Internet giants surged, Hong Kong stocks rose for the third consecutive day!

On Wednesday, April 24th, the Hong Kong stock market opened high again, with the Hang Seng Index breaking through and stabilizing above 17,000 points, together with the Hang Seng China Enterprises Index hitting a new intraday high in nearly 5 months. Technology stocks continued to strengthen for the third consecutive day, with the Hang Seng Tech Index rising sharply by 3.61%, accumulating an 8.2% increase over three days.

Meituan rose more than 17% over the three days this week, reaching over HKD 110 again, hitting a new high since November 23, 2023; Tencent rose more than 12% over three days, reaching HKD 340, hitting a new high in over 9 months; Kuaishou rose more than 17% over three days, Bilibili rose 14% over three days, JD.com rose by 13% over three days, Alibaba rose by 8.5% over three days, Baidu rose more than 6% over three days, and the Hong Kong Internet ETF rose by 10.87% over three days.

On one hand, from a policy perspective, the China Securities Regulatory Commission introduced 5 measures last week to support the Hong Kong capital market, boosting the performance of Hong Kong stocks, improving the medium to long-term liquidity of Hong Kong stocks, and providing incremental funds. Analysts at Guotai Junan Securities believe that the latest measures will continue to drive mainland funds into Hong Kong, enhance market influence, and help stabilize prices.

As of Wednesday, mainland investors have been increasing their holdings of Hong Kong stocks for 17 consecutive trading days, setting a record for the longest consecutive increase in history. Today, southbound funds continued to flow in with a net inflow of HKD 1.995 billion, totaling HKD 39.158 billion in inflows since April. So far this year, except for 11 trading days, mainland investors have increased their holdings of Hong Kong stocks on all trading days.

In addition, the Hong Kong Monetary Authority has been injecting liquidity intensively this week, injecting liquidity of HKD 525 million and HKD 500 million to banks through the discount window on April 22nd and 23rd respectively. Since the beginning of this year, the Hong Kong Monetary Authority has repeatedly used the discount window to inject liquidity into banks, with a cumulative amount of approximately HKD 6.897 billion.

Some analysts point out that the discount window, as a standby arrangement for Hong Kong dollar liquidity by the Hong Kong Monetary Authority, aims to ensure the smooth operation of the interbank payment system. This move indicates that the Hong Kong Monetary Authority is playing an active role in maintaining financial market stability and liquidity.

In terms of valuation, the Hang Seng Index currently corresponds to an expected price-to-earnings ratio of about 8.3 times by the end of 2024, which is still at a relatively low valuation level compared to historical levels. UBS recently raised its rating on Hong Kong stocks to "overweight" in a report, citing higher dividend support for Hong Kong stocks and the recovery of the tourism industryAccording to the index-weighted EPS calculation method favored by UBS, the EPS of the MSCI China Index has only decreased by about 2% in the past 18 months, outperforming other emerging markets (which have fallen by about 8%). The largest components of the China Index have shown overall good performance in terms of earnings and fundamentals.

The report also points out that with signs of consumer recovery emerging and signals of household savings gradually flowing into the market strengthening, UBS is now more optimistic about earnings