Hong Kong Stock Market Closing (08.23) | Hang Seng Index fell by 0.16%, insurance stocks rose against the market, and Era Angel's performance surged by 17% after the bell

According to the Wisdom Financial APP, the Hong Kong stock market performed poorly throughout the day, with all three major indexes collectively under pressure and declining. As of the close, the Hang Seng Index fell by 0.16% or 28.90 points to 17,612.10 points, with a total daily turnover of 75.678 billion Hong Kong dollars; the Hang Seng China Enterprises Index fell by 0.08% to 6,219.24 points; and the Hang Seng Tech Index fell by 1.13% to 3,468.94 points.

TF Securities pointed out that the Hong Kong dollar carry trade may suppress stock market liquidity, and signs of overseas capital inflows into the Hong Kong market are not yet clear. The loose state of Hong Kong dollar liquidity is more a result of weakening demand, and the inflow-driven appreciation of the Hong Kong dollar awaits the Federal Reserve's interest rate cuts to lower the US dollar below the Hong Kong dollar interbank lending rate. The steady recovery of the domestic economy will also help restore asset price expectations. The US stock market may still be in a high volatility range, and the pressure of the yen carry trade reversal may have been relieved. Against the backdrop of increasing macroeconomic uncertainty, stock market volatility may increase.

Blue Chip Performance

Ping An Insurance (02318) led the blue chips with a 3.64% increase. As of the close, it rose by 3.64% to 35.55 Hong Kong dollars, with a turnover of 2.834 billion Hong Kong dollars, contributing 13.50 points to the Hang Seng Index. Ping An Insurance released its interim results for the six months ended June 30, 2024, with a total revenue of 554.097 billion yuan, an increase of 1.46% year-on-year; a net profit attributable to the parent company's shareholders of 74.619 billion yuan, an increase of 6.84% year-on-year; and earnings per share of 4.21 yuan.

In other blue chip stocks, Shenzhou International (02313) rose by 2.15% to 66.45 Hong Kong dollars, contributing 1.86 points to the Hang Seng Index; Li Ning (02331) rose by 2.15% to 14.24 Hong Kong dollars, contributing 1.14 points to the Hang Seng Index; CRRC Corporation (00669) fell by 1.04% to 105 Hong Kong dollars, dragging down the Hang Seng Index by 2.76 points; and Hansoh Pharmaceutical (03692) fell by 6.91% to 17.24 Hong Kong dollars, dragging down the Hang Seng Index by 2.44 points.

Popular Sectors

1. Insurance concept stocks rose against the market. As of the close, China Taiping Insurance (02601) rose by 6.11% to 19.80 Hong Kong dollars; Ping An Insurance (02318) rose by 3.64% to 35.55 Hong Kong dollars; and China Life Insurance (02628) rose by 2.06% to 10.90 Hong Kong dollars.

Ping An Insurance released its interim results for the six months ended June 30, 2024, with a total revenue of 554.097 billion yuan, an increase of 1.46% year-on-year; a net profit attributable to the parent company's shareholders of 74.619 billion yuan, an increase of 6.84% year-on-year; and earnings per share of 4.21 yuan. CICC believes that the improvement trend of Ping An's life insurance business is evident, and despite some investors' doubts about the complex NBV measurement, for companies operating prudently, the return to growth trend of NBV will eventually translate into profit improvement.

Recently, Yin Jiang'ao, Director of the Property Insurance Supervision Department of the China Banking and Insurance Regulatory Commission, stated at a press conference that interest rate management is of utmost importance for insurance companies, especially life insurance companies. It is necessary to guide the industry to timely lower the predetermined interest rates of life insurance products, establish a mechanism linking predetermined interest rates with market rates, and dynamically adjust them At the same time, accelerate the transmission of asset-side yield to the cost rate of liability funds, make assets and liabilities more matched, strengthen the rigid constraints of investment yield on settlement interest rates and dividend levels, promote the realization and rationalization of customer interests, urge insurance companies to adjust the structure of products, optimize the demonstration of policy rates, and reasonably guide market expectations.

2. Shipping stocks lead the decline. As of the close, COSCO Shipping International (00316) fell by 7.32% to HKD 106.40; China COSCO Shipping (01138) fell by 5.15% to HKD 8.66; China COSCO Holdings (01919) fell by 4.20% to HKD 10.48.

COSCO Shipping International released its first-half results, with revenue of USD 4.646 billion, an increase of 2.31% year-on-year; net profit attributable to shareholders was USD 833 million, a decrease of 26.18% year-on-year; basic earnings per share were USD 1.26; proposed to distribute an interim dividend of USD 0.63 per share and a special dividend of USD 0.17 per share. The announcement stated that in the first half of 2024, COSCO Shipping International's overall cargo volume increased by 2%, with total revenue up 2% year-on-year.

Fitch Bohua pointed out that the Red Sea crisis remains a major uncertainty affecting container shipping demand. Once the crisis is resolved, the market may face the problem of overcapacity again, which could lead to a further decline in freight rates to even lower levels. Shanghai Mid-term Futures indicated that in early August, the quotations of various shipping companies gradually converged towards the central level of USD 8,500, and the freight rates may further decline in late August. Overall, there is still no sign of an end to geopolitical conflicts, and with the subsequent relaxation of capacity supply, frequent downward adjustments in spot freight rates have slightly undermined market confidence.

3. Gold stocks generally weakened. As of the close, Lingbao Gold (03330) fell by 5.44% to HKD 3.30; China Gold International (02099) fell by 2.16% to HKD 40.70; Shandong Gold (01787) fell by 0.95% to HKD 16.68.

In the U.S. market on Thursday, spot gold touched down to USD 2,480, the first time since August 16. The latest report from Shengbao Bank indicates that the risk of consolidation or even pullback in gold prices is imminent. After the latest rebound set new records, the trend of gold prices shows signs of fatigue, especially considering the moderate response to weak U.S. job growth and the Federal Open Market Committee meeting minutes almost confirming a rate cut in September. Guotai Junan Futures stated that the rate cut expectations are already quite sufficient, posing a risk of a phased pullback in international gold prices.

UBS expects that as the Fed begins to cut interest rates, the holding cost of gold will decrease, and the inflow of funds into gold ETFs will further increase. Seasonal demand will drive the physical demand in China and India to rebound, in addition, central banks around the world are still buying gold, and emerging market central banks still have room to increase their gold holdings.

Hot Stock Movements

1. Era Angel (06699) showed strong performance throughout the day, closing up 17.40% at HKD 61.40.

Era Angel announced its interim results, with revenue of approximately RMB 861.5 million, an increase of 39.8% year-on-year; adjusted net profit of approximately RMB 71.7 million, an increase of 95.8% year-on-year. During the reporting period, the total number of cases reached approximately 152,900, an increase of 60.3% year-on-year from approximately 95,400 cases, with the number of international market cases reaching 57,600, accounting for 37.7% of the total cases Guojin Securities pointed out that the global business layout of Times Angel is gradually entering a harvest period, with the company's international market continuing to expand. Despite higher initial costs, it is expected that with the increase in sales volume, cost dilution will occur, and the losses in the international market are expected to further narrow.

2. Ping An Insurance (02318) rose after its performance announcement, closing up by 3.64% at HKD 35.55.

Ping An Insurance released its first-half financial results, with the group achieving a total revenue of RMB 554.097 billion, a year-on-year increase of 1.46%; net profit attributable to the parent company's shareholders was RMB 74.619 billion, a year-on-year increase of 6.84%. At the same time, the company will distribute an interim dividend of RMB 0.93 per share in cash to shareholders. In the first half of 2024, the group achieved an operating profit attributable to the parent company's shareholders of RMB 78.482 billion; annualized operating ROE was 16.4%. Among them, the core businesses of life insurance, health insurance, property insurance, and banking all achieved growth.

CICC pointed out that Ping An Insurance's first-half performance met the bank's expectations. The trend of improvement in the life insurance business is evident, and based on various indicators of Ping An Life Insurance's business, the bank is optimistic about the company's future operating trends.

3. AAC Technologies (02018) rose again, closing up by 4.80% at HKD 106.40.

Morgan Stanley believes that AAC Technologies' first-half performance exceeded expectations, with a strong rebound in profit margins. The management indicated that they remain optimistic about this year's revenue performance stabilizing and profit margins continuing to recover. Benefiting from the turnaround of the optical business from loss to profit, the improvement in gross margin was more significant than expected. The company believes that this trend will continue in the second half of the year. Goldman Sachs stated that AAC Technologies' revenue and gross margin for the first half of this year were higher than market expectations, maintaining a positive outlook on the company and expecting further improvement in its future performance.

4. China COSCO Shipping Energy Transportation (01138) declined throughout the day, closing down by 5.15% at HKD 8.66.

China COSCO Shipping Energy Transportation announced that it plans to hold a board meeting on August 29 to approve its interim performance. HSBC previously pointed out that China COSCO Shipping Energy Transportation's first-half performance preliminarily showed profits weaker than expected, with a year-on-year decline in recurring net profit in the second quarter. The bank believes that potential inventory replenishment in mainland China and an increase in OPEC+ production are key catalysts for the recent decline in China COSCO Shipping Energy Transportation's stock price. However, any signs of potential demand weakness have the opportunity to impact short-term profit recovery and trigger futures premium trading