Zhitong Finance's investment strategy for Hong Kong stocks in April and the top ten gold stocks

Let's review last month's judgment: “It's normal to digest all kinds of uncertain news at the beginning of March, and if something beyond expectations comes out later, the Hang Seng Index is likely to maintain a strong trend.” In April, the overall strength of Hong Kong stocks was strong. The Hang Seng Index had operating space of 22574.53-24874.39 points. The Hang Seng Index rose 2.12% monthly.

After the two meetings, policies to stabilize consumption and expand domestic demand were implemented, compounded by a recovery in real estate sales data (second-hand housing transactions increased 27% year on year), boosting market expectations about economic fundamentals. Coupled with the boom in the February market, the inertia of the Hang Seng Index rose to 24,874 points, but after that, Trump's tariff war once again caused great disturbance to the market.

The March market looked like the index was doing well, but the profit effect was not good compared to February. The most prominent products in the market were newly included in Hong Kong stocks. Among them, the leader was the Michelle Group (02097): Sinking market expansion and supply chain optimization drove revenue to double, and net profit increased 120% year on year in 2024. The increase nearly doubled, driving the consumer IPO Weilong Meishui (09985) to rise by more than 60%; another robot startup, Yuejiang (02432): The pre-sale price of Dobot Atom, the world's first humanoid robot, fell to 199,000 yuan, speeding up the mass production process of the industry, and the market share of collaborative robots is second in the world. The biggest increase was nearly 166%. The collective strengthening of the sector is the pharmaceutical sector, such as Heplatinum Pharmaceuticals - B (02142): A strategic partnership was reached with AstraZeneca, and the Harbour Mice platform received an investment of US$105 million, with a cash profit of 220 million yuan in 2024. It rose more than 73%, Sansheng Pharmaceutical (01530) rose as high as 78%, and China Oriental Education (00667), which combines vocational training with AI, rose more than 66%. Gold stocks were trending strongly during the general market adjustment. Leading leader Lingbao Gold (03330) rose more than 55%.

Entering April, the market situation took a sharp turn, and the US stocks themselves suffered backlash. From a domestic perspective, there was also a lack of obvious stimulus. Furthermore, the performance level was also a major constraint. Therefore, the overall April market was not optimistic.

Let's look at tariffs first. On Sunday EST, US President Trump said that the target of the reciprocal tariffs he will announce this week will include all countries in the world, not just the 10 to 15 countries with the most serious trade deficits. If strictly implemented, the vast majority of countries in the world will be greatly impacted. However, as far as China is concerned, there seems to be no loss. According to statistics, after the two rounds of mutual tariffs imposed by China and the US this year, the weighted average tariff of the US is about 32%, while our weighted average tariff on the US is 16% to 17%. However, the VAT rate we implement is 13%. Even without considering the US average 10% sales tax, we still have a 3% negative parity gap in our trade with the US. However, this is obviously impossible; later it is estimated that the US will add VAT or even additional industrial tariffs. Anyway, the tariffs will be very high. However, if this were to be done, the sequelae would be quite obvious, and China would inevitably step up its countermeasures.

The geopolitical aspect is also fraught with crisis. Although all parties to the Russian-Ukrainian conflict are still in the negotiation stage, there is no way to reach an agreement on too many issues, and it is impossible to reach a complete cease-fire. According to the latest news, Putin's internal speech revealed that he is “willing to fight a hundred years war.” It seems that Putin has clearly seen the situation and no longer has any illusions about the US. The reason is very simple. Talks cannot be effective without the participation of Ukraine, Europe, and China. Today's America is no longer the America it used to be. It doesn't have this ability to dominate the overall situation, not to mention that Europe itself is still harvesting Europe. Europe has been spending money and fighting for so long, so how can it be abandoned halfway if it doesn't get the benefits. Everyone has their own small plan; they will only keep up the fire and find ways to drag America down. Fighting the Houthis can only be considered a side dish; the big meal is Iran. According to a report by the National Broadcasting Corporation (NBC) on March 30, local time, US President Trump threatened that “if Iran does not reach an agreement with the US on its nuclear issue, the US will bomb Iran” and “levy secondary tariffs” on related products. On March 31, Iran's Supreme Leader Ayatollah Ali Khamenei said that if the US acts on President Trump's “threat of bombing,” then “America will be hit hard.” Iranian President Pezzahizyan confirmed on March 30 that in response to Trump's letter, Iran refused direct negotiations with the US, but indirect talks can continue as long as the US proves its credibility. With naval exercises between China, Russia, and Iran, Iran also has the strength to fight back. If the US only carried out bombing, it would obviously not be enough to hurt Iran, but if it wanted to send ground forces, the US would not have that ambition. Not to mention that its military strength is not that strong. Being involved in multi-line combat, it cannot be spent on financial resources alone. The guess is to fight a proxy war and let Israel fight it.

Also, US President Trump said on the 29th local time that the US will receive 100% of Greenland, and the possibility of using military means is not ruled out. If Greenland were to be taken, America's territory would be very close to Europe. Will Europe and Russia stand idly by? This kind of aggressive approach is equivalent to a random round of eight punches. The victims are US stocks, and the world is also being impacted. According to the latest economic data, the US consumer confidence index fell to its lowest level in more than two years. Trump has done almost nothing useful since coming to power. He thinks tariffs are a panacea, but under the premise that he lacks his own strength, the probability of being affected is very high.

According to current developments, it is quite difficult for US stocks to move forward this time. The only hope is that the Federal Reserve will cut interest rates, but it will be until May at the earliest, because there will be no meeting in April. Moreover, with inflation being so high, how to cut interest rates is also a big problem.

Back at home, there isn't much excitement at the moment. The key is to stay stable. Among them, the Ministry of Finance will issue the first batch of special treasury bonds of 500 billion yuan to actively support the Bank of China, China Construction Bank, Bank of Communications, and Postal Savings Bank of China to supplement core Tier 1 capital. The central bank has also mentioned many times that it will take the opportunity to cut interest rates. It is estimated that interest rate cuts will not be that fast. It is estimated that they will have to wait for the Federal Reserve to take the lead. It is estimated that it is also a downgrade. This effect is relatively average.

The good side is that foreign investors have a relatively positive view of the Chinese market. Moreover, if US stocks remain weak, this situation will continue to strengthen. Capital knows no borders; wherever it is safe, stable, and profitable, it will go wherever it is safe, stable, and profitable. This is also a comparative advantage. Foreign investors may start by increasing the allocation of Hong Kong stocks from passive funds. At the same time, southbound capital will also accelerate its inflow into Hong Kong stocks.

What is worth looking forward to is the Politburo meeting. It is expected that in late April, it will mainly set policies for the second quarter, including real estate policy optimization (such as relaxation of purchase restrictions in first-tier cities), consumption incentives (such as continued subsidies for new energy vehicles), and technology industry support (such as the AI Big Model Special Fund).

In summary, the Hang Seng Index is expected to test 21,000 points of support in April and then rebound under policy catalysts.

April 2025 Investment Strategy: Defend Yourself

Zhitong Finance's March gold stocks outperformed the market by a large margin. The biggest increase in the Hang Seng Index was 8.4% in the same period in March; the top ten gold stocks had the biggest increase of 15% in March. The biggest monthly gains of the top ten gold stocks are as follows: Qiu Tai Technology (01478) rose 29.9%, Federal Pharmaceuticals (03933) rose 29.1%, Premium Choice (09880) rose 25.4%, Weichai Power (02338) rose 17%, Zhixing Technology (01274) rose 11.6%, Ping An Good Doctor (01833) rose 10.1%, Maanshan Steel (00323) rose 8.9%, Geely Auto (00175) rose 7.4%, Galaxy Entertainment (00027) 6.1% , Vanke Enterprise (02202) rose 4.1%.

Gold stocks in March are all exciting opportunities. If you don't do a good job, you can also easily be dragged down by the market. April is more difficult than March because the environment will be even harsher. So the overall strategy is: Defend well.

The market has gradually moved from “speculating on expectations” to forward-looking and verifying performance. The types of defense at this stage are mainly in the gold, pharmaceuticals, utilities, and consumer categories. However, the science and technology category cannot be ignored. The 7th issue of “Qiushi” magazine, which will be published on April 1, will publish the leaders' important article “Moving Courageously Toward the Ambitious Goal of Building a Strong Nation of Science and Technology”. The article points out that with the firm determination and tenacious will to “sharpen one sword in ten years,” we must work hard and work hard step by step to make the strategic goal of becoming a scientific and technological power a reality step by step. The focus is on robotics and AI.

Note some of these catalytic factors, such as pharmaceutical health insurance negotiations (April 20). The direction of collection has become friendlier; Huawei Medical Ecology Conference April 25; Home Appliance Trade-In Policy Rules Mid-April: The subsidy scale is expected to exceed 300 billion yuan.

Speaking of gold, Goldman Sachs raised the gold price forecast for the end of 2025 from 3100 US dollars/ounce to 3,300 US dollars/ounce, and adjusted the forecast range to 3250 US dollars/ounce to 3,520 US dollars/ounce in the latest research report. Furthermore, Goldman Sachs anticipates that the largest central banks in Asia may continue to buy gold rapidly over the next 3 to 6 years to reach the estimated target range of potential gold reserves. In an extreme risk scenario, the price of gold could break through 4200 US dollars/ounce.

Specific varieties:

Rongchang Biotech (09995)

Meitu Corporation (01357)

Midea Group (00300)

Dongfeng Group Co., Ltd. (00489)

Huaxin cement (06655)

Tongcheng Trip (00780)

Beijing Holdings (00392)

China Ship Leasing (03877)

Anhui Wantong Expressway (00995)

China Gold International (02099)

The detailed list is as follows:

1. Rongchang Biology (09995)

Revenue in 2024 increased 59% year over year to $17.1 billion (RMB, same below), with tetracip and verdicitol increasing 88%/36% to 970 million/720 million yuan, respectively. The net loss for the year was 1.47 billion yuan, and both gross margin and operating expenses ratio showed a marked improvement trend.

Net loss was drastically reduced to less than 1 billion yuan, striving to achieve break-even in 2026 and further clarify the profit path in 2027. As of the end of 2024, the cash reserves were sufficient to meet working capital and capital expenditure requirements, considering that the company had sufficient unused bank credit lines and losses were reduced rapidly. Among them, Titacip's overseas launch is about to usher in a key development: although overseas development of titacip's SLE indications has been suspended, the company is actively promoting phase III myasthenia gravis (GmG) research, which requires less capital and is progressing faster. It is expected that patients will be enrolled by the end of this year/early next year. Domestic Phase III data has been selected by the American Academy of Neurology (AAN) for a major oral report and will be officially announced in early April. Phase II data shows safety advantages over competitive products.

It is expected that the gMG indication for titacept will be approved for marketing in the US in 2027, and PoS adjusted sales will peak at $3-4 billion. Currently, the market is still overly concerned about Taixip's overseas prospects and the company's losses and cash consumption; as the company's profit expectations after fee control and Taixip's overseas registration path gradually become clear, the current stock price is still significantly undervalued. The next 12 months are rich in key catalysts: 1) the progress of multiple new indications/new product marketing applications in China, including Taitacip's gMG (accepted and included in priority review in October last year), IgA nephropathy (1H25 submission), dry syndrome (2H25 delivery), vidicital's 2LHER2+ BC with hepatic metastasis (2Q25 expected to be approved), 1L UC combined PD-1 (2H25 delivery), and RC28 (2H25 submission); 2) Tecitaxip MG data reading Going abroad Phase III progress; 3) Early pipeline progress such as RC278 and prospects for going to sea.

2. Meitu Corporation (01357)

In 2024, the company achieved revenue of 3.341 billion yuan, an increase of 23.9% over the previous year, and adjusted net profit of 586 million yuan (forecast range of 566-589 million yuan), close to the upper limit of the forecast range, with a year-on-year increase of 59.2%. The company announced a dividend of HK$0.0552 per share, totaling approximately HK$225 million (RMB 232 million), with a dividend payment ratio of approximately 40%. The company's profit side maintained high growth, mainly due to the following points: 1) Revenue from the high-margin core business “imaging and design products” driven by AI technology grew rapidly. The revenue of this segment reached 2,086 billion yuan for the full year of 24, up 57.1% year on year, accounting for 62% of total revenue; in addition, advertising business revenue reached 853 million yuan, up 12.5% year on year, of which programmatic advertising growth rate reached 35%, mainly due to advertising system optimization; beauty solutions business revenue reached 385 million yuan; 2) R&D investment related to AI technology and products was relatively high There was a marked increase, but the increase in comprehensive operating expenses was lower than the increase in gross profit, and profitability was further improved; 3) The globalization strategy was effectively promoted. By the end of '24, the MAU of the company's products reached 266 million, up 6.7% year on year. The number of company subscribers exceeded 12.61 million, and the payment rate rose to 4.7%, an increase of 0.5 pct compared to June '24. Among the core products, Meitu Design Studio's paid users reached 1.13 million by the end of the year, an increase of 30% over the previous year, and the revenue contribution reached 200 million yuan, doubling the previous year. Wink MAU surpassed 30 million, and the starting MAU exceeded one million levels. Among them, Meitu Design Office has now used DeepSeek technology, which mainly generates PPT-related functions for AI, and is testing and cooperating with large models such as Doubao and Keling. As a representative of AI applications in vertical fields, the company has rich material reserves, and is expected to continue to benefit from savings in computing power costs and technology equality under the open source model. Since the company released several AI products in 2023, the increase in payment rates has continued to accelerate. With the release of various productivity tool products, the company's application scenarios have gradually expanded from lifestyle and entertainment to productivity scenarios. Currently, domestic and foreign users continue to increase their awareness of payment for tool applications, and target users of productivity tools are more capable and willing to pay. The company has been deeply involved in the retouching application market for many years and has high user stickiness. The company is expected to open up commercial monetization space for productivity tools, benefiting from the large open source model and the reduction in computing power costs. Continued growth in performance.

3. Midea Group (00300)

In 2024, we achieved total operating income of 409.1 billion yuan, +9.5% year over year; net profit to mother of 38.5 billion yuan, +14.3% year over year; net profit after deducting non-return to mother of 35.7 billion yuan, +8.4% year on year. Among them, 24Q4 achieved total operating income of 88.7 billion yuan, +9.1% year over year; net profit to mother of 6.8 billion yuan, +13.9% year over year; net profit without return to mother of 5.4 billion yuan. In terms of dividends, the company plans to pay a dividend of 35 yuan for every 10 shares, with a total cash dividend of 26.7 billion yuan, corresponding to a dividend ratio of 69.3%. A 25-27 shareholder return plan was introduced, and cash dividends are implemented twice a year under relevant conditions; profits distributed in cash are not less than 30% of the average annual distributed profit achieved in the last three years, and cash dividends account for at least 60% of this profit distribution. Specifically, the household appliances business earned 269.5 billion yuan in 24 years, +9.4% year on year; 24Q4 revenue was 54.1 billion yuan, +7% year over year. The revenue of the ToB business was 104.5 billion yuan in 24 years, +6.9%, including smart building technology +10%, new energy and industrial technology +21%; 24Q4 smart building technology revenue +27%, and industrial technology revenue +26%. The trend was positive in all sectors in the fourth quarter of the single quarter. In addition, cash flow has steadily increased and reservoirs have been further expanded, leaving room for performance. The company's 24-year operating activities generated a net cash flow of 60.5 billion yuan, +4.5% over the same period last year. As of the end of '24, the company's other current liabilities were RMB 90.4 billion, +27%/+3% YoY/Q3; contract liabilities were RMB 49.3 billion, +18%/+31% YoY/Q3. Overall, Midea Group has a clear leading advantage in the white electronics business, and the development logic of each business line is clear: 1) In the home appliance business, the domestic trade-in policy is expected to drive demand and boost COLMO+ Toshiba's dual high-end brands to optimize profits, and the share of overseas OBM business is expected to increase in 25 years. 2) The ToB business trend is improving, and each business gradually breaks through and strengthens horizontal collaboration across product divisions, which is expected to be accompanied by scale expansion and gradual optimization of profitability.

4. Dongfeng Group Co., Ltd. (00489)

The company has many subsidiaries, and its business covers various fields such as commercial vehicles, passenger cars and auto parts. The product lineup covers famous brands and commercial models such as Rantu, Nissan, Infiniti, Kaichen, Logo, and Citroen. At the same time, the transformation of the company's independent sector is accelerating. Dongfeng Passenger Vehicle focuses on R&D and manufacturing of passenger cars such as Fengshen, Fengxing, Nano and Yipai, and has strong market competitiveness and comprehensive strength. Among them, the joint venture business base is stable, and autonomous transformation continues to accelerate: the Group's main joint venture brands are Dongfeng Nissan and Dongfeng Honda. Both achieved sales of 1.58 million vehicles in 2023, accounting for 90+% of the company's passenger car share, and are an important source of profit for the Group. Although the company's joint venture brand has been under pressure for a short period of time, the transformation of its own brands has accelerated. Rantu has launched various models such as FREE, Dreamer, and Chaser, forming a comprehensive layout of SUVs, MPVs, and sedans, and subsequent sales are expected to continue to grow; as a medium to large luxury electric off-road vehicle, the Warrior 917 has successfully entered the hardcore off-road segment and is expected to continue to contribute to growth. At the same time, cooperation with Huawei has been deeply empowered, and policy incentives continue to benefit: In February 2024, Huawei Auto BU and Dongfeng Mengshi formally signed a strategic cooperation agreement aimed at promoting the sharing of industrial resources and complementary advantages, and the level of intelligence of the company's own brands has been greatly improved. In addition, the company's own brands include Fengshen, Fengxing, and Nano series. The joint venture brands Dongfeng Nissan's Sylphy and Dongfeng Honda's Civic are both ranked A and below, fully benefiting from domestic demand stimulation policies, and sales are expected to continue to rise. In addition, demand for commercial vehicles continues to recover, leading to an upward recovery in profits: the company's main products in the commercial vehicle sector include light trucks, light buses, heavy trucks and buses, and heavy truck sales have long been in the top five in the market. Dongfeng Commercial Vehicle is a heavy truck manufacturing subsidiary of the Group. It has an independent R&D and production base. Its products cover complete vehicles and chassis for medium and heavy trucks and buses, as well as key powertrains. Looking at the moment, domestic demand for commercial vehicles is following a macroeconomic recovery, with broad export space and continuous contributions. The company's commercial vehicle sector is expected to fully benefit. Overall, the company will develop rapidly in the field of intelligence and continue to benefit from favorable policies such as trade-in.

5. Huaxin Cement (06655)

The company's revenue/net profit to mother in '24 was $342.42 billion, +1.4%/-12.5%. Among them, Q4 revenue/net profit to mother was $950/ 1.28 billion yuan, -1.0%/+43.9% YoY. The significant year-on-year increase in Q4 net profit was mainly due to improved gross margin and the company achieved asset disposal revenue of $730 million. Among them, in 24, the company's cement/aggregate/concrete sales volume was 57 million tons/143 million tons/32 million square meters, -2.0%/+9.0%/+16.7%, achieving revenue of 180.3/56.4/8.42 billion yuan respectively, -1.6%/+5.2%/+10.0% year-on-year. The aggregate business continued to grow rapidly. Overall cement sales declined, but overseas sales volume was +37% year-on-year. The company's overall gross profit margin in '24 was 24.7%, -2.0pct year-on-year, of which Q4 was 26.4%, or -1.3/+1.7pct. According to Digital Cement Network, as of March 21, '25, the average price of cement in the country was 401 yuan/ton. The price at that time was +9.5%. Cement prices have resumed rising since March, which is expected to drive 25Q1's profitability recovery. In addition, the international layout continues to deepen. Energy saving and carbon reduction drive the company's overseas revenue in 24 years was 8.04 billion yuan, +46.5% over the same period. The share of revenue increased by 7.3 pcts to 23.5%. Overseas business continued to grow rapidly. By the end of 24, the company's cumulative overseas operations and cement production capacity under construction exceeded 25 million tons. At the same time, the company continues to cultivate green and low-carbon development. The comprehensive energy consumption of domestic clinker decreased by 0.67 kgce/t year on year in 24. The international layout and energy saving and carbon reduction advantages are expected to drive the company's medium- to long-term growth. Overall, the rebound in cement prices is expected to catalyze the continued restoration of 25Q1 profitability, and internationalization and energy saving and carbon reduction are expected to drive the company's medium- to long-term growth.

6. Tongcheng Trip (00780)

2024Q4 Tongcheng Travel achieved revenue of 4.24 billion yuan/year on year +34.8%, adjusted net profit of 660 million yuan/year on year +36.8%/adjusted net profit margin of 15.6%. The higher performance than expected was mainly due to the core OTA business operating margin of +6.8 pct to 28.4% year on year, and the profitability of the core business improved markedly. Looking at the business split, core OTA revenue grew steadily, and the international business expanded rapidly: on the revenue side, the 2024Q4 transportation business revenue was 1.72 billion yuan/year over year, and its international air ticket market share expanded rapidly, and the annual business volume increased by more than 130% year over year; accommodation business revenue was 1.14 billion yuan/year over year +28.6%. Among them, international hotels maintained the leading growth rate in the industry, and business volume increased by more than 110% year on year; other business revenue of 60 billion yuan/year on year +14.8%. Among them, Yilong Hotel Technology Platform maintained an expansion trend There are nearly 2,300 hotels in operation; the vacation business revenue is 780 million yuan, and the value of products and services drives more than 1,000 travel agency stores. On the operating profit side, 2024Q4's core OTA operating profit was 980 million yuan/YoY +44.4% /operating profit margin 28.4%, and vacation business operating profit of 18.22 million yuan/operating margin 2.3%. In addition, the average number of monthly paying users reached a record high, and user value continued to rise: in 2024, the average number of monthly paying users reached 43.1 million/ +4.4%, a record high. The annual number of paying users reached 240 million/ +1.5% YoY, and the number of annual service users reached 1.93 billion/ +9.3% YoY. Overall, Tongcheng Travel, as an OTA leader in the sinking market, relies on Tencent and Ctrip's outstanding competitive advantages in traffic and inventory resources, and the competitiveness of domestic business continues to improve; actively positioning the international market is expected to drive the release of medium- to long-term revenue and performance gains.

7. Beijing Holdings (00392)

The company announced 2024 results: revenue of 84.06 billion yuan, +2.1% year on year; net profit to mother of 5.12 billion yuan, -6.8% year on year, core operating profit of 5.12 billion yuan, +5.0% year on year, in line with expectations. In terms of joint ventures/joint ventures, Beijing Pipeline/Rosneft VCNG/Beijing Water Services/China Gas achieved investment revenue of 2.30 billion/ 830 million/648 million yuan. Among them, there is still room to recover profits from the LNG trading business. Losses in the company's LNG trading business (terminal operation+LNG distribution+international LNG trade) narrowed significantly in 2024. 1) The Nangang LNG terminal load rate is expected to increase year-on-year in 2025; 2) The Nangang LNG project's partial investment recovery mechanism may be formally determined after the Beijing gas distribution cost review is completed, and the company's LNG trading business profit is expected to continue to recover in 2025-2026. At the same time, the debt structure is expected to be further optimized. In 2024, the company reduced headquarters financial expenses by more than 300 million yuan year-on-year through instruments such as panda bonds and dollar swaps. According to the company's announcement, as of the end of 2024, the company's total interest-bearing debt was about 79 billion yuan, of which 65.7% was RMB denominated debt. Considering the current low domestic debt financing costs, it is determined that the company may further optimize its debt structure to reduce financial costs in 2025. Furthermore, the increase in dividend payout rates may help the company's valuation continue to recover. The company's dividend yield in '24 was +3.2ppt to 36.2% year over year. Based on the closing price of Hong Kong stocks on March 28, the dividend yield for 2025 reached 5.5%. Looking ahead, considering that the medium- to long-term development prospects of the company's various businesses are relatively stable, some investors may value the company using the DDM model. With the optimization of the debt structure and corporate governance, there is still plenty of room to improve the company's medium- to long-term dividend payment capacity, and the increase in dividend payment capacity is expected to further repair the company's valuation. Overall, with the improvement of the company's operating conditions and the optimization of the debt structure, there is plenty of room for improvement in the company's dividend payment capacity, and there is room for the stock price to rise.

8. China Ship Leasing (03877)

China Ship Leasing is the world's leading ship leasing company, and the first and only listed shipyard leasing company in China. Benefiting from shareholders' professional backgrounds, a “fixed+flexible” business model, high-quality and balanced fleet assets and a sound risk management and control system, the company has a higher performance growth rate and more efficient asset returns than its peers. Furthermore, at this point, risk-free interest rates continue to decline, and the company's dividend yield is attractive. Specifically, based on the holding background of the world's largest shipyard, the company has ship-understanding genes. With strong expertise and rich experience in the shipping industry, it helps to seize business opportunities and move through the cycle. Among them, the “fixed+flexible” business model calms cycle fluctuations. The company placed a large number of orders to build ships at low ship prices, expand operating volume, ensure steady development of the general business market, and achieve asset premiums at high cycle levels. Since its launch in 2019, net profit has grown rapidly at an annualized rate of more than 20% in 2019-2022. 24H1's total revenue was HK$2.2 billion, up 27% year on year, and achieved net profit of HK$1.33 billion, up 22% year over year. Annualized ROE and ROA were 20.2% and 6.0% respectively, the highest since listing. At the same time, it also has high-quality and balanced fleet assets: full coverage of oil and gas collection, developing towards green, high quality, and high added value. The company's fleet is small, low in cost, strong in circulation, and the proportion of high-tech value-added vessels such as LNG is large, and the proportion of ships is balanced. As of the 2024 mid-year report, the company has 125 ships, with an average age of 3.73, including 38 bulk carriers, 24 oil tankers, 19 container ships, 15 gas carriers, and 29 special ships; 23 are under construction, including 4 container ships, 6 oil tankers, 9 gas carriers, and 4 special ships. Furthermore, dividends continue to be paid at a high rate, and the allocation value is prominent in a low interest rate environment. Since its listing, the company has continued to pay a high percentage of dividends. The total dividend has reached HK$3.13 billion, which has exceeded the total amount of capital raised since listing in June 2019.

9. Anhui Wantong Expressway (00995)

The company is the only highway listing platform in Anhui Province, focusing on toll road business. Relying on cost advantages in highway construction and operation management in the province, the company's gross margin and return level have remained industry-leading for a long time. The average ROE and gross profit margin (excluding construction period business) in 2010-19 were 12% and 61% respectively. Beginning in 2020, the company continued to strengthen shareholder returns, and the dividend ratio increased to 60% and has remained so far. At the same time, demand resilience brought about by being located in a major transportation hub in the east helped the company to recover its profit level relatively ahead of the pace during the period. The A-share price has risen by more than 250% since 2020, which is clearly more than that of its peers. According to the provincial highway network revision plan issued by the provincial transportation department in 2021, the provincial road network will reach more than 10,000 kilometers by 2035. Based on this calculation, the CAGR will remain around 5% in 23-35. In terms of construction direction: The first is to strengthen inter-provincial connectivity and open up “guillotine roads” with Zhejiang, Jiangsu, and other provinces to integrate into the Yangtze River Delta region; the second is to expand existing arterial roads in the province and make up for shortcomings in the southern Anhui highway network in the process to stimulate road travel demand through rich tourism resources. In 35, the province's road section with six lanes or more is planned to reach 4,571 kilometers, accounting for 45% of the total mileage. Against the backdrop of fluctuating macro expectations and declining risk-free returns, the value of high-dividend asset allocation with stable fundamentals continues to stand out. In the short to medium term, macroeconomic efforts are compounded by a rise in production capacity at the Ningxuanhang Expressway and the Yuewu Expressway, and the company's fundamental improvement process is expected to accelerate. From a long-term perspective, the improvement and upgrading of the province's major transportation networks is expected to continue to drain the company, and the interaction and collaboration between listed companies and the Group's road products is worth looking forward to.

10. China Gold International (02099)

China Gold International is the only overseas listing platform belonging to China Gold Group. The full resumption of production of the company's Jiama mine is imminent, contributing to increased profits. The Jiama Copper and Gold Mine is a large-scale copper polymetallic deposit located in the Tibet region. It is the company's main copper mine (holding 100% interest). The main products include copper concentrate and gold concentrate. By the end of 2023, the Jiama mine had discovered and controlled 5.5436 million tons of copper metal, 4.39 million ounces of gold, and 484,800 tons of molybdenum metal. It is rich in resource reserves and has good potential to increase reserves. At the beginning of 2023, production was stopped in the Jiama mining area due to tailings overflow from tailings depots, and production resumed in the first half of 2024. By the end of September 2024, the Jiama mine had achieved copper production of 27,900 tons, corresponding sales revenue of US$177 million, and copper production is expected to reach up to 44,500 tons.

Furthermore, the Group has abundant reserves of overseas resources, which can be expected to be injected into the company. China Gold Group is rich in overseas mineral reserves, mainly gold and copper. The company is positioned as the Group's overseas resource platform. The relatively stable increase comes from China Gold Group's overseas resource reserves, including two gold mines, a copper-gold mine, and a copper-lead-zinc mine. They are the Kuru-Tegelek copper-gold mine in the Kyrgyz Republic (54% interest), the Kruch gold mine in the Russian Far East region (70% interest), the Buchuk gold mine in Kyrgyzstan (51% interest), and the Sorimi copper-lead-zinc mine (65% interest) in the Congo (Brazzaville). Among them, the Kuru-tegelek copper and gold mine has already been put into operation. The first phase of the Zorimi copper-lead-zinc mine in the Congo (Brazzaville) has been put into operation. The first phase of the Buchuk gold mine is in production. Infrastructure period. Overall, the company's gold production is expected to be close to 49,000 tons in 2024, and copper metal production is expected to reach 44,500 tons. We are optimistic about the upward cycle of gold prices. Considering the increase in copper and gold caused by the resumption of production at the Jiama Gold Mine, the company is expected to benefit.

(Text: Wan Yongqiang, Director of Zhitong Financial Research Center)

Disclaimer: The stock in this article is for shareholder discussion only and must not constitute investment advice. The stock market is risky, so you need to be careful when investing