Source: Brokerage China Author: Qu Hongyan Recently, China Yangtze Power hit a historical high and once again showed the slow bull stock trend of "tripling in ten years". The slow bull market has left behind many passers-by and brought good returns to the steadfast investors. It is "rare for those who triple in one year to be like carp jumping over the dragon gate, while those who double in three years are few and far between." On the other end of the investment world, however, violent collapses are also deafening, with many financial products suspected of "Ponzi schemes" ceasing payments, leaving investors with no hope of recovering their investments. Both positive and negative cases illustrate the importance of forming a suitable mentality towards money in one's lifetime; otherwise, sooner or later, you will divorce yourself from your money. "I call this the money mind, a person's IQ can reach 120, 140, or even higher levels, and perhaps some people's minds are good at doing one thing, while others are good at doing another. They can do things that most ordinary people can't do. But I know some very smart people who make very foolish decisions because they lack the money mind." Buffett once said so. The so-called money mind refers to believing in common sense, believing in compound interest, being cautious and rational, thinking independently, prioritizing security over return, not dealing with people with questionable character, not easily guaranteeing for others, not believing in windfall profits, and not trying to cross legal norms for extra benefits. In today's world of ubiquitous information, everyone's wealth may become the "prey" of those with ulterior motives. Only with the money mind, can one form good behavior habits and shield oneself from separating from one's wealth. Do not entrust your wealth easily. Wealth is easy to lose but hard to accumulate, and trust is a vital reason leading to the rapid loss of wealth. "Do not allow anyone else to manage your business unless you can watch their every move closely and understand their behavior; or you have strong reasons to believe in their character and ability. For investors, this criterion determines when you can let someone else make investment decisions for you." Graham's criterion written eighty years ago is so clear. Almost all the investors who lost their wealth in the financial products have violated the above two criteria. They did not have the ability to closely supervise the whereabouts of their funds, nor did they have sufficient reasons to believe in the character of the product issuers. They easily invested their own wealth solely based on others' glib tongue and a piece of commitment paper. They did not act as gatekeepers of their own wealth and ended up with nothing left even if the government punished the wrongdoers. "An ounce of prevention is worth a pound of cure." This is a phrase Munger often says. Destiny must be in one's own hands, and investors with a suitable money mind will try their best to find suspicious points in their investments to protect the safety of their principal. For example, whether the manager is trustworthy, whether the underlying assets are profitable, whether oneself can timely monitor the risks in the investment process, and whether the sales staff is obtaining large commissions. As long as any unreliable signs are found, these investors firmly will not invest their money. Do not desire to get rich quick. As in the capital market and anywhere else, making money is not easy, and desiring to get rich quick will lead to quick loss of wealth. In the capital market, the desire to get rich quickly often leads to investors over-allocating specific stocks, industries, or assets at the worst time. For example, buying high-risk stocks that can gain huge returns once an adventure succeeds, but the chance of success is very small, also known as "whispering stocks" by legendary fund manager Peter Lynch. "They often tell investors a story with explosive effects. These 'whispering stocks' have a hypnotic effect on people, and it is easy for you to believe that the story the company tells has an emotional appeal that can easily confuse you." This is like hearing a very tempting "sizzling" sound, making you salivate, but you did not notice that there is no steak on the grill. In the eyes of investors who lack the money mind, stable yield provided by blue chips such as China Yangtze Power cannot meet their demands. However, historical experience clearly shows that buying stocks lacking in safety solely based on imagined high yields is unwise. The long-term average investment return of general stocks is 9%-10%, which is also the average investment return of stock indexes in history, a benchmark to measure one's investment performance and the benchmark to measure fund investment performance.
Author: Yang Yucheng On July 5th, the stock price of the company known as the "first stock of Hong Kong stocks LIDAR" suddenly plummeted in volume, with the lowest price touching 15.28 Hong Kong dollars during the day, with a maximum drop of 70%, and a market value as low as 6.9 billion Hong Kong dollars. On June 11th, the stock price of Hesai Robot fell sharply, reaching a historical high of 137.5 Hong Kong dollars per share, and the highest market value reached 62 billion Hong Kong dollars. That is to say, in just over 20 days, the market value of Hesai Robot evaporated by 55.1 billion Hong Kong dollars, a decrease of more than 88%. So, what is the reason for the sharp drop in Hesai Robot this time? Suddenly plummeted. In the morning of July 5th, Hesai Robot's Hong Kong stocks suddenly fell sharply in volume. As of noon closing, Hesai Robot's decline still reached 67.73%, with a turnover of more than 0.19 billion Hong Kong dollars and a total market value of 7.4 billion Hong Kong dollars. Hesai Robot's decline is related to the lifting of restricted stocks. Hesai Robot was listed on the Hong Kong Stock Exchange on January 5th this year. Today happens to be the day when the six-month ban on sales ends, that is, the restricted shares with huge trading volume can be listed and circulated. Among them, 18.166 million shares of restricted shares held by the cornerstone investor Shenzhen Nanshan Xinxing Venture Investment Co., Ltd. are included. Previously, some analysts believed that Hesai Robot's competitor Hesai had a larger scale than Hesai Robot, but a lower market value, which means that Hesai Robot's estimated value faces a significant risk of decline after the lifting of the ban. Recently, the market consulting firm Yole Group released the "2024 Automotive LIDAR Market Report", which shows that Chinese manufacturers have an absolute advantage in the global automotive LIDAR market in 2023, taking five of the top ten seats. Specifically, the five Chinese manufacturers of Hesai Technology, Hesai Robot, Tudato, Huawei and Landtech jointly won 84% of the global automotive LIDAR market share, further increasing from a total of 73% market share in the previous year. Hesai Technology's market share is still the first in the world, but its market share of 37% has decreased compared to 46% in 2022. Hesai Robot, ranked second in the world, accounted for 21% of the market share last year, a significant increase of 12 percentage points from the previous year. It is the LIDAR company with the fastest market growth in 2023. As of May 2024, Hesai Robot has obtained mass production orders for 71 models of 22 mainframe manufacturers. The first stock of Hong Kong's LIDAR. Hesai Robot is a leading company in the LIDAR industry. In January of this year, the company landed on the Hong Kong Stock Exchange and was known as the "first stock of Hong Kong's LIDAR". At that time, it also became the LIDAR listed company with the highest market value in the world. The issue price of Hesai Robot was HKD 43/share, and it closed at a flat price on the first day of listing, with a market value of about 19.3 billion Hong Kong dollars. This is another entrepreneurial company that has completed listing in the domestic LIDAR track. Earlier, Hesai Technology, the "first stock of Chinese LIDAR", went public on NASDAQ in the United States in February 2023. After more than four months of listing, Hesai Robot's stock price has been tepid, until mid-May, the company's stock price began to fluctuate significantly. On May 17th, the Hang Seng Index Company announced the latest quarterly review results, and Hesai Robot was included in the Hang Seng Composite Index, and the change will take effect from June 11th. Afterwards, on May 20th, Hesai Robot's stock price rose sharply by 90% during the session, and closed at 60.75 Hong Kong dollars, up 45.86%, with a current total market value of about 27.4 billion Hong Kong dollars. On the evening of May 20th, Hesai Robot disclosed its first-quarter financial report for 2024. In the first quarter, Hesai Robot's revenue was 0.361 billion yuan, an increase of 149.1% year-on-year, mainly due to the increase in product sales. During this period, the sales of the company's LIDAR products, LIDAR products for ADAS applications, and LIDAR products for robots and others were approximately 1.204 million units, 1.162 million units, and 4200 units respectively, an increase of 457.4%, 542.0%, and 20.0% respectively. In the first quarter, the company's net loss was 0.132 billion yuan, a decrease of 61.9% compared to the same period last year's net loss of 0.343 billion yuan. As of March 31, the company holds 2.5 billion yuan in cash and cash equivalents and restricted cash and time deposits, compared to 1.8 billion yuan as of December 31, 2023. In addition, data shows that as of the end of the first quarter of 2024, Hesai Robot's cumulative total sales of LIDAR had exceeded 460,000 units. As of May 17, 2024, Hesai Robot has obtained mass production orders for more than 70 models of 22 automakers and first-tier suppliers, and helped 25 models achieve SOP.

On September 16th, HKEX announced that it has received regulatory approval to implement adverse weather trading. Adverse weather trading will be effective from September 23, 2024. Securities trading conducted on the exchange or through the exchange (including northbound and southbound trading of Stock Connect) will continue to operate during adverse weather conditions. Similar to regular trading days, all exchange participants are required to continue providing trading-related services during adverse weather.

It is worth noting that just ten days ago, the Hong Kong stock market was closed for the whole day due to the impact of Typhoon "Makyo".

In the morning session today, all three major Hong Kong stock indexes fell by more than 1% at one point, with the Hang Seng Tech Index experiencing a particularly large decline. In the afternoon, the market situation changed drastically, and all major indexes continued to rise, with both the Hang Seng Index and the Hang Seng Tech Index turning positive. As of the close of trading on Monday, the Hang Seng Index rose by 0.31% and the Hang Seng Tech Index rose by 0.51%. Kuaishou Technology rose by over 4%, NIO Inc. rose by nearly 4%, Meituan and Xpeng Inc. rose by nearly 3%. In addition, Hong Kong gold stocks rose, with China Gold International and SD Gold both rising by over 4%.

Major announcement from HKEX

On September 16th, HKEX announced that it has received regulatory approval to implement adverse weather trading. Adverse weather trading will be effective from September 23, 2024. Securities trading conducted on the exchange or through the exchange (including northbound and southbound trading of Stock Connect) will continue to operate during adverse weather conditions. Similar to regular trading days, all exchange participants are required to continue providing trading-related services during adverse weather.

Just three months ago, on June 18th, Carrie Lam, the Chief Executive of the Hong Kong Special Administrative Region, announced that the Hong Kong Stock Exchange would close under bad weather conditions. Starting from September 23rd, the Hong Kong securities market will continue to operate during bad weather, even when Typhoon Signal No. 8 or above is hoisted, or when a black rainstorm warning is in effect. Investors can still trade during this period.

This change means that Hong Kong will end the tradition of closing the market during typhoons and heavy rainstorms. The arrangements for market operations during bad weather are linked to the severity of typhoons, rainstorms, and extreme circumstances as announced by the Hong Kong authorities.

In response to this, the Chief Executive of the Hong Kong Stock Exchange, Charles Li, stated, 'This measure not only helps maintain market continuity, but also ensures that investors can manage risks under various weather conditions.'

According to the Securities Times, many brokers in Hong Kong rely on phone orders to place stock trades, as the stock trading system in Hong Kong is not as advanced as that of mainland China. Power outages or communication disruptions can cause losses for investors, which goes against market fairness.

On June 17th, when attending an event, Charles Li, the former Chairman of the Hong Kong Stock Exchange, expressed his strong support for the government's study on the 'continuous trading during bad weather' measure. He said that this measure would help align Hong Kong's trading days with other international financial centers. In the past, when a typhoon hit, employees were unable to work due to transportation disruptions, resulting in trading suspension. With the advancement of electronic trading, continuous trading during bad weather has been promoted to keep up with the times and increase trading.

It is worth mentioning that the Hong Kong stock market has been suspended multiple times due to bad weather, with 4 occurrences in 2023. Last year, the stock market was closed for the entire day on September 1st due to Typhoon Signal No. 10 'Sulra' hitting Hong Kong. Then, on September 8th, it was closed again due to a black rainstorm warning and extreme conditions, resulting in two full-day closures in September alone. According to statistics from Wind, the average daily trading volume of the Hong Kong stock market in the first 8 months of last year was HKD 112 billion. If we calculate based on this average daily trading volume, the 2-day closure in September resulted in a loss of HKD 224 billion in trading volume.

How to ensure operation?

On November 30th last year, the Hong Kong Stock Exchange published a consultation paper, proposing suggestions for maintaining normal operations of the Hong Kong securities and derivatives markets during bad weather, and soliciting market opinions on operational models and related arrangements.

"This reflects the determination of HKEX to enhance Hong Kong's resilience and attractiveness as a global leading financial center, providing a wide range of diverse products and platforms for investors worldwide." HKEX proposes that trading arrangements will no longer be affected by inclement weather. HKEX plans to keep its securities and derivatives markets open to all investors as usual during adverse weather conditions, including the Shanghai-Hong Kong Stock Connect Southbound and Northbound, derivatives holiday trading, and after-hours trading.

During adverse weather conditions, trading, post-trading, and listing arrangements will be essentially the same as on normal trading days but some necessary adjustments will be made to ensure market resilience and the safety of market participants. Certain services provided by physical business locations may not be available.

For instance, during inclement weather, participants who cannot deposit physical securities into the settlement system due to the closure of physical business locations are advised to be granted certain repurchase exemptions. If some companies' actions encounter adverse weather on the last transfer registration day, it is suggested to postpone that date because participants holding physical securities will be affected by the closure of physical business locations.

"Personnel safety is always a key consideration, and we encourage market participants to work remotely as much as possible during adverse weather." HKEX confirms that during adverse weather, its trading, clearing, settlement, and market data systems can all be accessed remotely online and has optimized its infrastructure and operations multiple times, reducing the need for market participants to log in to the system from offices.

It is understood that HKEX's current investors generally conduct transactions electronically, so even if banks or brokerages do not provide physical HKEX storefront trading services during adverse weather, it should not have a significant impact on market activities. Market participants need to ensure smooth remote operations and that HKEX is able to handle fund transfers without using physical services, to prepare for maintaining trading during adverse weather.

In response to this issue, the Hong Kong Bankers Association and the Hong Kong Interbank Clearing Limited work together with a dedicated team to confirm that during adverse weather, relevant banking services will operate as usual. For example, designated banks of certain settlement institutions and settlement banks will continue to provide electronic check settlement and electronic transfer services, fully supporting operational and fund settlement needs of participants in settlement.

Editor/rice