[Editor’s Market View]
Once again, the market was stimulated by a small article, and the end of November has passed smoothly. Last week, the Hang Seng Index rose slightly by 0.29%.
There were no particularly favorable news over the weekend; however, the November PMI data was 50.3%. The PMI data from August to November were 49.1, 49.8, 50.1, and 50.3, achieving three consecutive increases, which is quite rare, and it has remained above the boom-bust line of 50 for two consecutive months. The improvement in the November PMI data was led by the new export orders index and the new orders index, which were stronger than the production index. Essentially, clients in the U.S. are aware that tariffs will be significantly increased soon, prompting them to rush for exports and orders in advance. Therefore, the data still needs to be monitored continuously.
The U.S. non-farm payroll data for November, to be released this Friday, will serve as an important decision-making basis for the Federal Reserve's Federal Open Market Committee (FOMC) meeting on December 17-18.
Tariffs are back. Over the weekend, the U.S. announced plans to impose tariffs of up to 271% on solar imports from four Southeast Asian countries. This news is unfavorable for production capacity in Thailand and Vietnam, but it is beneficial for the U.S. market, as the scarcity of domestic production capacity compared to that outside Southeast Asia will become more pronounced. We will see if the domestic industry conference can hedge this; from December 4-6, the China Photovoltaic Industry Association will hold the &#34;2024 Photovoltaic Industry Annual Conference&#34; in Yibin City, Sichuan Province.
From the above, the market does not yet see clear catalysts and needs to continuously pay attention to whether significant meetings can be held in advance. In terms of hot topics, on November 30 local time, the Vietnamese National Assembly approved a ten-year investment plan for the North-South high-speed railway. The plan will invest a total of $67 billion, with a total length of 1,541 kilometers, connecting the capital Hanoi and Ho Chi Minh City, and linking 20 provinces and cities in between. The Vietnamese National Assembly requires feasibility studies to start in 2025, aiming for basic completion before 2035. This is expected to stimulate the high-speed rail sector.
On November 29, 2024, the Guangdong Capital Market Mergers and Acquisitions Reorganization Alliance was officially established in Guangzhou. This alliance was jointly initiated by Guangdong Hengjian Holdings, the Guangdong Listed Companies Association, and GF Securities. Mergers and acquisitions concept stocks are expected to become active again.
[This Week's Golden Stock]
Hansoh Pharmaceutical (03692)
The company announced that four of its innovative drugs have been renewed and included in the &#34;National Basic Medical Insurance, Work Injury Insurance and Maternity Insurance Drug Catalog (2024)&#34; published by the National Healthcare Security Administration and the Ministry of Human Resources and Social Security. The 2024 National Medical Insurance Catalog will officially take effect on January 1, 2025. In the first half of 2024, the revenue from innovative drugs and cooperative products totaled 5.032 billion yuan, an increase of approximately 80.6% compared to the same period in 2023, accounting for 77.40% of total revenue.
Hansoh Pharmaceutical's innovative transformation has shown results. Since the launch of its first independently developed Class 1 innovative drug, Malingda, in 2014, the company has had eight innovative drugs approved for marketing. From 2020 to 2023, the proportion of revenue from innovative drugs rapidly increased, achieving a phased leap from 18% to 42% to 53% to 67%. Antitumor drugs are the company's traditional advantage, with revenue from antitumor drugs reaching 6.169 billion yuan in 2023, accounting for 59.7%. In the first half of 2024, the revenue from antitumor drugs reached 4.475 billion yuan, accounting for 68.8%
The company has formed a healthy product portfolio and a rich R&amp;D pipeline in the field of anti-tumor treatment: the market share of the third-generation EGFRTKI Amivantamab continues to rise, contributing major revenue through sustained volume growth; the efficacy of the second-generation Bcr-AblTKI Furmonertinib is superior to Imatinib, with a clear trend of replacement; the subsequent tumor R&amp;D pipeline is rich, covering multiple potential targets, especially two ADC products authorized to GSK, which are expected to bring continuous licensing revenue to the company. Comprehensive layout in non-tumor fields. The company is laying out multiple disease areas in metabolism, autoimmunity, central nervous system, and anti-infection, especially in large indication areas with a significant number of domestic patients. We are optimistic about the continuous performance improvement brought by the sales volume growth of the company's listed products and the advancement of R&amp;D for products under development.
【Industry Observation】
New tobacco products are accelerating iteration, benefiting core suppliers.
The growth of NB is steady, with differentiation in the vaping structure. In 2023, the global market size for HNB cartridges/refills/disposable products reached USD 32.3 billion, USD 13.5 billion, and USD 5.4 billion respectively, with year-on-year growth rates of +12.1%/8.2%/54.9%, and a CAGR from 2019 to 2023 of 21.3%/2.9%/83.7%. Benefiting from the accelerated product iteration and market expansion by global tobacco giants such as PMI and BAT, HNB growth is particularly bright, with market penetration rates in core regions such as Japan/Hungary/Czech Republic/South Korea reaching 39%/24%/19%/18%, and a CAGR expected to reach 13.5% from 2023 to 2028 (Euromonitor data). Disposable products account for 25% of the vaping segment, with global control tightening in H2 2023, growth gradually slowing down alongside the implementation of bans in regions like the UK in 2025, while refillable products are expected to recover growth, with CAGRs for refills/disposable products expected to be 5.5%/-0.3% from 2023 to 2028.
Tobacco giants are accelerating HNB layout, with continuous product iteration. In 2023, the global CR5 for HNB reached 97%. Due to the involvement of regulated materials such as tobacco leaves in consumables and high industry barriers, leading tobacco groups occupy major shares, with market shares for Philip Morris International/ British American Tobacco/ Japan Tobacco/ Korea Tobacco/ Imperial Brands at 71.0%/15.6%/6.0%/3.6%/0.7% respectively. PMI and BAT laid out early, with a rich variety of products, comprehensive technical paths, and ongoing innovation; Japan Tobacco, Korea Tobacco, and Imperial Brands have also accelerated product launches and market expansion in recent years, aiding in the overall market expansion.
The policy direction is positive, and the global compliance process is expected to accelerate. From 2020 to 2024, the Biden administration approved only 9 new harm reduction product applications (with a pool of applications reaching a million), while Trump previously publicly supported the smoking cessation efficacy of e-cigarettes and claimed to remove counterfeit products in the U.S. His administration is expected to have a positive impact on flavor restrictions (having planned to ban the sale of all fruit flavors in 2019, later changing stance) and PMTA review processes. In addition, global regulations are significantly tightening, with increased crackdowns on non-compliant e-cigarettes (recently, South Korea is promoting restrictions on synthetic nicotine e-cigarettes, Kyrgyzstan has signed laws banning e-cigarettes, and the UK has banned disposable e-cigarettes), and the compliant refillable market is expected to steadily recover. In this process, leading brands/suppliers are expected to continue to increase their market share due to years of strong compliance awareness/social responsibility/cost advantages
Key focus on Hong Kong stocks: deep cooperation partner of British American Tobacco, HNB with a strong accumulation of Smoore International (06969).
【Data Monitoring】
According to data released by the Hong Kong Stock Exchange, the total number of open contracts for the Hang Seng Index futures (December) is 106,382, with a net open position of 37,878. The settlement date for the Hang Seng Index futures is December 30, 2024.
From the distribution of bullish and bearish positions in the Hang Seng Index, at the 19,424 point level, the bear certificate concentration area is close to the central axis, indicating that there is room for a rebound in Hong Kong stocks. The market pricing suggests one interest rate cut in the first half and another in the second half of next year, with institutions expecting the Federal Reserve to pause in the first half and cut rates twice in the second half, each by 25 basis points. The Hang Seng Index is seeking support below 20,000 points and is bullish this week.
<img src="https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20241202/1733101543611222.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="牛熊.png" original-src="https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20241202/1733101543611222.png"/>
【Editor's Remarks】
Two interesting data points: first, the amount of repurchases by industrial capital last week was HKD 7 billion, with 260 cases, close to the level in April this year. Second, the net inflow of southbound funds last week was HKD 22.8 billion, with southbound trading accounting for 36.3%, at a high since 2014.
The liquidity remains stable. Based on past experience, as we approach the end of December, fund managers tend to push up prices, and the profit effect will be stronger than in November. At this point, the market should be observed cautiously but with optimism.
Regarding new stocks, the performance of the popular stock Jiuyuan Fund on its first day of listing last week is a typical case where the national allocation is entirely cornerstone, and new stock investors learn from their experiences. This week, Mao Ge Ping is worth looking forward to, let's see the subscription situation.
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00HSI

The market rose slightly under the stimulus of small essays, with the Hang Seng Index increasing by 0.29% last week. The November PMI data is at 50.3%, indicating an economic recovery, especially with strong performances in new export orders and the new orders index. The upcoming non-farm payroll data in the United States will impact the Federal Reserve's decisions. The high tariffs imposed by the U.S. on Southeast Asian countries may affect local production capacity but benefit the U.S. market. A domestic photovoltaic industry conference will be held in December, and the market needs to pay attention to the progress of the conference. The Vietnamese National Assembly has approved a high-speed rail investment plan, which is expected to stimulate related sectors

- The Hang Seng Index saw a slight increase of 0.29% last week, with November PMI data at 50.3%, indicating a rare three-month rise above the neutral line.  
- The positive PMI was driven by new export orders, as U.S. clients anticipated increased tariffs, impacting Southeast Asian solar imports with tariffs up to 271%.  
- Upcoming U.S. non-farm payroll data will be crucial for the Federal Reserve's December meeting, while Vietnam's investment in a high-speed rail project is expected to stimulate the sector.

Zhitong Decision Reference | The market lacks clear catalysts, pay attention to whether the important meeting is held in advance