GMT EIGHT

HK Stock Market Move | BOE VARITRONIX (00710) up nearly 6% Again, the company plans to expand its overseas business. Citigroup is optimistic about market share growth and gross margin recovery.

BOE VARITRONIX (00710) rose nearly 6%, rising to 4.79% at the time of publication, reaching 7 Hong Kong dollars with a trading volume of 15.8544 million Hong Kong dollars. In terms of news, BOE VARITRONIX, a subsidiary of BOE, recently showcased over 60 innovative technology products and a variety of IoT scene technology solutions at CES, and also announced the "HERO" plan for applications in the era of smart cars. Su Ning, Vice President of BOE Technology Group and CEO of BOE VARITRONIX, revealed that last year, overseas revenue accounted for 42% of BOE VARITRONIX's total revenue, and they plan to increase this to 50% in the future. Citi released a research report stating that looking ahead to 2025, with the acceleration of the trend towards smart cabins, the demand for automotive displays is expected to remain strong. The utilization rate of the Chengdu factory is expected to reach 70 to 80% by the end of 2025, supporting financial performance improvement. Citi raised the target price of BOE VARITRONIX from 5.6 Hong Kong dollars to 8.5 Hong Kong dollars, maintaining a "buy" rating.

21 min ago

HK Stock Market Move | CTIHK(06055) rose by more than 7% again, domestic HNB product research and development progress has accelerated, and the company's market share is expected to increase rapidly.

CTIHK (06055) rose by over 7%, reaching a 7.35% increase to HK$26.3 as of the time of reporting, with a trading volume of HK$88.9394 million. Zheshang released a research report stating that the global trend towards smoking control is accelerating, with the market share of new tobacco products continually increasing. By 2023, the market size for HNB (Heat-Not-Burn) products will reach 34.1 billion US dollars, with a CAGR of over 23% between 2018 and 2023, showing rapid development. The progress in research and development of HNB products domestically has accelerated, leading to significant growth in business and profitability levels, with great potential for future development. As of 2018, provincial tobacco companies under China Tobacco had submitted 1,391 technical patent applications related to the manufacturing of heat-not-burn products. Many international trading companies have shown strong interest in Chinese heat-not-burn products and are actively introducing them to overseas markets. Sinolink pointed out that the HNB products are currently in a period of development dividend, with product enhancement and regional expansion driving accelerated development. The revenue share of this business in 2023 is 1.1%, with a CAGR of 48% between 2019 and 2023, and a year-on-year revenue growth of 28% in the first half of 2024. According to Euromonitor, the global market size for HNB products will reach 34.1 billion US dollars by 2023, and is expected to maintain a CAGR of 13.5% between 2023 and 2027, indicating that the industry is currently in a period of development dividend. Currently, the market share of China Tobacco's HNB brand is still relatively low, but with continued product enhancement (such as natural smoke technology) and ongoing regional expansion, the market share is expected to accelerate.

22 min ago

Morgan Stanley: The cancellation of flights in the Greater Bay Area may have a potential positive impact on CATHAY PAC AIR (00293) and Mainland airlines.

Morgan Stanley released a research report stating that the cancellation of flights by Hong Kong Air in the Greater Bay Area may have a positive impact on CATHAY PAC AIR (00293) and mainland airlines. While Cathay Pacific does not directly compete with Hong Kong Air in the Greater Bay Area, it may benefit from improving market sentiment. It is worth noting that Cathay Pacific also owns the budget airline Hong Kong Express. The report indicated that the direct impact of the recent events on mainland airlines this year is relatively small, but it reflects the continuous supply interruptions in the aviation industry, which is a major factor that was previously emphasized as driving Chinese airlines into a multi-year growth cycle.

30 min ago

HK Stock Market Move | GD LAND (00124) has fallen by over 33% again. Since early December, it has fallen by over 60%. GUANGDONG INV has completed the physical distribution of GD LAND shares.

GD LAND (00124) has fallen by more than 33%, with a cumulative decrease of over 60% since the beginning of December. As of the time of writing, it has dropped by 26.43%, trading at 0.167 Hong Kong dollars with a turnover of 1111.99 million Hong Kong dollars. On the news front, GUANGDONG INV has completed the physical distribution of GD LAND shares on January 21, 2025. It is reported that GUANGDONG INV had previously proposed to distribute special dividends to shareholders in the form of physical distribution of GD LAND shares, involving the distribution of 1.261 billion shares, accounting for approximately 73.72% of GD LAND's share capital. After the distribution is completed, GD LAND will no longer be a subsidiary of GUANGDONG INV, and its financial performance will no longer be consolidated into GUANGDONG INV's financial statements. Through this distribution, the major shareholder, Yuehai Holdings, will maintain its 58.26% stake in GUANGDONG INV unchanged, while GUANGDONG INV will no longer hold any shares of GD LAND, making GD LAND and the company sister companies.

33 min ago

HK Stock Market Move | ZTE Corporation (00763) rose by over 4% again, with an increase of over 50% in the past two months. The self-developed chip business is driving up the company's valuation.

ZTE Corporation (00763) has surged more than 4% again, with a cumulative increase of over 50% since early December. As of the time of writing, it has risen by 3.44% to HK$28.55, with a trading volume of HK$7.52 billion. In terms of news, according to media reports, ByteDance plans to invest $12 billion in artificial intelligence chip research and procurement by 2025. Minsheng Securities previously pointed out that ByteAI is making initial efforts on the edge, collaborating with ZTE Corporation in the mobile phone business to redefine AI phones together. This cooperation reshapes the company's consumer business imagination space; ZTE Microelectronics is a domestic semiconductor design company second only to Huawei HiSilicon, continuously increasing the company's gross profit margin with self-use chip products. It has recently started shipping CPUs to internet giants, and the bank expects ASIC chips to also break through. Sinolink pointed out that ZTE Microelectronics has gradually developed from custom processors in the communication field to custom computing generalization + accelerator domain customized computing power chips, covering a variety of specifications and applications. Self-developed Everest and Taihai chips provide high-performance, diverse computing acceleration hardware. The self-developed chip business provides impetus for the company's valuation enhancement and opens up growth opportunities.

45 min ago

Goldman Sachs: Raise the target price of AIA (01299) to HK$94, while lowering that of PRU (02378) to HK$147.

Goldman Sachs released a research report stating that it believes with the recovery in new business sales and the continued increase in US bond yields, the distribution of profits will reach a turning point, and the expected capital return rates for AIA (01299) and PRU (02378) from 2025 to 2027 will expand. The speed of capital generation will also accelerate, providing greater potential for shareholder returns. Compared to European insurance companies, the short-term outlook for shareholder returns for both AIA and PRU is lower, partly reflecting the longer impact of the pandemic. The report states that AIA has implemented a $12 billion share buyback program (2022-2024) and is believed to be able to maintain an additional $2 billion buyback in the 2025/26 fiscal year. Looking ahead, the bank expects the capital return rate to increase from 14% in 2023 to 19% in 2027. Estimated profit growth is expected to recover to a compound annual growth rate of 8% from 2024 to 2027, similar to pre-pandemic levels. The target price has been adjusted slightly from HK$93 to HK$94. The "buy" rating is reiterated. Based on new business premiums, PRU holds a leading market share in key markets such as China, Hong Kong, Indonesia, Malaysia, Singapore, the Philippines, and Vietnam. PRU has asset management businesses in multiple Asian markets, with assets under management reaching $237 billion by the end of the 2023 fiscal year. As the impact of pandemic-related disruptions diminishes, strong growth in new business sales and the continued increase in US bond yields should benefit the company's profit growth. The bank estimates that PRU's capital return rate will increase from 17% in 2023 to 19% in 2027, and the compound annual growth rate of distributable profits is expected to recover to 7% from 2024 to 2027, returning to pre-pandemic levels. Goldman Sachs has lowered PRU's new business profit forecast for the 2024-2026 fiscal years by 8-10% to reflect the negative impact of rising US bond yields and a strong US dollar (against Asian currencies) and reiterated a "buy" rating. The target price has been reduced from HK$154 to HK$147.

50 min ago

HK Stock Market Move | XTALPI-P(02228) rose over 11% against the market trend. The company recently raised over 1.1 billion Hong Kong dollars in net placement, exceeding the total amount raised in its IPO.

XTALPI-P (02228) rose more than 11% against the market, with an 8.99% increase at the time of writing, reaching HKD 4.85, with a turnover of HKD 3.05 billion. On the news front, on January 19th, XtalPi Technology announced that on January 18th, the company successfully raised approximately HKD 1.13 billion by placing a total of 264 million shares. It is worth noting that the fundraising amount from this placement exceeds the amount raised from its IPO. The company went public on the main board of the Hong Kong Stock Exchange on June 13, 2024, raising HKD 9.89 billion, plus additional fundraising from exercising excess share option, totaling approximately HKD 10.36 billion. Furthermore, XtalPi Technology recently announced a partnership with the National Cancer Centre, Singapore (NCCS) and Duke-NUS Medical School, Singapore, to collaborate on AI-driven drug discovery. They plan to use their AI and automation-driven peptide R&D platform to discover and design clinical candidate drugs targeting a newly identified target for clear cell renal carcinoma by NCCS, and to share subsequent commercialization results with their partners. In addition, the company has formed a strategic partnership with Microsoft China to explore innovative applications of AI, big models, Siasun Robot & Automation Lab, and other cutting-edge technologies in the fields of biomedicine and materials science, ushering in a new chapter in research, education, and innovation applications.

54 min ago

HK Stock Market Move | ZENGAME (02660) fell more than 9% after issuing a profit warning. It is expected that the net profit attributable to shareholders for the year 2024 will decrease by about 35% to 45% year-on-year.

After the profit warning, ZENGAME (02660) fell by over 9%, as of the time of publication, it dropped by 9.73%, closing at HK$2.32, with a turnover of HK$2,723,300. On the news front, on January 21, ZENGAME announced that the Group expects a decrease in the profit attributable to owners of the company for the year ending December 31, 2024, of approximately 35% to 45% compared to the year ending December 31, 2023. The expected decrease is mainly due to: lower than expected sales of new products and gameplays, and a general downturn in the gaming market in 2024, leading to a decrease in the Group's revenue by around 15% to 25%; higher operating costs for games, resulting in a decrease in the Group's gross profit margin by around 5% to 10%; and the transfer of retained profits of RMB 500 million from indirect wholly-owned subsidiary Shenzhen ZENGAME Co., Ltd. to the Group, benefiting the Group and its shareholders as a whole, while incurring additional tax expenses of approximately RMB 70 million.

55 min ago

FIRST SHANGHAI initiates coverage on CHINAHONGQIAO (01478) with a "buy" rating and a target price of 16.8 Hong Kong dollars.

FIRST SHANGHAI released a research report, covering CHINAHONGQIAO (01478) for the first time, and gave it a "buy" rating, predicting that the company will achieve operating income of 150.3/153.2/154.3 billion yuan in 2024-2026, and net profit attributable to the parent company of 20.9/22.7/23.6 billion yuan, an 82% increase from the previous year, with a target price of 16.8 Hong Kong dollars. The main points of FIRST SHANGHAI's report are as follows: Industry in high prosperity, significant performance growth: The company's subsidiary, Shandong Hongqiao, achieved operating revenue of 110.1 billion yuan in the first three quarters, a year-on-year increase of 12.5%; achieving a net profit attributable to the parent company of 15.8 billion yuan, a year-on-year increase of 141%. In Q3, Shandong Hongqiao achieved operating revenue of 38 billion yuan, a year-on-year increase of 13.9%, and a net profit attributable to the parent company of 5.96 billion yuan, a year-on-year increase of 38%, a 9.4% increase from Q2. The growth in operating income is mainly attributed to the rise in prices of electrolytic aluminum and alumina. In the third quarter, the domestic spot price of electrolytic aluminum was 19,550 yuan/ton, maintaining a high level of volatility. The average ex-factory price of alumina in Shandong in Q3 was 3,920 yuan/ton, a year-on-year increase of 37.3% and a 7.9% increase from the previous quarter; the average ex-factory price in Q1-Q3 was 3,611 yuan/ton, a year-on-year increase of 25.3%. Raw material prices are low, operating costs are decreasing: Coal and pre-baked anode prices on the cost side have fallen, with the average price of Q5500 thermal coal at Qinhuangdao Port in Q3 being 848 yuan/ton, a 2% decrease year-on-year, and an average price of 866 yuan/ton in Q1-Q3, an 11% decrease year-on-year. The price of pre-baked anodes in the East China region was 4,168 yuan/ton in Q3, a 20% decrease year-on-year, and an average price of 4,227 yuan/ton in Q1-Q3, a 22% decrease year-on-year. The decrease in raw material prices has reduced the company's operating costs, increasing profits. Integrated layout of the industrial chain: The company insists on building an integrated industrial chain to ensure supply stability. The company's joint venture Guinea bauxite project has an annual capacity of 50 million tons, with alumina production capacity of 19.5 million tons (Shandong 17.5 million tons + Indonesia 2 million tons), achieving a self-sufficiency rate of 156%; and electrolytic aluminium production capacity of 6.46 million tons (Shandong 4.46 million tons + Yunnan 2 million tons), with a clear competitive advantage in the industry with its integrated layout.

58 min ago

HK Stock Market Move | YOURAN DAIRY (09858) up over 4% again, post-holiday animal husbandry may usher in a new round of clearing. The company's gross profit margin in the second half of the year will remain steady.

YOURAN DAIRY (09858) rose by over 4% again, with a three-day cumulative increase of nearly 20%. As of the time of publication, it rose by 4.55% to HK$1.84, with a turnover of HK$176.392 million. On the news front, Citic Securities previously released a research report stating that following YOURAN DAIRY's release of its interim results on August 26, 2024, it maintained a "buy" rating for YOURAN DAIRY with a target price of HK$2.1, a premium of 90%. The bank pointed out that YOURAN DAIRY's raw milk sales volume and gross profit margin in the first half of 2024 were better than expected. During the reporting period, YOURAN DAIRY's cost per kilogram of feed decreased by 12.9%, non-feed costs decreased by 2.9%, and overall costs decreased by 11%. This was due to the company's continuous optimization of cost structure, which successfully led to an overall decrease in unit costs. Management expects that with further decreases in feed prices and improvements in operational efficiency, the gross profit margin in the second half of the year will remain stable. CITIC SEC pointed out that the elimination and consolidation of the dairy industry continued to progress in 2024, with a 6.7% decrease in inventory in the main production areas in Q1-3, and a 2.8% year-on-year decrease in raw milk production for the whole year. Downstream dairy companies were relatively cautious in stocking up for the 2025 Spring Festival, and after a short-term surge in the price of bulk milk in December, dairy industry enterprises continued to face operational pressures. Following the Spring Festival and in the off-season, the industry may see a new round of accelerated consolidation, maintaining the judgment of a supply-demand turning point in the industry in 2025H2.

1 h ago

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