Daiwa Capital Markets: Maintains a constructive view on the mid-term market conditions; Alibaba, Ganfeng Lithium, and Minth Group added to the buy list; Sell Meituan

Daiwa Capital Markets stated that the Chinese stock market rebounded in January, with the Hang Seng Index and MSCI China Index rising by 6.9% and 5% month-on-month, respectively. However, the overall increase was limited by the "national team" led by Central Huijin, which sold $68 billion. The best-performing stocks in Daiwa's January selection were WuXi Biologics (02269.HK) and Hang Wai Technology (01523.HK), with returns of 17.7% and 16.6%, respectively.

Daiwa Capital Markets indicated that the market conditions in February may continue to be volatile, but they maintain a constructive outlook for the medium term. The exponential rise in gold and silver prices over the past two months saw a sharp adjustment at the beginning of February. This may lead to forced liquidations of leveraged long positions, spilling over into the stock market. Therefore, the market may remain volatile in February, but due to the supportive macro policy environment, they still hold a constructive view on the medium-term market conditions. They have added Alibaba-W (09988.HK), Ganfeng Lithium (01772.HK), and MINTH GROUP (00425.HK) to their buy list, while Meituan (03690.HK) has been added to the sell list. They regretfully need to stop-loss sell Midea Group (000333.SZ), Pinduoduo (PDD.US), Sunny Optical (02382.HK), and WuXi Biologics (02269.HK)