Daily Investment Strategy
Recommended Stock：CMB（3968）
3Q24 PPOP grew +1.6% yoy (v.s. a -2.9% yoy in 2Q) on effective OPEX control (-10% yoy) and 11% yoy trading gain. Net interest income is stable when compared to its peers, only fell 1% yoy and rose 1% qoq. Meanwhile its fee income down -12.9% yoy, though the decline has narrowed compared to a -17.7% yoy in 2Q, likely dragged by weak wealth mgmt. and bancassurance fee in 3Q. Yet, the situation may improve in 4Q24, given the fiscal stimulus from the Chinese government. As at the end of the reporting period, the Company had 206mn retail customers, representing an increase of 4.57% yoy. The balance of total assets under management (AUM) from retail customers amounted to RMB14.3trn, representing an increase of RMB1trn or 7.69% yoy. The 12th meeting of the Standing Committee of the NPC will be held from Nov 4 to 8. With policy expectations heating up, there is a chance to attract investors back into the market. CMB's leading position in the wealth management product market could make it a major beneficiary as the risk appetite of mainland citizens increases. Target price: $45; Stop- Loss price: $34.6.
Non-farm payroll fell short of expectations
The latest U.S. non-farm payrolls increased by 12,000, far below the market expectation of 106,000 and the revised 223,000 for the previous month. However, the unemployment rate remained at 4.1%. The Bureau of Labor Statistics noted that the data might have been distorted by recent hurricanes and a major strike at Boeing. However, the downward revision of employment numbers for August and September did provides room for the Federal Reserve to cut interest rates.
On Friday, the Southbound Stock Connect recorded a net inflow of HK$4.25 billion, with Xiaomi (1810) having the highest inflow of HK$808 million, followed by Tencent (700). Ping An Insurance (2318) recorded the largest net outflow of HK$290 million, followed by SMIC (981).
Wen Kit Kenny is a SFC licensed person accredited to KGI Group to carry on regulated activities (for details, please refer to:https://apps.sfc.hk/publicregWeb/indi/AJF244/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
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