Zhitong App learned that the strong non-farm payroll data has suppressed expectations of interest rate cuts, and the market is now waiting for US inflation data this week. The three major indexes of the Hong Kong stock market opened lower in the morning and then fell throughout the day. The Hang Seng Index and the Hang Seng China Enterprises Index continued to hit new lows. At the close, the Hang Seng Index fell 0.57% or 92.74 points to 16,097.28 points, with a total daily turnover of HKD 74.514 billion; the Hang Seng China Enterprises Index fell 0.52% to 5,421.23 points; the Hang Seng TECH Index fell 0.76% to 3,428.2 points.
Zhejiang International pointed out that from a fundamental perspective, both domestic and external demand are under pressure, and domestic economic data may continue to be under pressure. Further efforts on the policy front are the key. In terms of funds, the market has adjusted its overly optimistic expectations for interest rate cuts in the previous period, but overall it remains optimistic. Therefore, it is still necessary to be vigilant about further expectation adjustments caused by data fluctuations. In terms of allocation, the bank continues to emphasize maintaining a diversified and balanced industry sector allocation. In the current weak market environment, it is important to focus on sectors with stable performance, stock prices, and dividends.
Performance of blue-chip stocks
HAIDILAO (06862) led the gains in blue-chip stocks. At the close, it rose 8.41% to HKD 14.44, with a turnover of HKD 4.67 billion, contributing 2.99 points to the Hang Seng Index. Data shows that during the three-day New Year's Day holiday in 2024, HAIDILAO received more than 6 million customers nationwide, an increase of about 70% compared to last New Year's Day. Among them, December 31st, New Year's Eve, was the peak day for customer flow, with a total of more than 2.4 million customers served by HAIDILAO nationwide, setting a new record for daily customer flow and turnover rate since 2019. Morgan Stanley raised its net profit forecast for HAIDILAO for the fiscal years 2023 and 2024 by 2% and 6.4% respectively to reflect the healthy recovery in same-store sales and higher gross profit margin.
In other blue-chip stocks, WuXi Biologics (02269) rose 6.26% to HKD 28, contributing 9.93 points to the Hang Seng Index; Hansoh Pharmaceutical (03692) rose 2.35% to HKD 13.92, contributing 0.61 points to the Hang Seng Index; Master Kong Holdings (00322) fell 4.44% to HKD 8.6, dragging down the Hang Seng Index by 1.22 points; NIO Inc. (02015) fell 4.43% to HKD 125.2, dragging down the Hang Seng Index by 12.54 points.
Hot sectors
On the market, most large technology stocks fell; main contracts for European shipping routes fell more than 17% in early trading, and shipping stocks continued to decline; semiconductor stocks, automotive stocks, non-life insurance stocks, paper stocks, and others were all weak. On the other hand, pharmaceutical stocks continued to be strong, with CRO leading the way; most catering stocks rebounded, as did home appliance stocks and clothing stocks.
1. Pharmaceutical stocks continue to be strong. At the close, BeiGene (06160) rose 7.18% to HKD 110.4; WuXi Biologics (02269) rose 6.26% to HKD 28; WuXi AppTec (02268) rose 3.65% to HKD 29.85; and Kangfang Bio (09926) rose 2.67% to HKD 48.1.
CICC International stated that the continuous trading of domestic innovative drugs since 2024 fully demonstrates the R&amp;D strength of Chinese innovative pharmaceutical companies and indicates the reshaping of the ecological pattern of the Chinese biopharmaceutical industry. Considering the current low valuation of the Chinese pharmaceutical sector, the bank continues to be optimistic about more opportunities for innovative drugs to go global, as well as the relative performance of the pharmaceutical sector in 2024 with the combination of sentiment recovery and catalysts. Everbright Securities pointed out that the overall stability of CXO's overseas demand is due to the more mature development of the overseas innovative drug industry. The transmission path of &#34;macro factors → biopharmaceutical technology stock performance → investment and financing → CXO performance&#34; is faster. The improvement of overseas CRO order indicators driven by the warming of overseas financing in 23Q3 has driven the improvement of overseas CRO order indicators. The domestic demand is still bottoming out. Under the background of the increasingly mature policy framework for innovative drugs and the breakthrough in going global, high-quality supply is the key factor determining domestic biotech financing outside macro factors. In the process of establishing the inflection point of demand, the warming of macro factors, the improvement of Sino-US relations, and the acceleration of the upgrade of the domestic downstream industry are expected to catalyze the release of market optimism, and the stock price of CXO will react in advance.
2. Most catering stocks rebounded. At the close, Haidilao (06862) rose 8.41% to HKD 14.44; Xiabuxiabu (00520) rose 3.13% to HKD 2.31; Helen of Troy (09869) rose 3.08% to HKD 3.35; and Nayuki (02150) rose 2.1% to HKD 3.4.
Zheshang Securities stated that from the perspective of the recovery degree compared to the same period in 2019, the recovery degree of the catering industry above the quota in January-November 2023 exceeded 120%, which is better than the overall retail industry. The bank believes that the proactive price reduction by various catering brands is mainly due to the increasing sensitivity of consumers to prices, which is the general trend and will continue in the second half of 2023. The bank pointed out that opening new stores is still the main source of growth for some catering companies. Combining the willingness and ability to expand stores, the bank expects companies such as Helen of Troy, Jiumaojiu, and Nayuki to achieve slightly better performance in the second half of 2023 through store expansion compared to the first half of 2023.
3. Shipping stocks continue to decline. At the close, Sinotrans Shipping (01308) fell 5.79% to HKD 12.7; COSCO Shipping Holdings (01919) fell 5.24% to HKD 7.6; COSCO Shipping Energy Transportation (01138) fell 2.79% to HKD 7.33; and Orient Overseas International (00316) fell 1.39% to HKD 106.8.
Yesterday, all contracts of the European shipping line fell by the limit, with the main 2404 contract falling more than 17% today. Earlier, there were reports that Houthi armed forces had reached agreements with some shipping companies regarding the Red Sea route, allowing their vessels to safely pass through this important global waterway. However, Maersk and Hapag-Lloyd subsequently denied these reports, stating that they had not reached any agreements with the Houthi armed forces. Daiwa believes that it is unlikely for leading shipping companies to reach agreements with the Houthis, as meeting their demands would be equivalent to imposing sanctions on Israel, posing significant operational risks for shipping companies in developed countries, especially since their main revenue comes from European and American countries. Such agreements may also indirectly violate the US-led Operation Sentinel, and bypassing the Red Sea route would lead to excess shipping capacity in the market and put upward pressure on freight rates.
4. Automobile stocks are generally under pressure. At the close, NIO Inc. (02015) fell by 4.43% to HKD 125.2; XPeng Inc. (09868) fell by 1.02% to HKD 48.45; Great Wall Motor Co. Ltd. (02333) fell by 0.77% to HKD 8.97.
According to incomplete statistics, since January 1st, seven car companies, including Tesla, have announced price reductions for their models or introduced limited-time cash discounts. The industry generally believes that the &#34;price war&#34; will continue in 2024, and the elimination round will continue. Ping An Securities predicts that the &#34;price war&#34; dominated by leading new energy vehicle companies will continue in 2024, especially in the mainstream price range of 100,000 to 200,000 yuan. In addition, the decline in battery costs provides space for car companies to lower prices for new energy vehicles. Rating agency Fitch Ratings stated that as domestic car brands accelerate the promotion of high-level autonomous driving and global car brands accelerate the electrification process, competition in the Chinese car market will continue to intensify in 2024. Fitch Ratings believes that intensified competition may put short-term pressure on car companies' market share and profitability, leading to weakened cash generation capabilities while facing higher investment demands.
Hot Stocks
1. BC Technology Group (00863) fell throughout the day. At the close, it fell by 8.99% to HKD 8.
The U.S. Securities and Exchange Commission (SEC) issued a statement stating that a physically-backed Bitcoin ETF had been approved, but SEC Chairman later clarified that his account had been hacked and the Bitcoin ETF had not yet been approved on Tuesday. This false information caused the Bitcoin trading price to briefly rise above $48,000, but then it quickly fell below $46,000, dropping to around $45,600.
2. COSCO SHIPPING Holdings (01919) issued a profit warning. At the close, it fell by 5.24% to HKD 7.6.
China COSCO Shipping Corporation Limited has issued a profit warning announcement, expecting a net profit of approximately RMB 28.389 billion for the group in 2023, a decrease of about 78.40% YoY. This means that the recurring net profit for the fourth quarter of last year was RMB 1.8 billion, a significant decrease compared to RMB 5.5 billion in the third quarter. The profit before tax was RMB 3.4 billion, also down from RMB 8.5 billion in the third quarter.
3. Anta Sports International (01368) has seen a significant increase. At the close, it rose by 8.66%, reaching HKD 4.14.
For the three months ended December 31, 2023, Anta's main brand retail sales (including online and offline channels) recorded a growth of over 30% YoY, with a retail discount level of approximately 30%. In the fiscal year 2023, Anta's main brand retail sales (including online and offline channels) achieved a growth of over 20% YoY, with a channel inventory turnover of four to four and a half months.

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Hong Kong stocks closed with the Hang Seng Index down 0.57%. Pharmaceutical and catering stocks bucked the trend and rose, with HAIDILAO leading the blue-chip stocks. Non-farm data suppressed expectations of interest rate cuts, and the market is awaiting US inflation data. The Hang Seng Index fell with a turnover of HKD 74.514 billion. Zhejiang International pointed out that both domestic and external demand are under pressure, and policy efforts are the key. HAIDILAO received over 6 million customers, and Macquarie raised its forecast for the company's annual net profit. WUXI BIO and Johnson & Johnson's pharmaceutical stock prices rose, while Master Kong Holdings fell.

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Hong Kong Stock Market Closing (01.10) | Hang Seng Index fell 0.57%, healthcare and catering stocks rose against the trend, HAIDILAO led the blue-chip stocks.