Review of Hong Kong stock market

At one point in the early afternoon of Friday, the Hang Seng Index fell to 680 points, setting a new session low, and then rebounded all the way back to close at 350 points, down 1.35% at 25961.03. Technology stocks were significantly lower on Friday, with the Dow down 4% at one point and closing down 2.56% at 6780.97. On the market, education stocks, beer and pharmaceutical sectors led the decline, inner housing stocks generally fell; steel, photovoltaic and other carbon-neutral plates rose against the market. In terms of individual stocks, BABA (09988.HK) fell 4.2%, Kuaishou Technology (01024.HK) fell 7.4%, Meituan (03690.HK) fell 5.8%, and China Evergrande Group (03333.HK) fell 9.1%. Xinjiang Goldwind Science & Technology (02208.HK) rose 8 per cent, Great Wall Motor (02333.HK) rose 6.8 per cent and Maanshan Iron and Steel (00323.HK) rose 10.2 per cent.

The Prospect of Hong Kong stocks

As of press time, the HS50 index rose 0.73% to 26089.5.

Earlier, it was reported that the Securities Regulatory Commission said that it was difficult for the Hang Seng Index to fall to 27428 points again in a short period of time, but did not see any good news to allow Hong Kong stocks to rebound to a range of 27500 points to 29500 points. 250 Skyline is expected to have resistance. A number of Hong Kong banking and public stocks have announced their results this week, including HSBC Holdings PLC (00005.HK) and Standard Chartered PLC (02888.HK), who were banned from paying dividends by the Bank of England last year. Among them, Exchange Control will announce its interim results today and review whether it will pay interim dividends on the same day. It is believed that if the two banks can resume paying dividends, it will give a boost to the sector as a whole. In addition, investors can pay more attention to the views of management on the future trend of interest rates in the results announcement.

A list of macro news

• The Ministry of Industry and Information Technology requires 25 large Internet and hardware companies, including BABA and Tencent, to carry out self-inspection.

The Ministry of Industry and Information Technology of China has asked 25 large Internet and hardware companies, including BABA and Tencent, to conduct self-inspection in the areas of data security and the protection of consumers' rights and interests. The Internet Society of China has convened a meeting of 12 enterprises, including BABA, to strengthen the exit management of important data. Regulatory authorities will also step up supervision of online car-hailing and freight platforms such as DiDi Global Inc. and Full Truck Alliance Co. Ltd. Group.

• Stamp duty on stock transactions in Hong Kong increased from 0.1% to 0.13%

With effect from August 1, the stamp duty rate on stock transactions in Hong Kong has been raised from 0.1% to 0.13%. The analysis of "Brokerage China" believes that there will be a structural transfer of investment opportunities in Hong Kong stocks in 2021, mainly from the reversal of local stocks in Hong Kong, and the transfer of pricing power leads to the convergence of H valuation differences. The impact of stamp duty adjustment is minimal.

A list of individual stock news

• China Evergrande Group sold an 11% stake in Hengteng Network for HK $3.25 billion, and Tencent became the second largest shareholder.

On the evening of August 1st, 00136.HK announced on the Hong Kong Stock Exchange that China Evergrande Group (03333.HK) had sold a total 11 per cent stake in Hengteng for HK $3.25 billion. According to the announcement, Tencent bought 7 per cent of Hengteng's shares at HK $3.20 per share for a total consideration of HK $2.068 billion, while another independent third-party buyer bought 4 per cent of Hengteng's shares at HK $3.20 per share for a transaction consideration of HK $1.182 billion. Upon completion of the deal, Tencent and the independent third-party buyer will hold about 23.90 per cent and 4 per cent of Hengteng's issued share capital respectively, while China Evergrande Group will still hold 26.55 per cent.

• NetEYun Music is heard by the Hong Kong Stock Exchange, and the largest music community in the world sprint for listing.

NetEase, Inc Yun Music has passed the listing hearing and uploaded the post-hearing data set, with listing co-sponsors Merrill Lynch, CICC and Credit Suisse, according to the official website of the Hong Kong Stock Exchange. According to the latest disclosed data, NetEase, Inc Yun Music maintained rapid growth in the first quarter of 2021, ranking first in the industry in terms of revenue growth, MAU growth, paying subscriber growth and online music payment rates. Of this total, revenue was 1.5 billion yuan, up 74.6% from the same period last year, while the gross loss rate narrowed sharply to 3.6% from 26.8% in the first quarter of last year.

• New Oriental Education & Technology Group cancels board meeting and results announcement

New Oriental Education & Technology Group (09901.HK) Hong Kong shares issued an announcement last night that, in view of recent regulatory developments, the board meeting scheduled for today and the results announcement for the fourth quarter of fiscal year 2021 were cancelled, as well as the corresponding results announcement conference call and webcast at 8pm Beijing time, according to HKEx documents. According to the announcement, further updated information will be provided at an appropriate time in the future.

• Lenovo Holdings expects net profit to increase by no less than 371% in the first half compared with the same period last year.

Lenovo Holdings (03396.HK) announced that it expects the group's net profit attributable to corporate equity holders to be no less than 3 billion yuan in the six months to June 30, 2021, an increase of no less than 371 percent compared with 637 million yuan in the same period in 2020. The expected growth is mainly due to: (1) the overall improvement of the global epidemic situation of COVID-19, the overall prevention and control of the epidemic situation in China, the sustained economic recovery, and the obvious improvement in the operating performance of the company and its subsidiaries compared with the same period; (2) in the first half of 2021, the domestic capital market is booming, and the market is favorable to increase the fair value of many investments of the company and its subsidiaries. And (3) in the same period in 2020, the company associate, China car Rental Co., Ltd., made a large one-time impairment, resulting in a net loss attributable to equity holders of the company exceeding 1 billion yuan for the company and its subsidiaries, and there was no such event in the first half of 2021.

• The expected medium-term homing net loss of minimally invasive medical care expands to about $90 million-$100m.

Minimally invasive Medical (00853) announced that it is expected to lose about $90 million-$100m during the period in which the group acquired equity shareholders in the first half of 2021, compared with a loss of about $65.6 million in the same period last year. The change is mainly due to the impact of price reduction brought about by the national centralized procurement policy of coronary stents; a significant increase in R & D investment compared with the same period last year; and one-time transaction costs for the issuance of convertible bonds. At the same time, during the reporting period, the Group's sales revenue achieved double-digit growth compared with the same period last year, partially offsetting the above adverse effects. The increase is mainly due to the substantial increase in coronary stent sales brought about by the national centralized volume procurement policy, rapid marketing, the contribution of new product revenue, and the recovery of elective surgery brought about by the recovery of novel coronavirus epidemic.

• Zijin Mining Group's net profit in the first half of the year increased by 174.6%, exceeding that of 2020.

Zijin Mining Group (601899) disclosed the semi-annual report on the evening of July 30th that the company's revenue in the first half of the year was 109.863 billion yuan, an increase of 32.14% over the same period last year, and its net profit was 6.649 billion yuan, an increase of 174.6% over the same period last year, exceeding the full-year net profit of 2020 and setting a record high.

• DiDi Global Inc. can be monitored in front of the APP, Meitu changed the array and transferred the restricted business to VIE to avoid legal risks.

01357.HK said on Friday that in order to promote fund-raising activities in its smart hardware business, it had transferred its smart hardware business to independent holding structures at the overseas and domestic levels, separate from other businesses, to avoid legal risks.

• Zhou Shengsheng expects his six-month profit to increase by more than 1.45 times.

00116.HK announced that after the board's preliminary review of the group's unaudited consolidated management accounts for the six months ended June 30, 2021, the profit attributable to shareholders was expected to range from HK $518 million to HK $539 million, an increase of 145% to 155% over the same period in 2020. The Board attributed the growth to a significant rebound in Chinese mainland's business following a sharp decline in the Group's jewelry retail business affected by the 2019 coronavirus epidemic in the first quarter of 2020.

• Guotai Junan: the net profit in the first half of the year was 8.013 billion yuan, an increase of 46.93% over the same period last year

Guotai Junan (02611.HK) released its results on the evening of July 30, KuaiBao said that the net profit attributed to the owners of listed companies in the first half of 2021 was 8.013 billion yuan, up 46.93% from the same period last year, and operating income was 21.918 billion yuan, up 38.62% from the same period last year. The announcement said that in the first half of 2021, the Shanghai Composite Index rose 3.40%, the total net price (total value) index of Chinese bonds rose 0.38%, the trading volume of equity funds in Shanghai and Shenzhen increased by 22.21% compared with the same period last year, and IPO underwriting in the A-share market increased by 50.27% compared with the same period last year. "the company adheres to the general tone of 'seeking progress in stability and strengthening the foundation', and in accordance with the general requirements of 'integrated service, digital transformation, international layout, group management and control', adhere to the driving force from reform, vitality from talents, efficiency from management, development from innovation, take the initiative to seize market opportunities, promote the steady development of various businesses, and achieve better business performance. "

• XPeng Inc.: 8040 cars were delivered in July, an increase of 228% over the same period last year

XPeng Inc. announced on the Hong Kong Stock Exchange that 8040 smart cars were delivered in July 2021, an increase of 228% year-on-year and 22% month-on-month, setting the company's highest monthly delivery record. As of July 31 this year, the company's total delivery volume reached 38778 vehicles, an increase of 388% over the same period last year. The company plans to officially release the P5 in the third quarter of 2021 and delivery is expected in the fourth quarter of 2021.

Selected analysis

• Morgan Stanley: food stocks preferred Mengniu (02319.HK), NONGFU SPRING CO., LTD. (09633.HK), etc.

Morgan Stanley pointed out that profit pressure affected the mainland food and beverage industry in the first half of this year, but hoped that product price increases in the second half of the year would lead to improved profit margins. According to the report, shares related to the catering industry have fallen by about 16% since the beginning of the year, down about 15% compared with the MSCI China Index over the same period. Among them, the market is concerned about the rise in the cost of raw materials, resulting in a weak performance of the restaurant, seasoning and dairy industries, while regional alcohol and beer stocks have benefited from high-end products and increased market share and performed relatively well. Companies that focus more on pricing and profit margins in the future are expected to see year-on-year earnings growth of about 20 per cent in the second half of the year, up from 15 per cent in the first half of the year, according to Morgan Stanley. Morgan Stanley preferred stocks for Mengniu (02319.HK), Haitian Flavor Industry (603288.SH), China Resources Beer (00291.HK), etc., and upgraded NONGFU SPRING CO., LTD. (09633.HK) rating to synchronize with the big city.