Daily Investment Strategy
Recommended Stock：PSB (1658)
Following the reductions in Chinese banks' deposit board interest rate, LPR and interest rates on existing mortgages, the market began to pay attention to whether the floating range of interest rates will also be lowered. According to the industry news, the possibility of an adjustment is relatively high, potentially allowing banks to have lower costs. Amongst all CN banks, we previously recommended PSB. PSB's 3Q PPOP increased by 8.8% yoy, an improvement compared to a decline of 6% in the second quarter. Driven by loan growth and improvements in asset structure, net interest income rose by 0.7% yoy and increased by 1.1% qoq. Non-interest income decreased by 0.8% yoy, with net income from fees and commissions increasing by 0.8% compared to the previous year. In the first three quarters, the total loans to customers amounted to RMB8.7trillion, representing an increase of RMB0.63trillion, or 7.74% yoy. Personal loans amounted to RMB4.7 trillion, representing an increase of RMB0.2 trillion, or 5.69% yoy. Corporate loans amounted to RMB3.5 trillion, representing an increase of RMB0.37 trillion, or 11.66% yoy. Overall, major banks in China recorded a positive profit growth this time. Meanwhile, Postal Savings Bank showed improvement in PPOP, making it a possible choice for investors to invest using dollar cost averaging method. Target price: $5.2; Stop- Loss price: $4.2.
NVIDIA closed lower ahead of earnings
NVIDIA's stock price fell 1% after reports that its new Blackwell AI chip had overheating issues. The report comes before NVIDIA’s third-quarter earnings release on Wednesday, and the results could affect how investors view technology stocks, AI trading and overall stock market, especially after the post-election market rally stalls. According to FactSet, 93% of the companies in the S&P 500 have currently reported earnings, with three-quarters reporting positive EPS surprises and 61% reporting positive revenue surprises.
Hong Kong Stock Connect had a net inflow of HK13.5bn on Monday of which Tracker Fund (2800) had the largest net inflow, reaching HK$4.19bn; followed by HSCEI ETF (2828). Sunac (1918) recorded the largest net outflow at 49mn, 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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