Market Analysis
Today, A-shares rose and then fell back, but the trading volume exceeded trillions, indicating a significant increase in market activity. Hong Kong stocks opened at the highest point, with a larger decline, closing up by 0.68%. The trading volume continued to increase to 254.8 billion.
After a series of positive measures were introduced yesterday, the bullish sentiment in the market was ignited. From the current environment, the news continues to move in a favorable direction. A report released by the American Conference Board on Tuesday showed that US consumer confidence unexpectedly dropped by 6.9 points to 98.7 in September, marking the largest decline since August 2021, due to concerns about the labor market and overall economic outlook. Christian Lawrence, a cross-asset strategist at Cooperatieve Rabobank, stated that these data have raised expectations for a 50 basis point rate cut by the Federal Reserve this year. The market expects a 50 basis point rate cut in November or December, resulting in a total of 125 basis points cut for the year.
The RMB exchange rate soared again in the early part of today, with the offshore RMB against the US dollar recovering the 7.0 level, reaching as high as 6.9963. COMEX December gold futures rose by 1.11% at the close, to $2682 per ounce, reaching as high as $2689.40 during the session, hitting an intraday historical high. Spot gold rose nearly 1.4% to break through $2660 at the close, continuing to hit historical highs, with a cumulative increase of 29% so far this year. Shandong Gold (01787) and Zijin Mining (02899) also surged at one point during the session, but later retreated as the exchange rate weakened.
The People's Bank of China conducted a 300 billion yuan MLF operation today, with a winning bid rate of 2.00%, down 0.3 percentage points from the previous month, marking the first market-oriented rate cut after the State Council Information Office press conference yesterday. The industry expects that the LPR and deposit rates will also follow suit.
The sudden strength of the Chinese stock market will have a significant impact on global capital, and overseas capital will naturally not miss this opportunity. As the most influential globally, Goldman Sachs timely held a conference call, which was so popular that it was temporarily overloaded, with the number of participants reaching maximum capacity. For investors who missed the call, Goldman Sachs trading department summarized several key concerns of clients. It was mentioned that trading volume in Hong Kong by Goldman Sachs increased by 143% compared to the 4-week average, while in A-shares it increased by 154%. Their buying volume in Hong Kong and A-shares was 1.87 times higher, with the majority of purchases concentrated in Hong Kong. In Hong Kong, hedge funds were net buyers, accounting for 22% of Goldman Sachs' flow. They had been reducing short positions recently and actively replenishing them, with a long/short ratio of 3.2 (peaking at 3.5). Long-term investors became more active in trading yesterday afternoon, with buying volume in Hong Kong ultimately reaching 2.77 times, accounting for 78% of the total flow. Purchases were concentrated in the financial, consumer goods, and ETF sectors. Both mutual funds and hedge funds in China and Hong Kong have very light positions. Goldman Sachs' conclusion is: the upward trend can continue.
Since foreign capital is actively reducing positions, why did the market rise and then fall back today? Goldman Sachs also mentioned: Southbound funds accounted for 15% of the trading volume yesterday, with a net outflow of $553 million, mainly selling Tencent (00700), Meituan (03690), and ETF 2800 HK
What does this mean? It indicates that in this market trend, domestic funds are taking the initiative, pulling up the market and then selling off, while foreign funds are picking up the pieces. It's different from what we usually imagine, where foreign funds are usually more well-informed. The main reason is that this meeting was arranged at the last minute and there was no leakage beforehand. This shows that the regulatory authorities have also changed their tactics, becoming more proactive. In today's relatively high position, foreign funds naturally won't easily step in, resulting in a rise followed by a fall. However, since Goldman Sachs publicly expressed a bullish view, it's not just a whim, there is logical support behind it.
As mentioned yesterday, the vanguard of this rebound is the large financial sector, with leading securities companies continuing to rise today. For example, CICC (03908), HTSC (06886), etc., rose by over 4%, while bank stocks like China Merchants Bank (03968) also rose by 4.52%, and insurance company Ping An of China (02318) rose by 3.84%. Diversified financial company Kingsoft Financial International (01468) also had good news: it plans to acquire Youngtimers AG shares for 4.32 million Swiss francs. The target company focuses on private equity and small to medium-sized listed stocks, especially targeting the East Asian market and selectively investing in the European market. This will promote the future growth of Kingsoft Financial International's business, leading to a nearly 30% increase today.
Geng Hongzhou, a first-level inspector at the Ministry of Commerce's Consumer Promotion Department, stated that as of midnight today (September 25th), the national car scrappage and subsidy platform has received over 1.13 million applications for car scrappage and renewal subsidies, with over 1.68 million registered users on the platform. The subsidy application volume continues to grow rapidly. Stimulated by this news, automobile stocks strengthened again. According to Leapmotor (09863), the company's new global platform's first model, Leapmotor B10, will officially debut at the Paris Motor Show on October 14th. The B platform is an important part of Leapmotor's global strategy, featuring the latest Leap3.5 technology architecture, focusing on providing top-notch intelligent new energy products for young people worldwide. The B platform will launch multiple models by 2025 to meet the personalized and intelligent vehicle needs of different consumer groups. Today, it rose by 6.56%; BYD (01211) announced plans to launch a seven-seater model &#34;Tang&#34; in the Japanese market. This is the fourth type of vehicle BYD has introduced in Japan after compact SUVs, small cars, and sedans. In addition, the &#34;Han&#34; and &#34;Qin&#34; models will also enter the Japanese market one after another. This expansion will help BYD diversify its presence in the Japanese market. Today, it continued to steadily rise.
On the evening of September 24th, the China Securities Regulatory Commission issued the &#34;Guidelines for the Supervision of Listed Companies No. 10 - Market Value Management (Draft for Solicitation of Opinions)&#34;. It requires that long-term companies trading below net asset value should disclose their valuation enhancement plans, including targets, deadlines, and specific measures, and provide a special explanation on the execution of the valuation enhancement plan at the annual performance briefing. This measure has a relatively strong impact on central and state-owned enterprises. Yesterday, undervalued steel stocks performed well, and today some varieties emerged, such as China Communications Construction (03969), China Railway (00390), China National Building Material (03323), Zhengzhou Bank (06196), etc., with gains generally exceeding 4%. Various regions are also actively responding to the call for market value management, as detailed in the sector focus
According to the official website of the U.S. Congress, on September 23rd local time, there has been progress in the legislation of the &#34;Biosecurity Law&#34;. In the latest amendment, WuXi AppTec has been removed, but WuXi Biologics, BGI Genomics, BGI Tech, and its subsidiary Complete Genomics remain on the list. At the same time, the proposal is to be renamed the &#34;Foreign Access to U.S. Genetic Information Prohibition Act&#34; and will further focus on human data-related businesses. Regarding the aforementioned changes, on September 25th, WuXi AppTec has not responded. WuXi AppTec (02269) did a good job in public relations, as it was surprisingly not on the list, leading to a significant increase during trading hours and ultimately closing up by 4.20%.
[Sector Focus]
On the morning of September 26th, Hunan Province will hold a province-wide TV and telephone conference on market value management of listed companies to strengthen market value management of listed companies and accelerate the high-quality development of listed companies in the province. The provincial government will host the main venue, while various cities will set up branch venues. Representatives from the Provincial Party Committee's Financial Office, Hunan Securities Regulatory Bureau, Provincial State-owned Assets Supervision and Administration Commission, Changsha Municipal Government, and representatives of listed companies will speak at the meeting. The Deputy Governor in charge of financial work of the provincial government will attend the meeting and deliver a speech.
If the government attaches importance to market value management, relevant listed companies will be greatly motivated to do so. It is expected that many preferential policies will be provided at the policy level. Relevant listed companies in Hunan include: Times Electric (03898), Zoomlion (01157), Weichai Power (03393), and Ausnutria Dairy (01717).
[Stock Analysis]
Sichuan Chengyu Expressway (00107): Intends to acquire 85% equity of Hubei Jingyi Expressway, tapping into the potential of new energy transformation
The company announced that on August 14, 2024, it entered into an acquisition agreement with Shudao Chuangtou. The company conditionally agreed to purchase and Shudao Chuangtou conditionally agreed to sell the target assets (85% equity of Jingyi Expressway held by Shudao Chuangtou) by issuing and issuing shares and paying cash as consideration. The two parties have agreed that the final total consideration for the proposed acquisition shall not exceed RMB 2.2 billion. This includes cash and the issuance of no less than 105 million A-shares or no more than 439 million A-shares at an issue price of RMB 5.01. The final total consideration for the proposed acquisition will be based on the evaluation value of the target assets recorded in the asset evaluation report by the competent state-owned assets supervision and administration authority or its authorized unit, determined after fair negotiation between the two parties, and will be clearly stated through a supplementary agreement.
Analysis: This acquisition will help the company expand its highway network, aligning with the company's strategic considerations to further strengthen control over high-quality road network resources, beneficial for enhancing the transportation core business, supporting sustainable and healthy development, strengthening market competitiveness, and better leveraging economies of scale and synergies between industries. The main reasons for the company's decline in net profit attributable to shareholders in the first half of the year were: a reduction of non-recurring gains and losses by over 50 million yuan; and as construction projects progressed, the increase in interest-bearing liabilities led to a slight increase in financial expenses. The company will continue to carry out cost reduction and efficiency improvement work, further solidify the foundation of its core business, drive the transformation of the high-speed industry: highlighting the value of the road network port, promoting business model upgrades through economies of scale. Increasing supercharging facilities, establishing dedicated charging areas to meet diverse scenario needs
Combining the &#34;trade-in for new, equipment renewal&#34; initiative, guiding potential customers to &#34;switch from oil cars to electric cars, and drive electric cars on highways&#34;. Enhancing energy replenishment facilities on encrypted road networks, extending synchronously to management offices and toll stations; focusing on solar power, energy storage, hydrogen energy, and other business areas to reduce energy consumption costs, benefiting highway traffic flow; leveraging the advantages of the &#34;Chengdu-Chongqing Hydrogen Corridor&#34; scenario, jointly promoting hydrogen energy high-speed demonstrations with upstream and downstream companies in the industrial chain. The company's current ongoing projects include the Tianqiong Expressway (from Tianfu New Area to Qionglai) BOT project and the Chengle Expressway expansion and construction project. Overall, the company's main business income is stable, and annual dividends are also impressive.
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Today, A-shares rose and then fell back, with a trading volume exceeding trillions, indicating an increase in market activity. Hong Kong stocks opened high but fell back after reaching the peak, closing up by 0.68%. Consumer confidence in the United States has dropped significantly, with market expectations of a 50 basis point rate cut by the Federal Reserve. The RMB exchange rate has rebounded, and spot gold has hit a historic high. The People's Bank of China conducted a 300 billion yuan MLF operation, leading to a decrease in interest rates. The strength of the Chinese stock market will have a significant impact on global capital, with Goldman Sachs holding a conference call that received enthusiastic responses

- The A-share market experienced a high turnover exceeding 1 trillion, indicating increased market activity, while the Hong Kong stock market closed up 0.68%.  
- A report revealed a significant drop in U.S. consumer confidence, raising expectations for a potential 50 basis point rate cut by the Federal Reserve.  
- The Chinese yuan strengthened against the dollar, and gold prices reached new highs, reflecting a robust response from both domestic and foreign investors in the current market environment.

Intelligent Hong Kong Stock Analysis | Goldman Sachs' hot conference bullish on the future Market value management takes the lead