Hong Kong Stock Market Closing (10.31) | Hang Seng Index closed down 0.31%, brokerage, domestic property, and photovoltaic stocks rose, while automotive stocks fell again

According to Zhitong Finance APP, after a strong opening in the morning, the Hong Kong stock market showed a fluctuating trend, with all three major indices turning negative in the afternoon, and the Hang Seng Index falling below 4500 points. By the close, the Hang Seng Index was down 0.31% or 63.31 points, at 20317.33 points, with a total turnover of HKD 154.479 billion; the Hang Seng China Enterprises Index fell 0.31%, closing at 7264.11 points; the Hang Seng Tech Index dropped 0.32%, ending at 4499.15 points. For the entire month, the Hang Seng Index has accumulated a decline of 3.86%, the China Enterprises Index has fallen 3.27%, and the Hang Seng Tech Index has decreased by 5.32%.

Everbright Securities stated that the improvement in domestic policy expectations, combined with the Federal Reserve's interest rate cuts, makes the Hong Kong stock market worthy of active attention. The business revenue of listed companies in the Hong Kong stock market mainly comes from the domestic market, and under the influence of proactive domestic policies, the expectations on the microeconomic front in the Hong Kong stock market are likely to continue improving. In addition, as an offshore financial market, the Hong Kong stock market is expected to see improved liquidity with the Federal Reserve officially entering a rate-cutting cycle. Overall, the Hong Kong stock market is still worth actively allocating resources.

Blue Chip Performance

Xinyi Solar (00968) led the blue chips. By the close, it was up 3.64%, at HKD 3.99, with a turnover of HKD 874 million, contributing 1.11 points to the Hang Seng Index. Recently, there have been continuous positive news in the photovoltaic industry. On October 30, the National Development and Reform Commission and other departments issued guidance on vigorously implementing renewable energy substitution actions, which proposed to comprehensively enhance the supply capacity of renewable energy and accelerate the construction of large-scale wind and photovoltaic bases focused on desert, gobi, and barren areas, as well as promote the clustered development of offshore wind power.

In other blue chip stocks, China Mengniu Dairy Company Limited (02319) rose 3.45%, closing at HKD 17.4, contributing 2.95 points to the Hang Seng Index; China Resources Land (01109) increased by 2.78%, at HKD 25.85, contributing 3.69 points; WH Group (00288) fell 5.02%, closing at HKD 6.06, dragging down the Hang Seng Index by 4.39 points; BYD Electronics (00285) dropped 3.04%, at HKD 33.5, pulling down the Hang Seng Index by 1.36 points.

Popular Sectors

On the market, large technology stocks generally showed declines, with Tencent and Alibaba both closing down over 1%. Several brokerage firms achieved a performance turnaround in the third quarter, leading to a rise in Chinese brokerage stocks in the morning; the six major banks will implement a new mechanism for adjusting existing mortgage rates starting tomorrow, boosting domestic property stocks during the session; six departments issued documents to implement renewable energy substitution actions, leading to gains in wind and photovoltaic stocks; dairy stocks, semiconductor stocks, film and television stocks, and coal stocks generally performed well. On the other hand, the EU decided to impose a five-year anti-subsidy tax on Chinese electric vehicles, causing automotive stocks to decline again; gas stocks, pharmaceutical stocks, and beer stocks all showed weak performance.

1. Chinese brokerage stocks rose strongly. By the close, CITIC Securities (06030) was up 5.9%, at HKD 21.55; Hongye Futures (03678) rose 5.71%, at HKD 3.33; China Galaxy (06881) increased by 3.73%, at HKD 6.96; and China Merchants Securities (06099) was up 3.43%, at HKD 13.26 Recently, multiple securities firms have disclosed their third-quarter performance, with most companies achieving a performance reversal. From the perspective of leading companies, CITIC Securities reported a net profit of nearly 16.8 billion yuan in the first three quarters, a year-on-year increase of 2.3%. Both China Merchants Securities and Guotai Junan Securities reported net profits exceeding 4.8 billion yuan, with positive growth rates. Firms like Founder Securities and Soochow Securities also reported net profits exceeding 1.1 billion yuan. Some small and medium-sized securities firms achieved rapid growth, with Harbin Investment Group's performance increasing by 6.4 times in the first three quarters, while First Capital and Guosheng Financial Holdings both saw growth rates exceeding 70%.

Zhongyuan Securities pointed out that under strong policy-driven factors, the industry's profitability in the fourth quarter is expected to improve significantly compared to the first three quarters. After sufficient turnover and consolidation, along with improvements in the industry's fundamentals, the securities sector is likely to challenge the recent valuation high of 2 times P/B; even during the process of fluctuations and consolidation, the securities sector is expected to maintain a good structural market, warranting continued attention to the securities sector.

2. Most domestic property stocks rose. As of the close, China Jinmao (00817) rose by 10%, closing at HKD 1.21; Sunac China (01918) rose by 7.51%, closing at HKD 2.72; Longfor Group (03380) rose by 2.88%, closing at HKD 1.07; Vanke Enterprises (02202) rose by 2.35%, closing at HKD 7.41.

On October 31, the six major commercial banks, including Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications, and Postal Savings Bank of China, announced that starting from November 1 (tomorrow), they will successively implement a new pricing mechanism for commercial personal housing loan interest rates. This also means that the People's Bank of China's requirements for improving the pricing mechanism for commercial personal housing loan interest rates, issued a month ago, will soon be officially implemented.

KYG Securities pointed out that since the end of September, the central bank, the Ministry of Housing and Urban-Rural Development, and other departments have released a package of policy measures to promote the healthy development of the real estate industry through coordinated efforts in real estate, monetary, and fiscal policies. Currently, the overall valuation of the real estate sector remains in a relatively low range, and the policy package is expected to restore market sentiment. Stabilizing sales in the future will benefit the cash flow of real estate companies, and investment opportunities in quality real estate firms may continue to stand out.

3. Photovoltaic stocks rose again. As of the close, Xinyi Solar (00968) rose by 3.64%, closing at HKD 3.99; GCL-Poly Energy (03800) rose by 3.61%, closing at HKD 1.72; Flat Glass Group (06865) rose by 2.19%, closing at HKD 15.84; GCL New Energy (00451) rose by 2.17%, closing at HKD 0.47.

The National Development and Reform Commission and five other departments issued the "Guiding Opinions on Vigorously Implementing Renewable Energy Substitution Actions." It mentioned accelerating the construction of large-scale wind and photovoltaic bases, focusing on desert, gobi, and barren areas, and promoting the clustered development of offshore wind power. Additionally, it is reported that state-owned enterprise developers have recently modified rules in project bidding, involving both wind and solar energy storage industries. Documents obtained from informed sources indicate that a certain state-owned enterprise has modified the evaluation criteria for its proposed energy storage project bidding—adjusting the technical evaluation weight and price evaluation weight from the original 50% and 45% to 55% and 40%, respectively, while keeping the business evaluation weight unchanged Recently, there have been continuous positive news in the photovoltaic industry. Minsheng Securities believes that the photovoltaic sector is experiencing a rebound due to the recent price increase of components and expectations of energy consumption control on the silicon material supply side. If relevant supply-side reform policies are introduced in the future, the profitability of the photovoltaic main chain is expected to see a bottom reversal. Goldman Sachs pointed out in a report that the downturn cycle of the photovoltaic industry is about to end, with a cyclical bottom possibly appearing in 2025.

4. Automotive stocks continue to decline. As of the close, Great Wall Motors (02333) fell 3.89% to HKD 12.36; Brilliance China (0114) fell 2.71% to HKD 2.51; Li Auto-W (02015) fell 1.1% to HKD 107.4;

On October 29 local time, the European Commission announced that it has concluded its anti-subsidy investigation and decided to impose a five-year final anti-subsidy tax on electric vehicles imported from China. Additionally, the anti-subsidy tax will officially take effect on the 31st. According to relevant data, the registration of electric vehicles from Chinese automotive brands in the 16 EU countries tracked has decreased by 36%. In response, some institutions believe that the EU's anti-subsidy legislation will delay the implementation pace of domestic car companies' overseas strategies.

5. Gold stocks fell in the afternoon. As of the close, China Gold International (02099) fell 4.08% to HKD 36.4; Shandong Gold (01787) fell 2.65% to HKD 15.44; Lingbao Gold (03330) fell 2.22% to HKD 3.53.

The preliminary annualized quarterly growth rate of the U.S. real GDP for the third quarter recorded 2.8%, lower than the market expectation of 3%. The preliminary annualized quarterly core PCE price index recorded 2.2%, higher than the expected 2.1%, but lower than the previous value of 2.8%. Additionally, the U.S. ADP employment figure for October recorded an increase of 233,000, the largest increase since March 2024, significantly exceeding the market expectation of 114,000.

Galaxy Futures pointed out that in the next two days, the U.S. will release PCE and more employment data, and the performance of U.S. data may still lead to changes in the subsequent interest rate cut path. Moreover, with the presidential election and FOMC meeting and other macro events densely packed next week, precious metals may continue to benefit from safe-haven and interest rate cut factors in the short term, but volatility may increase.

Popular Active Stocks

1. Huahao Zhongtian Pharmaceutical-B (02563) debuted with a surge. As of the close, it rose 30% to HKD 20.8.

Huahao Zhongtian Pharmaceutical priced its shares at HKD 16, issuing a total of 14.588 million shares, with each lot consisting of 200 shares, and the net proceeds are expected to be approximately HKD 195.89 million. As a biotechnology company driven by synthetic biology technology, it is committed to developing innovative drugs for tumors and has successfully developed three core technology platforms focused on the research and development of new drugs based on microbial metabolites.

2. Prada (01913) rose throughout the day. As of the close, it rose 7.49% to HKD 59.55. Morgan Stanley's research report points out that Prada continues to be the preferred choice in the luxury goods sector. The bank stated that Prada's sales performance in the third quarter exceeded expectations, with strong sales growth recorded for the Miu Miu brand, while the Prada brand also achieved a fixed exchange rate growth of 1.7%, outperforming peers in the luxury sector such as LVMH Fashion & Leather Goods, Kering, and Moncler.

3. Zoomlion (01157) rises after earnings. At the close, up 4.13%, at HKD 5.3 .

Zoomlion released its earnings, reporting an operating income of RMB 34.386 billion for the first three quarters, a year-on-year decrease of 3.18%; the net profit attributable to shareholders of the listed company was RMB 3.139 billion, a year-on-year increase of 9.95%. In the third quarter, the operating income was RMB 9.85 billion, a year-on-year decrease of 13.89%; the net profit attributable to shareholders of the listed company was RMB 851 million, a year-on-year increase of 4.42%.

4. Shanghai Electric (02727) turns down at the close. At the close, down 8.39%, at HKD 2.51 .

Shanghai Electric released its performance for the first three quarters of 2024, reporting a total operating income of RMB 76.595 billion, a year-on-year decrease of 2.27%; the net profit attributable to shareholders of the listed company was RMB 758 million, a year-on-year decrease of 7.67%. The revenue for the third quarter was RMB 26.727 billion, a year-on-year increase of 5.67%; the net profit was RMB 157 million, a year-on-year decrease of 32.20%.

5. Innovent Biologics (01801) continues to face pressure. At the close, down 4.79%, at HKD 33.8 .

Innovent Biologics has recently been embroiled in controversy over "asset fire sales." On October 29th, the company held a conference call to respond to this. Regarding investors' concerns about the composition of the Fortvita pipeline, the company stated that due to confidentiality reasons, it could not disclose the specific names of the assets on the platform. Citi believes that Innovent Biologics' management has not disclosed detailed information about the Fortvita assets, estimating that the pressure on Innovent Biologics' stock price may continue in the short term