Evaluation of Hong Kong stocks

Futu Information on April 8 | the Hang Seng Index extended its decline in the afternoon, with ordinary trading heat, with individual stocks falling more and rising less. By the close, the Hang Seng index was down 2.12% at 24253.29, while the state-owned enterprises index was down 2.02% at 9846.92. The main board had a turnover of HK $126.3 billion throughout the day, a slight increase over the previous trading day.

In terms of the plate, the epidemic of COVID-19 in China has been alleviated. Wuhan began to unseal today, including railway and air routes have also been reopened. Beijing Capital Airport's performance rose 6% today. Wuhan City in Hubei Province lifted the blockade at 12:00 on Wednesday (8th), removing all roadblocks and gradually restoring railway, civil aviation, water transport, road and urban public transport operation. However, the Hubei Provincial epidemic Prevention and Control headquarters issued a notice on Tuesday (7th), pointing out that it is necessary to continue to strengthen community management and control, stressing that the lifting of channel control does not mean the lifting of prevention and control.

Local food and beverage stocks in Hong Kong surged against the trend, with everyone happy up 5.62% and Tai Hing up 6.25%. According to the news, the government has approved the launch of a second round of epidemic prevention fund, involving more than 100 billion yuan, equivalent to about 3.5% of Hong Kong's annual GDP. In addition, a survey shows that consumer confidence in Hong Kong has plummeted by more than 30%, the lowest since the third quarter of 2008.

Individual stocksChinese antibody-B (03681.HK) $The share price rose significantly today, rising more than 11% at one point to HK $3.34, with a turnover of HK $5.63 million, with a total market capitalization of HK $3.35 billion. The summary of the company's phase SM03 II clinical research report on the treatment of rheumatoid arthritis has been accepted for oral presentation at the 2020 European Congress of Rheumatology, indicating that the importance of the company's findings has been internationally recognized. It is expected to be commercialized by the end of 2021. It is worth noting that the shareholder loss for 2019 expanded by 230.44%. The increase in loss is mainly due to increased R & D expenditure and administrative expenses (in line with the Group's SM03 and SN1011 clinical trial development). The company is working on a strong drug pipeline and is entering a countdown period.

$Xinjiang Goldwind Science & Technology (02208.HK) $It rose 4.08% to HK $7.40, with a total market capitalization of HK $31.26 billion. According to the latest report released by Daiwa, it is estimated that the gold wind performance will pick up this year, but the price will be lowered by 8.3% to HK $9.9. The report points out that a number of power companies have reaffirmed their aggressive installation strategy, particularly by significantly increasing wind power capital expenditure this year to meet the subsidy deadline for offshore projects by the end of 2020. Goldwind, as the leader of wind turbine manufacturers, is expected to benefit. The report also said that although Jinfeng's performance was disappointed last year due to the rise in the cost of 2.5MW fans, with the promotion of urgent orders, and the business gross profit margin is expected to rebound by 30.4%, it is believed that it will help support the rebound in performance.

$Geely Automobile (00175.HK) $It fell 2.97% to HK $11.12, with a turnover of HK $568 million, with a total market capitalization of HK $102.3 billion. Geely announced yesterday that the group sold 73021 units in March, down about 41 per cent from the same period last year, and 206027 in the first quarter, down about 44 per cent from the same period last year. and reached 15 per cent of the group's 2020 sales target of 1.41 million.

$New China Life Insurance (01336.HK) $Fell 4.36% to HK $24.15, with a total market capitalization of HK $75.3 billion. The latest research report of Morgan Stanley downgraded New China Life Insurance's rating from "keep pace with the market" to "sell", and the target price dropped sharply from HK $35 to HK $22. At the same time, insurance stocks such as 02628.HK and 02601.HK, which were downgraded by Morgan Stanley, also fell across the board. Morgan Stanley said that although the internal insurance stocks fell and their valuations were also attractive, there was a lack of catalysts to stimulate stock prices in the next six months, so the insurance shares in China and Hong Kong were lowered from "attracting" to "keeping pace with the market."

Chenming Paper (01812.HK) $It rose more than 4 per cent to HK $3.08, with a total market capitalization of HK $8.94 billion. Since the beginning of this year, the "plastic ban" has been upgraded again, and attention has been paid to its most alternative white cardboard. Some brokerage analysts believe that with the successive implementation of relevant policies, the price of white card paper is expected to further increase. As a leader in the paper industry, Chenming Paper has a production capacity of 2 million tons of white cardboard and is expected to benefit from it. It is reported that at present, Chenming Paper has a market share of about 20% of white cardboard products.

Among the constituent stocks of the Hang Seng Index, individual stocks fell more than rose less, China Unicom led the market down; among the constituent stocks of the national index, Sunac China led the market down.

Market sentiment

As for the Hong Kong Stock Connect, today, the Hong Kong Stock Connect (southbound) has a net inflow of nearly HK $3.3 billion, and the net inflow has decreased recently.

Message surface

On the macro level, the central bank announced that the total liquidity of the banking system is at a reasonable and adequate level and does not carry out reverse repurchase operations today. No reverse repo expires today.

The size of Hong Kong's new rescue package is well over HK $30 billion.

In order to prevent and control the development of the epidemic, the Hong Kong SAR government announced on the morning of the 8th that the regulations on the catering industry and measures to prohibit the gathering of more than four people in public places would be extended by 14 days, valid until April 23. In addition, among the places requiring temporary closure, newly added beauty salons and massage parlors are also required to close for 14 days.

In terms of the epidemic, the International Labour Organization (ILO) released a report on the 7th, showing that 81% of the world's 3.3 billion working population has been affected by the COVID-19 epidemic, and its workplace has been completely or partially closed.

In terms of 5G, China Mobile Limited, China Telecom Corporation and China Unicom jointly released the "5G News White Paper" at an online press conference today. The White Paper expounds the core concept of 5G message, defines the relevant business functions and technical requirements, and puts forward some ideas for the ecological construction of 5G message. In the next step, China Mobile Limited, China Telecom Corporation and China Unicom will work with global operators and industrial partners to build 5G message service into a 5G universal information and communication service with multi-terminal support, wide user coverage and multi-industry enablement, in order to enhance the value of news business and drive the ecological prosperity and development of the global 5G industry.

As for cars, according to an email sent by Tesla, Inc. 's North American personnel department, Tesla, Inc. will temporarily take salary cuts to cut expenses from April 13. Specifically, salaries at and above the vice president level will be cut by 30%, those at the director level by 20%, and all other employees' salaries will be cut by 10%. Tesla, Inc. replied: "the measures in China will be different. The official reply will be announced later." "

As for game consoles, according to the Nippon Keizai Shimbun, due to the expansion of novel coronavirus's epidemic, Nintendo's Nintendo Switch production lags behind, and its products are in short supply. Shipments of Switch, Switch Lite and other products in Japan have been suspended, and the time for resumption of shipments has not yet been determined. The national version of Tencent in China can still be shipped normally.

In terms of mobile phones, JPMorgan Chase & Co currently expects iPhone sales to decline by 10% in 2020 compared with the same period last year.

For Huawei, according to South Korean media The Elec, Huawei Technology will set up cloud and AI business groups in South Korea this year, hoping to enter the GPU server market, which is currently dominated by NVIDIA.

Institutional viewpoint

Morgan Stanley: the industry view of insurance companies in mainland China and Hong Kong has been lowered from attractive to in line with the market, and due to the low return on reinvestment, the long-term profit and valuation estimates have been lowered by 30%. The rating of The People's Insurance was upgraded from equal proportion to overweight, and New China Life Insurance was downgraded from equal proportion to underweight.

Former Federal Reserve Chairman Ben Bernanke: measures to slow the spread of novel coronavirus will lead to a sharp decline in the US economy this quarter, after which the economy will not rebound quickly and sharply. I don't think there will be a rapid recovery, we may have to gradually restart economic activity, and then there may be a period when activity slows down again.

CITIC: the epidemic will eventually pass, and the opportunity belongs to optimists. The COVID-19 epidemic has triggered sharp fluctuations in the global market. judging the characteristics of the bottom of the market from the three dimensions of fundamentals ("relative valuation level", "dividend rate of the market" and "market risk compensation premium"), "Chinese assets" have become extremely attractive, especially in the Hong Kong stock market. Over the past five years, overseas long-term funds have made an annualized return of 14% in Chinese stocks, with the most important sources being the maximum cash dividends and retained earnings. "focus on bibcock, focus on cash flow, focus on domestic demand" is the best choice at present, H shares have obvious allocation performance-to-price ratio.

Goldman Sachs Group: in the coming months, we should focus on the number of continuous jobless claims. When it reaches its peak, it shows that GDP has stabilized, and a sharp decline will be the best sign of GDP recovery. Judging from the experience of the 2008 financial crisis, when first-time jobless claims fell by 1/3 from highs and continued jobless claims peaked, US GDP growth began to pick up.