Northbound funds flowed out over 10 billion again, against the trend to increase holdings in non-ferrous metals, buy into AI servers and leading shipbuilders

This week, the net outflow of northbound funds was 11.762 billion yuan, with a net outflow of 2.831 billion yuan through the Shanghai-Hong Kong Stock Connect and 8.931 billion yuan through the Shenzhen-Hong Kong Stock Connect.

From an industry perspective, the industries with the largest net inflows of northbound funds this week are non-ferrous metals, electricity and utilities, and transportation.

Debon Securities pointed out that in 2024, as the global monetary environment shifts from tight to loose and the domestic economy gradually recovers, the non-ferrous metal sector may see excess returns. The strength ranking of elasticity is precious metals > copper > minor metals > aluminum > rare earths, while particular attention is given to the field of new non-ferrous materials.

On Friday, power stocks strengthened, with multiple stocks such as Sanhua Electric, Hualing Cable, and Xinling Electric hitting the daily limit. In terms of catalysts, the "Basic Rules for the Operation of the Power Market" issued by the National Development and Reform Commission will officially take effect on July 1.

Xiangcai Securities stated that as the national unified electricity market system becomes more sound, the design of various levels of electricity markets and the mechanism for determining electricity prices will be more refined. The multiple values of electricity sources are expected to achieve fully market-oriented pricing, cost transmission is expected to be smoother, countercyclical properties are expected to weaken, factors that have long suppressed valuations are expected to diminish, the public utility attributes of the power industry are expected to return, and asset values are expected to be reassessed.

Increasing Investment in AI and Leading Shipbuilding Companies

Among the top stocks bought by northbound funds this week are Industrial Fulian (875 million yuan), China Shipbuilding (570 million yuan), and Fuyao Glass (358 million yuan).

The chairman of Industrial Fulian stated at the shareholder meeting held on Monday that the company is a leading enterprise in cloud computing and mobile device components, and will benefit from the dual advantages of AI computing power and AI smartphones.

The company expects AI to contribute 40% of its total cloud computing revenue in 2024, and its market share in AI servers will account for 40% of the global market share. It also announced plans to distribute dividends of 11.521 billion yuan, reaching a new high since its listing.

China Shipbuilding, the second most bought stock, surged 8% on Friday to hit a new high for the year. Zhongyuan Securities stated that by the end of May, the China New Shipbuilding Price Index had risen to 1098 points, an increase of over 42% compared to the end of 2020. The shipbuilding industry continues to see strong demand, with supply shortages being the norm. As the new shipbuilding price index rises and raw material prices fall, the profit margin continues to expand.

Another noteworthy development is that Zijin Mining, the fifth most bought stock, announced on Friday evening that its subsidiaries, Tibet Julong Copper Mine and Heilongjiang Copper Mountain Copper Mine, have added a total of 18.377 million tons of newly recorded copper metal resources and 5.777 million tons of newly recorded copper metal reserves, accounting for approximately 14.2% of China's copper reserves at the end of 2022

Bottoming out at 1 yuan cross-border e-commerce stocks

From the perspective of the increase in positions, the stocks with the highest increase in positions by northbound investors this week include Dalikapu, Kuajingtong, and Beifang Tongye.

In the global RF microwave MLCC market in 2022, Dalikapu ranks 5th among global enterprises and 1st among Chinese enterprises in market share, making it one of the few Chinese companies with the ability to supply RF microwave MLCC products to the international market.

Kuajingtong, with the second highest buying volume, closed at 1.31 yuan on Friday, approaching the face value delisting line. The company is known as the "pioneer of Chinese cross-border e-commerce" (formerly "Baiyuan Pants Industry"), mainly engaged in cross-border export e-commerce business and cross-border import e-commerce business