20220428-马银证券_香港_-每日港股简评_2页_160kb

Market Summary: Hong Kong and China Stocks

Core Market Overview

The Hong Kong stocks market showed a slight advance yesterday, driven by the rise of tech stocks. However, this was partially offset by the decline in financial institutions such as HSBC (5 HK) and Hang Seng Bank (11 HK). Meanwhile, China's basic materials and infrastructure sectors surged following President Xi Jinping's pledge to accelerate infrastructure construction to support economic growth amid the ongoing impact of widespread COVID-19 lockdowns. The Hang Seng Index closed at 19,946 points, up 11 points, with a daily turnover of HKD125.1 billion. Analysts at ig.com expect the index to open approximately 100 points higher this morning, reaching the 20,000 points level.

Sector News Highlights

China Infrastructure - Boost in Construction

On 26 April, President Xi Jinping emphasized the need to enhance infrastructure construction to stimulate domestic demand and economic growth. The Central Committee for Financial and Economic Affairs (CCFEA) meeting outlined a focus on transportation, energy, and water resources, with an emphasis on green and low-carbon energy projects. This policy direction is expected to positively influence investor sentiment in the China infrastructure and basic materials sectors.

China Property - Impact of Widespread Pandemic

The spread of COVID-19 in China, particularly in Beijing, Zhejiang, and Jiangxi provinces, has raised concerns about potential lockdowns and precautionary measures. The National Health Commission reported over 20,000 daily new local confirmed cases. Property developers with significant exposure to these regions, including Powerlong (1238 HK), CR Land (1109 HK), CIFI (884 HK), Sunac (1918 HK), and COLI (688 HK), are likely to be affected. Additionally, Powerlong, Seazen (1030 HK), and Longfor (960 HK) have high exposure to retail/mall rental income in these areas, which could further impact their performance.

Key Company Performance

HKEx (388 HK)

HKEx reported a 1Q22 revenue of HKD4.69 billion, down 21% YoY. Core business revenue declined by 16% YoY, while net investment loss reached HKD104 million, compared to a net income of HKD219 million in 1Q21. The EBITDA margin dropped to 75%, a 6% decrease from the previous year. Net profit amounted to HKD2.66 billion, down 31% YoY, primarily due to lower trading and clearing fees, and reduced depository fees. The stock is currently trading at a 29x forward PER.

LK Tech (558 HK)

LK Tech's management highlighted a strong growth trajectory for its die-casting machine business, anticipating at least 30% YoY growth over the next 2-3 years. The company currently has a customer base of 8-9 clients and is in discussions with 10-20 potential customers, including several auto OEMs. The management disclosed an order backlog of HKD2.4 billion, which is expected to be fulfilled over the next 3-6 months.

CGN Power (1816 HK)

CGN Power reported a 1Q22 net profit of RMB2.85 billion, a 20% increase YoY. This growth was attributed to higher market trading tariffs, despite an increase in tax expenses. The government's recent liberalization of power pricing has boosted market confidence in CGN Power's nuclear business outlook.

Disclaimers

This report is for general information purposes only and does not constitute investment research or a recommendation. MIB Securities (HK) Ltd does not independently verify the information provided and makes no representation regarding its accuracy or completeness. The content should not be relied upon for making investment decisions, and MIB (HK) accepts no liability for any losses that may arise from such reliance. The opinions expressed are subject to change and may not align with fundamental, technical, or quantitative analyses. MIB (HK) may participate in financing transactions or have positions in securities mentioned, and may provide investment banking services to these companies. This report is intended for MIB (HK)'s clients and may not be reproduced, altered, or distributed without prior written consent.