Zhitong Hong Kong Stock Exchange Unravels | Financial Street Forum uses multiple arrows to detonate the market and seize mainstream securities and technology

[Anatomy Dashboard]

At the critical moment, the two markets finally gained strength. The A-share GEM soared 7.95%, the Shanghai Index rose 2.91%, and the Hang Seng Index rose 3.61%. It sold 259.1 billion dollars, reversing the passive situation in one fell swoop.

Now the US stock Dow Jones has reached record highs; it's fake to say they're not in a hurry. We still have to rely on policies to catalyze. Speaking of recent press conferences, there have been quite a few, but none of them have been catalyzed. The reason is that before the conference, all kinds of short essays are always popular, then impregnate everyone with a goal. Afterwards, the capital market is anchored according to the essay, and shorting starts without the expected results. This is really a big problem. It's always so passive, and the market is a bit out of play.

Perhaps they have been hurt many times. Instead, they didn't explain their expectations for today's conference, or that no small essays have been circulated before. It is estimated that the work of secrecy has also been done quite well. Then, combined with sufficient adjustments, it finally worked today.

The 2024 Financial Street Forum opened today. Central Bank Governor Pan Gongsheng, Director Li Yunze of the China Financial Supervision and Administration, and Wu Qing, Chairman of the Securities Regulatory Commission, introduced the latest developments in the contents of the press conference of the State Information Office on September 24 this year, focusing on the implementation of relevant monetary policy tools such as convenient swaps between securities fund and insurance companies, stock repurchases and special reloans.

In conjunction with this forum, the People's Bank of China and the China Securities Regulatory Commission jointly issued the “Notice on Accomplishing the Work Related to Securities, Funds, and Insurance Company Interchange Facilitation (SFISF)” to clarify business processes, operating elements, and the rights and obligations of the parties involved in the exchange facilitation operation. The rules have all been issued, with a 90% mortgage rate and Dutch-style bidding. Currently, 20 securities and fund companies have been approved to participate in the convenient exchange operation, and the first batch of applications has exceeded 200 billion yuan. For example, E-Fangda Fund, Huaxia Fund, Harvest Fund, CICC (03908), and CITIC Securities (06030) have been approved to participate in the swap facilitation operation. Among them, CITIC Securities reported an amount of about 10 billion yuan. The increase brought about by the SFISF tool is huge. In the past, in order to make some money, stock prices continued to fall. Now, the central bank directly paid money, and the results were good, and it was also possible to apply for quotas repeatedly. This is equivalent to increasing leverage for brokerage firms. Whether the brokerage firms operate themselves or do customer financing, plus investors' capital, the incremental effect brought about by this will be geometric. There is also the latest increase. Following the previous 10 China Securities A500 ETFs, 25 more China Securities A500 OTC Index funds were quickly approved. It only took 2 days from product declaration to approval. Industry insiders expect that the above China Securities A500 OTC Index Fund will be on sale soon, which is expected to introduce more incremental capital into the market.

I didn't expect this policy to be implemented so quickly. It is estimated that the 500 billion quota will soon be used up. After a full recovery, securities stocks are once again sought after by investors. The A-share weather vane Oriental Wealth (300059.SZ) was selected as the first batch of 20 internet brokerage firms. Today, the volume reached 54.2 billion yuan, clearly grabbing funds. The Hong Kong stock market is even more exaggerated. China's financial investment management (00605) directly doubled and surged 115%; China Merchants Securities (06099), the leading securities company in the last round, surged more than 17%, while Shenwan Hongyuan (06806), CITIC Securities (06030), and Everbright Securities (06178) rose more than 13%. The insurance category has not yet entered the SFISF list; for now, there are only securities and funds, but Li Yunze, Director of the General Administration of Financial Supervision: Supporting eligible insurance institutions to establish new securities investment funds should prepare for the future. Xinhua Insurance (01336) has also increased by more than 10%. Also, China Cinda (01359), which has an AMC concept, surged more than 15%, and Hongye Futures (03678), which has a futures concept, surged more than 10%.

There are also benefits from the same batch. According to the notice, from now on, 21 financial institutions can issue loans to eligible listed companies and major shareholders to repurchase shares and increase their holdings, and apply for reloans from the People's Bank of China in the first month of the next quarter after issuing loans. The initial reloan amount is 300 billion yuan, the annual interest rate is 1.75%, and the term is 1 year, which can be extended according to circumstances. This benefit is also quite significant. Next, many eligible listed companies will actively apply for funding. The company announced yesterday that the board of directors has reviewed and passed the “Proposal on General Authorization to Repurchase Part of the Company's H Shares”. The plan is to repurchase some H shares at the right time. All of the repurchased shares will be cancelled to increase earnings per share and increase shareholders' return on investment. It is recommended that the board of directors be authorized to repurchase no more than 10% of the total number of H shares already issued during the validity period, but the bill needs to be submitted to the shareholders' meeting for consideration. It surged 9.65% today. Everyone should pay attention to companies that have previously announced that they will increase their holdings and buy back or that need to be announced recently. The reason is that there are listed companies that are at the bottom of the market and are afraid of them.

Interest rate cuts have also arrived. In addition, People's Bank of China Governor Pan Gongsheng revealed the next policy trend in his speech, saying that the loan market quoted interest rate (LPR) announced on the 21st of this month (next Monday) will drop 0.2-0.25 percentage points, and stock mortgage interest rate adjustments will reduce household interest expenses by 150 billion dollars. Furthermore, at the end of the year, depending on market liquidity conditions, the deposit reserve ratio will be further lowered by 0.25-0.5 percentage points. China Cinda (01359) with an AMC concept surged more than 15%, and other real estate properties also rose, but the limelight was taken away by securities, and capital inflows were relatively small. Because the benefits are not obvious, there are no securities. In contrast, the reduction in mortgage interest expenses may have given a certain stimulus to consumption. Yesterday, the mobile phone industry chain mentioned in the sector focused on the collective rise. For example, BYD Electronics (00285) and Ruisheng Technology (02018) mentioned rose by 12.32% and 7.74% respectively.

Semiconductors, which have been repeatedly mentioned recently, are finally gaining strength. After the market on October 17, a Foreign Ministry spokesperson responded to requests from US officials to impose restrictions on Huawei and related companies in the semiconductor field. More impetus came from TSMC's net profit of NT$325.3 billion in the third quarter, up 54% year on year. Last night, TSMC surged 9.74% to reach a market value of 1.1 trillion US dollars. Demand for 3- and 5nm related smartphones and AI has exploded. SMIC (00981), which has been mentioned many times, surged by more than 16%. Hongguang Semiconductor (06908), Jingmen Semiconductor (02878), and Huahong Semiconductor (01347) all increased by more than 10 points.

The Hong Kong Monetary Authority will announce a sustainable finance action plan next Monday afternoon. The Policy Address mentioned that the Hong Kong Securities Regulatory Commission and the Hong Kong Stock Exchange (00388) will announce specific measures to further optimize the listing approval process. Lei Tianliang, who is about to step down as the chairman of the Hong Kong Securities Regulatory Commission, said that details of the relevant measures will be announced as soon as Friday, hoping to make it easier for companies to grasp the listing schedule by simplifying listing procedures. He said that improving the listing approval process can make the listing approval process more clear and simplified, and he is confident that Hong Kong's IPO capital will soon return to the top three. As long as the Hong Kong stock market improves, the IPO business can advance smoothly. After speeding up approval, it is estimated that many mainland China will switch to Hong Kong listing, which is beneficial to the Hong Kong Stock Exchange (00388).

This rise came a bit off guard, because there was no sign of it beforehand; it suddenly gained strength in the afternoon, and bears would be cut if they failed to respond. If you want to make up for losses, you can only go back and go too long; this is the effect. Mainstream are big financial securities, insurance, and technology.

[Section Focus]

According to a report by China News Agency, Israel announced on the 17th that Yahya Sinwar, leader of the Palestinian Islamic Resistance Movement (Hamas) Political Bureau, has died in Gaza. Hezbollah in Lebanon said on the 17th that its confrontation with Israel has entered a “new phase of escalation.” Furthermore, the US retail sales data for September, which was released overnight, grew more than expected, suppressing loose expectations and further boosting risk aversion. Regardless of who is elected Trump or Harris, America will face the prospect of a widening deficit. According to data from the competent agency Committee for a Responsible Federal Budget (Committee for a Responsible Federal Budget), Trump's tax plan will require an increase of about 7.5 trillion US dollars in new debt, while Harris's fiscal plan will require an increase of 3.5 trillion US dollars in debt. Gold is likely to be more attractive given the plight of the US debt problem.

If Hamas leader Sinwar is confirmed, then it will further increase tension in the Gaza region. Iran says that the killing of Sinwar will strengthen the “spirit of resistance” in the region. The latest COMEX gold price has once again reached a new high. It can be seen that the market is looking for gold.

Major varieties in the Hong Kong stock market: Zhaojin Mining (01818), Shandong Gold (01787), Zijin Mining (02899), and Lingbao Gold (03330).

[Individual Stock Mining]

Zhongan Online (06060): Insurers will achieve continuous profit from quarterly repair insurance business

The total amount of original insurance premium income received by Zhongan Online from January 1, 2024 to September 30, 2024 was approximately RMB 25.496 billion, an increase of 10.93% over the previous year. 24H1 achieved insurance service revenue of 15.088 billion yuan, +19.0% year-on-year; net profit to mother of 55 million yuan. Net assets returned to the mother at the end of the first half of the year were 20.040 billion yuan, +0.8% compared to the end of the previous year.

Comment: With the gradual restoration of macroeconomic expectations and the gradual recovery of the equity market, the net profit and value growth of listed insurers is expected to be repaired and improved quarterly. The company's domestic insurance business continues to be profitable. 2024H1 achieved insurance service revenue of 15.088 billion yuan under the new standards, +19.0% year-on-year; the comprehensive cost ratio increased by 2.1 pct to 97.9% compared to last year. Among them, in a complex market environment, the payout rate was +3.6 pct to 60.7% year on year; the fee rate improved, -1.5 pct year over year to 37.2%. In terms of domestic technology business, in line with new opportunities in the industry, the company's revenue increased dramatically. 2024H1, domestic technology export revenue of 319 million yuan, +112.7% YoY. Domestic technology products mainly include business production series, business growth series and new digital infrastructure series. In the first half of the year, the company signed 56 new insurance industry chain customers, and further expanded the coverage of the industry. At the same time, the company has seized the opportunity of the industry to implement the new IFRS17 insurance contract standard, and has signed more than 10 IFRS17 customers so far. Looking forward to the future, it is expected that the company will continue to promote high-quality development and innovative exploration in various ecosystems, and build a second growth curve in the technology and banking sectors.

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