The three major indices of Hong Kong stocks rose slightly, with the Hang Seng Index up 0.11%. In terms of sectors, technology stocks generally rose, with Bilibili up 3.12%, SenseTime up 0.74%, JD.com up over 0.18%, and slight increases for Alibaba and Tencent. Semiconductor stocks and Apple concept stocks continued to strengthen, with SMIC up over 3.21% and Huahong Semiconductor up nearly 3.83%. Sunny Optical Technology rose over 3.82%, AAC Technologies and BYD Electronics rose over 0.5%, and GOWIN Semiconductor rose over 1%.

Recently, there have been market rumors that "taxes will start to be collected on US stocks this year, with the latest starting next year," and that "Futu is on the first list." In response, reporters called the official customer service of Futu Securities, Tiger Brokers, and Snowball Securities, and all three parties indicated that "they have not received any relevant notifications yet." The official customer service of Tiger Brokers stated that non-US residents and non-US trading taxpayers are exempt from capital gains tax.

A research report from Dongwu Securities pointed out that the main drivers of the low-altitude economy are three important indicators: policy, orders, and performance. Policy is the leading indicator for the first wave of the market. As policies become clearer, it will enter a stage of policy-to-order conversion, at which point the government and enterprises will initiate bidding work for related low-altitude economic projects, ushering in a second wave of opportunities for the industry. With the completion of project implementation, it will ultimately be reflected in the company's performance, thus driving the continuation of the market trend. With the continuous advancement of the "policy + industry" of the low-altitude economy, infrastructure construction is expected to bring large-scale new infrastructure opportunities.

Jinyang New Energy (1121.HK), which fell yesterday, rebounded today, rising more than 9% to HK$4.37 at one point during the trading session. The company announced on June 14 that Mr. Liang Zichong had resigned as executive director and chairman of the board due to other work arrangements, effective from June 14, 2024. Mr. Kang Zhuang, the company's chief financial officer, has been appointed as an executive director.

Hong Kong Exchanges and Clearing Limited closed up 0.46%. On the 18th, the Chief Executive of the Hong Kong Special Administrative Region, Lee Ka-chiu, announced that the Hong Kong Stock Exchange will not suspend trading during severe weather conditions, and this arrangement will be implemented in late September. According to past practice, the Hong Kong Stock Exchange (00388.HK) would suspend stock market trading, including northbound trading through the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, as well as the derivatives market, under relevant arrangements for severe weather conditions. Last year's Hong Kong budget proposed exploring arrangements for Hong Kong stocks to continue operating during severe weather conditions, and regulators and the industry have formed a working group to discuss "typhoon non-suspension."

BYD Co., Ltd. closed down 0.09%. Disclosure data from the Stock Exchange of Hong Kong showed that Berkshire Hathaway, owned by Warren Buffett, completed the reduction of its stake in BYD on the 11th of this month, reducing its holding from 7.02% to 6.9% at an average price of HK$230.46 per share. Based on this calculation, the cash out amount was approximately HK$310 million.

According to the disclosure requirements, major shareholders only need to make disclosures when their shareholdings cross a certain integer percentage. Simply put, when a major shareholder's shareholding drops from 7.02% to 6.9%, they must make a disclosure because their shareholding crosses the 7% integer percentage. However, if their shareholding drops from 6.9% to 6.1%, they do not need to make a disclosure because they have not crossed any integer percentage.

Zijin Mining Group closed down 1.47%. Zijin Mining Group (02899.HK) announced that before the trading session on June 18, 2024, the company entered into a placement agreement with the placement agent, pursuant to which the placement agent has conditionally agreed to procure no fewer than six placees to purchase or purchase on their own behalf a maximum of a total of 251.9 million placement shares at a placement price of HK$15.50 per placement share. This represents a discount of 5.02% compared to the latest closing price.

China Eastern Airlines Corporation Limited (00670.HK) closed down 0.00%. In May, passenger transportation capacity increased by 16.18% year-on-year, reaching 108.30% of the same period in 2019; passenger traffic increased by 34.08% year-on-year, reaching 106.66% of the same period in 2019; the load factor was 80.83%, an increase of 10.80 percentage points year-on-year; cargo and mail traffic increased by 64.89% year-on-year, reaching 128.51% of the same period in 2019.

Bilibili (09626) opened up over 4%. As of press time, it rose 3.15% to HK$121.3, with a trading volume of HK$39.11 million.

In terms of news, recently, the game "Sanguo: Conquering the World" distributed by Bilibili ranked third in total revenue on the iOS App Store on its first day of release, second only to Tencent's two blockbusters "Dungeon Fighter Online" and "Honor of Kings," and surpassing "Game for Peace" and NetEase's "Ni Shui Han" mobile game.

A research report from Morgan Stanley pointed out that "Sanguo: Conquering the World" has a low level of commercialization, simplified gameplay, and a creative hero system. Combined with the lack of a good new SLG game in the gaming industry in recent years, it is expected to drive the game's performance. Considering that Bilibili is launching its first SLG work, it is expected to achieve annual revenue of 1 billion yuan, with a US stock target price of US$14 and a rating of "In Line with the Market."

JD.com Inc. - SW (09618) closed up 0.18%. Goldman Sachs issued a research report maintaining its "Buy" rating on JD.com (09618) with a target price of HK$161, reflecting the company's leading position in retail scale, unique online direct sales and market model, supplemented by its industry-leading internal warehousing and supply chain capabilities.

The report quoted JD.com's management as stating that given the recent 618 event and the state of Chinese consumers, it is expected that active users will continue to have double-digit growth momentum in the first quarter, with supermarket categories performing well. Regarding e-commerce competition, JD.com believes that the e-commerce market is not a winner-take-all situation, and each company will find its own differentiated positioning. In terms of revenue growth momentum, department stores/supermarkets are expected to resume double-digit growth this year. JD.com continues to achieve mid-to-high single-digit revenue growth for the full year, with stable growth in JD Retail profits. KPIs such as GMV growth, absolute profits, and cash flow across categories are balanced, and confidence is maintained in the potential space for a 3% long-term GMV profit margin.

Goldman Sachs believes that given the high base in the second quarter of last year, it continues to expect JD.com's revenue growth to slow down quarter-on-quarter in the second quarter of this year; and maintains its forecast of 6% revenue growth and 7% net profit growth for the full year. Although Goldman Sachs recently lowered its preference for the e-commerce sub-industry to reflect the potential weakness in online consumption trends in June and investors' concerns about short-term declines in Taobao and Tmall profits and flat JD Retail profits, it believes that there are opportunities in the e-commerce industry in the second half of the year, and profits may reach an inflection point.

The current market's main line is still hardcore technology, with consumer electronics, AI hardware, and chips being the main lines of the Hong Kong stock market. Currently, it is these companies that are rising, forming a clear polarization with the Internet Chinese concept stocks in Hong Kong stocks. In terms of news, I roughly summarized it as follows:

1. The latest research from Canalys shows that the recovery trajectory of China's PC market is inconsistent with global trends. In the first quarter of 2024, weak IT spending by leading enterprises led to a downturn in the market, with a significant 19% decline in the commercial market. The decline in consumer market shipments was relatively moderate, at only 8%. Although PC market performance was average in 2024, with the continuous development of nationalized procurement, market performance is expected to be even stronger in 2025, with PC shipments expected to achieve 12% growth.

2. Hon Hai Precision Industry rose 16.55%. According to news on June 18, Hon Hai obtained an exclusive large order for NVIDIA's GB200 key component NVLink switch, with an order volume seven times that of server cabinets. This is not only a brand-new order, but its gross profit margin is also much higher than server assembly. Previously, Hon Hai had already secured a large share of NVIDIA's GB200 AI server contract manufacturing orders.

3. Sunny Optical Technology closed up 3.82%. A research report from China Merchants Securities indicated that based on recent supply chain tracking and product shipment data from Sunny Optical Technology (02382), the bank believes that the recovery of smartphone terminals in 2024 and optical imaging upgrade trends such as large image planes and periscope cameras will drive the company's mobile product shipments, ASP, and gross profit margin to increase simultaneously. The utilization rate of mobile phone lens and camera module businesses in 24H1 has returned to normal levels, and the recovery amplitude is expected to exceed previous official guidance. In the medium to long term, the bank is optimistic about the growth space in new overseas mobile phone customers, automotive, and XR fields, especially emphasizing the growth elasticity of the AR field, which the company has focused on investing in R&D this year, in the next three years. The bank expects the company's total revenue for 2024-2026 to be 37 billion/41.9 billion/47.4 billion yuan, with net profit attributable to shareholders of 1.9 billion/2.4 billion/3 billion yuan, corresponding EPS of 1.84/2.32/2.83 yuan, and a PE ratio of 24.1/19.1/15.6 times based on the current share price. This is the first coverage, and a "Buy" rating is given.

4. AAC Technologies (02018.HK) closed up 2.53%. According to a report on June 17, based on a document disclosed by the Hong Kong Stock Exchange on June 17, JPMorgan Chase & Co. (JPMorgan) increased its stake in AAC Technologies (02018.HK) by a total of 4.0516 million ordinary shares at an average price of HK$30.2055 per share on-exchange and HK$29.8573 per share off-exchange on June 12, with a total value of approximately HK$122 million. After the increase, JPMorgan's latest shareholding number is 84.6798 million shares, and its long position ratio has increased from 6.72% to 7.06%.

5. SMIC closed up 3.21% and Huahong Semiconductor closed up 3.83%. In terms of news, according to media reports, TSMC may initiate new price negotiation in the second half of the year, mainly targeting 5nm and 3nm, as well as future 2nm processes. It is expected that the decision to raise prices will take effect as early as 2025. Other reports indicate that TSMC's 3nm foundry pricing increase may be over 5%, and the annual pricing increase for advanced packaging next year is expected to be between 10% and 20%.

Source: Hong Kong Stock Research Society