Review of Hong Kong stock market

The Hang Seng Index weakened in the afternoon. By the close, the Hang Seng Index closed down 1.45% at 27321.98, while the Hang Seng Technology Index fell 2.96% to 7268.14.

Online education stocks plummeted in the afternoon, New Oriental Education & Technology Group-S (09901) shares halved, the day's market capitalization lost 40 billion Hong Kong dollars, New Oriental Education & Technology Group online (01797.HK), think think music education (01769.HK) fell 28%. Technology stocks are collectively weak, Kuaishou Technology is down 10.7%, Bilibili Inc. is down more than 9%, China Evergrande Group Group is weaker, Hengteng Network Group Co., Ltd. is down more than 13%, China Evergrande New Energy Vehicle is down more than 10%, and China Evergrande Group is down 7%.

The Prospect of Hong Kong stocks

As of press time, the HS50 index fell 0.95% to 27031.5 points.

The market will not be too optimistic this week, there are several points: first, the negative impact of the weakness of US Chinese stocks will continue to exert pressure on the Hang Seng Index; second, the big fluctuations caused by the education industry will continue to interfere with market sentiment, and many giants have invested. Burst positions are inevitable. At the same time, there is also the real estate industry, where Shanghai has begun to raise lending rates. The interest rate for first home loans will be adjusted by 5% from the current 4.65%, and the interest rate for second home loans will be raised from 5.25% to 5.7%. The new rules will come into effect on July 24. Finally, the month-end effect, generally in this node of the market funds will be tight.

Overseas, the Federal Open Market Committee (FOMC) will announce the interest rate decision and issue a monetary policy statement on Wednesday. Powell, chairman of the Federal Reserve, will also hold a press conference after the meeting. Fed policy makers are expected to discuss scaling back their bond purchases at this week's meeting, which could be bad for stocks if there are signs of a reduction in asset purchases by the end of the year. In addition, the Bureau of Economic Analysis will release an initial figure for GDP growth in the second quarter, which is expected to rise from 6.4 per cent to 7.9 per cent. If the data exceed expectations, then inflationary pressures will emerge.

A list of macro news

• Cement is expected to rise in quantity and price in the second half of the year.

According to the cement net news of July 25, the pressure of stable economic growth in China in the second half of the year is still great, and most of the projects will be launched in the second half of the year. Infrastructure investment will become the main driving force for the growth of cement demand, and cement production is expected to continue to grow. On the supply side, 2021 is the first year of "double carbon", and the cement industry has a long way to go to remove production capacity, and the upgrading of off-peak production policy in the second half of the year is the trend. Recently, new regulations on capacity replacement in the cement industry have been issued, and the proportion and conditions of capacity replacement have become stricter. Supply is expected to decrease to some extent.

• The policy of "double reduction" was introduced.

The General Office of the CPC Central Committee and the General Office of the State Council issued the opinions on further reducing the burden of homework and out-of-school training of students in compulsory education. Discipline training institutions are not allowed to list and raise funds, and capitalization operations are strictly prohibited. Listed companies may not invest in discipline training institutions through stock market financing, or purchase the assets of discipline training institutions by issuing shares or paying cash. Overnight, U. S. stocks adjusted sharply, including education stocks. Hong Kong stock education and training plate under heavy pressure, the market continues to be bearish.

A list of individual stock news

• Li Auto Inc. sought dual listing through the hearing of the Hong Kong Stock Exchange.

Li Auto Inc. was heard by the HKEx with Goldman Sachs Group and CICC as co-sponsors and UBS as financial advisers, the HKEx disclosed on July 26th. Li Auto Inc. will seek to apply for dual major listings as issuers with different voting structures. Li Auto Inc. is a Chinese manufacturer of new energy vehicles, designing, developing, manufacturing and selling luxury smart electric vehicles. The company's first and only commercial add-on electric car model-the ideal ONE is a six-seater medium and large luxury electric SUV equipped with extended range systems and advanced smart car solutions. Li Auto Inc. began mass production of ideal ONE in November 2019, and launched 2021 ideal ONE on May 25th, 2021. As of June 30, 2021, Li Auto Inc. has delivered more than 63000 ideal ONE.

• Tencent was ordered to revoke the exclusive copyright of online music.

A few days ago, the General Administration of Market Supervision ordered Tencent Co., Ltd. (00700.HK) to lift the exclusive copyright of online music and other penalties.

• New Oriental Education & Technology Group online will actively seek guidance from and cooperate with the Administration on its efforts to abide by the new rules of off-campus training.

New Oriental Education & Technology Group online (01797.HK) issued an announcement that the company will follow the spirit of "opinions" and abide by relevant rules and regulations when providing educational services. The Company is considering appropriate compliance measures which are expected to have a significant adverse impact on training services related to compulsory education service disciplines in China. We will actively seek guidance from and co-ordinate with the Administration on our efforts to comply with the advice and any relevant rules and regulations.

• Corning Jerry Pharmaceutical-B will present a summary of research progress and electronic posters on KN046 and KN026 at the 2021 ESMO Conference.

Corning Jerry Pharmaceutical-B (09966.HK) announced that the research progress of KN046 (an anti-PD-L1/CTLA-4 bispecific antibody) and KN026 (a HER2 targeted bispecific antibody) will be presented in the 2021 European Society of Oncology Congress (2021 ESMO Congress) in the form of summaries and electronic posters. The European Society of Internal Oncology Congress is an influential European platform for oncology. Designed for clinicians, researchers, patient advocates, journalists and medical industry representatives from around the world. The summary will be published on the company's website at 00:05 on September 13, 2021 (CEST) and the electronic poster presentation materials will be posted on the company's website on September 16, 2021 (for the ESMO Conference to be held).

• Yasheng Pharmaceutical-B re-granted 8964 restricted shares to independent non-executive directors Ye Changqing, Yin Zheng and Ren.

Yasheng Pharmaceutical-B (06855.HK) announced that as part of the respective adjusted remuneration packages of Ye Changqing, Yin Zheng and Ren, the Board intends to cancel the originally proposed grant in order to strictly comply with the Model Code for Securities transactions by Directors of listed issuers set out in Appendix 10 to the listing rules. On July 23, 2021, the Board recommended that the Company, subject to the approval of the independent shareholders at the EGM, re-grant 8964 restricted share units to Ye Changqing, Yin Zheng and Ren, each of whom are independent non-executive directors of the Company, respectively, under the restricted share Unit Plan.

• The subsidiary of Shisiyao Group cooperates with Shanghai Lechun Biology to develop biofilm market.

Stone four Pharmaceutical Group (02005.HK) announced that Jiangsu Bosheng Medical New Materials Co., Ltd. (Jiangsu Bosheng), a wholly owned subsidiary of the Group, and Shanghai Lechun Biotechnology Co., Ltd. (Party A) signed a memorandum of strategic cooperation on July 23, 2021. The two sides agreed to carry out all-round cooperation in the research and development, testing, promotion and application of biofilm and related products, and jointly develop the international and domestic markets of biofilm, so as to maximize win-win cooperation. Jiangsu Bosheng will add a seven-layer biofilm production line with a width of 1.6 meters. If the quality and performance of the products meet the requirements of Party A, Party An agrees to give priority to purchasing Jiangsu Bosheng products.

• Chinese antibody-B:SN1011 completes the last patient's last visit in Chinese phase I clinic.

China Antibody-B (03681.HK) announced that SN1011 had completed its last visit to the subjects of the Phase I dose climbing study in China on July 23, 2021. In this study, 71 healthy subjects were enrolled in the study, and the dose of SN1011 climbed to 800mg. None of the subjects reported serious adverse events. The product shows good safety and tolerance. The clinical study report is expected to be released by the end of the third quarter of this year. The purpose of this phase I clinical trial was to evaluate the safety, tolerance, pharmacokinetics, pharmacokinetics and phase II recommended dose of SN1011 in the treatment of autoimmune diseases.

• All the directors of China Gas will give up their remuneration of about HK $22.5 million for the pension and aftercare of the victims of the Shiyan gas explosion.

China Gas (00384.HK) announced that at 06:42 on June 13, 2021, a gas explosion occurred at the Yanhu Community Fair in Zhangwan District, Shiyan City, Hubei Province. Shiyan Dongfeng Zhongshang City Gas Development Co., Ltd. (the project company), a non-wholly-owned subsidiary of the company, is a pipeline gas supplier in the region. The pipeline gas management right in this area is owned by Dongfeng Automobile Group Co., Ltd. (Dongfeng Motor) Gas Company. On December 22, 2015, Dongfeng Motor invested in the gas network and related facilities, and a subsidiary of the company invested in cash to jointly set up the project company.

• Yuexiu Real Estate subsidiary 1.874 billion yuan to acquire 98% equity in Guangzhou Baicheng Investment Development

Yuexiu Real Estate (00123.HK) announced that on July 23, 2021, the buyer Guangzhou Yuexiu Huacheng Real Estate Development Co., Ltd. (the company's subsidiary) entered into an equity transfer agreement with the seller (the company's controlling shareholder). The buyer agreed to buy 98% of the target company, Guangzhou Baicheng Investment and Development Co., Ltd. (owns the project land). The equity transfer consideration is about 1.874 billion yuan. In addition, within 60 business days from completion, the buyer shall inject a repayment amount of approximately RMB 419 million into the target company to pay the seller the amount payable, with a total purchase consideration of approximately RMB 2.293 billion. Upon completion, the buyer will own 98% of the target company. The target company will become an indirect non-wholly owned subsidiary of the company, and the financial performance of the target company will be incorporated into the comprehensive financial performance of the group.

• Shanghai Pharmaceutical plans to contribute 90 million yuan to participate in the establishment of a special fund for the biomedical industry.

Shanghai Pharmaceutical (02607.HK) announced that as one of the limited partners, Shanghai Pharmaceutical intends to participate in the establishment of Shanghai Shanghai Biopharmaceutical Innovation and Transformation Private Investment Fund Partnership (Limited Partnership) (hereinafter referred to as "the underlying fund" or "fund"), with a capital contribution of RMB 90 million. According to the disclosure, the underlying fund is a special fund for the biomedical industry initiated by Shanghai Industrial (Group) Co., Ltd. (hereinafter referred to as "Shanghai Real Group"). The underlying fund is based in Shanghai, linked with the Yangtze River Delta and Guangdong-Hong Kong-Macau Greater Bay Area, and is globally oriented, providing systematic investment and transformation support for projects with innovation attributes and achievement transformation value, focusing on the biomedical field. To create a leading domestic biomedical innovation transformation platform.

• Huoyan Holdings will launch reward points platform and reward points promotion business in South America and other Southeast Asian regions

Fire Rock Holdings (01909.HK) announced that after the launch of its reward points platform and promotion business, its major games in Thailand are among the top three bestsellers in IOS and Android App Store respectively. The board of directors is of the view that in view of the achievements of Thailand's reward points platform and reward points promotion business, the company will gradually replicate its successful experience in the Thai market to South America and other Southeast Asian regions. As a result, the company is recently registering a wholly-owned subsidiary (Turkish subsidiary) and launching a trial version of the company's game in Turkey.

• The People's Insurance's second shareholder, the National Social Security Fund Council, intends to reduce its holdings of no more than 884 million A shares and no more than 2% of the total number of shares.

The People's Insurance (01339.HK) issued an announcement that recently, the National Social Security Fund Council, the company's second largest shareholder, informed by letter that it plans to reduce some of the company's shares under unlimited sales conditions. Due to the needs of the asset allocation and investment business of the national social security fund, the Social Security Foundation plans to reduce its holdings of unlimited conditional A shares within six months after 15 trading days from the date of the announcement by means of centralized bidding or block trading, no more than 884 million shares, that is, no more than 2% of the total number of shares currently issued by the company.

• China Energy Construction has signed a contract for the 132kV power transmission and transformation project from Port Mo to Ruimu, Papua New Guinea, involving US $268 million.

China Energy Construction (03996.HK) announced that recently, China Gezhouba Group International Engineering Co., Ltd., a subsidiary of China Gezhouba Group Co., Ltd., signed a contract for a 132kV power transmission and transformation project from Port Mo to Rimu, Papua New Guinea. The project is located in Port Moresby and Remu, the capital of PNG. Its main work is the design, procurement, construction and commissioning of transmission and transformation lines and supporting substations with a length of about 300 km from Port Mo, the capital of PNG, to Remu. The contract amount for the project is tentatively set at US $268 million.

• Haidilao International Holding expects the interim results to turn from deficit to profit from the same period last year to 80 million-100 million yuan, an increase of 104% in income.

Haidilao International Holding (06862.HK) reported that the group expects a net profit of about RMB 80 million-Rmb100m in the first half of 2021, compared with a net loss of about Rmb965 million in the same period last year. Revenue is expected to be about 20 billion yuan in the first half, up about 104 per cent from a year earlier. Compared with the first half of 2020, the company changed from loss to profit in the first half of 2021, but these results did not meet the expectations of the company's management, which reflected that the company's internal management and operation needed to be corrected and improved. Other reasons include that the company opened more stores in the second half of 2020 and the first half of 2021, the related expenses increased, and it took longer for the company to break even for the first time and achieve a return on cash investment in the second half of 2020 and the first half of 2021. And overseas store operations are still affected by the novel coronavirus epidemic in different countries and regions.

• Oriental Securities performance KuaiBao: net profit in the first half increased by 77% compared with the same period last year

On July 23, 03958.HK Securities (03958.HK) released its results, KuaiBao. During the period, the group achieved a total operating income of about 13.277 billion yuan (the same unit below), an increase of 37.94 percent over the same period last year. The net profit belonging to shareholders of listed companies was about 2.7 billion yuan, an increase of 76.95 percent over the same period last year. Basic earnings per share was 0.37 yuan.

• China Glass expects to make a net profit of not less than 300 million yuan in the first half of the year.

China Glass (03300.HK) announced that the Group expects to make a net profit of not less than RMB 300 million for the six months ended June 30, 2021, and a net loss of about RMB 277 million for the six months ended June 30, 2021. The announcement said that the return to profit was mainly due to the further recovery of the glass market and the increase in the selling price and sales volume of the group's main products. As well as the comprehensive influence of factors such as further optimizing and improving the internal management level of the group.

• Huishang Bank expects its net profit to increase by about 14% in the first half compared with the same period last year.

03698.HK expects net profit to rise by about 14 per cent in the first half of 2021 over the same period last year, a cost-to-income ratio of less than 25 per cent, a non-performing loan ratio of less than 1.7 per cent and provision coverage of more than 220 per cent, according to Huishang Bank. According to the information available at present, the bank believes that the increase in group net profit is mainly due to: the bank has always adhered to the development concept of serving the real economy, continuously increased the amount of credit, and the scale of interest-bearing assets has continued to grow; and through collection, restructuring, write-off and other measures to strengthen the disposal of non-performing assets, and achieved certain results.

• CNOOC expects the net profit attributable to shareholders to increase by 2.97-3.06 times to 1.23 billion-1.26 billion yuan in the first half compared with the same period last year.

China National Petroleum Chemical (03983.HK) announced that the group expects the net profit attributable to owners' rights and interests of the company to be about 1.23 billion to 1.26 billion yuan in the first half of 2021, an increase of about 2.97-3.06 times year-on-year. The announcement said that the expected increase in net profit is mainly due to the rising prices of the company's major products, such as urea, methanol, phosphate and compound fertilizer. In addition, the income from the sale of 51 per cent of CNOOC Hualu Shanxi Coal Chemical Co., Ltd. and 61.475 million yuan of debt and 49 per cent of Shanxi Hualu Yangpoquan Coal Mine Co., Ltd. was recognized in the first half of 2021 after the sale was completed. the expected profit includes the proceeds from the sale.

Selected analysis

• Fu Rui: to reiterate the target price of HK $10.02 for the "buy" rating of Hejing leisurely.

Furey released a research report that 03913.HK had earlier reported that it expected first-half earnings to increase by more than 1.5 times year-on-year, at least 7 per cent higher than the bank's forecast, and believed that the company's real earnings would increase by about 1.6 times year-on-year. Given the better-than-expected profit margin, the bank sees great growth potential in its full-year forecast, maintaining its target price of HK $10.02, reiterating its "buy" rating and maintaining its first choice among medium-sized companies, betting on strong and high-quality growth. The company expects strong profit growth in the first half of the year mainly due to a significant increase in floor space under management community value-added services and higher gross profit margins due to higher operating efficiency the report said. Given that first-half earnings already account for about 50 per cent of the bank's conservative full-year forecast, the bank believes that the current full-year profit forecast of 85 per cent has upward potential and that strong first-half results will boost investor confidence in management's annual income growth of more than 1.5 times and the guidance of a net interest rate of 18 per cent and 19 per cent.