Hong Kong Stock Market Closing (06.13) | Hang Seng Index rose by 0.97%, automobile and Apple concept stocks surged, BYD COMPANY soared nearly 6%

According to the Wise Finance APP, the three major Hong Kong stock indexes rose in the morning session, but then fluctuated and fell back. In the afternoon, the stock indexes rose again, with the Hang Seng Index successfully regaining the 18,000 level. As of the close, the Hang Seng Index rose by 0.97% or 174.79 points to 18,112.63 points, with a total daily turnover of 107.322 billion Hong Kong dollars; the Hang Seng China Enterprises Index rose by 0.98% to 6,421.81 points; and the Hang Seng Tech Index rose by 1.3% to 3,739.14 points.

Haitong Securities pointed out that the main reasons for the May rise in Hong Kong stocks are the rebound in expectations of a Fed rate cut, the strengthening of domestic real estate policies, and the improvement in corporate profits. In addition, the recent decline in the AH premium index to a low level, and the sharp rise in high-dividend assets in Hong Kong stocks, are important reasons for the rapid decline in the AH premium index recently. The bank believes that the current valuation repair of Hong Kong stocks is relatively sufficient, and the future upside depends on policy expectations and profit recovery.

Performance of Blue Chip Stocks

BYD COMPANY (01211) led the blue chips. As of the close, it rose by 5.82% to 232.8 Hong Kong dollars, with a turnover of 4.927 billion Hong Kong dollars, contributing 21.19 points to the Hang Seng Index. Citigroup initiated a 30-day upward catalyst observation on BYD, believing that the result of the EU tariff increase is slightly positive for BYD. The bank originally expected a tariff of 30% and improved the visibility of BYD's export growth in the second and third quarters of this year. BYD's tariffs in the EU are lower than those of other Chinese companies, indicating an expansion of the group's market share in the EU.

In other blue chip stocks, China Resources Power (02688) rose by 4.44% to 69.35 Hong Kong dollars, contributing 3.82 points to the Hang Seng Index; CRRC Corporation (00669) rose by 4.18% to 98.35 Hong Kong dollars, contributing 9.68 points to the Hang Seng Index; Haier Smart Home (06690) fell by 2.23% to 28.5 Hong Kong dollars, dragging down the Hang Seng Index by 2.48 points; Zijin Mining (02899) fell by 1.92% to 16.38 Hong Kong dollars, dragging down the Hang Seng Index by 2.78 points.

Hot Sectors

On the market, large-cap technology stocks generally strengthened in the late session, with Bilibili rising by over 5%, Meituan rising by over 3%, Xiaomi Group, Tencent, and others all closing up by over 2%. The potential impact of EU tariffs is controllable, leading to a rebound in auto stocks, with BYD rising by over 8% at one point; AI empowerment driving demand for phone upgrades, Apple concept stocks continuing to rise; entertainment, power, gas, semiconductor, and gaming stocks all performing well. On the other hand, the Fed significantly lowered its rate cut forecast, leading to a general softening in gold and other non-ferrous metal stocks, with household appliance stocks, heavy infrastructure stocks, and CRO concept stocks leading the decline.

1. Auto stocks rebounded today. As of the close, BYD COMPANY (01211) rose by 5.82% to 232.8 Hong Kong dollars; Leapmotor (09863) rose by 2.66% to 27.05 Hong Kong dollars; Geely Automobile (00175) rose by 1.69% to 9.05 Hong Kong dollars; Nio-SW (09866) rose by 1.31% to 34.8 Hong Kong dollars On June 12, the European Commission announced plans to impose temporary anti-subsidy duties on electric cars imported from China. The Commission stated that BYD, Geely Auto, and SAIC Group are proposed to be subject to tariffs of 17.4%, 20%, and 38.1% respectively; while other manufacturers will face a 21% tariff. Tesla cars imported from China may be subject to a separate tax rate. CICC International believes that the temporary tariffs disclosed by the European Commission are slightly lower than the market's previous expectation of 25%, allowing some car companies with economies of scale and supply chain advantages to remain competitive under a tariff of around 20%. The bank stated that the potential impact of EU tariffs is manageable and unlikely to hinder Chinese car companies' overseas expansion. Among the companies covered, BYD, Geely, and Great Wall have well-established export layouts and are expected to maintain growth in overseas sales.

2. Apple concept stocks continue to rise. At the close, Q Technology (01478) rose by 10.93% to HKD 4.06; GoerTek (01415) rose by 4.57% to HKD 21.75; BYD Electronics (00285) rose by 3.88% to HKD 37.5; Sunny Optical (02382) rose by 3.29% to HKD 47.05.

Apple's stock price rose by 2.9% last night, hitting a new historical high and surpassing Microsoft's market value at one point. Guotai Junan Securities stated that Apple's release of Apple Intelligence is expected to become the definer of edge AI in the future, optimizing AI functions for devices such as phones and computers to further drive the wave of device upgrades, benefiting the Apple supply chain. Huajin Securities believes that smartphones and PCs, as two major edge devices, will significantly benefit from the all-round experience upgrade brought by AI, expecting a new wave of device upgrades; from software upgrades to hardware configuration upgrades for edge AI devices, the supply chain will see new vitality.

3. Power stocks perform well. At the close, CGN Power (01816) rose by 5.52% to HKD 3.44; China Power (02380) rose by 5.38% to HKD 3.92; Huaneng Power International (01071) rose by 3.93% to HKD 5.29; China Resources Power (00836) rose by 3.67% to HKD 24.

Shanxi Securities pointed out the investment opportunities in the valuation reshaping of thermal power companies under the new electricity market reform. On the demand side, electricity load is expected to increase significantly this summer; in the long term, with the development of new quality productivity and the trend of energy substitution, electricity demand may further rise. On the supply side, the advantages of peak-shaving and flexibility of thermal power plants are highlighted during the peak summer period; in the long term, with the gradual advancement of ancillary services + capacity pricing mechanisms, the stable profitability and dividend-paying ability of thermal power companies are expected to improve, and new value points under improved business models are yet to be explored by the market.

4. Gold stocks generally decline. At the close, China Silver Group (00815) fell by 3.17% to HKD 0.305; Zijin Mining (02899) fell by 1.92% to HKD 16.38; Lingbao Gold (03330) fell by 1.69% to HKD 2.9 Shandong Gold (01787) fell by 1.63% to HKD 16.04.

The US May CPI came in lower than expected. However, the latest dot plot released by the Federal Reserve officials showed a significant downward revision in the expected number of rate cuts for this year, from 3 cuts to 1 cut, below the market's expectation of 2 cuts, which is negative for metals. In addition, Federal Reserve Chairman Powell's remarks at the press conference also signaled a "hawkish" stance. Powell stated that inflation has eased significantly but remains too high. So far this year, there is not enough confidence in inflation to warrant a rate cut. CITIC Futures pointed out that with the recent pause in gold purchases by the domestic central bank and the significantly better-than-expected non-farm payroll data released on Friday, precious metals experienced a sharp pullback. The bank believes that policy expectations will suppress short-term upside potential, but from a long-term perspective, gold support remains strong, and it is advisable to wait for time to exchange for space.

Hot Stocks

1. A8 New Media (00800) resumed trading and surged, closing up by 140.88% at HKD 0.33.

A8 New Media announced that Chairman Liu Xiaosong (as the offeror) proposed to privatize the company through an agreement arrangement, with a cancellation price of HKD 0.36 per share, representing a premium of 162.77% over the suspension price. Currently, the offeror and its concerted parties collectively hold 70.04% of the company's share capital.

2. Qutoutiao (01478) showed significant strength, closing up by 10.93% at HKD 4.06.

Qutoutiao announced that the total sales volume of camera modules in May was 40.19 million units, a decrease of 3.3% month-on-month and an increase of 35.8% year-on-year. This is mainly due to the recovery in demand in the smartphone market and the good development of the group's business in mid-to-high-end camera module products and car camera module products.

3. MicroPort Medical (00853) rose throughout the day, closing up by 8.9% at HKD 6.36.

MicroPort Medical announced the redemption of USD 700 million zero-coupon convertible bonds due in 2026, which have all been fully redeemed. The company has applied to the Stock Exchange for the withdrawal of the listing status of the 2026 convertible bonds, and the withdrawal of the listing is expected to take effect after the close of business on June 20.

4. Huahong Semiconductor (01347) hit a new high, closing up by 5.37% at HKD 23.55.

Morgan Stanley released a research report stating that Huahong Semiconductor's wafer fab utilization rate has exceeded 100%, which may lead to a 10% increase in wafer prices in the second half of the year. In addition, the recovery pace of Huahong's business is faster than expected by the bank, which will result in an upward revision of the company's operating income guidance for the second quarter of the 2024 fiscal year.

New Listing Debut

**Jingtai Technology (02228) performed well. It closed up by 9.85% at HKD 5.8 QUANTUMPH-P (Crystal Tai Technology) is priced at HKD 5.28 per share, with a total issuance of 187.4 million shares. Each lot consists of 1000 shares, resulting in a net amount of approximately HKD 8.96 billion. As a leading AI pharmaceutical company in China, Crystal Tai Technology is the first pre-commercialization enterprise to be listed on the Hong Kong Stock Exchange through 18C. According to Frost & Sullivan data, the company is one of the few leading research and development enterprises in the world that are empowered by quantum physics and artificial intelligence in the fields of pharmaceuticals and materials science