Zhitong Hong Kong Stock Exchange Unravels | Chengdu-Chongqing Individual Stocks Rush Real Estate Conference Policy Report Lacks Major Benefits

Zhitongcaijing · 10/16 12:09

[Anatomy Dashboard]

With both US stocks falling overnight, both markets showed resilience today. Although the Hang Seng Index closed down 0.16%, market sentiment was not bad, and it contracted again, which in itself indicates that bears are running out.

The global deal now focuses on Trump. Speaking at the Chicago Economic Club on Tuesday (October 15), Trump lashed out at European automakers, including Mercedes-Benz, and vowed to impose high tariffs on imported cars, saying this was the only way to force production back to the US. Trump expanded the scope and scale of his trade commitments during this year's campaign, and plans to impose tariffs of up to 20% on all imported goods, 60% on all Chinese imports, and other tariffs on countries that are abandoning the use of the dollar. Trump added that he has no power to tell the Federal Reserve what to do, but he does think that as president, he should have some say in raising or cutting interest rates. I have to say that Trump is quite popular, his remarks are significant, and even Europe is developing policies to counter its policies.

Real estate news was released intensively today. The Information Office of the State Council is scheduled to hold a press conference at 10 a.m. on October 17, 2024 (Thursday). 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. The Tianjin property market policy has been drastically loosened: purchase restrictions and price limits have been completely abolished. Currently, only some cities in the north, Shenzhen and Hainan still have purchase restrictions. The current economy can only hope if real estate stabilizes. Capital saw another opportunity. Sunac (01918) and R&F (02777) surged more than 32%, and Vanke (02202) surged nearly 19%. Building materials stocks followed the rise, such as China Building Materials (03323), Jinyu (02009), and Conch Cement (00914).

Also, with another boost, the topic of large-scale demolition in Chengdu is trending. Yesterday, the topic “New on the Chengdu Demolition Map” topped Weibo's hot list of the same city in Chengdu. Many netizens also linked the topic of large-scale demolition in Chengdu to topics such as “Western Development” and “Exploring the Western Hinterland.” The day before yesterday, we talked about market rumors that Sichuan will launch a 2.15 trillion infrastructure plan, and 330 major projects will start within 2 to 3 years. Today, a developer refuted the rumor: Chengdu is indeed proceeding with demolition, but this is not the rumored major demolition and construction. Anyway, where this kind of news easily resonates is actually the financial data approved by the next National People's Congress. If it far exceeds expectations, this logic will be very smooth; anyway, it's all in line with expectations. The Chongqing Rural Commercial Bank (03618) already took the lead the day before yesterday. Today, it rose by nearly 7%. Even stronger was Chongqing Iron and Steel (01053), which directly pulled 40.74%; the Sichuan-Cheng-Chongqing Expressway (00107) and the Bank of Chongqing (01963) all rose more than 8 points. In terms of metal stocks, China Hongqiao (01378) and China Aluminum (02600) were also driven. Unless tomorrow's real estate conference has more content than expected, don't go too far.

Chief Executive Li Jiachao published the third “Policy Address” during his tenure today (16th). In summary, 1. In terms of people's livelihood and consumption, the SAR government has submitted a request to the central government to further optimize travel vouchers for mainland residents to Hong Kong, including resuming Shenzhen's “one sign, multiple travel” individual travel endorsements and expanding the scope of pilot cities with the “one trip a week” personal travel endorsement policy. Relevant departments of the central government said they will actively accelerate research. The launch will stimulate Salsa International (00178) and Everybody's Happy (00341); Hong Kong will adjust the tax on spirits (alcohol with an alcohol concentration above 30%). From now on, the tax rate for spirits with an import price of HK$200 or more will be reduced from 100% to 10%, while the tax rate will remain unchanged for those parts of HK$200 and below, and spirits with an import price of HK$200 or less. This is good for liquor. Currently, Hong Kong is the first stop for mainland liquor to go overseas. According to customs statistics, Hong Kong, China continued to be the largest export destination for liquor in the first half of this year, accounting for 26.5% of exports. Zhenjiu Li Du (06979) is up more than 3% today.

2. Securities: The securities market will be further optimized. Measures include developing new overseas capital. Exchange-traded funds (ETFs) that track the Hong Kong stock index are listed in the Middle East and absorb local funds to allocate Hong Kong stocks. The Securities Regulatory Commission and the Hong Kong Stock Exchange will improve market efficiency and reduce transaction costs, including reviewing deposit arrangements and optimizing margin and collateral requirements. However, there is no mention of reducing stamp duty. Relatively disappointed.

3. In the direction of real estate, in addition to uniformly reducing mortgages to 70%, Hong Kong will also optimize the 'New Capital Investor Entry Program' to allow investment in residential properties from now on. The transaction price of such property must be HK$50 million or more, and the maximum amount of total investment calculated for investment in real estate is HK$10 million. Local real estate stocks Hengdi (00012) and New World Development (00017) all had intraday changes. Overall, the new “Policy Address” lacks significant benefits, so the market has not performed very well.

Optics Valley of China announced that Optics Valley companies have achieved a huge breakthrough in the field of photoresists for semiconductors. According to reports, the T150A photoresist product launched by Wuhan Taiziwei Optoelectronics Technology Co., Ltd. has passed the semiconductor process mass production verification, and the formula has been completely independently designed, which is expected to create a new situation in semiconductor lithography manufacturing in mainland China. T150 A targets the mainstream KrF photoresist series of leading international companies. The ultimate resolution in the lithography process reaches 120nm, and has greater process tolerance, higher stability, excellent post-film drying rate, and is more friendly to post-etching processes. Originally, this news was expected to stimulate semiconductors, but I didn't expect the Asmer explosion to affect the mood.

On Tuesday local time, lithography giant Asmack's earnings report, which was originally scheduled to be released on Wednesday, was unexpectedly released ahead of schedule. The company originally planned to release the financial report on Wednesday morning (Wednesday afternoon Beijing time) and hold a conference call to interpret it. However, at around 22:30 on Tuesday evening Beijing time, various financial terminals simultaneously caught the company's financial reports accidentally posted online. According to data released in advance, Asmack announced that orders for the third quarter of this year were only 2.6 billion euros, which is nearly half of the 5.4 billion euros expected by the market. In an exclusive interview with CFO Roger Dawson's earnings report published on the official website, he mentioned that next year's revenue from the Chinese market is expected to account for about 20% of total revenue. Mainland China originally accounted for nearly 50% of revenue; 30% was directly cut off. As soon as thunder came out, Asmack's European shares fell nearly 16% during the closing phase. According to statistics, this is the company's biggest one-day decline since 1998. In fact, this news shows that the loss of the Chinese market is being overwhelmed by a huge backlash; in turn, it is also an opportunity for China itself.

Recently, the market paid a lot of attention to the restructuring of individual stocks. Gaoxin Retail (06808) announced the resumption of trading and received a letter of contact from an independent third party interested in offering, indicating their intention to make a voluntary conditional offer with preconditions for all of the company's issued shares. The majority shareholder Alibaba Group and New RetailStrategic 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. Furthermore, Gaoxin Retail is making a profit. It is expected that profit after tax for the first six months ending September 30, 2024 will improve significantly and change from loss to profit over the same period of the previous fiscal year. Today, it surged 15.08%. The stock also recently nearly doubled from the bottom. Today's opening was funded, but acceptance is still relatively steady. This news is basically clear. It depends on the attitude of capital in the future. If it continues to release more than 100 million trading volume to maintain the turnover, then the market is worth paying attention to in the future.

There's nothing to be pessimistic about now. Look at India. The Indian stock market “carnival” that started in October has come to an end. As corporate profit growth has slowed, the benchmark index has recently pulled back sharply, and market concerns about India's “peaking” have reignited. As of the 14th, overseas investors had reduced their holdings of Indian stocks by more than $7 billion in October, the biggest monthly outflow since a record was set in March 2020. At least some of these funds have been transferred to the Chinese market.

[Section Focus]

The Securities Regulatory Commission's Technology Supervision Department, China Securities Technology Company, and China Securities Data Company will host the Capital Market Fintech Forum at the Fintech Conference on the morning of October 21. The theme is “'Data Factor+AI' Two-wheel Drive High-Quality Digital Transformation of the Capital Market”.

According to the “Guangzhou Municipal Data Regulations”, the municipal people's government shall establish a data property rights operation mechanism where data resource ownership rights, data processing and use rights, and data product management rights are distributed in accordance with relevant national regulations. Municipal statistics departments should promote the integration of data elements into the statistical accounting system for national economic and social development. As a new product of the digital economy era, data elements will become a new generation of production factors after land, energy, population, and food. They are one of the essential elements for future economic activity, and are also expected to relay real estate to become a new pillar of GDP.

The main varieties in the Hong Kong stock market: Fubo Group (03738), Universal Data - SW (09698).

[Individual Stock Mining]

China Aluminum (02600): Establishing a capital increase agreement to enhance product competitiveness, net profit far exceeded expectations in the first half of the year

The company issued an announcement. Recently, China Alcoa Shandong signed a capital increase agreement with China Alcoa International and Shandong Engineering. According to this, China Alcoa International and China Alcoa Shandong agreed to increase the capital of the Shandong project by a total of RMB 500 million in cash, of which China Alcoa International will invest RMB 300 million and China Alcoa Shandong will invest RMB 200 million. China Aluminum's net profit in the first half of the year increased 105% year-on-year to 7.02 billion yuan.

Comment: Through this capital increase, the company has maintained the leading edge of the company's fine alumina products in the industry and enhanced product competitiveness. Judging from this year's performance, the company has achieved the best level in history, and various business sectors such as alumina, primary aluminum, marketing, and energy generation have shown growth. The net profit of China's aluminum industry in the first half of the year far exceeded expectations, mainly due to the increase in alumina profits. China Alcoa's net profit for the second quarter increased 166% to 216% year over year, reaching 4.3 billion to 5.1 billion yuan, an increase of 91% to 127% over the quarter. The tight supply of aluminum mines in Shanxi and Henan and the decline in raw material inventory levels in smelters all support alumina prices. It is expected that aluminum prices may fluctuate at a high level, and China Alcoa's aluminum business will profit or improve in the second half of the year. The output of the company's main products has increased dramatically, including 8.2 million tons of metallurgical grade alumina, 2.07 million tons of fine alumina, 3.63 million tons of raw aluminum, etc. Equipment operation rate and cost control have been significantly improved, and costs are kept within the budget level. The company's capital expenditure is expected to be between 10 billion and 20 billion dollars over the next three years, giving priority to securing financial resources for strategic investment projects. The company attaches great importance to shareholder returns. By improving profitability and dividend strength, the mid-2024 dividend was 0.82 yuan for every 10 shares, and the dividend ratio will continue to increase in the future.

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