Zhitong Hong Kong Stock Exchange Unravels | Market Affects Policy Addiction and Intensive Countermeasures Begin

[Anatomy Dashboard]

After the market entered a cooling period, it became dependent on policies again. If the policy falls short of expectations, it will go short. Today, the Hong Kong stock market only rushed for half an hour, then began a downward pattern. The Hang Seng Index closed down 1.02%. The amount of energy has shrunk to 191.3 billion.

Let me first talk about the morning press conference. At 10 a.m. on October 17 (Thursday), the Information Office of the State Council held a press conference. 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 Supervision and Administration, introduced the situation relating to promoting the steady and healthy development of the real estate market. Highlights include 1. 4 cancellations: mainly including purchase restrictions, sales restrictions, price limits, ordinary housing and non-ordinary housing standards; 2. 4 reductions: by implementing these policies already in place, reducing residents' housing purchase costs, reducing loan repayment pressure, and supporting residents' demand for rigid and improved housing; 3. Two increases: one is the implementation of 1 million new urban village renovation and dilapidated housing renovation through monetized resettlement and other methods. Second, by the end of the year, the credit scale of the “white list” project will be increased to 4 trillion dollars.

Looking at the overall content, it has all been mentioned before; there is nothing particularly new. However, the 1 million units are quite inferior to the shed reform period. According to Shen Wan Hongyuan, the cumulative scale of special loans for shed reform from 2015 to 2018 reached 4.53 trillion yuan. In addition to local and commercial bank funds, the total investment amount was 6.26 trillion yuan. This time, the investment is about 1 trillion dollars. Furthermore, local governments are not well-off financially. For example, local governments are allowed to issue special bonds, but the problem is that if the debt is not settled properly, how can new bonds go smoothly; they are all linked issues. As a result, overall, it fell short of expectations. Today's real estate stock trends are not ideal. Sunac (01918), R&F (02777), and Vanke (02202), which were strong yesterday, have all been brought back to their original form. As stated in yesterday's takeover: “Unless tomorrow's real estate conference has more content than expected, don't go too far.” In the future, investors will have to come out as soon as they find out that the policy falls short of expectations for this kind of early rush; otherwise, it will become cannon fodder.

Meanwhile, Sunac China (01918) announced that it plans to discount approximately 19.97%, with a subscription price of HK$2,465. It will sell up to 489 million shares, with a net final proceeds of approximately HK$1,192 million. Yesterday's hike was in fact largely due to the need for financing. Despite such a big discount, in fact, according to today's closing price of 2.24 yuan, it was still a loss of money. But there's nothing you can do about it; you don't deserve to lose more. Market-based placement is fast, but if you keep losing money if you take over the market, this method can make people nervous. The side also shows that the cash flow of housing enterprises is quite tight. The market is also worried. Real estate stocks will be sold once they rise, so ordinary investors should grasp the pace.

China and Europe continue to struggle over automobile tariffs. A press spokesperson from the Ministry of Commerce explained at a regular press conference today (October 17) that China is studying measures such as raising tariffs on imported high-displacement fuel vehicles. Careful decisions will be made after taking all factors into consideration. This should take a back seat; this decision will not be made easily. Let's look at the EU's attitude later.

Germany has begun to soften. According to media reports, on October 16, local time, German Chancellor Scholz once again clearly criticized the EU's policy of imposing tariffs on Chinese electric vehicles during his speech in the German parliament. He said that 17 countries within the EU do not support this policy, and all the car manufacturer executives he spoke with also opposed this policy. The plight of German car companies is reflected in their sales volume in China. Last week, Germany's BMW Group reported the biggest drop in sales of 30% in four years, Mercedes-Benz deliveries fell 13%, and Porsche also reported the worst third-quarter sales in ten years, a 19% drop. The German Volkswagen Group, the parent company of Porsche, also saw a 15% year-on-year decrease in deliveries in China in the third quarter. If China imposes tariffs on fuel vehicles, the German automobile industry will only worsen. So Germany is nervous. However, although the automobile industry itself has little influence, red wine and the next luxury goods are also its weak points. Other European countries, such as dairy and agricultural products, will all be countered. Until this problem is solved, the trend of new energy vehicles will not be very good, and there is a lot of money to wait and see.

Other counterattacks are also under way. The China Cyberspace Security Association has issued a review document pointing directly at Intel, the CPU hegemon. In the article, Intel's problems are counted: such as frequent security breaches, knowing the wrong; poor reliability, and not changing mistakes; falsifying the name of management, actually carrying out surveillance; setting up hidden doors, with huge hidden risks; cooperating with the crackdown and taking the initiative to cut supply and service against Chinese companies such as Huawei and ZTE. Nearly a quarter of Intel's annual global revenue of more than 50 billion US dollars comes from China. In 2021, Intel's CPU accounted for about 77% of the domestic desktop market and 81% of the notebook market; in 2022, Intel's x86 server market share in China reached 91%. Now that's the situation, it's OK if you don't knock. We must not always be subject to all kinds of unfounded sanctions by others. If we fight back properly, the pressure will be less.

Also, on October 16, the Ministry of National Security posted an article on its WeChat account stating that the work of the national security agency revealed that an overseas enterprise A is unlawfully carrying out geographic information surveying and mapping activities in China through cooperation with Company B, which has surveying and mapping qualifications in China, using research on intelligent automobile driving as a cover. To be honest, it is estimated that this kind of behavior has been done quite a bit before, but there are no highlights. This point is very effective, and the directivity is also obvious.

Judging from the countermeasures mentioned above, China's determination to follow the path of autonomy and control has become firmer. Whether it is the underlying chip, such as SMIC (00981) or the operating system Hongmeng, it must speed up the replacement process. Chinasoft International (00354) announced yesterday after the market that the company has recently completed internal testing and successfully launched on the Huawei app market. As an important contributor to the Hongmeng ecosystem, Chinasoft International has rich experience in developing Hongmeng applications in key fields of various industries. It's up 3.70% today. Kingdee International (00268) also rose more than 3%.

When there is no clear direction in the market, the market can only speculate on specialty varieties, such as tobacco. According to data from China's General Administration of Customs, in August 2024, the export value of China's tobacco and its products was US$88.14 million, up 29.8% year on year; export volume was 23,300 tons, up 36.5% year on year. In terms of cigarettes, in August, the export value of Chinese cigarettes (cigarettes made from tobacco) was US$34.2 million, an increase of 66.3% over the previous year; the number of cigarettes exported was 12.78 million, an increase of 140.3% over the previous year. As the only monopoly industry, China Tobacco Hong Kong naturally enjoyed dividends, surging 7.52% today. There is also Bubble Mart (09992), which continues to reach new highs. This type of addictive hipster IP has opened up room for growth because it has opened up overseas markets (overseas revenue has increased by more than 200%) and can be easily replicated. Also, Auto Street (02443) mentioned the day before yesterday has begun to become active. Today, it has surged by nearly 13%. Judging from repeated reviews, there should be a story later, and investors will continue to keep an eye on it.

Privatization is also risky. China Traditional Chinese Medicine (00570) announced on February 21 this year that Sinopharm Group plans to privatize Chinese medicines at a price of HK$4.6 per share. According to the latest announcement of privatization progress, since it is currently unlikely that overseas direct investment approval has not yet been obtained before the final deadline of the preconditions, that is, October 18, 2024, the offeror and controlling shareholders are currently seeking the consent of the investor group to extend the final deadline of the preconditions, but it is still uncertain whether such consent can be obtained from the investor group. Today it's down 8.56%.

[Section Focus]

By the fourth quarter, the smartphone industry's “flagship battle of the year” had begun. In addition to Huawei, leading mobile phone brands such as vivo, OPPO, and Honor all released new flagship phones in October. Earlier, the reporter learned that the Huawei Mate 70 series smartphone has entered full mass production and is expected to be officially launched in November this year. On the evening of October 14th, the VivoX200 series was officially released. According to vivo, the sales volume of the entire series on the first day of pre-sale was 150% of the previous generation, and the Pro version, which starts at 5,299 yuan, reached 200% of the previous generation. OPPO announced the design for the FindX8 series on October 16 and officially opened pre-orders. The new model will be officially unveiled at 19:00 on October 24. Honor's next-generation flagship Magic7 series will be officially released on October 30, with the first MagicOS 9.0 system.

According to IDC data, the global smartphone market shipped 316.1 million units in the third quarter of 2024, up 4.0% year on year, and has been growing for five consecutive quarters. According to previous estimates, global shipments will increase 5.8% year-on-year to 1.23 billion units in 2024. Generative AI smartphones will grow by 344%, accounting for 18% of the overall market.

Major products in the Hong Kong stock market: Ruisheng Technology (02018), Shunyu Optics (02382), Xiaomi Group (01810), and BYD Electronics (00285).

[Individual Stock Mining]

Cinda Biotech (01801): Continued rapid year-on-year product growth will bring about commercial transformation in core areas

On October 17, Cinda Biotech announced that picontibimab injection (recombinant anti-interleukin 23p19 subunit (IL-23p19) antibody, R&D code: IBI112) reached a major end in a multi-center, randomized, double-blind, placebo-controlled phase II clinical study conducted in Chinese subjects with moderate to severe active ulcerative colitis (UC). 2024H1's total revenue was 3.95 billion yuan, up 46.3% year on year; product revenue was 3.81 billion yuan, up 55.1% year on year.

Comment: The company's products have been growing rapidly year-on-year for many consecutive quarters. The number of products already on the market continues to be released, and multiple R&D pipelines are about to enter the product harvest period. The company has a sustainable and diversified layout in the four key fields of oncology, cardiovascular and metabolic diseases, autoimmunity, and ophthalmology. In terms of oncology, 9 oncology products have been approved for marketing, 1 has been submitted for NDA, 2 are in the critical clinical stage, and more than 10 are in clinical development. The core product Cindilizumab sold about 2.75 billion yuan in 2023, an increase of 34% over the previous year. Cindilizumab is expected to maintain its growth trend. The potential for self-developed next-generation IO therapy is beginning to emerge, and IBI363 has seen excellent curative effects in all representative tumor types. In the integrated product pipeline, the company has commercialized 2 products, 2 have submitted NDAs, 2 are in critical clinical stages, and nearly 10 are in clinical development, covering chronic diseases such as self-immunity, metabolism, and ophthalmology. Marsitol is the fastest progressing dual-target GLP-1R inhibitor in China. It is the world's first GLP-1R/GCGR dual-target agonist to enter clinical phase III. The NDA for long-term weight management for obese or overweight patients was accepted in February 2024, and the NDA for type 2 diabetes was accepted in August, and commercialization is expected to begin in 2025. The PASI90 in the phase 3 clinical study of picontibimab to treat psoriasis surpassed 80% in 16 weeks, and was administered once every 12 weeks, showing the best potential in its class with strong curative effects. The IGF-1R antibody tetuumab is expected to become the first innovative drug in the field of thyroid eye disease in China. In terms of commercialization, the company has a mature commercialization team of about 3,000 people, and its commercialization capabilities have been initially verified.

[Disclaimer] This VIP information product is for communication and discussion purposes only, and does not constitute any investment advice. Unauthorized reproduction is strictly prohibited. For more high-quality information and data products, please log in to the “Zhitong Finance” app.