02338 Overview

Market Volatility: The market has seen significant fluctuations due to the ongoing Mideast war and changing policies from leaders, prompting caution among investors.

Investment Advice: Daiwa recommends avoiding stocks impacted by Mideast tensions, such as shippers and airlines, and suggests focusing on undervalued stocks instead.

Stock Recommendations: The report highlights specific stocks to consider, including BYD COMPANY, WEICHAI POWER, MINTH GROUP, JD LOGISTICS, and ZOOMLION.

Short Selling Data: The article provides short selling statistics for various stocks, indicating the level of market activity and investor sentiment towards these companies.

FTSE China Index Series Review: FTSE Russell has released the results of the FTSE China Index Series quarterly review for 1Q26, highlighting its significance as a benchmark for the Chinese equity market, with nearly 60% of globally issued ETFs tracking a FTSE China index.

Index Additions and Removals: The FTSE China A50 Index will include new stocks such as CHINA CSSC, TFC, and WANHUA CHEM, while removing EVERBRIGHT BANK, CRRC, and SHANXI FEN WINE.

FTSE China 50 Index Changes: The FTSE China 50 Index will add NCI and WEICHAI POWER, and remove MINSHENG BANK and ZTE, with details on short selling ratios provided for each stock.

Market Data Notes: The article includes a note that Hong Kong stock quotes are delayed by at least 15 minutes, and short selling data is current as of March 4, 2026.

Daiwa Report on Stock Picks: Daiwa released a report highlighting top picks in the H- and A-share markets, including notable companies like Tencent, Alibaba, and Kweichow Moutai, with varying short selling ratios.

Stock Performance Overview: The report details the performance of several stocks, with Tencent and Alibaba experiencing declines, while Naura and Kweichow Moutai showed gains.

Goldman Sachs Forecast: Goldman Sachs has raised the long-term earnings forecast for WEICHAI POWER, reflecting a positive outlook for its power generation business, which is expanding its product and technology portfolio.

Profit Contribution Growth: The AIDC power generation business is projected to grow significantly, contributing about 10% to WEICHAI POWER's net profit in 2025 and expected to increase to one-third of total profits by 2030, surpassing the domestic heavy-duty truck engine segment.

Investment Rating: Goldman Sachs has reiterated a Buy rating for WEICHAI POWER and raised its target price from HKD21 to HKD37, identifying the company as a key beneficiary in the Asian AIDC power generation sector.

Market Activity: The stock has seen a short selling of $99.74 million with a ratio of 16.038%, indicating significant market activity surrounding WEICHAI POWER.

Citi's Outlook on Chinese Carmakers: Citi has a neutral outlook for Chinese carmakers in 1Q26, predicting that BYD, Geely, and Leapmotor may outperform the market due to model updates and strong export growth, while others like Seres and Li Auto may struggle with profit margins and weak sales.

Industry Challenges and Tailwinds: The Chinese auto industry is expected to face five major tailwinds, including increased EV market share and export growth, but also five challenges such as rising costs and cautious retail growth for EVs, leading to a potential decline in wholesale and retail forecasts for FY26.

Stock Recommendations: Citi has recommended several stocks, including BYD, Pony, WeRide, Hesai, Minth Group, and Weichai Power, amidst a backdrop of short selling activity and varying market performance.

Market Conditions: The report highlights a potential end to the price war in passenger vehicles and a favorable phase for commercial vehicle demand, while also noting high inventory levels of fuel vehicles as a concern for the market.

Stock Performance: TENCENT saw a notable increase of 2.306%, while SHENZHOU INTL and BABA-W also experienced gains of 1.536% and 1.530%, respectively.

Short Selling Data: TENCENT had a short selling amount of $529.35M with a ratio of 8.541%, while SHENZHOU INTL had a significantly higher short selling ratio of 35.574% at $62.89M.

Declines in Other Stocks: WEICHAI POWER, MIDEA GP, and HENGRUI PHARMA experienced slight declines, with MIDEA GP dropping by 0.775%.

Market Overview: The report includes delayed quotes for HK stocks and mentions that the short selling data is as of January 28, 2026, indicating a focus on real-time market analysis.