Zhitong Hong Kong Stock Exchange Unravels | Staggering Precious Metals Accomplish All Lines, Hainan Free Trade Port Suddenly Benefit

[Anatomy Dashboard]

Due to concerns about US stock trends and wait-and-see evening non-agricultural data, Hong Kong stocks fluctuated mainly throughout the day, and the Hang Seng Index closed slightly down 0.48%.

Faced with Trump's tariff shock wave and trillion-dollar deficit, Goldman Sachs took the lead in initiating risk control mechanisms — actively reducing risk exposure and hoarding liquid ammunition. As one of Wall Street's trendsetters, Goldman Sachs has a huge impact on global capital.

Unexpectedly, Trump and Musk, the richest man in the world, were actually “torn apart”. Musk revealed Trump's “big news” on social media platform X. He said that Trump's name actually appeared in Epstein's files. Trump threatened to cancel the government contract of Musk's company; affected by this, Tesla's stock price fell by more than 14% on Thursday, and the market value evaporated by 152 billion US dollars (about 1092.2 billion yuan), the biggest one-day decline in history, falling below the 1 trillion US dollar threshold.

At the core of the conflict between Musk and Trump is the “big and beautiful” tax reform bill promoted by the latter. The bill plans to eliminate electric vehicle tax credits, cut clean energy subsidies, expand support for the oil and gas industry, and involve $1.5 trillion in spending cuts and $4 trillion in tax cuts. Musk believes the bill will increase the fiscal deficit and damage the interests of Tesla and SpaceX under its umbrella. At the end of the day, it's all for profit, and there's no deep hatred; there's no need to go too deep into the drama. If it didn't work out, the two parties acted. The stock price dropped, then hit the bottom again. After that, a settlement was made, and the stock price rose again. It was all a game where capital played to reap.

On the evening of June 5, President Xi Jinping was scheduled to make a regular phone call with US President Donald Trump. This is the first time that the leaders of China and the US have spoken since Trump took office on January 20 this year. Trump said via social media on the 5th that the call, which lasted about an hour and a half, was “very good” and brought “very positive results” to both countries. Trump also said that the heads of state of China and the US have invited each other to visit each other's countries. No specific results have been seen, but at least after communication, differences can be managed and not worsen. It is estimated that Trump will also feel uncomfortable being stuck in rare earths. We will see later how the two sides can further communicate. There was an adjustment for rare earths today. Li Jiachao once again responded to the Changhe (00001) sale of the port, stressing the need to measure overall interests and personal interests. Let's talk about this topic again at this point, but it's actually quite sensitive.

The China Securities Regulatory Commission said it is currently working with global regulators to curb the activities of illegal financial influencers (finfluencers), saying that these financial influencers are putting millions of social media users at risk by illegally peddling financial products or services. The Securities Regulatory Commission said that within a week starting June 2 this year, relevant regulators participated in the “Global Action Week to Fight Illegal Financial Influencers”. Regulatory rectification is necessary, but sentiment will be affected.

With the gold price already at a high level of around 3,400 US dollars, capital began attacking other precious metal varieties that are lagging behind. Spot silver prices surged 4.5% in the intraday session on Thursday, hitting the highest level of 36.06 US dollars/ounce since February 2012; spot platinum prices also soared 4.8% overnight, further breaking the high of 1,152 US dollars/ounce since March 2022 during the Asian session on Friday. The relevant individual stocks were naturally moved by news, and China Baiyin Group (00815) surged by more than 26%. Wanguo Gold Group (03939) surged more than 10%, while other non-ferrous mineral resources (01208), China Hongqiao (01378), Jiangxi Copper (00358), and Luoyang Molybdenum (03993) all rose by more than 4%. If the evening non-agricultural data is still very poor, then it is a step further from cutting interest rates. After starting interest rate cuts, it is good for Hong Kong real estate stocks, because the Hong Kong dollar implements a US dollar linked exchange rate system, and the Hong Kong dollar will follow interest rate cuts. Local real estate stocks in Hong Kong, such as Hysan Development (00014), rose more than 4%, and the Wharf Group (00004) rose nearly 3%. Meanwhile, Swire Properties (01972) has reached a new annual high.

Under weakness, capital continues to revolve around mainstream pharmaceutical speculation. On May 10, CSPC Group (01093) announced news that the Group is discussing three potential deals with several independent third parties, involving a total of about 5 billion US dollars. This is a huge amount of money. One of the three potential deals is already in an advanced stage and is expected to be completed in June 2025. Today, it has risen by more than 12%. It is estimated that they are betting on the implementation of this news. Perhaps the time is fast. Well, other innovative drugs with promising results will be stimulated. For example, King's (01548)'s CARTITUDE-1 has made positive progress, rising more than 8% today. Luye Pharmaceuticals (02186): Rotigotine Luye, a rotigotine patch to treat Parkinson's, was marketed in the UK and also in Germany. The company plans to work with partners to launch this product in more countries around the world. Today's increase is over 4%.

The AI application was active. June 6 marked the first anniversary of the launch of Keling AI under Kuaishou (01024). According to Kuaishou's official website, Keling AI's annualized revenue operating rate has exceeded 100 million US dollars 10 months after launch (that is, in March of this year). Recently, Keling AI and Lovart reached a deep cooperation. Lovart embeds it as the core engine in the video generation process by calling the Keling API to automatically generate complete video content for more than one minute in a single task, which can cover various scenarios such as advertising, marketing, vlogs, etc., and significantly improve content creation efficiency. Kuaishou rose more than 8%; pharmaceutical AI was also very powerful. For example, Pharmacist Gang (09885) and Yidu Technology (02158) all showed good gains.

According to the latest news, according to the “South China Morning Post”, the Hainan Free Trade Port recently announced the opening of global Internet access in some regions. This historic breakthrough not only injected strength into the free trade port construction, but also brought opportunities to the cross-border data flow infrastructure and VPN industry. This policy will directly increase the demand of enterprises for international Internet resources, promote network infrastructure upgrades, cloud service expansion, and the development of cross-border data services. First, benefit the three major operators, such as China Mobile (00941), China Telecom (00728), and China Unicom (00762), and also benefit ZTE (00763): In order to meet the international access needs of enterprises, operators need to purchase next-generation routers and switching equipment. The company is a leading global provider of communication equipment and solutions. It has strong technical strength in network security and communication infrastructure construction. Its products and solutions may be used in the construction and optimization of VPN networks to provide users with secure and efficient network connections.

Today, investors are also watching the US non-farm payrolls report for May to be released on Friday evening. Considering the poor performance of small farmers ADP data and initial jobless claims data on Wednesday and Thursday, the market's expectations that the Fed will cut interest rates at least twice during the year have been strengthened. It just depends on the final data.

[Section Focus]

According to industry chain research, domestic power battery leaders have greatly exceeded expectations in terms of the progress of solid-state batteries: 1. In terms of performance, the cycle life has reached 300-400 times within 90% SOC, and the energy density has reached 350Wh/kg-350Wh/kg; 2. In terms of material selection, the electrolyte uses a sulfide route, the cathode uses a high nickel system, and the anode uses artificial graphite+silicon-carbon anodes, and a small number use anode-free technology; 3. In terms of technology, isostatic pressure equipment is used to solve the current fixing interface problem. wet process, The dry process may be used in the future; 4. In progress, the pilot line has now been completed, and it is planned that 50 cars will be equipped with solid-state batteries for road testing within the year. Leading all-solid-state batteries are about to be loaded for road testing. The progress of the industry has exceeded expectations. Previously, Guoxuan Hi-Tech had released related solid-state battery products, and future solid-state batteries are expected to usher in more industrial catalysis.

Shanghai Xiba's first-generation high-specific energy soft-pack solid-state lithium-ion battery has been tested, and the energy density has reached 340 wh/kg (exceeding the established target of 320 wh/kg). It is expected to be first used in eVTOL, and is also suitable for humanoid robots, robot dogs, etc. Solid-state batteries are constantly making breakthroughs, and there is huge room for incremental replacement in the future.

Main varieties: Ningde Era (03750), Ganfeng Lithium (01772), Tianqi Lithium (09696).

[Individual Stock Mining]

China Resources Electric Power (00836): Favorable policies are expected to improve performance and highlight the company's development prospects at several levels

On June 4, the National Energy Administration issued the “Notice on Organizing and Carrying Out the First Batch of Pilot Work for the Construction of New Electric Power Systems”. The “Notice” indicates that pilot work will be carried out in seven directions, including grid-based technology, system-friendly new energy power plants, smart microgrids, collaboration between computing power and power, virtual power plants, large-scale delivery of a high proportion of new energy sources, and next-generation coal power.

Comment: Policy catalysis is expected to improve performance. At the same time, the upcoming hot weather and AI demand will rise, and electricity supply will also peak. Furthermore, the company's renewable energy equity share of installed capacity is close to 50% by the end of 2024. It is planned to split back into an A-share listing, which is expected to increase the company's valuation. The company is the sole power operator under China Resources Group. China Resources Group's headquarters is rooted in Hong Kong, and its unique geographical location and early work nature have established its market-based genes. Since its launch, China Resources Electric has never lost money and successfully passed two major thermal power tests (2008 and 2021). The company's average diluted ROE in 2004-2024 was 11.49%, 4.72 percentage points higher than Huaneng International. Since its listing, China Resources Electric has accumulated dividends of HK$54.4 billion, accounting for 41% of the cumulative net profit attributable to mother. Excellent management mechanisms and operational capabilities are an important guarantee for the company to move through the cycle. Reviewing the company's stock price and valuation over the past ten years. 1) At a time when the industry had no positive benefits (or even deteriorated fundamentals), the company's stock price had stronger support. 2) At a time when the fundamentals of the industry improved, China Resources Electric's stock price performance significantly outperformed its peers. In the successive thermal power restoration logic, China Resources Electric Power's stock price increase led the national leader; in the post-dual-carbon strategy Green Power revaluation logic, the company's performance was second only to the pure green leader Longyuan Electric (00916).

In 2024, the company's renewable energy sector achieved net profit of HK$9.228 billion and core profit of HK$9.029 billion. In contrast, Longyuan Electric Power, which has a larger installed capacity of new energy, had a net profit of 6.345 billion yuan in 2024. In the context of subsidy arrears, most of the company's new energy stock units are located in South China and Central China provinces where the benchmark electricity price for coal power is higher overall, and the unit installed cash flow is also significantly superior to the industry average. The profitability of the company's thermal power assets is also ahead of its peers, and it is expected to play a greater role in the new power system. Tracing back to its roots, the excellent profitability of China Resources Electric Power's assets is that it has stronger market-based genes, and incentives are in place, making better use of the subjective dynamism of power plants. Compared with Huaneng International, which has the same unit mainly located in the eastern coastal region, the company's electricity profit for the year 2022 to 2024 was about 0.032 yuan/kilowatt-hour higher than Huaneng International's constant. In the current context of declining coal prices, high-quality management capabilities help unleash the company's performance. Looking forward to the future, if the share of revenue from capacity electricity prices increases in the future, the stability of the company's performance will be further improved, and the weakening of cyclical attributes is expected to reduce the company's discount rate, thereby increasing the valuation.