Hong Kong's three major indexes saw further declines in the afternoon. The Hang Seng Tech Index opened high and fell all day, finally closing down 1.82%. The Hang Seng Index and the HSI National Index fell 0.94% and 0.95%, respectively. None of the three were able to continue yesterday's strong rebound.
At the close, 552 stocks rose, 1329 fell, and 1187 were flat in the Hong Kong Stock Exchange.
The specific industry performance is as follows:
In terms of sectors, most network technology stocks fell, with Meituan down nearly 3%, Tencent, Kuaishou, and Netease down nearly 2%, and Xiaomi, JD.com, and Baidu down more than 1%.
Banking stocks rose against the trend, with Agricultural Bank of China up nearly 2%, and China Construction Bank, Industrial and Commercial Bank of China, and Bank of China up more than 1%, and Citic Securities and China Merchants Bank up about 1%.
Nonferrous metals stocks fell, with Aluminum Corporation of China down nearly 7%, CMOC Group down more than 6%, Zhaojin Mining, SD-Gold down more than 3%, and Zijin Mining Group down nearly 3%.
Apple supplier stocks were weak, with BYD Electronic falling nearly 5%, Sunny Optical, AAC Tech, Q-Tech falling more than 2%, and Cowell falling nearly 2%.
Pharmaceutical stocks fell across the board, with Hutchmed (China) down nearly 5%, Innovent Bio down more than 3%, Hansoh Pharma down more than 4%, and Sino Biopharm down more than 2%.
Semiconductor stocks fell, with Hua Hong Semi down nearly 7%, Shanghai Fudan down nearly 5%, and Semiconductor Manufacturing International Corporation down more than 3%.
In addition, real estate, electric vehicle companies, electrical utilities, and biomedical stocks showed a significant decline; coal stocks were slightly down, while telecommunication and shipping stocks were slightly up.
In terms of individual stocks,$COSCO SHIP ENGY (01138.HK)$Goldman Sachs: Bullish on H-shares, with an average valuation level expected to rise as oil transportation gradually transitions from weak to strong in the second half of the year.
$BYD COMPANY (01211.HK)$BYD's H-share stocks fell by over 3%. Berkshire Hathaway and its affiliates sold 0.3955 million H-share shares of BYD, and Buffett's shareholding ratio dropped to less than 5%.
$JIUMAOJIU (09922.HK)$Zhaojin Mining hit a new low, falling more than 4%, with a net profit decline of nearly 70% expected in the first half of the year. Second-quarter data is still below expectations.
$CHALCO (02600.HK)$Aluminum prices continued to be weak, with Aluminum Corporation of China down nearly 7% and running under pressure due to weak seasonal aluminum demand.
Today's top 10 Hong Kong stock turnover
Hong Kong Stock Connect Fund
In addition, the net inflow of Hong Kong Stock Connect (Southbound) was 0.095 billion Hong Kong dollars today.
Institutional perspective
Citigroup: Gives HKEX a "sell" rating, with target price down to HKD 230.
Citi released a research report giving a buy rating with a target price of HKD 25.5. The report predicted an increase in China's electrical utilities demand for this year from the previous growth rate of 6% to 7.5%, and next year's growth rate to 7%. The expected increase in demand for electrical utilities mainly comes from charging services, machinery and equipment manufacturing, rare earth metal smelting, as well as the development of artificial intelligence and electrified transportation related railroad transport industries. The anticipated higher demand for electrical utilities is expected to benefit power grid equipment suppliers to strengthen their capital expenditure and improve the utilization of coal-fired power plants. The preferred choices are Henan Pinggao Electric, Sieyuan Electric, and China Res Power.$HKEX (00388.HK)$"Sell" rating, lowering earnings forecasts by 1%-3% per share for fiscal years 2024 to 2026 to reflect lowered daily trading volume forecasts. Target price was lowered from HKD 240 to HKD 230. In addition, the company's second quarter results are expected to be good but its growth prospects are uncertain. Since July, daily trading volumes have dropped to around HKD 100 billion. Citigroup said HKEX will announce its second-quarter results on August 21. The bank forecasted that net profit for the second quarter will reach HKD 3.3 billion, up 10% quarter-on-quarter and 12% year-on-year, 2% higher than market expectations. Benefiting from the rebound in daily trading volume, the bank predicts total revenue of HKD 5.6 billion, up 8% quarter-on-quarter and 11% year-on-year. Investment income for the quarter may fall from a high base, but it can still be maintained at HKD 1.2 billion, down 8% quarter-on-quarter, up 8% year-on-year.
Goldman Sachs: Maintains a "buy" rating on 99, with target price lowered to HKD 3.8.
Goldman Sachs released a research report stating that it maintains its "Buy" rating and raises its profit forecast for the 2024-2028 period by 1% per year to reflect increased revenue. Since April 30th, the stock prices of global chip foundry companies have risen 0% to 34%, reflecting a revaluation of the industry, and the target price has been raised from HKD 23 to HKD 26.3.$JIUMAOJIU (09922.HK)$"Buy" rating, with target price lowered from HKD 6.2 to HKD 3.8. The bank lowered its profit forecasts by 37%-55% for fiscal years 2024 to 2026, reflecting weaker-than-expected results for the first half of this year and the possibility of continued pressure on same-store sales growth in a challenging market. However, the bank expects that 99's gross profit will continue to improve in the second half of this year and next year as management focuses on cost controls, cost savings, and resource concentration on major brands.
Deutsche Bank: Removes Taiwan Semiconductor, SK Hynix, and others from its Asia Pacific (excluding Japan) focus list, and adds several consumer stocks.
Morgan Stanley released a report on emerging Asia stock market strategies, stating that the bank will raise its rating on the technology sector to "shareholding" in October 2022; however, it believes that the overall valuation of the Asian stock market has peaked and there is a fund rotation between technology and necessities. Before estimating the Federal Reserve's first rate cut in September, it is necessary to adjust the technology stock ratings to "sync with the market" for profit-taking. Taiwan Semiconductor, SK Hynix, MediaTek, Tokyo Electron, and Tokyo Precision will be removed from the focus list, while Samsung Electronics and Foxconn will be retained to reflect their lower beta risk and large advantages in the AI smartphone cycle.
Editor/Feynman