Hong Kong Stock Market Closing (09.11) | Hang Seng Index fell by 0.73%, lithium mining stocks and pharmaceutical stocks rebounded strongly, while Topoyiyin plummeted by 16% after issuing a profit warning

According to Wisdom Financial APP, the market is waiting for the release of the U.S. August CPI inflation data tonight. The three major Hong Kong stock indexes fell collectively in the morning session, with the Hang Seng Index and the H-share Index hitting new lows. The Hang Seng Tech Index rose slightly in the afternoon after falling nearly 1% earlier. At the close, the Hang Seng Index fell by 0.73% or 125.38 points to 17,108.71 points, with a total turnover of HKD 105.785 billion; the Hang Seng China Enterprises Index fell by 0.73% to 5,982.55 points; and the Hang Seng Tech Index rose slightly by 0.01% to 3,450.92 points.

Guoyuan International pointed out that after entering September, the U.S. stock market has once again experienced a correction. During the short-term adjustment period of the U.S. stock market, Hong Kong stocks may attract overseas funds due to their relatively low valuations. The bank believes that this will bring some incremental funds to Hong Kong stocks in the short term, helping to partially repair the valuation of Hong Kong stocks in the short term. However, due to the overall deleveraging of the domestic economy, the long-term repair of the valuation of Hong Kong stocks still requires more domestic policy support and improvement in economic fundamentals as a support.

Performance of Blue Chips

WuXi AppTec (02359) led the gains in blue chips. At the close, it rose by 6.83% to HKD 34.4, with a turnover of HKD 3.1 billion, contributing 1.3 points to the Hang Seng Index. WuXi AppTec announced that in order to further maintain the company's value and shareholder rights, the company plans to repurchase shares with its own funds, with a total amount of 1 billion yuan, and the repurchase price not exceeding HKD 61.02 per share. This is the company's third 1 billion yuan A-share cancellation repurchase plan this year.

As for other blue chips, Haier Smart Home (06690) rose by 3.94% to HKD 23.75, contributing 3.6 points to the Hang Seng Index; WuXi Biologics (02269) rose by 3.67% to HKD 11.3, contributing 2.47 points to the Hang Seng Index; China Resources Power (00836) fell by 5.66% to HKD 18.34, dragging down the Hang Seng Index by 3.41 points; Shenzhou International (02313) fell by 4.86% to HKD 55.85, dragging down the Hang Seng Index by 3.85 points.

Hot Sectors

In the market, large-cap technology stocks showed mixed performance, with Baidu up by 0.44%, Tencent up by 0.43%, and Alibaba down by 0.18%. The 2024 ESMO conference is approaching, with biopharmaceutical stocks performing well; CATL suspended lithium production in Jiangxi, leading to a strong rebound in lithium mining stocks, with Tianqi Lithium Industries surging over 13%; home appliance stocks and some auto stocks rose. On the other hand, Anta Sports plummeted by 20% after issuing a profit warning, dragging down sports equipment stocks; overnight oil prices fell sharply, leading to another decline in oil stocks, as well as declines in power stocks, domestic bank stocks, Apple concept stocks, and telecom stocks.

1. Strong Rebound in Lithium Mining Stocks. At the close, Tianqi Lithium Industries (09696) rose by 13.15% to HKD 21; Ganfeng Lithium (01772) rose by 9.01% to HKD 16.94.

There are rumors in the market that CATL has suspended its lithium mica business in Jiangxi, which has stimulated a more than 7% surge in the main contract of lithium carbonate futures. In terms of spot prices, Shanghai Steel Union data shows that the price of battery-grade lithium carbonate rose by 1000 yuan today, with an average price of 73,500 yuan/ton. Some analysts point out that CATL's suspension of lithium mining operations in Jiangxi will lead to an 8% reduction in China's monthly lithium carbonate production, which may cause lithium prices to rise by 11%-23% Guotai Junan stated that high-cost mines actively reducing production, with some signs of supply clearance; if further production cuts are expanded, the supply-demand fundamentals are expected to improve.

2. Pharmaceutical stocks lead the gains. As of the close, BeiGene (06160) rose by 7.66% to HKD 125.1; WuXi AppTec (02359) rose by 6.83% to HKD 34.4; WuXi Biologics (02268) rose by 5.13% to HKD 19.66; Rongchang Biotech (09995) rose by 4.96% to HKD 12.7.

The 2024 ESMO Congress will be held in Barcelona, Spain, from September 13th to 17th, combining online and offline formats. Many innovative drug companies including Hutchmed, Zai Lab, Kangfang Bio, Innovent Biologics, and Rongchang Biotech will collectively appear. Analysts believe that under policy drive, the entire sector is expected to see valuation recovery; coupled with catalysts such as the second half of the ESMO Congress and medical insurance negotiations, the outlook for the innovative drug sector is positive.

On the evening of September 10th, WuXi AppTec announced that, to further maintain company value and shareholder rights, the company plans to repurchase shares with its own funds, with a total amount of 1 billion RMB, at a repurchase price not exceeding RMB 61.02 per share. It is worth mentioning that this is the third 1 billion RMB A-share cancellation repurchase plan by WuXi AppTec this year. Prior to this, WuXi AppTec completed the first two repurchase plans on February 5th and May 22nd, repurchasing a total of 2.9 billion RMB A-shares.

3. Home appliance stocks perform well. As of the close, Hisense Home Appliances (00921) rose by 5.65% to HKD 21.5; Haier Smart Home (06690) rose by 3.94% to HKD 23.75; TCL Electronics (01070) rose by 2.19% to HKD 4.67.

Various regions across the country have launched support measures for equipment renewal and trade-in of consumer goods. First-tier cities such as Beijing, Guangdong Province, Hunan Province, Shanghai, and Shenzhen have successively issued government notices to support the trade-in of consumer goods using long-term special national debt funds for subsidies on automobiles, home appliances, etc. China Galaxy Securities Research Institute predicts that this round of trade-in policy will drive the renewal of home appliances by approximately 60 million units, driving the total consumption of home appliances to nearly 100 billion RMB; the domestic home appliance market is expected to continue to rise under the support of consumption policies, with industry leaders in intelligent and international layout expected to continue to benefit.

4. Casino stocks are generally under pressure. As of the close, Wynn Macau (01128) fell by 3.61% to HKD 4.8; Galaxy Entertainment (00027) fell by 3.46% to HKD 27.9; MGM China (02282) fell by 3.27% to HKD 9.68; Sands China (01928) fell by 3.03% to HKD 13.46.

Citi released a research report stating that according to industry data, Macau's casino revenue in the first 8 days of September may reach approximately MOP 4.75 billion. The implied daily casino revenue for the period is approximately MOP 594 million, a decrease of about 6% from the daily casino revenue of approximately MOP 635 million in the last 13 days of August. According to industry sources, VIP room betting volume is expected to decline by 7 to 10% monthly, while mass market betting volume is expected to decline by 5 to 8% monthly. To reflect the slight negative impact of the typhoon, the bank has lowered its casino revenue forecast for the period ending September 24th from MOP 18.5 billion to MOP 18.25 billion, meaning that the daily casino revenue for the remaining time of this month is approximately MOP 614 million 5. Oil stocks fall again. As of the close, Sinopec (00386) fell by 2.95% to HKD 4.28; CNOOC (02883) fell by 2.5% to HKD 6.24; PetroChina (00883) fell by 2.3% to HKD 18.72; Sinopec (00857) fell by 1.41% to HKD 5.61.

International oil prices plummeted overnight, with Brent November crude oil futures falling below $70 per barrel, hitting a new low since December 2021. OPEC's monthly report released on Tuesday local time showed a downward revision of forecasts for global oil demand growth in 2024 and 2025 for the second consecutive month. Citigroup predicts that by 2025, with the market experiencing oversupply, oil prices may fall to around $60 per barrel. Goldman Sachs, on the other hand, points out that market expectations of oversupply of crude oil could be a catalyst for weak oil prices, and predicts that by 2025, the crude oil market may shift from tight supply to oversupply.

Hot Stock Movements

1. Taobo (06110) issued a profit warning. As of the close, it fell by 16.17% to HKD 2.23.

Taobo issued a profit warning, expecting a year-on-year decline of about 35% in net profit for the six months ended August 31, mainly dragged down by factors such as a weak macro environment. Goldman Sachs significantly lowered Taobo's target price from HKD 6 to HKD 2.7, reflecting the profit downgrade.

2. China Resources Power (00836) fell throughout the day. As of the close, it fell by 5.66% to HKD 18.34.

Daiwa Research pointed out that due to the potential cold winter and the stagnation of the renewable energy industry, China Resources Power's thermal power business faces profit contraction risks. At the same time, the downturn in China Resources Power's renewable energy business is expected to continue into the second half of the year. The rating of China Resources Power was downgraded from "Hold" to "Underperform the Market", with the target price lowered from HKD 20 to HKD 17.7.

3. Yuexiu Property (00123) significantly rose, closing up by 5.41% to HKD 4.09.

Yuexiu Property announced that the company has been considering potential schemes and opportunities that may benefit the group, including potential transactions involving the ownership of the group's office space and parking lot in the Tianhe District Guangzhou Grandview Mall. In addition, Yuexiu Property had two land parcels in Guangzhou requisitioned and recovered, with an amount exceeding 12 billion yuan