Source: Yaya Hong Kong Stock Exchange

This year, as of the first 11 months, Hong Kong stocks fell by 13%, and the performance was not satisfactory. After a major rebound from the end of November last year to January of this year, affected by interest rate hikes and exchange rates, the market also began a realistic trading logic of weak recovery, leading to a huge gap with the economic recovery and valuation recovery expected at the beginning of the year.

If the current decline were to be predicted in January at the beginning of the year, almost no one would believe it. However, the pain experienced by Hong Kong stocks this year can be reflected through some of the companies that have experienced the biggest declines.

Ranking of year-to-date declines, what is the biggest drop$LI NING (02331.HK)$It has dropped 67%. If we calculate from the highest point during the year, it has fallen by 73% so far. This is also the Whitehorse stock that has fallen the most this year.

Li Ning's weakness is summed up as the poor recovery of the general environment and the poor management ability, and the brand power is no longer able to support the selling price.

Over the past few years, Adi and Nike weakened, and Li Ning received dividends from Xinjiang cotton, Li Ning raised the selling price. However, due to the slump in consumption recovery this year, high-priced goods cannot be sold, and various channel vendors are anxious to clear their inventory at discounts. There is a problem of channeling goods and random prices. The low prices of some agents are even lower than those of Li Ning's direct sales channels and e-commerce channels, and the price cuts of channel providers have disrupted the balance of prices on the sales side. For example, the official price of a pair of shoes is 1,500 yuan, but it may only be around 500-700 yuan after the channel vendor discounts it.

This kind of problem with shoes and apparel is a reflection of the company's poor management ability.

Last month, Li Ning's management said it would step up efforts to digest inventory, which meant there was also a possibility of increasing discounts to clear inventory. Management lowered the sales guidelines for 2023 to below 10% year-on-year growth. The previous guidance was a 15% year-on-year increase, causing Li Ning to once again plummet 20% in one day against the backdrop of continuous decline this year.

What is the second largest decline$CG SERVICES (06098.HK)$This year can be described as being full of disasters and difficulties, falling 61%. The situation of the real estate industry and the consumer industry is somewhat similar.

Because at the beginning of the year, the market had relatively optimistic expectations for the real estate industry, judging that the general environment this year was good, the past year would at least not get worse. Furthermore, policy expectations are very optimistic. As a result, quite a few policies have been introduced, but it is still difficult to reverse the trend of the general environment, which is in stark contrast to the positive expectations at the beginning of the year.

In the past, the parent company sold the house and then gave the community to its own property company, but when the general housing sales environment was not good, the property company was in a market of shrinkage or stock, and the property management company lost the most stable source of incremental revenue, as well as the most important growth factor.

What is the third place in the decline$ZHONGSHENG HLDG (00881.HK)$It has fallen by 52% year to date. This is also a microcosm of the major environmental changes in the past two years. Zhongsheng Holdings is mainly a 4S store company that sells cars such as Mercedes-Benz, Lexus, Audi, and Toyota.

Judging from the K-line chart trend, since June last year, Zhongsheng Holdings has fallen by nearly 70%. The main impact is that policy support for new energy vehicles was increased in the middle of last year, speeding up the penetration of trams.

For example, in October of this year, the sales volume of passenger cars ranked in the top ten, and fuel cars only ranked 4th. Moreover, the year-on-year growth rate of the three fuel vehicle brands has declined.

However, when consumers bought electric trains became a major trend, 4S stores selling fuel-powered cars were also killed by Davis. Fuel car sales declined, and trains all had their own sales channels. There was no channel for 4S stores. The business model was at odds with the general environment of high sales of trams, so there was such a big decline.

What is the fourth largest decline$JD-SW (09618.HK)$It fell 51%. This was the most unexpected for everyone. It was also the one where the stock price was hit hard after being changed by the general environment and its competitive advantage was weakened.

Why is JD's decline, we and$PDD Holdings (PDD.US)$Looking at the superposition of stock prices, it is easy to understand. That is, JD was knocked down by Pinduoduo, JD fell 51%, while Pinduoduo rose 45%. The two stock price trends are completely opposite.

Everyone should remember that in February of this year, JD still chanted to fight with Pinduoduo. On March 8, it launched a high-profile 10 billion subsidy campaign. The products included in the campaign must be at the lowest price on the entire network. If it's not the lowest price, it will cost customers money.

At the time, some surprises were given to the market. It seemed that JD could still compete with Pinduoduo.

However, we also mentioned at the time that low price competition is an area that JD has not ventured into. This is also the opposite of JD's strategy to reduce costs and increase efficiency. If it faces resistance to Pinduoduo, it is feared that gross margin will decline. The low price competition, on the other hand, is Pinduoduo's success. With the trend of declining consumption, JD did not threaten Pinduoduo in the end; instead, it fell down on its own.

What is the fifth place in the decline list$ENN ENERGY (02688.HK)$It has fallen 49% year to date. The company is mainly in the retail business of natural gas, liquefied petroleum gas, and automotive gas.

The main reason for the decline was a thunderstorm in the interim report. Revenue in the first half of the year unexpectedly fell 7%, and core profit fell 5%, which was lower than the low unit growth generally anticipated by the market. There are two reasons for the revenue explosion. Last year, the company achieved growth through LNG trade and obtained a high base.

However, in the first half of this year, the company adjusted its industrial gas sales structure and stopped supplying gas to its own power plants with low gross margins. The decline in revenue and the impact of last year's high base figure led to a thunderstorm in the interim report, which plummeted 16% on the same day. Excluding this part of the impact, the overall gas sales volume fell by about 1-2%, not by 7%.

Judging from the top five companies in decline this year, whether it is consumption, real estate, or fuel vehicle companies, the bleakness of fuel vehicle companies, it is all related to changes in the general environment. However, when the general environment changes, competitors are strong, and the company itself still faces bottlenecks, then it is easy to be double killed by Davis in the market.

Also, since$Hang Seng Index (800000.HK)$Since its launch, the longest period of decline was from 2000 to 2002, when it fell for 3 consecutive years. The Hang Seng Index temporarily fell 14% this year, and 2023 will end in one month. It is almost a miracle for the recovery, then this year is bound to break the longest period of continuous decline in the Hang Seng Index, starting in 2020-2023. The benefits of the above 5 stocks are indelible.

Editor/Corrine