On the last trading day of July, both Hong Kong A-share and mainland markets witnessed a strong upward trend. At the close, the Hang Seng Tech Index rose sharply by 3.01%, delivering the best performance, while the Hang Seng Index and China-A share both rose by 2.01%.
At the close, there were 1,348 gainers and 536 losers in the Hong Kong stock market, with 1,183 stocks remaining unchanged.
The specific industry performance is shown in the following figure:
In terms of sectors, most of the network technology stocks rose today. Fast Group W gained 4.04%, Xiaomi Group W gained 3.19%, Meituan-W jumped 2.73%, Netease-S rose 2.52%, Tencent Holdings rose 2.43%, JD.com-SW rose 1.76%, and Alibaba-SW rose 1.44%.
Large financial stocks (China-affiliated brokerage, insurance, and bank stocks) collectively surged, especially with the outstanding performance of China International Capital Corporation and China Galaxy, which both rose by over 8%.
Biotechnology stocks have become stronger, with two companies, WuXi apptec and WuXi Bio, gaining 16.38% and 9.71% respectively. Other notable gainers included Tigermed Pharmaceutical Co. Ltd. (8.50%), Akeso Inc. (7.37%), GenScript Biotech Corporation (4.89%), AY'20 Clinical Laboratory Co.,Ltd (4.57%) and Beigene (3.04%).
Semiconductor stocks generally rose today, with Contel (8.20%), Ce Huada Tech (5.61%), Hua Hong Semiconductor (4.76%), Shanghai Fudan (4.56%), SMIC (4.17%), and Solomon Systech (3.64%) all posting gains.
Gold stocks generally rose. Lingbao Gold gained 6.17%, Chi Silver GP rose 5.88%, China Gold International rose 4.67%, Zhaojin Mining Industry gained 4.33%, Zijin Mining Group Co., Ltd. rose 4.20%, and SD-Gold Corp. rose 2.66%.
Real estate stocks rose, with Sunac China Holdings Ltd. up 6.00%, China Vanke Co., Ltd. up 4.89%, Longfor Group Holdings Ltd. up 4.10% and China Overseas Land & Investment Ltd. up 1.93%.
In addition, home appliances, sporting goods, pulp and paper, marine transportation, photovoltaic, dining, apple supplier, coal industrial concept, and property management stocks all rose simultaneously.
In terms of individual stocks,$YADEA (01585.HK)$The stocks related to 'Trade-in to buy a new one' rose by more than 10%. The launch of the policy of Trading-in to buy new goods is expected to stimulate new terminal demand.
$WUXI BIO (02269.HK)$Semiconductor stocks rose nearly 10%, as the signal of industry recovery is gradually emerging, and innovation policy warming will drive continued growth in the industry.
$EAST BUY (01797.HK)$Genscript Bio, which is strongly dedicated to production, rose nearly 12%. The company reiterated that both flow of traffic and product are two driving forces. Moreover, the company may launch offline membership stores.
$COSCO SHIP ENGY (01138.HK)$Crude oil product stocks gained nearly 6%, as Deutsche Bank said the adjustment caused by seasonal factors has basically come to an end. The increase in crude oil production may become a catalytic factor.
$HSBC HOLDINGS (00005.HK)$AY21 Clinical Laboratory Co.,Ltd rose nearly 5%. Its mid-term profit was higher than expected, and it plans to launch a share buyback of up to USD 3 billion.
$HANG SENG BANK (00011.HK)$China Southern Airlines Company Limited fell by nearly 6%. Its pure profit in the first half increased by 1% year-on-year. It plans to pay an interim dividend of HKD 1.2.
TOP 10 trading volume today
Hong Kong Stock Connect Fund
Regarding Hong Kong stock market connectivity, a net inflow of HKD 2.291 billion (Southbound) was recorded today.
Institutional perspective
China International Capital Corporation pointed out: The Bank of Japan's interest rate hike is in line with expectations, and it will have little impact on carry trades.
China International Capital Corporation noted that Japan's central bank announced a 15bp interest rate hike to 0.25%, which is basically in line with pre-meeting expectations. The rate hike is not large, and the interest rate spread is still high. Considering the high proportion of carry trades, it is not expected to impact the carry trades significantly. China International Capital Corporation believes that this interest hike will not have a significant impact on China, even if it influences the carry trades, there is no significant amount of money from foreign investors investing in China's market through yen carry trades. At most, it may influence the USD/RMB exchange rate through the yen, but the impact is currently limited. The seesaw of trading funds is difficult to maintain even if it exists. The basic situation will still depend on the long term.
Citi designated WuXi Apptec as a "buy" and lowered its target price to HKD 70.00.
Citigroup released a research report stating that for this year's revenue forecast remains unchanged, and next year to 2026 revenue forecast respectively lowered by 3% and 6%, while this year to 2026 earnings per share forecast respectively decreased by 6%, 8% and 11%, target price lowered from HKD 90 to HKD 70, rating "buy". The bank mentioned that the company's on-hand orders in the first half of the year increased by 33% year-on-year, which reflects higher transparency in achieving the annual guidance target, but believes that the company faces greater gross margin pressure due to the high base last year and overseas expansion affecting production capacity utilization; testing and biology business is more focused on the mainland, and will face local price competition; and the US "Biosecurity Act" drags down the revenue of the high-end treatment CTDMO business (ATU). The management expects to maintain a stable adjusted profit margin through measures such as improving corporate efficiency.$WUXI APPTEC (02359.HK)$Goldman Sachs: downgraded Eastbuy to "sell" and cut target price by 55% to HKD 7.1. The rating was downgraded from "neutral" to "sell", and the target price was cut from HKD 15.9 to HKD 7.1, believing that the recent growth prospects have become uncertain after Dong Yuhui resigned and sold "Yuhui Tongxing", and the lower operating leverage may further restrict the profit recovery. Goldman Sachs stated that it maintains its forecast for the 2024 fiscal year largely unchanged, but based on a 32% to 36% reduction in forecast for total commodity trade, it lowered the revenue forecast for 2025 to 2027 by 25% to 26% to reflect the negative impact of Dong Yuhui's resignation and the weak growth in commodity trade in June to July. Therefore, the bank lowered its adjusted net profit forecast for 2025 to 2027 by 39% to 40%. In addition, it was also mentioned that in discussions with investors about "Yuhui Tongxing", concerns were raised about the management of Eastbuy, mainly in terms of retaining talent and the distribution of capital.
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According to the research note from Goldman Sachs,$EAST BUY (01797.HK)$The Goldman Sachs research report downgraded Eastbuy to "sell", and cut the target price by 55% from HKD 15.9 to HKD 7.1. This was due to the recent uncertainty in growth prospects after Dong Yuhui's resignation and the sale of "Yuhui Tongxing", and the lower operating leverage may further restrict the profit recovery. Goldman Sachs maintains its forecast for the 2024 fiscal year largely unchanged, but based on a 32% to 36% reduction in forecast for total commodity trade, it lowered the revenue forecast for 2025 to 2027 by 25% to 26% to reflect the negative impact of Dong Yuhui's resignation and the weak growth in commodity trade in June to July. Therefore, the bank lowered its adjusted net profit forecast for 2025 to 2027 by 39% to 40%.
Editor/Feynman