① The Hang Seng Index has gained 10 consecutive days. How do institutions view short-term trends? ② China's graphite has soared by more than 50% in the intraday market. Why is capital being sought after?
Financial Services Association, May 6 (Editor: Feng Yi) The three major indices of Hong Kong stocks fluctuated low in early trading today and turned up in the afternoon. The Hang Seng Index rose 0.55% for 10 consecutive trading days. The Hang Seng Technology Index closed up 0.92%, while the SOE Index rose 0.38%.
As domestic consumption remained high during the May Day holiday, market expectations were further boosted, and short-term sentiment remained high.
The market is generally concerned about the risk of a pullback after Hong Kong stocks continued to rise. According to Agricultural Bank Securities, the current Hang Seng Index is equivalent to about 9.06 times the price-earnings ratio. In the last five years, the index's average price-earnings ratio was 11.11 times. The current price-earnings ratio is 18% below the 5-year average. Therefore, the price-earnings ratio valuation of the Hang Seng Index is still within a reasonable trading range.
Southbound funding
The net inflow of Southbound capital today was HK$5,086 billion. Currently, the net inflow has been maintained for 23 consecutive trading days, with cumulative purchases of HK$10.338 billion.
Today's market
Judging from market performance, sectors such as tourism, home appliances, gaming, and biomedicine are showing active performance today, while domestic housing stocks, automobiles, oil and gas, and gaming industries are generally declining.
[Travel stocks continue to rise, Ctrip leads a rise of more than 4%]
Short-term travel stocks are still leading in activity. Ctrip Group (09961.HK), Tongcheng Travel (00780.HK), and China Travel Hong Kong (00308.HK) rose 4.17%, 3.55%, and 2.33% respectively.
Note: Travel stock performance
Consumption remained strong during the May Day holiday. According to data from the Ministry of Culture and Tourism, the total number of domestic travel trips during the “May 1st” holiday was 295 million, up 7.6% year on year, up 28.2% from the same period in 2019 on a comparable scale; the total travel expenses of domestic tourists were 166.89 billion yuan, up 12.7% year on year, and 13.5% on a comparable scale compared to the same period in 2019.
China Galaxy Securities also released a research report saying that overall, travel consumption during the May 1st holiday overcome a high base and continued to increase steadily. If weather factors improve during the peak summer season, the growth rate is expected to improve month-on-month.
[Home appliance stocks continued to reach new highs, Hisense home appliances rose more than 4%]
Home appliance stocks had the highest gains today. Hisense Home Appliances (00921.HK), Chuangke Industrial (00669.HK), and Haier Smart Home (06690.HK) rose 4.44%, 3.60%, and 3.19% respectively.
Note: Home appliance stock performance
According to the news, various regions are actively organizing and carrying out a series of trade-in activities to drive steady growth in bulk consumption.
According to the Ministry of Commerce's key monitoring, sales of automobiles, home appliances, and furniture increased 4.8%, 7.9%, and 4.6% year-on-year respectively, with household appliances leading the growth rate in the mass consumption sector.
Huatai Securities released a research report saying that the trend of valuation repair in the home appliance sector is expected to continue. The 1Q24 Fund's heavy holdings have positively rebounded to 3.6%, and the ratio has returned to around 2020. At the same time, expectations for a recovery in domestic sales of home appliances are still optimistic, and the frequent introduction of trade-in activities in various regions is expected to drive an improvement in domestic sales.
[Domestic housing stocks pulled back in the short term, Shimao Group fell more than 9%]
After a continuous rebound in the Hong Kong stock market during the May 1st period, domestic housing stocks today ushered in a correction. Shimao Group (00813.HK), Sunac China (01918.HK), and Ocean Group (03377.HK) rose 9.09%, 7.19%, and 6.76% respectively.
Note: Domestic housing stock performance
According to the news, although stimulus policies continue to be implemented in various regions, real estate sales data is still under pressure.
According to Kerui's data, in April, the top 100 real estate companies achieved trading sales of 312.17 billion yuan, a decrease of 12.9% from the previous month and a sharp drop of 44.9% from the previous year. The monthly performance remained at a historically low level.
Furthermore, Kerry expects that the absolute sales of the top 100 real estate companies in May will remain the same as in April or decline slightly. Considering the high base for the same period in 2023, the sales performance of the top 100 real estate companies will continue to decline year-on-year in May.
Currently, the real estate stock market is still revolving around industry recovery. Short-term policies are driving a rebound in real estate stocks, but the stabilization of the sales market still needs to be further verified in the future.
Individual stock news and changes
[China's graphite surged by more than 50% in the market, and the supply of graphite materials attracted attention]
There was a change in the graphite concept of Hong Kong stocks today. China Graphite (02237.HK) once surged more than 50% intraday and closed up 31.91%.
According to the news, the US Treasury Department said on May 3, local time, that it will provide car manufacturers with more “flexibility” on the requirements for using minerals in electric vehicle tax credits. These key minerals include Chinese graphite.
Graphite is used in almost all anodes, that is, the negatively charged part of electric vehicle batteries, and China produces about 70% of the world's graphite and refines about 90% of graphite materials.
[The company's major shareholders reduced their holdings, and Zhengwei Group dived by nearly 30% at the end of the session]
Today, snack manufacturer Zhengwei Group (02147.HK) experienced a wave of diving markets at the end of the session and ended up falling 29.90%, ranking high in the individual stock decline list.
According to the Hong Kong Stock Exchange announcement, Lin Qiuyun, the wife of Yang Shengyao, the company's main shareholder and actual controller, has previously reduced her shareholding of the company's common shares by 8.972 million.
At the market level, after entering 2024, Zhengwei Group's trading in Hong Kong stocks was weak, and shareholders' holdings reduction also had a liquidity impact on the company's shares.