Amara Asset Management Investment Director Guo Jiayao said that the US stock market performed poorly on Tuesday, October 1st, with concerns about the deterioration of the Middle East geopolitical situation affecting investment sentiment. All three major indices closed with declines, the US dollar performed well, and the yield on the US ten-year Treasury fell to 3.73%. Gold prices remained high, while oil prices rebounded from their lows. Hong Kong stocks are expected to open slightly lower in the early session, with individual developments in the pre-market securities.

Mainland stock market performed well before the National Day holiday, with expectations of more bullish policy news being implemented. The Shanghai Composite Index surged to the 3,300 level, with record high trading volume in both Shanghai and Shenzhen markets.

Hong Kong stocks remained strong before the holiday, with the index reaching the 21,400 level. The market slightly reversed its upward trend towards the end, with trading volume hitting a record high of 500 billion. After consecutive days of gains, there may be a technical adjustment in the short term, but overall sentiment remains positive. Market anticipates more stimulating policies to be implemented, with the index expected to hold above the 20,800 level and potentially challenge the 22,000 level in the future.

Hengan International (01044.HK) recently announced its interim financial performance. The operating income for the period was 11.836 billion RMB, a 3% year-on-year decrease. Profit was 1.409 billion RMB, a 14.9% year-on-year increase. Overall gross margin increased by 3.9% to 3.936 billion RMB, with gross margin rising from 31% in the first half of last year to 33.3%. Operating profit increased by 11.4% to 1.896 billion RMB. The group's sanitary napkin business sales revenue in the first half of the year decreased by 2.2% to 3.147 billion RMB, with gross margin improving from 61.8% in the same period last year to 62.7%. Tissue business sales revenue dropped by 3.1% to 6.951 billion RMB, with gross margin increasing from 17.7% to 19.6% compared to the same period last year. Wet tissue business sales revenue increased by 20.4% to 0.592 billion RMB. Diaper business sales increased by 7% to 0.711 billion RMB, with gross margin rising from 36% in the first half of last year to 45.3%. The RMB exchange rate remained relatively stable in the first half of the year, and the group recorded an operating exchange loss of approximately 35.894 million RMB, a reduction of about 80.3% in exchange losses. The group expects high-margin products to continue growing, offsetting the impact of wood pulp price increases on gross margin. Income in the second half of the year is expected to improve over the first half, with current valuation still considered relatively low.

(The author is a licensed person of the SFC, and neither he nor the relevant persons hold the above shares)~