According to the Zhichun finance APP, Hong Kong stocks today stopped falling and rebounded, with the three major indices quickly rising in the afternoon, the Hang Seng Index and the National Index both up over 1%, while the Hang Seng TECH Index rose more than 2% at one point. By the close, the Hang Seng Index rose 0.83% or 164.07 points, closing at 19,864.55 points, with a total turnover of 107.541 billion Hong Kong dollars; the Hang Seng National Index rose 1.06%, closing at 7,180.79 points; the Hang Seng Technology Index rose 1.82%, closing at 4,468.85 points.

Ping An Securities (Hong Kong) pointed out that domestic monetary finance and industry policies are continuously being implemented and their effects are gradually becoming apparent. The Hong Kong stock market, which is at a relatively low valuation position, remains an important direction for allocating Chinese assets. The consecutive corrections in Hong Kong and A-shares that began last Friday may provide a good opportunity for funds to actively re-enter, but attention still needs to be paid to bottom-up selection of industries and companies. Structural investment opportunities in Hong Kong stocks are expected to continue to unfold.

Blue chip performance

Geely Automobile (00175) performed brilliantly. By the close, it rose 4.12%, closing at 15.68 Hong Kong dollars, with a turnover of 0.875 billion Hong Kong dollars, contributing 5.92 points to the Hang Seng Index. DBS released a research report stating that it raised the target price for Geely Automobile by 22%, from 16.2 Hong Kong dollars to 19.8 Hong Kong dollars, due to improved fundamentals after the business merger, maintaining a "Buy" rating and ranking it as a preferred stock. The bank expects the company's annual sales to exceed the original sales target.

In other blue chip stocks, Li Auto-W (02015) rose 5.45%, closing at 89.9 Hong Kong dollars, contributing 10.1 points to the Hang Seng Index; Hansoh Pharma (03692) rose 3.94%, closing at 18.48 Hong Kong dollars, contributing 1.32 points to the Hang Seng Index; China Shenhua Energy (01088) fell 1.48%, closing at 33.35 Hong Kong dollars, dragging down the Hang Seng Index by 2.68 points; Tingyi (00322) fell 0.6%, closing at 10.02 Hong Kong dollars, dragging down the Hang Seng Index by 0.19 points.

Hot sectors

On the market, large technology stocks rose across the board, with Baidu up by 1.74% and JD.com up by 1.27%. The State-owned Assets Supervision and Administration Commission issued documents to promote the value management of state-owned enterprises, leading to a rise in Infrastructure, Electric Power, and other central valuation stocks; the effects of the old-for-new vehicle policy continue to manifest, pushing auto stocks higher across the board; driven by AI, the industry is set to experience a recovery in prosperity, with Semiconductor stocks seeing a generalized increase today; some pharmaceutical stocks and AI concept stocks performed strongly. On the other hand, Bitcoin fell below $104,000 today, leading to declines in Cryptos ETFs and related concept stocks; Pulp and Paper stocks and Aviation stocks showed losses.

1. The central valuation has once again gained momentum, with Infrastructure central state-owned enterprises and Electric Power stocks rising. By the close, CHINA COMM CONS (01800) rose 4.28% to HKD 5.36; Huadian Power International Corporation (01071) rose 3.73% to HKD 3.89; CHINA TOWER (00788) rose 3.7% to HKD 1.12; China Railway (00390) rose 3.69% to HKD 3.93; MAANSHAN IRON (00323) rose 3.65% to HKD 1.42.

On December 17, the State-owned Assets Supervision and Administration Commission of the State Council issued "Several Opinions on Improving and Strengthening the Value Management of State-owned Listed Companies". The opinions mainly propose 9 specific requirements, including focusing on improving the development quality of listed companies, actively carrying out mergers and acquisitions that benefit investment value, increasing market-oriented reform efforts, comprehensively improving the quality of information disclosure, proactively strengthening investor relations management, stabilizing investor return expectations, improving institutional arrangements to enhance investor confidence, perfecting the systems and mechanisms for value management, and strictly adhering to the legal compliance bottom line.

Caitong Securities stated that with the implementation of the current debt conversion policy promoting fund recovery, local fiscal conditions may marginally improve, driving demand and operational quality in central state-owned enterprises, combined with the push from value management for corporate valuation restoration. Continuous focus is recommended on state-owned enterprises in the construction sector that benefit from government debt conversion, value management, and with a PB < 1. Soochow Securities believes that in recent years the state has comprehensively promoted the reform of central state-owned enterprises, deeply advancing the optimization and adjustment of the central state-owned enterprise system from a strategic level, forming a gradual expectation for the investment value of the "central valuation" central state-owned enterprises.

2. Auto stocks rose across the board. By the close, LEAPMOTOR (09863) rose 6.42% to HKD 30.65; LI Auto-W (02015) rose 5.45% to HKD 89.9; Geely Automobile (00175) rose 4.12% to HKD 15.68; Xpeng Inc-W (09868) rose 4.05% to HKD 50.1.

According to data from the China Automobile Industry Association, in November 2024, the production and sales of Passenger Vehicles reached 3.109 million units and 3.001 million units, respectively, with month-on-month increases of 14.9% and 9%, and year-on-year increases of 14.9% and 15.2%. From January to November 2024, the production and sales of Passenger Vehicles totaled 24.459 million units and 24.435 million units, showing year-on-year growth of 4.3% and 5%. According to analysis by the China Automobile Industry Association, in November, the effects of the vehicle trade-in policy continued to show results, with ongoing promotional activities by various regions and companies, along with a year-end push, supporting a sustained strengthening of the Passenger Vehicle market and further releasing purchasing demand.

3. Semiconductor stocks saw a generalized increase today. By the close, HG SEMI (06908) rose 7.64% to HKD 0.62; Semiconductor Manufacturing International Corporation (00981) rose 2.77% to HKD 25.95; HUA HONG SEMI (01347) rose 2.74% to HKD 20.6; SHANGHAI FUDAN (01385) rose 2.7% to HKD 15.24.

Guokai Securities pointed out that due to the explosive demand for AI, the stabilization of the global economy, and various countries introducing support policies for the semiconductor industry, the global semiconductor industry is expected to experience a recovery in prosperity in 2024. The firm believes that under the recovering industry cycle, cash flow and valuation will improve, enhancing the activity of mergers and acquisitions. Coupled with the current phased slowdown of A-share IPOs, mergers and acquisitions in the semiconductor industry will enter an opportunity phase, catalyzing an increase in the investment value of the sector. CCB International stated that the semiconductor industry chain is self-controllable. The firm is optimistic about the opportunities for increasing domestic shares brought about by the trend of self-controllability in China's semiconductor industry chain in the long term.

4. AI Concept stocks performed strongly. By the close, FOURTH PARADIGM (06682) rose by 9.46%, reporting 53.8 HKD; MOBVISTA (01860) increased by 5.22%, reporting 9.68 HKD; MEITU (01357) was up by 5.81%, reporting 3.46 HKD; INNOVATION WISDOM (02121) rose by 4.77%, reporting 7.25 HKD.

On December 18-19, Volcano Engine held the Original Power Conference, showcasing more capabilities of the Doubao large model family and demonstrating trial effects of new landing scenarios like AI toys and AI glasses. Notably, in the global overall ranking (App), ByteDance's AI chatbot Doubao ranks second with 51.3 million monthly active users, just behind ChatGPT. This application has surpassed 0.1 billion cumulative downloads since the beginning of the year.

China Securities Co.,Ltd. previously pointed out in a research report that since November this year, the attention on overseas AI applications has significantly increased, with a clear rise in AI penetration rates, and a number of AI application companies exceeded expectations in the third quarter Earnings Reports. Currently, AI applications are concentrated in the B2B scenarios, with advertising/agent/data directions leading the way. In the short term, B-end AI applications are more likely to realize performance quickly; in the long term, C-end has greater elasticity, and once it explodes, there will be larger long-term potential and flexibility.

Popular stocks with abnormal movements

1. JINGTAI HOLDING-P (02228) was strong throughout the day. By the close, it rose by 29.83%, reporting 6.18 HKD.

Jingtai Technology and Microsoft China announced the signing of a strategic cooperation memorandum, aimed at leveraging cutting-edge technologies such as AI, large models, and Siasun Robot&Automation laboratories for collaboration. They will actively explore the innovative applications of these technologies in Biomedical and materials science, opening a new chapter in scientific research, Education, and innovative applications.

2. SUTENG JU CHUANG (02498) performed strongly. By the close, it rose by 17.93%, reporting 30.25 HKD.

Puhua Bank International pointed out that Chinese Lidar manufacturers are late bloomers, with Chinese companies first achieving mass production and significant volume in 2022. By 2023, revenue and shipment share have shown overwhelming advantages; the overseas suppliers lost further designated projects due to slow mass production, with Hesai and SUTENG securing nearly 80% of global designated cooperation, laying a solid foundation for the shipment volume in the next 2-3 years.

3. BRILLIANCE CHI (01114) rose significantly. At the close, it increased by 6.29%, closing at 3.72 HKD.

BRILLIANCE CHI revised its dividend policy, aiming to distribute at least 50% of the after-tax profits of the relevant financial year, which Citi indicated exceeded market expectations. Citi mentioned that it has anticipated BRILLIANCE's after-tax profits this year to be 4 billion yuan, and if calculated at a payout ratio of 50% to 75%, the regular dividends to be paid next year are expected to reach 2 billion to 3 billion yuan, equivalent to a dividend yield of 12% to 18%, and believes the stock price reaction will be overwhelmingly positive.

4. GOLDLION HOLD (00533) resumed trading today. At the close, it rose by 13.93%, closing at 1.39 HKD.

GOLDLION HOLD announced that its chairman, Zeng Zhiming (the offeror), proposed to privatize the company through a scheme arrangement at a cash price of 1.5232 HKD per share, which represents a premium of 24.85% over the last closing price before suspension. The maximum cash consideration is 0.464 billion HKD. After the scheme takes effect, the company will apply for the cancellation of its listing status on the Stock Exchange. Currently, the offeror and its concert parties collectively hold 68.75% of the company's equity.

5. KONNECT OPTICS (02276) reached an all-time high. At the close, it rose by 10.76%, closing at 17.3 HKD.

GTJA pointed out that the company is making good progress on multiple R&D projects with leading global technology and Consumer Electronics companies, optimistic about accelerating its smart glasses business. The firm believes that AI smart glasses are the best hardware vehicle for AI implementation, with the industry entering a rapid development phase, and the company's cooperative efforts progressing smoothly, leading to early benefits. Huaxin Securities Research Reports state that AI glasses symbolize a new trend in the smart clothing market, which may lead the next generation of terminal revolution.