HSI Ends 61 Points Lower as AAC TECH Falls 13% After Earnings; CHINA RES POWER Drops Over 5%
Market Performance: The HSI closed down 61 points (0.2%) at 25,104, with the HSCEI and HSTECH also declining by 38 points (0.4%) and 42 points (0.8%), respectively, amid a total market turnover of $239.487 billion.
AAC TECH's Profit Report: AAC TECH reported a 63% increase in net profit for 1H25 but did not declare an interim dividend, causing its stock to drop by 13.2%.
GDS-SW and BOYAA Developments: GDS-SW plans to list its overseas business within 18 months, leading to a 2% stock price increase, while BOYAA's share price rose 4.6% after announcing a discounted share placement.
Mixed Results from Other Companies: SINO-OCEAN GP expects significant profits due to debt restructuring, boosting its stock by 7.1%, whereas CHINA RES POWER saw a nearly 16% drop in net profit, resulting in a 5.9% decline in its stock price.
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<Study>JPM Ratings and Target Prices for Gas Utilities (Table)
Stock Performance: Several Hong Kong gas companies experienced declines in share prices, with China Gas Holdings down 1.34% and China Resources Gas down 2.44%.
Short Selling Activity: Notable short selling activity was reported, with China Gas Holdings having a short selling ratio of 26.606% and HK & China Gas at 23.762%.
Analyst Ratings: ENN Energy received an "Overweight" rating with a target price increase from 66.5 to 72.5, while HK & China Gas was downgraded from "Overweight" to "Neutral".
Market Updates: Kunlun Energy saw a slight increase in share price, while Jefferies upgraded HKEX to "Buy" and raised target prices for BEA and BOCHK.
JPM Recommends Profit-Taking on Certain HK Utilities Amid US Rate Cut Uncertainties
JPMorgan's Investment Recommendation: JPMorgan advised investors to take profits on certain Hong Kong utilities, noting their outperformance against the HSI and highlighting uncertainties regarding US rate cuts.
Dividend Yield Concerns: The average dividend yield for Hong Kong utilities is low at 4.4%, with limited potential for increases, leading to downgrades for CLP Holdings and HK & China Gas to Neutral.
Top Pick in Utilities: CKI Holdings was identified as JPMorgan's top pick in the sector, with an increased target price due to potential for dividend growth from its UK and Australian operations.
Market Performance Insights: The outperformance of Hong Kong utilities is attributed to the positive spillover from local banks and developers, despite the overall market uncertainties.
JPM Holds Cautious View on CN Gas Utilities, Raises KUNLUN ENERGY Price Target to $9
JPMorgan's Cautious Outlook: JPMorgan maintains a cautious view on Chinese gas utilities, predicting disappointing annual results and limited improvement for 2026.
Top Picks and Ratings: KUNLUN ENERGY is rated Overweight with a target price increase to $9, while ENN ENERGY is also rated Overweight due to a significant A/H discount, with target prices raised accordingly.
Downgrade of HK & China Gas: HK & CHINA GAS has been downgraded from Overweight to Neutral, with a slight target price increase reflecting its reasonable valuation after recent price hikes.
Market Context: The report highlights uncertainties in the market, suggesting that investors may consider taking profits on some HK utilities amid concerns over US rate cuts.
HSBC Research Names CKI HOLDINGS as Preferred Choice; HK Utilities Sector Surpasses HSI Performance
Hong Kong Utilities Sector Performance: The Hong Kong utilities sector has outperformed the Hang Seng Index (HSI) due to favorable macroeconomic factors, a shift in market sentiment towards defensiveness, and increased southbound capital inflows, according to HSBC Research.
Valuation Insights: HSBC Research notes that the current valuations are nearing a four-year peak, and any further revaluation will depend on the specific circumstances of companies that drive earnings and dividends, favoring those with strong fundamentals and free cash flow.
Top Investment Picks: CKI Holdings is highlighted as a top pick due to its regulated utility assets in the UK and Australia, which are resilient to macroeconomic fluctuations, while other companies like HKElectric and CLP Holdings are also recommended for investment.
Stock Ratings and Target Prices: The report includes updated investment ratings and target prices for various stocks in the utilities sector, with CKI Holdings rated as a "Buy" with a target price increase, while others like Power Assets and HK & China Gas are rated as "Hold."
<Midday Update> HSI Ends Midday at 26,705, Gaining 138 Points; HSTI Reaches 5,367, Up 7 Points; ZIJIN MINING Surges Over 4%; HK & CHINA GAS, CK ASSET, WH GROUP, TIANGONG INT'L, and CONCH VENTURE Achieve New Record Highs
Market Performance: The Hang Seng Index (HSI) rose by 138 points (0.5%) to 26,705, while the Hang Seng Tech Index (HSTI) and the Hang Seng China Enterprises Index (HSCEI) also saw slight gains.
Active Heavyweights: Notable movements included HKEX (+0.9%), PING AN (+0.4%), and TENCENT (+0.2%), while XIAOMI, BABA, and MEITUAN experienced minor declines.
Significant Movers: ZIJIN MINING surged by 4.7%, CHINAHONGQIAO increased by 3.9%, and CNOOC rose by 3.7%, while YUM CHINA fell by 4.6%.
Short Selling Trends: High short selling ratios were observed in several stocks, with YUM CHINA at 47.6% and MEITUAN at 25.8%, indicating significant market speculation.
<Daily Summary> HSI Ends at 27,032, Dropping 233 Points; HSTI Finishes at 5,408, Decreasing by 91 Points; MEITUAN Falls More Than 4%; WUXI APPTEC, SHK PPT, SINOPEC CORP, CHINA RES MIXC, HK & CHINA GAS Reach New Peaks; Market Turnover Increases
Market Performance: The Hang Seng Index (HSI) fell by 233 points (0.9%) to close at 27,032, while the Hang Seng Tech Index (HSTI) and the Hang Seng China Enterprises Index (HSCEI) also experienced declines.
Active Heavyweights: Major stocks like Meituan, Tencent, and Xiaomi saw significant drops, with Meituan down 4.5% and Tencent down 2.3%, amidst high short selling activity.
Notable Movers: Bud APAC and Lenovo Group faced substantial losses, with Bud APAC down 5.2%, while Zijin Mining and PICC P&C were among the few gainers, with Zijin Mining up 3.4%.
High Performers: Unisound and Guofuhee experienced remarkable gains, with Unisound rising by 16.8%, indicating strong market interest in these stocks.
<Study>JPM Ratings and Target Prices for Gas Utilities (Table)
Stock Performance: Several Hong Kong gas companies experienced declines in share prices, with China Gas Holdings down 1.34% and China Resources Gas down 2.44%.
Short Selling Activity: Notable short selling activity was reported, with China Gas Holdings having a short selling ratio of 26.606% and HK & China Gas at 23.762%.
Analyst Ratings: ENN Energy received an "Overweight" rating with a target price increase from 66.5 to 72.5, while HK & China Gas was downgraded from "Overweight" to "Neutral".
Market Updates: Kunlun Energy saw a slight increase in share price, while Jefferies upgraded HKEX to "Buy" and raised target prices for BEA and BOCHK.
JPM Recommends Profit-Taking on Certain HK Utilities Amid US Rate Cut Uncertainties
JPMorgan's Investment Recommendation: JPMorgan advised investors to take profits on certain Hong Kong utilities, noting their outperformance against the HSI and highlighting uncertainties regarding US rate cuts.
Dividend Yield Concerns: The average dividend yield for Hong Kong utilities is low at 4.4%, with limited potential for increases, leading to downgrades for CLP Holdings and HK & China Gas to Neutral.
Top Pick in Utilities: CKI Holdings was identified as JPMorgan's top pick in the sector, with an increased target price due to potential for dividend growth from its UK and Australian operations.
Market Performance Insights: The outperformance of Hong Kong utilities is attributed to the positive spillover from local banks and developers, despite the overall market uncertainties.
JPM Holds Cautious View on CN Gas Utilities, Raises KUNLUN ENERGY Price Target to $9
JPMorgan's Cautious Outlook: JPMorgan maintains a cautious view on Chinese gas utilities, predicting disappointing annual results and limited improvement for 2026.
Top Picks and Ratings: KUNLUN ENERGY is rated Overweight with a target price increase to $9, while ENN ENERGY is also rated Overweight due to a significant A/H discount, with target prices raised accordingly.
Downgrade of HK & China Gas: HK & CHINA GAS has been downgraded from Overweight to Neutral, with a slight target price increase reflecting its reasonable valuation after recent price hikes.
Market Context: The report highlights uncertainties in the market, suggesting that investors may consider taking profits on some HK utilities amid concerns over US rate cuts.
HSBC Research Names CKI HOLDINGS as Preferred Choice; HK Utilities Sector Surpasses HSI Performance
Hong Kong Utilities Sector Performance: The Hong Kong utilities sector has outperformed the Hang Seng Index (HSI) due to favorable macroeconomic factors, a shift in market sentiment towards defensiveness, and increased southbound capital inflows, according to HSBC Research.
Valuation Insights: HSBC Research notes that the current valuations are nearing a four-year peak, and any further revaluation will depend on the specific circumstances of companies that drive earnings and dividends, favoring those with strong fundamentals and free cash flow.
Top Investment Picks: CKI Holdings is highlighted as a top pick due to its regulated utility assets in the UK and Australia, which are resilient to macroeconomic fluctuations, while other companies like HKElectric and CLP Holdings are also recommended for investment.
Stock Ratings and Target Prices: The report includes updated investment ratings and target prices for various stocks in the utilities sector, with CKI Holdings rated as a "Buy" with a target price increase, while others like Power Assets and HK & China Gas are rated as "Hold."
<Midday Update> HSI Ends Midday at 26,705, Gaining 138 Points; HSTI Reaches 5,367, Up 7 Points; ZIJIN MINING Surges Over 4%; HK & CHINA GAS, CK ASSET, WH GROUP, TIANGONG INT'L, and CONCH VENTURE Achieve New Record Highs
Market Performance: The Hang Seng Index (HSI) rose by 138 points (0.5%) to 26,705, while the Hang Seng Tech Index (HSTI) and the Hang Seng China Enterprises Index (HSCEI) also saw slight gains.
Active Heavyweights: Notable movements included HKEX (+0.9%), PING AN (+0.4%), and TENCENT (+0.2%), while XIAOMI, BABA, and MEITUAN experienced minor declines.
Significant Movers: ZIJIN MINING surged by 4.7%, CHINAHONGQIAO increased by 3.9%, and CNOOC rose by 3.7%, while YUM CHINA fell by 4.6%.
Short Selling Trends: High short selling ratios were observed in several stocks, with YUM CHINA at 47.6% and MEITUAN at 25.8%, indicating significant market speculation.
<Daily Summary> HSI Ends at 27,032, Dropping 233 Points; HSTI Finishes at 5,408, Decreasing by 91 Points; MEITUAN Falls More Than 4%; WUXI APPTEC, SHK PPT, SINOPEC CORP, CHINA RES MIXC, HK & CHINA GAS Reach New Peaks; Market Turnover Increases
Market Performance: The Hang Seng Index (HSI) fell by 233 points (0.9%) to close at 27,032, while the Hang Seng Tech Index (HSTI) and the Hang Seng China Enterprises Index (HSCEI) also experienced declines.
Active Heavyweights: Major stocks like Meituan, Tencent, and Xiaomi saw significant drops, with Meituan down 4.5% and Tencent down 2.3%, amidst high short selling activity.
Notable Movers: Bud APAC and Lenovo Group faced substantial losses, with Bud APAC down 5.2%, while Zijin Mining and PICC P&C were among the few gainers, with Zijin Mining up 3.4%.
High Performers: Unisound and Guofuhee experienced remarkable gains, with Unisound rising by 16.8%, indicating strong market interest in these stocks.
