Review of Hong Kong stock market

The stock markets of China and Hong Kong fell sharply in the afternoon under selling pressure. At one point, the Hang Seng Index fell more than 5%, losing the 25000 mark. At one point, the Dow Index fell nearly 10%, setting an all-time low. On the market, science and network stocks continued to plummet, Evergrande, catering and other plates led the decline. Semiconductor sector as a whole maintained a rise, financial, gold and other risk aversion sectors rose against the trend.

In terms of individual stocks, Tencent (00700.HK) fell 8.9%, the biggest decline since May last year, Meituan (03690.HK) fell 17.6%, continued to hit an all-time low; Naixue's tea (02150.HK) fell 26%, the market price of less than HK $10; China Evergrande Group (03333.HK) fell 13.4%, the lowest since March 17. Semiconductor Manufacturing International Corporation (00981.HK) rose 5.8 per cent, while HSBC Holdings PLC (00005.HK) and China Construction Bank Corporation (00939.HK) both closed up more than 1 per cent.

The Prospect of Hong Kong stocks

As of press time, the HS50 index rose 1.16% to 25369.4.

The Hang Seng Index continued its decline yesterday, approaching the 25000-point mark all the way. On Monday, Allison Lee, acting chairman of the Securities and Exchange Commission (SEC), said that Chinese companies listed in the United States must disclose their relationship with the government, otherwise they may break the law. With the addition of domestic regulation, the Internet giants have fallen sharply again.

The chip was one of the few bright sectors in the market yesterday. Semiconductor Manufacturing International Corporation (00981.HK) rose 7 per cent at one point, but fell back in late trading due to a serious lack of investor confidence. It may continue to rise today. In addition, due to the risk of listing in the international situation, gold stocks are expected to be optimistic.

On the whole, today, investors need to pay attention to whether the Internet giants suppressed by regulation and the education stocks under the heavy hammer of "double reduction" can stabilize, but at present, the direction of the market is unknown, so it may be a safer choice to appropriately reduce the position and wait and see for the time being. In terms of plate, you can pay attention to chip, military industry and brokerage plate.

A list of macro news

[demand for high-end laptop panels increases]

Jibang Consulting: from 2020 to 2021, the demand for laptops increased significantly due to telecommuting and teaching, which simultaneously led to double-digit growth in shipments of notebook panels, with a price increase of more than 40%, which became the incentive for panel manufacturers to actively invest in the production of OLED, LTPS and Oxide high-end notebook panels. Shipments of high-end laptop panels are expected to reach 17.8% in 2021 and 21.4% by 2022.

[digital RMB patent quantity blowout intelligent contract becomes a new direction]

With the gradual deepening of the digital RMB pilot project, the number of relevant patent applications is constantly being refreshed, and the number of patents applied by many well-known domestic institutions exceeds that of last year. Among them, China Mobile Limited (00941.HK), China banknote Credit Card, Tencent (00700.HK), Baidu, Inc. (09888.HK), Industrial and Commercial Bank of China (01398.HK), Bank of China Ltd. (03988.HK) and other institutions all had relevant patent updates in the first half of the year. The programmability of digital RMB makes smart contracts very popular, and a number of patents are highly concerned by the market.

A list of individual stock news

[BABA released annual report for fiscal year 2021: annual active consumers exceeded 1 billion]

On July 27th, BABA Group (09988.HK) released its annual report for fiscal year 2021, and Zhang Yong, chairman of the board and CEO, issued a letter to shareholders. The letter points out that BABA hopes to become a company that combines consumer Internet with industrial Internet better, which is a very important orientation and direction for BABA to move towards the future. According to the annual report, in fiscal year 2021, BABA eco-global annual active consumers exceeded the 1 billion milestone, reaching 1.13 billion. Domestic and overseas consumers have created an annual transaction volume of 8.119 trillion yuan on the BABA platform. As BABA's second growth curve for the future, Aliyun's sales in the last fiscal year exceeded 60 billion yuan, an increase of 50% over the same period last year, continuing to maintain a leading position in the industry.

XIAOMI car settled in Hefei? XIAOMI responded: everything is subject to official disclosure]

Us-Hong Kong Telecommunications (APP) on the 27th, in response to media reports that "XIAOMI will settle in Hefei", XIAOMI responded that "everything is subject to official disclosure", accompanied by Wang Hua, general manager of XIAOMI's public relations department, who refuted the recent rumors, Weibo Corp. Earlier today, media reported that Anhui SASAC was in contact with XIAOMI Motor, XIAOMI Automobile may be settled in Hefei. The news also said that Jianghuai Automobile may be the OEM for XIAOMI Automobile. XIAOMI's first model is likely to focus on the market of less than 200000 yuan, and will layout the power exchange business.

[Guangzhou Automobile Group plans to more than double car sales by 2035]

Guangzhou Automobile Group (02238.HK) said in a statement on Tuesday that the company aims to produce and sell 5 million cars by 2035, with new energy vehicles accounting for 50 per cent of the total. By 2025, the group will produce and sell 3.5 million vehicles, with a market share of more than 12%, and new energy vehicles account for 20%, the statement said. Guangzhou Automobile Group's share of the new energy vehicle market in 2020 was 5.7%. The company plans to build Guangzhou Auto Zhaopin New Energy vehicle Industry Park into a globally competitive Guangdong-Hong Kong-Macau Greater Bay Area independent brand intelligent network and new energy vehicle industry cluster through a cumulative investment of 8.5-100 billion yuan.

[the antidepressant "Futioxetine hydrobromide tablets" developed by Sino Biopharmaceutical has obtained the drug registration certificate]

Sino Biopharmaceutical (01177.HK) announced that the group's antidepressant Futioxetine hydrobromide tablets (trade name: Qingshuxin) has been issued with a drug registration certificate by China's State Drug Administration. The product is declared according to four categories of chemicals, which is regarded as the first generic drug of the same variety in China to be approved through the evaluation of the consistency of the quality and efficacy of generic drugs. The approved indications are: for the treatment of adult depression. It is reported that votioxetine is a new antidepressant with multi-target mechanism, and it also has 5-HT transporter (SERT) inhibition, serotonin (5-HT1A) receptor activation and 5-HT3 receptor antagonism. Compared with traditional antidepressants (such as heterocyclic and tricyclic antidepressants), futioxetine has the same efficacy, but has fewer side effects, better safety and tolerance, so it has become a commonly used first-line antidepressant in Europe and the United States.

[Cheng Yilong plans to hold a board meeting on July 29th to approve the strategic cooperation and marketing framework agreement with Tencent]

In an announcement with 00780.HK, the board meeting of the company is expected to be held on July 29th, 2021 to approve, among other things, the conclusion of the strategic cooperation and marketing framework agreement with Shenzhen Tencent computer Systems Co., Ltd. (Tencent Limited (00700)) relating to traffic support and advertising and marketing promotion.

[Pharmaron Beijing Co., Ltd.* plans to contribute 68 million yuan to join Beijing Junlian Huikang Equity Investment Partnership]

Pharmaron Beijing Co., Ltd.* (03759.HK) announced that in order to make full use of the ability of professional investment funds to collect, research and judge projects in the industry and improve the company's investment ability, the company plans to subscribe 68 million yuan as a limited partner with its own funds. Participate in affiliated Fang Junlian Capital Management Co., Ltd as fund manager, Lhasa Junqi Enterprise Management Co., Ltd as general partner, Shanghai Junqi Equity Investment Management Co., Ltd., Zhuhai Junlian Xincheng Equity Investment Fund (limited partnership), Ningbo Longtaikang Investment Management Co., Ltd., Zhuhai Junlian Jianning Equity Investment Enterprise (Limited Partnership) is a Beijing Junlian Huikang Equity Investment Partnership (Limited Partnership) established as a limited partner.

[Country Garden Services Holdings intends to buy back shares in the open market]

Country Garden Services Holdings (06098.HK) issued an announcement that the company has known that the trading price of the company's shares has fallen and the trading volume has increased since yesterday, that is, July 26, 2021. Having made reasonable enquiries about the company in the relevant circumstances, the Board confirms that it is not aware of any cause of price and volume fluctuations, or any information that must be published to avoid false markets in the securities of the Company, or any inside information required to be disclosed under part XIVa of the Securities and Futures Ordinance, Cap. 571 of the laws of Hong Kong.

[Xuhui Yongsheng service is expected to increase the unaudited comprehensive net profit and the profit attributable to the owners of the company by more than 55% over the same period last year]

Asahi Yongsheng Services (01995.HK) announced that it is expected that the group's unaudited comprehensive net profit and profit attributable to company owners for the six months ended June 30, 2021 will increase by more than 55 per cent compared with the same period in 2020. The announcement said that the increase in net profit was mainly due to the increase in the construction area of the property under management by the group; the increase in income from community value-added services and value-added services provided to non-owners; and the business recovery after the impact of COVID-19 's epidemic.

[turn loss to profit Zhou's Black Duck expects medium-term net profit to be no less than 200 million yuan]

Zhou's Black Duck (01458.HK) announced that the group's expected net profit for the six months ended June 30, 2021 was not less than Rmb200m, compared with a net loss of 42.2 million yuan for the same period in 2020. Total revenue for the reporting period was about 1.45 billion yuan, compared with 904 million yuan for the same period in 2020, an increase of about 60 per cent. The announcement said that the relevant growth was mainly due to the fact that the COVID-19 epidemic in China was basically under control in the first half of 2021, but the consumer goods industry was still facing greater pressure and challenges due to repeated outbreaks in some regions. The group overcame the adverse effects of the sharp decline in human flow during the Spring Festival in 2021, continued to firmly promote the six major development strategies, and achieved remarkable results, and the overall business performance improved quarter-on-quarter. At the same time, the group franchise business has maintained a strong momentum of development, online and offline all-channel simultaneous efforts, the integration and optimization of the supply chain system, the continuous improvement of production and operation efficiency, and the overall profitability has been significantly enhanced.

[Shimao Service expects medium-term profit attributable to shareholders to increase by not less than 120% compared with the same period last year]

00873.HK announced that for the six months ended June 30, 2021, the group expected unaudited profit attributable to shareholders to increase by no less than 120 per cent compared with the same period in 2020. According to the notice, the increase is mainly due to the increase in the contracted floor area of the group's property management and the area under management, as well as the combined increase in community value-added services and non-owner value-added services.

[the newly signed contract value of China Rallway in the first half of the year was 1.03367 trillion yuan, an increase of 18.8% over the same period last year]

China Rallway (00390.HK) announced that the value of newly signed contracts was 704.44 billion yuan in the second quarter of 2021 and 1.03367 trillion yuan in the first half of the year, an increase of 18.8 percent over the same period last year.

[Wharf Real Estate Investment expects that the profit attributable to shareholders in the first half of the year will not be less than HK $2.5 billion]

Wharf Real Estate Investment (01997.HK) announced that the group expects a profit attributable to shareholders of no less than HK $2.5 billion in the first half of 2021, compared with a loss in the same period last year. This is due to a significant reduction in unrealised revaluation losses on the Group's investment properties.

[the profit attributable to shareholders in the medium term is expected to be not less than 180 million yuan]

According to the announcement issued by 09922.HK, the group expects to obtain a profit attributable to the company's equity holders of not less than RMB 180 million during the six-month period ended June 30, 2021, compared with a loss of RMB 85.9 million attributable to the company's equity holders in the same period in 2020. The announcement said that the expected turnaround is mainly due to the increase in restaurant operating income due to the following factors: Taier Restaurant network continues to expand, from 161 restaurants as of June 30, 2020 to 286 restaurants and group operations as of June 30, 2021 recovered from the 2019-nCoV epidemic, so the total number of restaurant operating days during this period increased compared with the same period in 2020.

[Sihuan Pharmaceutical's first-half profit is expected to increase by more than 300%]

Sihuan Pharmaceutical (00460.HK) announced that the group expects earnings and profits to increase significantly by more than 80 per cent and more than 300 per cent respectively in the first half of 2021 compared with the same period in 2020. The expected substantial increase in earnings and profits during the period was mainly attributable to the continued growth in sales of non-cardio-cerebrovascular drugs due to the Group's strong sales platform, and the introduction and sale of medical and beauty products by the Group during the period, resulting in new sources of revenue.

[IMAX China's revenue in the first half of the year turned into profit compared with the same period last year]

IMAX China (01970.HK) announced that in the six months ended June 30, 2021, the company achieved total revenue of US $53.431 million, a year-on-year increase of 702.03%, adjusted EBITDA US $33.797 million, total box office revenue of US $133 million, profit of US $19.198 million for the period attributable to shareholders, a loss of US $35.248 million for the same period last year, and a basic profit per share of US $0.06. interim dividend per share of US $0.028.

[Huaneng International Power Co., Ltd. lost 26.14% to 4.019 billion yuan in the first half of the year compared with the same period last year]

Huaneng International Power Co., Ltd. (00902.HK) announced that in the six months ended June 30, 2021, the company and its subsidiaries made a combined operating income of 95.116 billion yuan (the same unit below), an increase of 20.21% over the same period last year. The net profit attributable to the company's equity holders was 4.019 billion yuan, down 26.14% from the same period last year. The earnings per share is 0.19 yuan, and the net assets per share (excluding minority interests and other equity instruments) is 5.16 yuan. In the first half of the year, the company's operating power plants in China totaled 207.926 billion kilowatt-hours according to the consolidated report, an increase of 20.80% over the same period last year; the average utilization hours of power plants in the company was 1980 hours, an increase of 263 hours over the same period last year; the proportion of market-oriented trading electricity of the company was 61.09%, an increase of 11.20% over the same period last year.

[interim profit attributable to shareholders of ASM PACIFIC increased by 221.6% year-on-year to HK $1.252 billion interim dividend per share]

ASM PACIFIC (00522.HK) reported results for the six months ended June 30, 2021, with a record revenue performance of HK $9.51 billion in the first half of the year, an increase of 41.5 per cent on an annual basis and 19.3 per cent on a half-year basis. Gross profit margin soared, increasing by 260 pips on an annual basis and 481 pips on a half-yearly basis. The profit attributable to company holders was HK $1.252 billion, an increase of 221.6 per cent over the same period last year. Interim earnings per share were HK $3.05 and an interim dividend of HK $1.30 per share. The Group's total new orders in the first half of this year also reached a record high of HK $15.15 billion, with annual and semi-annual increases of 100.2% and 84.7% respectively. In particular, the total amount of semi-annual new orders of SEMI and SMT divisions reached a record high. Although the total amount of new orders is still dominated by SEMI, the total amount of new orders in the SMT division has set a new record for two consecutive quarters.

Selected analysis

JPMorgan Chase & Co: upgrade the rating of BYD to the target price of HK $250

JPMorgan Chase & Co said in a report that for contract manufacturers, investors are worried about profits and profit pressure in the next quarter or the first half of the year, mainly due to chip shortages, rising raw material costs and increased competition during the period. However, the contract manufacturer has rebounded by an average of 46% since May 13, while the share price of Changqi has risen after the recent profit forecast, reflecting that the market has absorbed the weak performance in the second quarter or the first half of the year. The bank estimates that Byd Company Limited (01211.HK) made a profit of about 1 billion yuan in the first half of the year. If the one-time income from the mask business is excluded and the annual increase is about 9%, the situation is similar to that of Changqi. It is believed that the market will focus on the company's core business, and it is expected to accelerate in the second half of the year, mainly benefiting from the growth in sales of new energy vehicles, while potential orders for batteries will also improve the atmosphere and upgrade the rating from neutral to overweight. Raise the target price to HK $250 to reflect a positive view of its business.