Evaluation of Hong Kong stocks

Futuo Information on January 20 | Hong Kong stocks continued yesterday's rally, the main index rose across the board, the market mood is very good. The Hang Seng Index closed up 1.08 per cent at 29962.47 points, approaching the 30, 000-point mark, with market turnover rising to HK $300 billion.

Plate aspectTechnology stocks broke out again, and the Hang Seng Technology Index rose 5.44% to close at 9885.22 points. Among the constituent stocks, Hongteng rose 23%, JD Health 15.42%, BYD Electronic 10.73%, and Cat Eye Entertainment 9.35%.

SaaS concept stocks were strong, including Weimeng Group up 15.54%, China up 13.39%, Yunxiang Technology up 12.2% and Ming Yuan Cloud Group up 11%. Recently, the SaaS concept has been sung together, and it is generally believed that the SaaS industry is expected to usher in rapid development opportunities, and the relevant leaders are expected to achieve double improvement in performance and valuation.

BABA's concept stocks broke out collectively in the afternoon, with Alibaba Health Information Technology up 17.06%, Gaoxin Retail up 4.05% and BABA Pictures up 3%.

The concept of anti-epidemic has risen widely, with its Middle East sunshine medicine up 7.55%, CANSINOBIO 6.81% and Sino Biopharmaceutical 5.7%. BoCom International released a report, the fourth batch of collection list was officially announced, the bid was opened on February 3, involving 45 varieties, 80 specifications. The total sales of the drugs at the terminals of China's public medical institutions will reach 55 billion yuan in 2019, and the maximum purchase scale involved will exceed 25 billion yuan. The bank believes that 1-2 batches of collection will be normal in the future, and the average price drop in this round is still expected to exceed 50%. Be optimistic about pharmaceutical leaders and innovative health enterprises.

Individual stocks$Tencent (00700.HK) $The share price closed up 3.74 per cent at HK $679.5 and the share price hit another record high. CITIC believes that the video number is a major breakthrough for Wechat in the video field. The video number will achieve the underlying structure of "decentralized distribution + community reconstruction + live broadcast interaction", which will help Wechat transform from picture and text information to video, and achieve another upgrade of Wechat ecology. It is expected that the video number will bring great commercial value to Tencent in advertising, e-commerce and other fields. Be optimistic about Tencent's medium-and long-term investment value and maintain the company's "buy" rating.

$BABA-SW (09988.HK) $It closed up 8.52% at HK $265. Ma Yun met with 100 rural teachers across the country via video connection and spoke online. "when the epidemic is over, we will meet again," he said. This is Ma Yun's first appearance more than two months after he "disappeared" in public. Subsequently, BABA Group Intranet also released a post-"Laba Festival and the teachers have an appointment with Mr. Ma to come to the appointment."

$Meituan-W (03690.HK) $The share price closed up 9.09% at HK $372, and the share price hit a new high. Xiaomo recently pointed out that it is estimated that the accelerated growth of Meituan's users and the increase in urban coverage and total transaction volume (GMV) of the group purchase business will be the catalyst for the stock price in the near future, raising Meituan's target price from HK $270,000 to HK $450m.

$JD.com Group-SW (09618.HK) $Shares closed up 3.35 per cent at HK $364.2, with shares hitting another all-time high. This morning, foreign news reported that JD Logistics, Inc., owned by asset management companies Blackstone Group Inc (Blackstone), Meituan, ESR Cayman Limited and JD.com, is bidding for a controlling stake in China's logistics assets, which could be as high as US $2 billion (about HK $15.5 billion).

$Geely Automobile (00175.HK) $It closed up 5.63% at HK $33.80. Geely Automobile Group signed a strategic cooperation agreement with Tencent in Hangzhou yesterday to carry out all-round strategic cooperation in the areas of smart cockpit, autopilot, digital marketing, digital base, new digital business and low-carbon development. Tencent will help Geely complete the digital upgrade of "user life cycle", open up the digital closed loop of the whole industry chain, such as product research and development, manufacturing, marketing, use, user operation and after-sales service, and build a "people-centered" digital service system.

$Sihuan Medicine (00460.HK) $It closed up 43.48% at HK $1.32. The company recently announced that levetiracetam injection concentrated solution (5ml:0.5g) developed by its subsidiary Beijing Sihuan Pharmaceutical Co., Ltd. was approved for listing by the State Drug Administration on December 21, 2020. In addition, Sihuan Pharmaceutical is a Korean biopharmaceutical company Hugel, Inc. The production of botulinum toxin Letibao is the exclusive agent in China.

In terms of funds for Hong Kong stock exchanges

As for Hong Kong Stock Connect, there was a net inflow of HK $20.631 billion from Hong Kong Stock Connect (southbound) today.

Message surface

Macroscopic aspectThe central bank conducted a seven-day reverse repurchase operation of 280 billion yuan in the open market, with the operating volume reaching a four-month high. As 2 billion yuan of reverse repurchase expired today, the net investment reached 278 billion yuan, the largest in more than a month.

Exchange rate aspectLiang Ming, director of the Institute of Foreign Trade of the Research Institute of the Ministry of Commerce, said: at present, with the marketization of the RMB exchange rate, we have become more dependent on the market to adjust the RMB exchange rate. Therefore, in fact, the change of exchange rate depends more on the demand of the market. As a result, with the recovery of the US economy, there is a good chance that the RMB will return to the level of 6.5 to 6.8 against the dollar.

SemiconductorsJin Wei, vice mayor and secretary-general of Beijing, said on the 20th that efforts should be made to overcome key core technologies in important areas in terms of making up for deficiencies. The first is to promote a breakthrough in integrated circuit production and research. The second is to carry out technological research and development of key new materials and accelerate the R & D process of technologies and products in the third generation semiconductors and other fields. The third is to focus on the general-purpose key parts, research and development to break through some of the key parts of the instrument. Fourth, we will promote breakthroughs in the research and development of high-end instruments and equipment, and support the formation of a number of customized scientific instruments and equipment that serve major scientific and technological infrastructure.

Real estateFrom January 1 to January 18, 2021, nearly 30 housing companies sold financing projects worth about $14 billion, of which more than $10 billion have been completed. "Housing enterprises financing frequently, the main reason is to prepare in advance, seize the window to increase the scale of financing. Zhang Dawei, chief analyst at Zhongyuan Real Estate, said that the record low financing cost of US dollar debt is also one of the driving forces for real estate companies to increase the scale of financing, with most real estate companies issuing new debt in exchange for old high-interest debt.

In terms of insuranceMost listed insurance companies have abandoned their business sprint at the end of 2020 to store energy for this year's "good start". According to a "good start" data from listed insurance companies circulated in the industry, Ping An Insurance, China Pacific Insurance, New China Life Insurance, China Life Insurance Company Limited and PICC had a divergent record in the first half of January. the premiums of the first three companies in each insurance period rose by more than 25 per cent year-on-year, with a year-on-year growth rate of as high as 74 per cent, while the latter two companies showed negative growth due to reasons such as a relatively high base last year.

Institutional viewpoint

China International Capital Corporation:Since the beginning of the year, mainland funds have continued to flow into Hong Kong stocks through the Shanghai-Hong Kong Stock Connect, with a net inflow of more than 150 billion yuan. In the future, taking into account the capital inflow potential of insurance, private equity and other types of institutional investors, and mainland investors' understanding of Hong Kong stocks has been greatly improved, we estimate that on the premise that Hong Kong stock valuations remain attractive, the average annual inflow potential of southbound capital in recent years is likely to remain at a high of 5000-600 billion yuan. In the medium to long term, the proportion of positions held by mainland institutional investors between A shares and Hong Kong shares may roughly match the market capitalization ratio of both sides.

CITIC:"rush" Jiancang ease, speculative hugging will continue to disintegrate, the market will return to the slow rise, it is recommended to focus on A shares and Hong Kong stocks two major markets of high performance-to-price ratio plate. For the Hong Kong stock market, Hong Kong stocks obviously stagnated within the global mainstream index in 2020, and the basic fabric will be repaired quickly this year; the current US "investment ban" has led to the forced sale of some foreign investors in the short term, stimulating domestic funds to go south to raise funds, and a total southward net inflow of 158.7 billion yuan in 11 trading days in 2021. We continue to strengthen our strategic allocation proposal for Hong Kong stocks.

Guosheng Securities:In recent years, the southward capital of Hong Kong stocks has continued to flow into Hong Kong stocks. In particular, in 2020, the cumulative net inflow of the Hong Kong Stock Connect channel alone was close to HK $700 billion, which to a large extent hedged the impact of foreign capital outflow. Domestic southward funds have in fact become the most important capital increment in the Hong Kong stock market and the ballast stone that determines market performance. According to its estimates, the proportion of funds from mainland China in the total turnover of Hong Kong stock market has risen to about 15% in 2020, accounting for 1% of the proportion of foreign funds in Hong Kong stocks. With the accelerated flow of southward funds into the Hong Kong stock market, southward funds are also expected to repeat the process of northward funds affecting A shares in the past few years, seize the pricing power of Hong Kong stocks and become a decisive force in influencing the performance of the Hong Kong stock market.