Pre-market Hong Kong Stocks: Hang Seng Index Futures Up 0.24%; 1.74 Million BYD Shares Transferred to Citibank

Today's main content includes: Last Friday, the three major U.S. stock indexes closed collectively higher, the Japanese stock market was closed today for Marine Day, and the Hang Seng Index night futures rose by 0.24%. BYD Company saw another 1.74 million shares "transferred" to Citibank; "Wind and solar" power generation companies welcome a 39.9 billion yuan subsidy boost.

Review of Last Friday's Overseas Market Trends

Last Friday, the three major U.S. stock indexes closed collectively higher, with bank stocks experiencing a significant surge. Citigroup soared over 13%, marking its largest increase since March 2020. At the close, the Dow Jones Industrial Average rose by 2.14%, the S&P 500 Index increased by 1.91%, and the Nasdaq Composite climbed by 1.79%.

Popular Chinese stocks were mixed, with Hong Kong-based digital financial services company AMTD Digital soaring nearly 108% on its first day of trading. NIO fell 1.57%, XPeng dropped 1.40%, Baidu declined 1.39%, JD.com slipped 1.28%, Alibaba decreased 1.27%, Pinduoduo rose 0.02%, TAL Education Group gained 0.25%, Li Auto increased 0.71%, and New Oriental Education rose 1.46%.

New York gold futures fell 0.1%, once breaking below $1,700 during trading; U.S. WTI crude oil closed up 1.9%. In addition, copper prices fell to a new low in 20 months.

HSI Futures Night Session Closes at 20,330 Points, Up 0.24%.

Japanese Stock Market Closed for One Day on July 18th Due to Marine Day.

The detailed market data is as follows:

Overview of Important Pre-Market News in Hong Kong Stocks

1. BYD Company's "Mysterious" Maneuvers Continue: Another 1.74 Million Shares "Transferred" to Citi

The adjustment of BYD's H shares continues. Data disclosed by the Hong Kong Stock Exchange shows that after the "mysterious" sudden increase of approximately 225 million BYD H shares in Citibank’s position on July 11, the number of BYD H shares held by this position has been increasing daily as of July 14. On July 11, the holding volume was 388,609,416 shares, with a shareholding ratio of 35.39%; on July 14, the holding volume reached 390,353,237 shares, with a shareholding ratio of 35.55%. Over three days, the holding volume increased by 1,743,821 shares, and the shareholding ratio rose by 0.16 percentage points.

2. 39.9 Billion Yuan in Subsidy Funds to Be Distributed Soon"Wind and Solar" Listed Companies See Benefits

Recently, according to the State Grid, the first payment request of the 2022 annual budget has been made. The Ministry of Finance is expected to allocate a total of 39.937 billion yuan for the renewable energy electricity price subsidy to the company. Among this, wind power generation will receive 10.5 billion yuan, solar power generation 26 billion yuan, and biomass power generation 3.4 billion yuan. This marks the first subsidy distribution by the State Grid and the third by the national finance for renewable energy.

The continuous issuance of new energy subsidies will continue to benefit new energy operators and upstream photovoltaic and wind power industries. Chuancai Securities recommends paying attention to high-quality new energy operation companies. Relevant companies include Xinte Energy (01799), China Longyuan Power (00916), and Goldwind (02208).

3. SSE Releases Rules and Supporting Guidelines for Market Making Trading Business of STAR Stock

On July 15, the Shanghai Stock Exchange released the "Detailed Rules for the Implementation of Market Making Business for STAR Market Stocks of the Shanghai Stock Exchange," which took effect from the date of issuance.

Guotai Junan Securities Research Department believes that, with the introduction of the market maker mechanism on the STAR Market, brokers with strong order processing capabilities, risk tolerance, value discovery abilities, and abundant sources of securities will have a competitive advantage in market making. Therefore, top-tier brokers with strong overall capabilities will benefit: CITIC Securities (06030), Huatai Securities (06886), and CICC (03908).

4. National Energy Administration: Strengthening the Regulation of Power Dispatching, Trading, and Market Order

On July 15, the National Energy Administration organized the 2022 Power Dispatching Transaction and Market Order Grid-Enterprise Joint Conference at the headquarters level of central enterprises.

The meeting pointed out that the current power dispatching, trading, and market order are facing issues such as an overall tight power supply and demand situation, persistently high primary energy prices, improper market intervention still existing in some regions, the need for further standardization in power dispatching and trading operations, and market mechanisms adapting to the energy structure transition yet to be further improved.

Focus on Today's Trading

New Share Activity:

China Graphite (2237) goes public today. According to Futu Securities, China Graphite (2237) closed at HK$0.375 in the grey market last Friday, up 15.38% from the issue price of HK$0.325, with a total market value of HK$600 million. The company is mainly engaged in the production and sale of flake graphite concentrate and spherical graphite.

Economic Calendar：

1. Tokyo Stock Exchange in Japan is closed for a day due to Marine Day.

2. 3 billion yuan of 7-day reverse repos mature in the central bank's open market operations

Earnings Announcement:

Goldin Holdings, Huilian Financial Services, China Automobile New Retail

Company Announcement

Positive Announcement

CStone Pharmaceuticals-B (02616): GAVRETO® New Drug Application Approved in Hong Kong, China

New Horizon Health-B (06606) Announces Profit Alert: Expects Total Revenue for the First Half to Increase by 394.5% to 427.6%

EVAHOLD (00838): Granted a Long-term Installment Payment Facility of HKD 1.19 Billion

Baiyun Mountain (00874) Branch's Cefradine Capsules Pass Generic Drug Consistency Evaluation

Ganfeng Lithium (01772) to Invest in the Construction of a 50,000 Tons Per Year Battery-Grade Basic Lithium Salt Project from Spodumene

CIMC Group (02039) Plans to Spin Off Controlling Subsidiary CIMC Sinotrans Logistics for Listing on the Shenzhen Stock Exchange

China Food (00506): COFCO Coca-Cola Subsidiary Plans to Acquire Equity of COFCO Beverage Target Company for 544 Million Yuan

Zhihu-W (02390) Repurchased 137,500 Shares for $428,800 on July 15

HSBC Holdings (00005) Repurchased a Total of 3.3 Million Shares on July 15

Pharmaron (03759) Announces Profit Growth, Estimating Net Profit Attributable to Shareholders of RMB 565 Million - RMB 610 Million for the First Half of the Year, Representing a Year-on-Year Increase of 0%-8%

Luye Pharma (02186): Innovative Drug LURBINECTEDIN (LY01017) Approved for Urgent Clinical Use in Hainan

Jin Lun Holdings Limited (01783) Proposes to Acquire the Remaining 60% Equity Interest in Jin Yang International (Hong Kong) Limited

Federal Pharmaceutical (03933) Plans to Establish a Joint Venture with Muyuan Co., Ltd. (002714.SZ)

Country Garden Services (06098) Repurchased 326,000 Shares on July 15

Emperor Entertainment Hotel (00296) Subsidiary to Acquire 100% Equity of Ever Explore Holdings

Emperor Cultural Industry (00491) Enters into General Framework Agreement with Albert Yeung Entertainment

Tapioca Resources (00841) Releases Annual Results, Shareholders' Profit Attributable Amounting to HKD 44.972 Million

Beijing Automotive (01958) Plans to Invest up to 2.879 Billion Yuan to Subscribe for New A Shares of BAIC BluePark

Zhejiang Huhang-Yong (00576) Enters into Project Construction Contract with Zhejiang Gaoxin and Qiantong Zhilian

Sirnaomics-B (02257) Repurchased 10,850 Shares for HKD 749,500 on July 15

Smoore International (06969) Expects Mid-term Profit and Total Comprehensive Income of 1.322 Billion to 1.554 Billion Yuan

Harmonious Automobile (03836) Repurchased 149,000 Shares for HK$439,200 on July 15

China Aluminum International (02068) Announces Profit Growth, Expects Net Profit Attributable to Shareholders of RMB 50 Million to RMB 74 Million for the First Half of the Year, a Significant Year-on-Year Increase

Minth Group (00425) subsidiary Minth Automotive Research will study and explore the possibilities and opportunities of external financing solutions and employee stock ownership plans.

Negative Announcement

Air China (00753) Issues Profit Warning Expects Net Loss Attributable to Shareholders of RMB 18.5-21 Billion for the First Half of the Year

China Eastern Airlines Corporation (00670) Issues Profit Warning Expected Mid-term Net Loss of Approximately 17 Billion to 19.5 Billion Yuan

China Southern Airlines (01055) Issues Profit Warning Expected Mid-term Net Loss of 10.2 Billion to 12.1 Billion Yuan

Chenming Paper (01812) Issues Profit Warning Expects H1 Net Profit Attributable to Shareholders of RMB 210-270 Million, Down 86.6%-89.6% Year-on-Year

Baixin Financial (01282): Li Junxiong Resigns as Independent Non-Executive Director

Shanshui Cement (00691) Issues Profit Warning Expects Net Profit Attributable to Shareholders for H1 to Decrease by No Less Than 60% Year-on-Year

Yashili International (01230) Grants 47,232,800 Phantom Shares

China Asset Management Group (00382) Grants Stock Options

Beijing North Star Co., Ltd. (00588) Issues Profit Warning Expected Mid-term Net Loss of 368 Million to 452 Million Yuan

Qiansheng Group Holdings (08475) Releases First Three Quarters Results, Net Loss of SGD 679,000, Narrowing 55% Year-on-Year

China Longgong (03339) Issues Profit Warning, Expects Mid-term Net Profit of RMB 75 Million to RMB 150 Million, Decrease of 84% to 92% Year-on-Year

HeartCare-B(06609): Ouyang Xiangyu Resigns as Non-Executive Director

Huaneng Power International, Inc. (00902) Issues Profit Warning, Expects Net Loss Attributable to Shareholders of RMB 2.7 Billion to RMB 3.24 Billion for the First Half of the Year

China Finance International (00721): Ding Xiaobin and Li Jie Resign as Non-Executive Directors

China Sanjiang Chemical (02198) Issues Profit Warning Expected Mid-term Net Loss of 70-90 Million Yuan

Kingboard Laminates (01888) Issues Profit Warning Expected Net Profit for the First Half of the Year to be Approximately HKD 1.7 Billion to HKD 2 Billion, Decreasing by About 40% to 49% Year-on-Year

Other Announcements

South China City (01668) Plans to Sell 50% Equity of Shenzhen First Asia Pacific Property Management for 1.2566 Billion Yuan

Longying Group (Holdings) (00689) Completes Acquisition of Canadian Oil and Gas Assets

Powerlong Real Estate (01238): Note Exchange Offer Completed

Taikang Insurance (06161): Subsidiary Winding-Up Petition Hearing Set for September 21, Legal Action Initiated Against Certain Former Directors

China Yiyi International (02341) Receives HKEX Resumption Guidelines

SocanData Holdings (03680) Proposes to Issue a Total of 20 Million Subscription Shares to Group Management or Key Technical Personnel

Jiayin Investment International (00310): Comprehensive Asset Net Value per Share at 0.034 HKD as of End-June

China Evergrande (03333) Receives Additional Resumption Guidelines from the Stock Exchange Continued Suspension

China Finance International (00721): Comprehensive Asset Net Value per Share at End of June was HKD 0.07

Goldstone Investment Group (00901) had a comprehensive debt net asset value per share of HK$0.02975 as of the end of June.

Upon Exercise of Share Options Ocumension Therapeutics-B (01477) Issues 317,200 Shares

Shall Renewables (00145): Major Shareholder Changed to Shi Xin Eco-Maternal Care Limited

Beijing Automotive (01958) Sells 12.02% Stake in Guochuang Center for 67.54 Million Yuan

China Urban Infrastructure (02349) Completes Sale of Shenzhen Property

Analysis of Hong Kong Stock Market Trends

CICC believes that the short-term Hong Kong stock market may continue to consolidate and enter a relatively quiet period before the situation gradually becomes clear. However, in the context of diverging economic growth and policy cycles between China and the US, the domestic policy stance remains loose, market valuations are still attractive, and the continuous inflow of southbound funds also ensures that the overall upward trend of the Hong Kong stock market will not be completely reversed in the medium term.

Against this backdrop, seeking certainty and high-quality targets, such as high-dividend stocks and quality growth stocks, could be a reasonable choice, helping to provide downside protection.

HKEX Major Rating

BofA Securities: Raises BYD (1211) Target Price to HK$431 Q2 Profit Beats Expectations

JPMorgan Chase: Downgrades Budweiser APAC (01876) Target Price to HKD 26 Rating: Overweight

BofA Securities: Downgrades Sun Art Retail (06808) Target Price to HK$4.8, Maintains Buy Rating

Bank of America Securities: Ganfeng Lithium (1772) Mid-term Results Slightly Beat Expectations Rating "Buy"

BofA Securities: Great Wall Motor (2333) Benefits from Ruble Exchange Gains, Maintains "Buy" Rating

Credit Suisse: Downgrades Target Price for China Life Insurance (01336) to HKD 20 Rating Neutral

Credit Suisse: Downgrades Sunny Optical Technology (02382) Target Price to HKD 138 Rating Outperforms the Market

Review of Hong Kong Stock Market Performance Last Friday

Last Friday, the Hong Kong stock market fluctuated and closed lower throughout the day. In terms of sectors, technology and internet stocks generally fell, with Bilibili plummeting nearly 7%, Alibaba dropping nearly 6%, and Baidu Group declining nearly 5%. Real estate stocks continued to suffer heavy losses, gold stocks led the declines, steel stocks remained sluggish, auto stocks were active, and coal stocks performed well.

In terms of focus stocks, BYD Company Limited rose by 3.96%. On the evening of July 14, BYD released its 2022 semi-annual earnings forecast, with the company achieving a net profit attributable to shareholders of RMB 2.8-3.6 billion in H1 2022, representing a year-on-year increase of +138.59% to +206.76%. CITIC Securities stated that the profit per vehicle increased, leading to high year-on-year profit growth in Q2. Profit elasticity is expected to be further released in the second half of the year.

High伟电子 rose 6.68%, and once surged over 8% during trading. Market news shows that the front camera of iPhone 14 will see a major upgrade. Renowned Apple analyst Ming-Chi Kuo stated that High伟电子 will be one of the winners from this upgrade, benefiting from the vertical integration of CCM and VCM.

Pop Mart Falls 9.22%, with Cumulative Decline Exceeding 32% Over the Past Ten Trading Days. Data Shows Sales in the Blind Box Industry Warmed Up in June Compared to the Same Period Last Year, with Pop Mart Ranking First in Sales, but Experiencing a Significant Year-on-Year Drop on the Tmall Platform.

Sunny Optical Technology Falls 2.78%. On July 14, the company announced that for the six months ended June 30, 2022, the profit attributable to shareholders of the company would be approximately RMB 1.344 billion to RMB 1.478 billion, representing a year-on-year decrease of about 45% to 50%.

Yankuang Energy rose 5.31%. The company announced that it expects to achieve a net profit attributable to shareholders of the listed company of approximately RMB 18 billion in the first half of 2022, representing a year-on-year increase of approximately 198%. The company's performance in the first half of 2022 has significantly improved compared to the same period last year.

Standard Chartered Group fell by 4.67%. The Hong Kong Monetary Authority (HKMA) has recently intervened in the market multiple times to support the Hong Kong dollar. The HKMA's Chief Executive stated that the Federal Reserve has cumulatively raised interest rates by 1.5% this year, creating a gap between U.S. and Hong Kong interest rates, which has led to capital outflows from the Hong Kong dollar system. The HKMA may need to accelerate its interventions to support the Hong Kong dollar until local interest rates align closely with U.S. rates and stabilize.

Last Friday's Southbound Capital Dynamics

Southbound funds net purchased 1.743 billion yuan last Friday. Regarding the Shanghai-Hong Kong Stock Connect, Tencent Holdings and BYD Co., Ltd. were net purchased for 505 million Hong Kong dollars and 343 million Hong Kong dollars respectively; China National Offshore Oil Corporation had the highest net sell amount of 226 million Hong Kong dollars. Regarding the Shenzhen-Hong Kong Stock Connect, BYD Co., Ltd. and Hang Seng China Enterprises Index ETF were net purchased for 327 million Hong Kong dollars and 324 million Hong Kong dollars respectively; Pop Mart International Group Limited had the highest net sell amount of 167 million Hong Kong dollars.

This article is selected from "Tencent Self-Selected Stocks," edited by Zhitong Finance: Xu Wenqiang.