Hong Kong Stock Market Closing (08.27) | Hang Seng Index rose by 0.43%, with strong performance from oil stocks. Trip.com Group-S surged 9% after earnings

According to the Wise Finance APP, the three major Hong Kong stock indexes opened lower in the morning and quickly fell. The Hang Seng Index fell by 1.81% at one point, but then the decline gradually narrowed, with the Hang Seng Index and the H-share index turning red in the afternoon. As of the close, the Hang Seng Index rose by 0.43% or 75.94 points to 17874.67 points, with a total daily turnover of 91.923 billion Hong Kong dollars; the Hang Seng China Enterprises Index rose by 0.44% to 6306.36 points; and the Hang Seng Tech Index fell by 0.05% to 3501.29 points.

CICC believes that in a scenario of rate cuts and uncertainty, Hong Kong stocks with high dividend strategies will still outperform. In the medium to long term, there are three positive factors: the policy direction encourages listed companies to further increase dividend levels; in the context of an "asset shortage", the market's demand for safe, stable, and high-yield bond-like assets will remain high; changes in accounting standards further favor long-term funds represented by insurance assets to increase allocation to high-dividend assets systematically.

Performance of Blue-Chip Stocks

Trip.com Group-S (09961) led the blue-chip stocks. At the close, it rose by 9.05% to 366.4 Hong Kong dollars, with a turnover of 1.456 billion Hong Kong dollars, contributing 8.37 points to the Hang Seng Index. Trip.com Group released its financial results for the second quarter and first half of 2024. In the second quarter, the company's total revenue was 12.788 billion yuan, a year-on-year increase of 13.55%; the net profit attributable to shareholders was 3.833 billion yuan, a year-on-year increase of 507.45%. The total revenue for the first half of the year was 24.709 billion yuan, a year-on-year increase of 20.69%; the net profit was 8.145 billion yuan, a year-on-year increase of 103.32%.

In other blue-chip stocks, Master Kong Holdings (00322) rose by 6.08% to 10.12 Hong Kong dollars, contributing 1.84 points to the Hang Seng Index; Sinopec (00386) rose by 5.23% to 5.43 Hong Kong dollars, contributing 10.62 points to the Hang Seng Index; Alibaba-SW (09988) fell by 4.02% to 79.95 Hong Kong dollars, dragging down the Hang Seng Index by 60.9 points; Haier Smart Home (06690) fell by 3.33% to 23.2 yuan, dragging down the Hang Seng Index by 3.14 points.

Hot Sectors

On the market, large-cap technology stocks saw mixed gains and losses, intensifying competition in the e-commerce industry. Alibaba's over 4% decline led the components of the H-share index, while NetEase rose by nearly 3% and Baidu rose by over 1%. The escalation of the situation in the Middle East combined with Libya's suspension of exports led to a surge in oil prices, driving up oil stocks; OTA platforms were strong, with Trip.com surging by 11% at one point and Tongcheng Travel closing up by over 6%; beer stocks, food stocks, coal stocks, property management stocks, and auto stocks all performed well. On the other hand, JianTao Group plummeted after its performance announcement, with JianTao Integrated Slab falling by over 10%; home appliance stocks, film and television stocks, education stocks, and gold stocks generally declined.

1. Collective Rise of Oil Stocks. At the close, Kunlun Energy (00135) rose by 8.56% to 7.86 Hong Kong dollars; Sinopec (00386) rose by 5.23% to 5.43 Hong Kong dollars; PetroChina (00857) rose by 4.08% to 7.15 Hong Kong dollars; CNOOC (00883) rose by 3.38% to 21.4 Hong Kong dollars.

Stimulated by the tense situation in the Middle East and the news of Libya's suspension of oil exports, oil prices surged by over 3% on Monday. The eastern government of Libya announced on August 26 that all oil fields, ports, and oil facilities faced "force majeure" and stopped all oil production and exports On August 25, Lebanon and Israel launched attacks on each other's targets, escalating the conflict and raising widespread concerns in the international community about the conflict sliding towards regional war.

In addition, oil companies have successively disclosed their mid-term performance. PetroChina achieved operating income of RMB 1.6 trillion in the first half of the year, a 5% year-on-year increase; net profit was RMB 88.61 billion, a 3.9% growth. The mid-term dividend is RMB 0.22 per share, with a dividend amount of RMB 40.26 billion, setting a new historical high for the third consecutive year. Kunlun Energy achieved revenue of RMB 92.922 billion in the first half of the year, a 6.72% year-on-year increase; attributable net profit to shareholders was RMB 3.305 billion, a 2.58% year-on-year increase; and a proposed mid-term dividend of RMB 0.1641 per share.

2. Property management stocks continue to rise. At the close, Lvjing Services (02869) rose by 10.37% to HKD 3.62; New Hope Services (03658) rose by 7.83% to HKD 1.79; Hejing Youhuo (03913) rose by 6.45% to HKD 0.33; and China Overseas Property (02669) rose by 5.71% to HKD 4.63.

On August 23, the State Council Information Office held a series of themed press conferences on "Promoting High-Quality Development." Deputy Minister of Housing and Urban-Rural Development Dong Jianguo mentioned the research on establishing a housing inspection, housing pension, and housing insurance system to build a long-term effective mechanism for housing safety management throughout the life cycle. Currently, 22 cities including Shanghai are piloting this. CITIC Securities believes that establishing a pension system at the institutional level, strengthening residential community inspections, and residential property management have the opportunity to become a light-asset service blue ocean industry with sustainable cash flow.

Looking at the latest performance disclosures of property enterprises, Lvjing Services achieved a net profit of RMB 505 million in the first half of the year, a 21.5% year-on-year increase. By the end of the first half of the year, the company's managed area reached 482 million square meters, a 16.2% year-on-year increase. China Overseas Property achieved a net profit of RMB 738 million in the first half of the year, a 15.97% year-on-year increase, and proposed a mid-term dividend of HKD 8.5 cents per share, compared to 5.5 cents in the same period last year. New Hope Services achieved a net profit of RMB 118 million in the first half of the year, a 7.89% year-on-year increase, with the mid-term dividend increasing to HKD 0.09 per share.

3. Some coal stocks rebounded. At the close, Yanzhou Coal Mining (01171) rose by 3.25% to HKD 10.16; China Shenhua (01088) rose by 2.68% to HKD 34.45; Shougang Resources (00639) rose by 2.33% to HKD 2.64; and China Coal Energy (01898) rose by 2.07% to HKD 9.35.

Guotai Junan Securities pointed out that listed coal companies have successively released their interim reports. Among them, China Coal Energy and Shanghai Energy announced their mid-term dividend plans, with China Coal Energy A shares distributing a cash dividend of RMB 0.221 per share (tax included), with a dividend ratio of 30%, and Shanghai Energy distributing a cash dividend of RMB 0.2 per share (tax included), with a dividend ratio of 30.65%. The landing of mid-term dividends for these two central coal enterprises may indicate that future dividend increases are expected to extend from central coal enterprises to local state-owned enterprises. Everbright Securities stated that the current coal market is operating steadily, and it remains optimistic about the support of peak summer demand for coal prices. It is expected that coal prices will start to rise seasonally from the end of August to mid-October 4. Auto stocks perform well. As of the close, Leapmotor (09863) rose by 5.42% to HKD 20.6; Geely Auto (00175) rose by 4.75% to HKD 8.6; XPeng Motors-W (09868) rose by 4.3% to HKD 30.3; Li Auto-W (02015) rose by 2.19% to HKD 83.95.

In late July, the subsidy for trading in old cars for new ones was increased. The subsidy standards for new energy passenger vehicles and passenger vehicles with a displacement of 2.0 liters and below were raised from RMB 10,000 and RMB 7,000 to RMB 20,000 and RMB 15,000. Data shows that as of August 23, the cumulative registered users on the car trade-in platform exceeded 1.1 million, with over 700,000 applications for car scrappage and renewal subsidies received, and over 10,000 new applications per day. This policy has stabilized passenger car retail sales. According to the China Passenger Car Association, from August 1 to 18, passenger car retail sales reached 907,000 units, an 8% year-on-year increase; new energy vehicle retail sales reached 490,000 units, a 58% year-on-year increase.

In addition, Leapmotor announced yesterday that Chairman and CEO Zhu Jiangming and shareholders Fu Liquan and his wife plan to increase their holdings of the company's H shares within six months from the announcement date, with an amount not exceeding RMB 300 million or the equivalent in Hong Kong dollars. XPeng Motors also recently announced that CEO He Xiaopeng increased his holdings. Between August 21 and 23, he bought 1 million H shares at an average price of approximately HKD 27.13 per share, and 1.42 million American depositary shares at an average price of approximately USD 7.02 per share.

Hot Movers

1. Asia Cement (China) (00743) plummeted on high volume, closing down 26.49% at HKD 2.22.

Asia Cement announced that the resolution proposed by controlling shareholder Asia Cement Holdings to privatize the company through an agreement arrangement was not approved by planned shareholders at the court meeting. Therefore, the privatization proposal and plan have failed. According to the takeover code, the offeror shall not make another offer for the shares within 12 months.

2. Maoyan Entertainment (01896) tumbled after earnings release, closing down 8.33% at HKD 6.27.

Maoyan Entertainment released its 2024 interim results, with revenue of RMB 2.171 billion, a 1.2% year-on-year decrease; adjusted net profit of RMB 352 million, a 22.8% year-on-year decrease; attributable net profit to owners of the company of RMB 285 million, a 29.96% year-on-year decrease; and earnings per share of 0.25 yuan.

3. Yadea Group (01585) surged significantly, closing up 7.89% at HKD 10.94.

Bank of America Securities pointed out that considering the better-than-expected subsidy for trading in old cars for new ones and the accelerated implementation of the new national standard, it raised Yadea's earnings per share forecast for the current and next year by 3% and 5%, and by 9% for the year after. The bank raised Yadea's target price from HKD 12.6 to HKD 14.1 and upgraded its rating to "Buy" 4. Master Kong Holdings (00322) opened low and closed high, as of the close, up 6.08% to HKD 3.12 .

Master Kong Holdings released its 2024 interim results, with revenue of RMB 41.201 billion, a year-on-year increase of 0.7%; net profit attributable to owners of the company was RMB 1.885 billion, a year-on-year increase of 15.1%; non-GAAP net profit was RMB 1.718 billion, a year-on-year increase of 43.33%. Profits exceeded expectations, mainly due to the better-than-budgeted decline in raw material costs