Zhitong Hong Kong Stock Exchange Unravels | Dollar Credit Weakens, Gold Continues to Strengthen, Innovative Drug ETF (513120.SH) is sought after again

[Anatomy Dashboard]

There was frequent positive news over the weekend, social finance data, etc. all showed an increase, and the US tariff war voluntarily contracted. Today, both markets experienced shortfall gains, and the Hang Seng Index rose 2.40%.

America's tariff war has turned into a farce. On the evening of the 11th, the US Customs and Border Protection announced that the federal government had agreed to exempt electronic products such as smartphones, computers, and chips from so-called “equal tariffs.” Documents issued by the Customs and Border Protection show that these products are excluded from so-called “equal tariffs” imposed by the government on trading partners.

It's not surprising that it's repeated over and over again, because if it were to be levied at an unprecedented tax rate, companies like Apple would simply have to kneel down, because if tariffs were added, they would be uncompetitive. Five years ago, it was easy for Apple to raise prices, but now, unlike in the past, Chinese products are too competitive to bear at all.

Also, from a realistic point of view, US Customs simply did not prepare related preparations at the same time. According to some sources, the US customs declaration system is malfunctioning. It's easy to understand. Originally, US customs were inefficient, and changing the tariff software didn't happen overnight. The Trump administration changed overnight, and the software simply couldn't keep up with policy changes, and Trump himself used tariffs to blackmail us. I really didn't expect us to be tough. Goods entering customs will pile up like mountains if there is a delay, so there is no choice but to be exempted from transit as soon as possible.

To save face, US President Trump said on the 13th local time that no “exceptions” to tariffs were announced last Friday; they were only transferred to different tariff categories. Trump hinted that the US government may still impose separate tariffs on the semiconductor industry and the broader electronics supply chain. As a result, Apple concept stocks surged higher and fell. Gaowei Electronics (01415) once opened 12% higher and eventually rose 2.42%.

As far as tariffs are concerned, the internal opinions of Trump administration officials are not uniform; they change almost every day, and the country's credit has directly become a laughing stock. The immediate consequence is that there is great concern about the credit of the US dollar. Demand to hedge against the depreciation of the US dollar has jumped to a 5-year high. Some investors have begun to leave the US, the market is re-evaluating the status of the US dollar as a reserve currency, and is in the process of rapid de-dollarization.

Gold, on the other hand, became the best carrier for de-dollarization. Spot gold continued to rise, breaking through previous highs and refreshing the historical high to 3245.45 US dollars/ounce, rebounding more than $35 from the daily low. Continuously mentioned, Chifeng Gold (06693) surged more than 22%, while Lingbao Gold (03330), Shandong Gold (01787), Wanguo Gold International (03939), and Zhaojin Mining (01818), which were mentioned by others, increased by more than 8%.

According to Goldman Sachs's latest opinion, the gold forecast for the end of 2025 was raised to 3,700 US dollars per ounce, compared to 3,300 US dollars per ounce. Goldman Sachs's current increase was as high as 12%, making it the agency's most aggressive increase in the year. The subsequent rise in gold depends on the speed at which the US dollar weakens and the strength of central banks to increase reserves. Also, keep an eye out for other commodity opportunities. Such as Minmetals Resources (01208), Luoyang Molybdenum Industry (03993), etc.

In the face of increasing external difficulties and challenges, China's foreign trade resilience did not diminish, and the first quarter had a smooth start. In the first quarter of 2025, China's total import and export value of goods trade was 10.3 trillion yuan, up 1.3% year on year, of which exports were 6.13 trillion yuan, achieving a relatively rapid increase of 6.9% over the same period last year.

On April 14, the Information Office of the State Council held a press conference. A spokesman for the General Administration of Customs stated: Currently, China's exports are indeed facing a complicated and serious external situation, but “the sky will not collapse.” In recent years, China has actively built diversified markets and deepened industrial chain supply chain cooperation with various parties. This has not only empowered each other's development, but also enhanced our own resilience. At the same time, China's domestic demand market is vast, and it is an important backbone. We will unswervingly do our own business well and deal with the uncertainty of the external environment with our own certainty. Domestic demand retail sales surged more than 26% (02586), and Oriental Selection (01797) launched the “Foreign Trade Premium Entry” campaign, which rose more than 12%.

Hainan Province issued the “Hainan Province's Three-Year Action Plan to Boost and Expand Consumption”, which mentions increasing financial support. From 2025 to 2027, we will coordinate more than 10 billion yuan of financial resources at all levels to support Hainan Province to boost and expand consumption. In 2025, financial interest rates will be given to eligible personal consumer loans and loans from service operators in the consumer sector. China Free Trade Center (01880) and Meilan Airport (00357) are expected to benefit.

ASEAN's investment opportunities are highlighted. Senior officials visited Vietnam from April 14 to 15, and Malaysia and Cambodia from April 15 to 18. Individual shipping stocks collectively changed, with Oriental Overseas International (00316), Pacific Shipping (02343), and COSCO Maritime Control (01919) all rising by more than 4%.

The Hong Kong Stock Innovative Drug ETF (513120.SH) rose more than 4% today, with a cumulative net inflow of 1,646 billion yuan in the past 7 days. There is a strong demand for capital allocation to innovative drug brands. The global competitive advantage of China's innovative drugs going overseas is showing. The impact of the current tariff policy on innovative drugs is far less than that of other growing sectors, and policy and regulatory attitudes are gradually shifting in favor of the sector.

Judging from the fundamentals of many pharmaceutical stocks, they are all quite powerful. For example, the product Aikolimbuvir tablets (0.3g) (previously known as Yingqiang Buvir tablets (0.3g)), which were independently researched and developed by Dongyangguang Changjiang Pharmaceutical (01558), have been approved by the China National Drug Administration and approved for listing. Today it surged more than 10%. Other notable ones include Shijiyao Group (01093), BeiGene (06160), and Junshi Biotech (01877), all of which are being sought after by funding.

On April 13, in response to recent news that China Securities may be delisted frequently in the US, the Financial Secretary of the Hong Kong Special Administrative Region Government, Chen Maobo, publicly wrote a statement saying, “In response to the latest global changes, I have instructed the (Hong Kong) Securities Regulatory Commission and the Hong Kong Stock Exchange to prepare. If China Securities listed overseas want to return, Hong Kong must be their preferred listing destination.” In the past three years, the share of dual-listed Chinese securities in the Hong Kong stock market has increased by 30 percentage points, reaching about 60% of the total market value. Since many China Securities have already achieved dual listing in Hong Kong, China, the impact of this “China Securities Delisting” is expected to be small, and the potential impact will be more manageable.

UBS estimates that there are currently about 230 Chinese securities listed in the US, and the total market capitalization exposure in the US is 460 billion US dollars, which is significantly lower than the 1.1 trillion US dollars at the end of 2021. At a time when Sino-US relations are becoming strained, it is expected that the return of Chinese securities will increase further in the future. The Hong Kong Stock Exchange (00388) may benefit, and foreign capital inflows are expected in the future.

[Section Focus]

Sinopec announced on the 14th that China's first cross-regional hydrogen heavy truck line was officially completed on the same day, and normal operation will begin. This western land and sea “hydrogen corridor” began in Chongqing and eventually arrived at Qinzhou Port in Guangxi. The journey is about 1,150 kilometers, with 4 hydrogen refueling stations along the way. It will drive short- and medium-distance branch logistics application scenarios around Chongqing, Guizhou, and Guangxi. It is an important step in the development of the hydrogen energy industry in western China.

The Western Land and Sea “Hydrogen Corridor” is China's first mainline logistics channel with hydrogen energy heavy trucks as the core. The “hydrogen corridor” is rich in hydrogen energy resources. Technologies such as hydrogen production from electrolyzed water and hydrogen decomposition from ammonia have been applied on a large scale. The annual output of industrial by-product hydrogen exceeds 400,000 tons, which can support the demand for 360,000 logistics vehicles.

This “hydrogen corridor” is not only a logistics channel, but also an industrial link. According to estimates, the potential two-way supply for the main line alone is 220,000 TES/year, and it passes through the Chongqing Highway Logistics Base, Guizhou Express Logistics Park, and the Jiangnan Logistics Park in Shajing, Nanning, etc., and there are plenty of application scenarios. The “Hydrogen Corridor” will give full play to the resources and industrial advantages of provinces, regions and cities along the route, build a “green channel logistics system+hydrogen energy supply system+hydrogen energy industry innovation system” to promote the deep integration of transportation, energy and industry.

Main varieties: CIMC Enric (03899), Dongyue Group (00189).

[Individual Stock Mining]

Dongyue Group (00189): The price increase of the company's products is good, demand is increasing, and prosperity is improving

According to Baichuan Yingfu data, as of April 11, the average price in the R32 market was 48,000 yuan/ton, up 6.67% from the previous month, up 11.63% from the beginning of the year, and 65.52% over the same period last year; the average price in the R22 market was 36,000 yuan/ton, up 0.70% from the previous month, 9.09% higher than at the beginning of the year, and 56.52% over the same period last year. The company's net profit for the full year of 2024 is expected to increase by more than 14% year on year.

Comment: Product price increases are the biggest fundamental aspect. The increase in the company's performance was mainly due to rising prices, which led to a high increase in refrigerant business profits. Its own advantages are highlighted. Dongyue Group is the leader in China's fluorosilicon industry. The company has a production capacity of about 220,000 tons of R22 and about 60,000 tons of R32 production capacity. In terms of quotas, in 2025, the company had an R22 quota of 44,900 tons, accounting for about 29.46% of the total quota, the largest quota in the country; it had an R32 quota of 56,300 tons, accounting for about 20.09% of the total quota, second only to Juhua shares; the company had a total quota of 129,900 tons of second-generation and third-generation refrigerant production quotas, which are among the highest in the country.

As refrigerant prices continue to rise in a tight balance between supply and demand, the company's gross profit and net profit of refrigerant products continue to increase. Most of the company's R22/R142b production capacity is used for fluoropolymer raw materials. Domestic demand is high, and it may support prices for non-refrigeration applications in the medium to long term. The price of R22 is expected to rise significantly. Dongyue Group is the leader in the second-generation refrigerant industry. It has a large R22 quota and is expected to fully enjoy the dividends of price increases. The company is the world's largest supplier of PTFE materials and has become a key material for humanoid robot tracks.