Market Insight
2024.07.17 12:07
{Market Preview}Investors can consider BYD
[ET Net News Agency, 17 July 2024] The Hang Seng Index was at 17,739 in the morning
session, up 11 points or less than 0.1%, with main board turnover of nearly HKD 56.7
billion. The Hang Seng China Enterprises Index was at 6,303, down 12 points or 0.2%. The
Hang Seng Tech Index was at 3,653, up 30 points or 0.8%.
The three largest traded stocks in the Hang Seng Index were Tencent (00700), CNOOC
(00883) and Alibaba (09988); Tencent reported HKD 373, down HKD 5 or 1.3%, with a turnover
of HKD 5.845 billion; CNOOC reported HKD 21.15, down HKD 1.15 or 5.2%, with a turnover of
HKD 3.293 billion; Alibaba reported a price of HKD 76.2, an increase of HKD 0.7 or 0.9%,
with a turnover of HKD 1.546 billion. The three largest traded stocks on the Hang Seng
China Enterprises Index are Tencent, CNOOC and Alibaba. The three largest traded stocks on
the Hang Seng Tech Index were Tencent, Alibaba and Meituan (03690); Meituan reported at
HKD 118.6, up HKD 1.1 or 0.9%, with a turnover of HKD 1.162 billion.
"Trump effect troubles Hong Kong stocks"
The previous night, the three major U.S. stock indexes all rose, with the Dow soaring
742 points to reach a new high of 40,954; the S&P rose 35 points to 5,667, setting a new
closing high; and the Nasdaq rose 36 points to 18,509. Looking back at the Hong Kong stock
market, after falling for two consecutive days, the Hang Seng Index still fluctuated up
and down today, lacking the motivation to rebound. Lee Wai Kit, a director of the
brokerage department at Huasheng Securities, told ET Net News Agency that the market's
expectations for a U.S. interest rate cut in September have increased, and the probability
has increased from 60% to 90%, boosting the Hang Seng Index to reach 18,300 points last
week. However, since Trump was shot, his chances of returning to the White House have
greatly increased. The Trump effect has emerged: increased tariffs on China and a tougher
attitude towards China.
On the other hand, the Third Plenary Session of the Central Committee of the Communist
Party of China has not yet released measures to support the economy. Even if it does, it
may be aimed at real estate, retail and how to improve new productivity, such as the
practical application of AI. However, the application in this area is already in progress.
The market is concerned that the policy of exempting H-share dividend tax from Mainland
China investors has not yet been announced. If the Hang Seng Index can hold 17,700 in the
next two days, it will have a chance to return to 18,300.
"BYD has many vehicle types and great potential for development"
Among the new forces of electric vehicles, "NIO, XPeng and Li Auto" performed well
today, with a temporary increase of between 3 and 4%. Lee Wai Kit said that since the EU
launched an action to impose additional tariffs on imported electric vehicles from China,
the stock prices of relevant stocks have fallen significantly. As the EU votes to impose
additional tariffs, the negative impact of the incident has gradually been digested. In
addition, the car sales data in June were satisfactory, recording monthly growth. Among
them, Li Auto (02015) had the best growth, with monthly growth more than 30%, which is
good for the stock price. In addition, the Mainland China government's active support for
the autonomous driving industry is expected to increase the purchase intention of electric
vehicles. XPeng (09868) is relatively leading in this regard.
The share price of electric vehicle leader BYD (01211) was soft today and did not rise
at the same time as "NIO, XPeng and Li Auto". Lee Wai Kit pointed out that when the EU
began to impose additional tariffs on Chinese electric vehicles, BYD's share price did not
fall but rose. Therefore, even if the EU implements additional tariffs, it is expected to
have little impact on its stock prices. On the contrary, Buffett's previous selling of BYD
shares had a certain negative impact. However, due to the wide range of vehicle types and
models produced by BYD, with prices ranging from RMB 100,000 to one million, ranging from
private cars to buses, the future development prospects are still optimistic. If investors
are interested, they can wait for the stock price to fall back to HKD 235 to buy the
stock, with a target price of HKD 260 and stop loss at HKD 220.
ET Net News Agency Limited
website:www.etnet.com.hk
email:cs@etnet.com.hk
Data Source：ETN
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