Hong Kong Stock Market Review: Expectations Too Low

Everything is cyclical, not only in the economy, but also in emotions. For example, although Tesla's delivery volume has declined year-on-year for the first time in two consecutive quarters, it is stronger than expected, and the stock price has surged in response. This is mainly due to low expectations, and of course, also due to the energy storage business exceeding expectations. Similarly, the market has low expectations for domestic conferences recently, so it is very sensitive to any news clues, like today's consumption tax. Quoting brokerage logic, the consumption tax reform has redistributed tax benefits, giving local governments more incentive to promote local consumption taxes or introduce policies to stimulate local consumption. At the same time, the price difference between taxed and tax-free will widen, benefiting tax-free scenarios. However, all of these ultimately depend on the national situation. Without an economic turning point, consumption will not pick up, and there may still be short-term suppressive effects. In essence, today's significant rise is based on the market finding the least resistance, with even real estate stocks rising under these rumors. Today, new energy vehicles have also followed the upward trend, with generally better-than-expected delivery numbers in June. Although Li Auto has experienced a Mega event this year, with its stock price falling nearly 50%, considering that Nio and XPeng have also experienced similar declines, it can't be considered oversold. Although Li Auto's vehicle sales in the second quarter increased by 35% compared to the previous quarter, it is far from the annual year-on-year growth target of 50-70%, which is approximately 564,000-639,000 vehicles. In the first half of the year, only the lowest target of about 33% was achieved. However, according to Bloomberg, the market consensus is actually around 501,000 vehicles, which means that if the company is willing to face reality and lower its guidance, coupled with the strong performance of the L6 priced below 300,000 yuan in the second half of the year, it might be quite easy to exceed market expectations like Tesla. Furthermore, the market is starting to speculate on companies with significant room for governance improvement. For example, among the three major telecommunications companies, China Unicom has clearly outperformed the other two recently. It is believed that as high-dividend stocks become less cost-effective, excess funds will flow into speculating on the market value assessment of state-owned enterprises