Hong Kong stocks closed (10.16) | Hang Seng Index closed down 0.16%, domestic housing stocks rose strongly and Rongxin China (03301) surged 1.2 times

The Zhitong Finance App learned that Hong Kong stocks stopped falling and picked up in early trading, and both the Hang Seng Index and the China Index rose more than 1% during the session; since then, the stock index rose weakly. The Hang Seng Index changed from rise to decline in the afternoon, and the Hang Seng Index and China Index turned green one after another at the end of the session. At the close, the Hang Seng Index fell 0.16% or 31.94 points to 20286.25 points, with a full-day turnover of HK$208.369 billion; the Hang Seng State-owned Enterprises Index fell 0.14% to 7267.98 points; and the Hang Seng Technology Index fell 1.09% to 4402.37 points.

Huatai Securities pointed out that after adjustments, Hong Kong stocks may now be close to the support level. The most important factor is that judging from policy expectations, corporate profit expectations, and dollar liquidity expectations, the current internal and external comprehensive environment is significantly better than in mid-June-July, and the current risk premium for Hong Kong stocks is close to that time level according to quantitative estimates. Looking ahead, the bank believes that Hong Kong stocks are likely to fluctuate in the current support area before early November. Momentary factors such as the US election, three-quarter reports, and policy verification will still be disrupted, but the release of sentiment may have basically been put in place.

Blue-chip stock performance

Longhu Group (00960) led the blue chip increase. At the close, it rose 7.8% to HK$13.82, with a turnover of HK$1,523 billion, contributing 3.33 points to the Hang Seng Index. The market is watching for the upcoming special press conference on real estate to be held tomorrow. The Yamato Research Report pointed out that the positive tone conveyed by the Ministry of Finance is believed to support domestic housing stock prices until the relevant plan is finally announced.

In terms of other blue-chip stocks, China Hongqiao (01378) rose 4.67% to HK$13.44, contributing 2.75 points to the Hang Seng Index; China Overseas Development (00688) rose 3.76% to HK$15.46, contributing 3.51 points to the Hang Seng Index; Galaxy Entertainment (00027) fell 4.05% to HK$34.35, dragging down the Hang Seng Index by 5.18 points; Sunyu Optical Technology (02382) fell 3.89% to HK$49.4, dragging down the Hang Seng Index by 2.53 points.

Popular sector aspects

On the market, large technology stocks had mixed ups and downs. Alibaba fell 0.9%, while Meituan rose more than 1%. The five departments will hold a press conference on real estate tomorrow. Domestic housing stocks have exploded strongly, and Rongxin China has doubled in a single day; concept stocks in Chengdu and Chongqing have surged 40%; gold stocks and large financial stocks have all performed well. On the other side, gaming stocks and semiconductor stocks declined under pressure. Furthermore, the Hong Kong Policy Address was released today. The report proposes to lower the alcohol tax from now on. At one point, Zhenjiu Li Du rose by more than 8%; in the property market, Hong Kong relaxed the upper limit of residential property mortgage loans to 70%, and Hong Kong real estate stocks generally rose.

1. Domestic housing stocks exploded strongly. At the close, Rongxin China (03301) rose 121.43% to HK$0.93; Sunac China (01918) rose 40% to HK$3.08; Zhongliang Holdings (02772) rose 33.88% to HK$0.162; and R&F Properties (02777) rose 32.67% to HK$1.99.

The Information Office of the State Council is scheduled to hold a press conference at 10 a.m. on October 17. Ni Hong, Minister of Housing, Urban-Rural Development, and heads of the Ministry of Finance, the Ministry of Natural Resources, the People's Bank of China, and the State Financial Supervisory and Administration, will introduce the situation relating to promoting the steady and healthy development of the real estate market and answer questions from reporters. Earlier, on October 12, the Ministry of Finance announced the introduction of a package of fiscal incremental policies, including supporting the real estate market through the combined use of tools such as special bonds, special funds, and tax policies.

Also, on October 16, Tianjin issued a new property market policy, which lifted restrictive housing measures, including abolishing purchase restrictions, sales restrictions, price limits, and standards for ordinary housing and non-ordinary housing. At the same time, the minimum down payment ratio for the first and second homes was unified at 15%, and interest rates on existing mortgages were adjusted in batches. According to incomplete statistics from the China Index Research Institute, some cities in Beijing, Shanghai, Shenzhen, and Hainan are still implementing purchase restriction policies. Since this year, over 10 cities, including Zhengzhou and Shenyang, have lifted price limits for new homes, and Hangzhou, Quanzhou and other places have lifted price limit requirements for newly sold land.

2. Gold stocks performed brilliantly. At the close, Zhaojin Mining (01818) rose 4.97% to HK$13.52; Shandong Gold (01787) rose 4.68% to HK$17; Lingbao Gold (03330) rose 4.33% to HK$2.89; and China Gold International (02099) rose 2.39% to HK$34.3.

Central bank officials from countries such as Mexico, Mongolia, and the Czech Republic have recently made rare remarks on various occasions, publicly expressing support for increasing gold reserves. On Tuesday, COMEX gold futures rose 0.52% to $2679.50 per ounce. Gold hit a record high of $2,685 per ounce last month, driven by the Federal Reserve's shift to easing. In addition, many gold mining companies are expected to perform well in the first three quarters. Among them, Shandong Gold is expected to achieve net profit of 1.85 billion yuan to 2.25 billion yuan in the first three quarters, an increase of 37.52% to 67.26% over the previous year.

3. Big financial stocks are generally active. At the close, China People's Insurance (01339) rose 4.8% to HK$3.93; Orient Securities (03958) rose 3.59% to HK$4.9; Everbright Securities (06178) rose 3.01% to HK$7.19; and Bank of Communications (03328) rose 3% to HK$6.19.

Hualong Securities previously pointed out that benefiting from policy momentum, market trading sentiment increased dramatically, and the brokerage sector benefited from a sharp rise before the National Day. In the short term, the short-term investment value of the brokerage sector increased under favorable factors such as the entry of incremental capital, increased market risk appetite, the expected continuation of incremental policies, and the acceleration of the pace of brokerage mergers, acquisitions and restructuring, etc., but we still need to pay attention to the risk of retracement after the sector's volume rises. Regulatory policy catalysis will help listed brokers' valuations in the long term to increase and maintain the industry's “recommended” ratings.

Also, there are rumors in the market that Chinese banks are about to cut deposit interest rates again in the near future and will be announced as soon as this week. Many banks asked by industry reporters have yet to respond positively to this, but some banking industry insiders said that there is indeed a possibility that interest rates on deposits will be lowered in the near future. A joint stock bank insider said that the bank originally planned to further reduce deposit interest rates after the 11th long vacation, but there are no changes yet. He anticipates that it is more likely that the regulatory authorities will guide banks to adjust deposit interest rates in the near future. This is also to hedge against the impact of the upcoming decline in stock mortgage interest rates on bank interest rates.

4. Concept stocks in Chengdu and Chongqing strengthened. At the close, Chongqing Iron & Steel (01053) rose 40.74% to HK$1.14; the Sichuan-Chengdu-Chongqing Expressway (00107) rose 12.84% to HK$3.69; Bank of Chongqing (01963) rose 7.68% to HK$6.03; and Chongqing Rural Commercial Bank (03618) rose 6.9% to HK$4.65.

Recently, rumors about large-scale demolition and industrial transfers in Sichuan have sparked a buzz in the market. Some netizens claim that their family received huge compensation for the demolition, and there are also rumors that industries in Jiangsu, Zhejiang, and Shanghai are moving to Sichuan. However, according to the latest report from the Financial Federation, with regard to matters such as sky-high eviction payments reported on the Internet, the Financial Services Association reporter found that most of them were “following the trend” or “playing tricks” on the Internet. Some evicted households said, “The amount of compensation spread on the Internet is very fake.”

It is worth noting that previously, on September 30, the State Council agreed in principle to the “Chengdu Territorial Spatial Master Plan (2021-2035)” reviewed and approved by the Ministry of Natural Resources. Furthermore, in April of this year, Sichuan Province released the “2024 List of Key Projects to Accelerate Early Work in Sichuan Province”, which lists 330 proposed major projects, with an estimated total investment of 2.15 trillion yuan.

5. Semiconductor stocks are sluggish. At the close, Hongguang Semiconductor (06908) fell 5.33% to HK$0.71; ASMPT (00522) fell 2.11% to HK$90.25; Shanghai Fudan (01385) fell 1.89% to HK$15.56; and SMIC (00981) fell 1.34% to HK$25.8.

Lithography giant Asmack's performance exploded. Overnight, its stock price plummeted 16% and led to a collapse in the US semiconductor sector. The company's order volume for the third quarter was only 2.63 billion euros, down 53% from the previous quarter, while lowering revenue and gross profit expectations for 2025. The company said that demand for AI chips has indeed surged, but other parts of the semiconductor market are weaker than expected, causing logic chip makers to delay orders.

Michael Rogge, an analyst at Degroof Petercam Bank, said he expected Asmack's warning to drag down the entire industry, but he pointed out that the company's sales are expected to grow in 2025 starting in 2024. “Despite the downturn in the chip terminal market, demand for devices has not declined.”

Popular exotic stocks

1. Jujing Holdings (08450) doubled once. At the close, it was up 81.4% to HK$0.078.

Jujing Holdings announced that the offender Lu Yujian acquired 560 million shares from Executive Director and Chairman of the Board of Directors Chen Zengtie, accounting for 56% of the total issued share capital, at a total cash cost of HK$33.6 million. After completion, the offeror and its co-actors held about 56% of the issued share capital. Therefore, the offeror is required to make a full purchase offer as usual. The cash offer price is HK$0.06 per share, which is a premium of about 39.53% over the closing price of HK$0.043 before the suspension of trading. The offender intends to maintain the listing status of the shares on the Stock Exchange GEM after the end of the offer.

2. Gaoxin Retail (06808) resumed trading and increased. At the close, it was up 15.08% to HK$2.06.

Gao Xin Retail announced that it has received a contact letter from an independent third party interested in offering a voluntary conditional offer with preconditions for all of the company's issued shares. The majority shareholder Alibaba Group and New Retail Strategic Opportunities Investments 1 Limited are currently discussing the main terms of a possible offer with interested offenders; Alibaba Group is also in discussions with several others.

In addition, Gaoxin Retail announced that it is expected that profit after tax for the first six months ending September 30, 2024 will be greatly improved and converted from loss to profit over the same period of the previous fiscal year. According to the Hong Kong Financial Reporting Standards, profit after tax for the first six months ended September 30, 2024 was obtained from approximately RMB 150 million to RMB 200 million (unaudited), while the after-tax loss for the same period last year was RMB 378 million.

3. Quanfeng Holdings (02285) announced Yingxi. At the close, it was up 10.88% to HK$21.4.

Quanfeng Holdings announced that the Group expects to achieve net profit of about 100 million US dollars in the nine months ending September 30, 2024, and net profit of about 23 million US dollars in the nine months ending September 30, 2023, a sharp increase of more than 300%. Mainly due to the strong terminal sales performance of the company's flagship brand EGO; thanks to the end of the inventory removal cycle, the company's revenue growth rate in the third quarter of 2024 was further accelerated, etc.

4. GHW INTL (09933) fell sharply throughout the day. At the close, it was down 26.96% to HK$4.09.

GHW was named by the Hong Kong Securities Regulatory Commission for a high concentration of shares. According to the investigation results, on September 27, 2024, 17 shareholders held a total of 174 million shares of the company, which is equivalent to 17.40% of the company's issued share capital. The relevant shares, together with 804 million shares (80.43% of the issued share capital) held by the three major shareholders, are equivalent to 97.83% of the company's issued share capital. As a result, only 21.653,500 shares of the company (2.17% of the issued share capital) are held by other shareholders.

5. Qiniu Smart (02567) broke on the first day of its launch. At the close, it was down 56.73 percent to HK$1.19.

Qiniu Smart is priced at HK$2.75 per share. A total of 160 million shares were issued, with a net proceeds of approximately HK$367.2 million. According to reports, Qiniu Smart is one of the first platforms to provide audio and video cloud services in China, and is committed to becoming the world's leading one-stop scenario-based intelligent audio and video service provider. According to iResearch, according to 2023 revenue, the company is the third-largest audio and video PaaS service provider in China, with a market share of 5.8%.