously, the blessings of Hong Kong stocks do not stop there.
In terms of policy - recently, the voice of the Hong Kong Stock Connect dividend tax reduction and exemption has gradually risen, and this policy may have a certain probability of being implemented, which is undoubtedly a potential benefit for the high-dividend assets of the Hong Kong Stock Connect. In addition, on April 19, the China Securities Regulatory Commission issued five blockbuster policies involving the Hong Kong stock market, which targeted to solve the problems of insufficient liquidity and declining financing attractiveness of Hong Kong stocks.
Fundamentals – The fundamentals of Hong Kong stocks continue to improve. Taking the "Internet sector", a representative sector of Hong Kong stocks, as an example, according to the statistics of the 2023 annual report, the fundamentals of the leading Internet stocks in Hong Kong stocks have recovered significantly, and the profits of leading companies such as Meituan, Xiaomi, Kuaishou, and Bilibili have all achieved high year-on-year growth. In 2023, Tencent Holdings achieved significant growth in gross profit and net profit for four consecutive quarters, showing a V-shaped recovery in fundamentals.
The 2023 annual operation of leading Internet companies in Hong Kong stocks
Data source: Wind, listed company announcements
The just-disclosed first quarter report of 2024 shows that Tencent Holdings' revenue was 159.5 billion yuan, a year-on-year increase of 6%; The adjusted net profit was 50.27 billion yuan, a year-on-year increase of 54%.
Meituan, a giant whose stock price soared by 77%.
All kinds of positive trends have contributed to the soaring stock price.
In just 15 trading days before and after the May Day holiday, the Hang Seng Index soared nearly 18%.
From the rearview mirror, on January 22, 2024, Hong Kong stocks walked out of the stage low of 14,794.16 points in this round of bear market. If you count from this day, Hong Kong stocks have rebounded strongly by more than 24% in the last 4 months or so.
Among them, the Hong Kong technology sector performed particularly well, with the Hang Seng Technology Index rising nearly 30% over the same period.
Internet leaders collectively restless, Meituan-W shares soared 77.57%, Xiaomi Group-W shares rose 51.59%, and Tencent Holdings shares rose 40.78% during the same period. In addition, Kuaishou-W, Bilibili-W, SenseTime, Kingsoft and others all soared.
Range performance of the top 10 heavyweights of the Hong Kong Stock Connect Internet Index (931637).
Data source: Wind, China Securities Index Company, time statistical period: 2024.1.22-2024.5.14
The Hong Kong Stock Connect Internet Index (931637), a Hong Kong stock technology index that includes Internet leaders such as Meituan, Tencent Holdings, Xiaomi Group, and Kuaishou, rose by more than 37% in the same period.
Hong Kong stock funds that have risen in batches
Under the soaring market, Hong Kong stock funds are rising in batches, and Hong Kong stock theme ETFs are also piled up in the ranks of the top students on the 2024 growth list.
Taking the Hong Kong Stock Internet ETF (513770), which tracks the above-mentioned Hong Kong Stock Connect Internet Index (931637), as an example, as of May 14, 2024, the on-exchange trading price of the Hong Kong Stock Internet ETF (513770) has rebounded by more than 50% since the low point in February, not only recovering the decline at the beginning of the year, but also rising more than 18% during the year. (Data source: Shanghai and Shenzhen Stock Exchanges)
According to public information, the Hong Kong stock Internet ETF (513770) is the key product of the "ETF giant" Huabao Fund in the field of Hong Kong stock investment, and its weighted stocks gather the leaders of the major Hong Kong stock Internet segments, holding Tencent Holdings, Meituan, Xiaomi Group, Kuaishou, and Jingdong Health with a total weight of nearly 70%, and the top ten constituent stocks weighing more than 80%, with outstanding leading attributes.
At present, buy Hong Kong stock Internet ETF (513770) from the secondary market, with a minimum of 100 shares, each price is less than 0.8 yuan (as of 2024.5.14), and you only need to pay very low transaction fees. In addition, investors can also directly subscribe to the feeder fund of Hong Kong stock Internet ETF - Huabao Hong Kong Stock Internet ETF Connect (Class A share: 017125, Class C share: 017126) from the OTC channel.
Not only is the buying threshold low, but the Hong Kong Internet ETF (513770) is very active in the market trading. The average daily turnover of the Hong Kong Internet ETF (513770) reached 246 million yuan during the year (as of 2024.5.14), and it can be traded on T+0 during the day. (Source: Wind)
Where will the 19,000-point Hong Kong stock go?
The Goldman Sachs team recently pointed out 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.
Hong Hao, chief economist of Sirui Group, recently expressed his latest views on the Hong Kong stock market: the current rise is only the first stage of the recovery of Hong Kong stocks, and the Hang Seng Index is expected to break through to a symbolic integer threshold, such as 20,000 points, and then it may need a certain consolidation to accumulate strength for the subsequent upward market. He reminded market participants to remain rational and not overly greedy, while stressing that this is not a simple technical rally, but a substantial rally based on the restoration of market confidence and the improvement of economic fundamentals.
As of 2024.5.14, the price-to-earnings ratio of the CSI Hong Kong Stock Connect Internet Index (CSI) Hong Kong Stock Connect Internet Index, the underlying index of Hong Kong Stock Internet ETF (513770), is 31.47 times, which is located at the 38% quantile of the index in the past 10 years. (Source: Wind)
In the context of the continuous improvement of asset fundamentals, the potential repair demand of the Hong Kong stock market is strong, and the enthusiasm for Hong Kong stock investment may be like dry wood meets a fire, which will ignite immediately.
And the investment in Hong Kong stocks in recent years has also confirmed the old saying: hope is bred in despair.
In other words, high-quality Hong Kong stock funds such as Hong Kong Stock Internet ETF (513770) are worthy of investors' attention at present.
Data sources: Shanghai and Shenzhen Stock Exchanges, Wind, China Securities Index Company, and announcements of listed companies.
Risk Warning: Hong Kong Stock Internet ETF passively tracks the CSI Hong Kong Stock Connect Internet Index, which has a base date of 2016.12.30 and was released on 2021.1.11, and the composition of the index constituents will be adjusted in due course according to the index compilation rules. The index constituents in this article are for illustration purposes only, and the individual stock descriptions are not intended as investment advice of any kind, nor do they represent the position information and trading trends of any fund under the manager. The risk level of the Fund assessed by the fund manager is R4 - medium and high risk, and the risk level of the fund assessed by the fund manager is R4 - medium and high risk, which is suitable for active (C4) and above investors. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, any form of expression, etc.) is for reference only, and investors shall be responsible for any investment behavior determined independently. In addition, any opinions, analysis and forecasts in this article do not constitute any form of investment advice to the reader, nor do they assume any responsibility for any direct or indirect losses arising from the use of the content of this article. Fund investment is risky, the past performance of the fund is not indicative of its future performance, and the performance of other funds managed by the fund manager does not constitute a guarantee of the performance of the fund, so fund investment should be cautious.