Overnight, the three major US stock indexes all rose by more than 1%, with the Nasdaq and S&P 500 closing at new highs. After four consecutive days of decline, Hong Kong stocks plunged by 556 points. This morning, they rebounded sharply by more than 300 points. The Hang Seng Index opened higher by 157 points at 17,629 points and then quickly rose by 324 points to 17,796 points, surpassing the 10-day moving average. By the close, the Hang Seng Index gained 2.06%.

Stimulated by favorable policies, Chinese assets witnessed a major counterattack today, with all three major indexes opening higher and closing higher, and nearly 5,000 stocks recording gains. In terms of news, the China Securities Regulatory Commission (CSRC) approved the application of China Securities Finance Corporation Limited (CSF) to suspend its securities lending business, effective from today. Market insiders believe that the suspension of securities lending and the overall increase in margin rates for securities lending will help boost market sentiment to a certain extent.

Meanwhile, there was also a major positive development from abroad. Overnight, Federal Reserve Chair Jerome Powell signaled a possible interest rate cut, and futures markets predicted a 77% probability of a Fed rate cut in September. China International Capital Corporation Limited (CICC) believes that the window for rate cut trades has arrived, and a Fed rate cut will ease external constraints on China's monetary easing, benefiting China's bond market and exchange rate performance. The rate cut is also positive for risky assets such as stocks and commodities.

Huatai Securities released a research report stating that Hong Kong stocks rose first and then fell last week, with trading volumes continuing to shrink, and bulls and bears engaging in a continuous tug-of-war. In terms of capital flows: 1) Foreign capital: Active foreign capital outflows expanded, while passive foreign capital inflows narrowed. The resonance between active and passive foreign capital weakened, leading to net outflows in allocation funds, but net inflows in trading funds. 2) Southbound capital: Southbound net inflows rebounded, with the AH premium rising to 144.7, indicating improved cost-effectiveness. Structurally, capital mainly flowed into Hong Kong stock dividends. 3) Industrial capital: Repurchase enthusiasm cooled last week, but weekly repurchase transactions, repurchase amounts, and repurchase market values were all above the 90th percentile since 2010. Internet, hardware, finance, and pharmaceutical sectors showed higher repurchase enthusiasm. 4) Sentiment remained volatile, with the Hang Seng Index short-selling ratio rising slightly to 13.8%, the put-call ratio rising to 1.05, and warrant trading volumes and their proportion declining month-on-month.

Haitong Securities' strategy report stated that the decline in Hong Kong stocks in June was mainly due to the market entering a fundamental verification and consolidation phase, while the effects of previous policies were still not apparent, and domestic fundamentals remained weak. Hong Kong stocks experienced multiple rounds of gains and corrections in the first half of the year, showing an overall upward trend with fluctuations and some valuation recovery. Looking ahead to the second half of the year, fundamentals, capital flows, and sentiment are expected to experience positive changes, supporting the continued rise of Hong Kong stocks.

Fundamentally, the inflection point is expected to be confirmed under continuous policy support, with macroeconomic growth expected to rebound and corporate earnings to recover. In terms of capital flows, there is still significant room for stable foreign capital with a longer-term investment horizon to flow in. Improved overseas liquidity in the second half of the year may boost the return of long-term foreign capital to Hong Kong stocks. Sentiment-wise, the current domestic market sentiment is at a historical low. The Third Plenary Session of the 20th CPC National Congress will be held in July, with reform efforts focused on developing new productive forces. Relevant reform policies may boost market risk appetite and drive a recovery in A-share and Hong Kong stock market sentiment.

Alibaba Group Holding Limited (09988.HK) gained 3.21%. According to online rumors, on July 6, Jack Ma returned to Hangzhou and appeared at Alibaba's headquarters building. The last time Jack Ma returned to China and appeared in public was on March 27. The following day, Alibaba announced the "most important transformation in its 24-year history," redefining and restructuring the governance relationships between Alibaba Group and its various businesses, launching the "1+6+N" organizational restructuring, with Daniel Zhang announcing his resignation, and Simon Cai and Wu Yongming, members of Alibaba's "Eighteen Rohan," taking over as Chairman of the Board and CEO, respectively.

According to the official Weibo account of Cainiao Express, Cainiao Express has upgraded its same-city express service for merchants in Guangzhou, offering same-day delivery for orders placed before 14:30. While significantly improving delivery times, prices for both first-weight and additional-weight items have been halved. To date, Cainiao Express has not announced the rollout schedule for other cities. However, insiders have revealed that Cainiao Express has deployed upgrades to its same-city express service in multiple cities since the new year.

According to the latest report on the Chinese large model benchmark evaluation released by SuperCLUE, Alibaba's Tongyi Qwen2-72B-Instruct open-source model ranked first in domestic general capabilities with outstanding performance, becoming the strongest open-source model globally. The SuperCLUE report detailed the comprehensive evaluation results of 33 large models both domestically and internationally. Qwen2-72B tied for second place with Claude-3.5-Sonnet in the primary overall score with 77 points, trailing only OpenAI's GPT-4o.

This score surpassed other open and closed-source large models such as Baidu Wenxin Yiyan 4.0, iFLYTEK Spark V4.0, and Llama-3-70B. Specifically, in the detailed evaluations across the science, liberal arts, and Hard dimensions, Qwen2-72B demonstrated comprehensive and balanced capabilities.

Kuaishou Technology (01024.HK) gained 1.27%. In terms of news, Kuaishou Job Fair held its 2024 annual summit and released a set of data, showing that Kuaishou's annual recruitment-related short videos and live broadcasts reached 100 billion views. In a single month, nearly 25 million job leads were generated, with over 1.18 million two-way job intentions reached.

CICC's research report pointed out that inbound tourism infrastructure needs to be upgraded, and Online Travel Agencies (OTAs) are expected to benefit in the new era. Currently, China's inbound tourism infrastructure, including payment, communication, language services, and supply chains, is inadequate and has not fully met the needs of foreign tourists. With policy pushes and enterprises responding actively, mobile payment solutions from companies such as Alipay and Tenpay will gradually improve this situation. After the pandemic, inbound tourism demand has undergone new changes, with supply chain and digital transformation becoming key reform areas. With their flexibility, OTAs can quickly respond to market changes and upgrade their products and services. CICC believes that OTAs are expected to benefit more from inbound tourism in the new era.

Baidu, Inc. (09888.HK) gained 2.26%. A research report from Guotai Junan Securities believes that the successful business model of Luobo Kuaipao in Wuhan is expected to be replicated elsewhere, and autonomous driving may challenge the taxi and ride-hailing industries. There are three main investment directions: 1) Internet companies that master autonomous driving technology; 2) Industrial chain enterprises that manufacture vehicles and components or provide IT services for Internet companies; 3) Autonomous driving infrastructure-related enterprises, such as vehicle-road-cloud companies.

Tencent Holdings Limited (00700.HK) gained 1.91%. Tencent sent an internal email to all employees announcing adjustments to its compensation and benefits policy. First, the year-end 13th-month salary will be distributed evenly across monthly salaries. Second, the existing housing allowance will be integrated into monthly salaries. Tencent stated that changes in the external environment over the past two years have led many employees to have higher demands for immediate and stable cash flow. These two measures aim to help employees arrange their work and life more at ease on the basis of higher and more stable monthly incomes.

This year, Tencent's performance has far exceeded expectations. In the first quarter, net profit (Non-IFRS) reached RMB 50.265 billion, a year-on-year increase of 54%. To reward shareholders and boost confidence, Tencent repurchased over HKD 52.3 billion worth of shares in the first half of the year, surpassing last year's total. The company's share repurchases accounted for over 40% of the total share repurchases in Hong Kong stocks during the same period, making it the largest share repurchaser among Hong Kong listed companies.

XPeng Inc. (00853.HK) gained over 11.66%. In terms of news, according to TMTBase's intellectual property information, Guangdong XPeng Motors Technology Co., Ltd. recently applied for the trademarks "XPeng M03" and "XPENG M03," both classified under transportation tools, and currently, both trademarks are awaiting substantive examination. According to media reports, XPeng previously released the official images of the first model in its MONA series and announced that the model would be named XPeng MONA M03. Recently, the model has made its global debut and is expected to be officially launched in August.

When talking about XPeng MONA M03, XPeng's Chairman expressed the hope of bringing a stylish and interesting car to young people. This time, XPeng MONA M03 spared no expense, increasing costs by 5-10 times to collaborate with top international companies AAC Technologies and PSS to refine 18 high-end custom speakers, forming a standard 7.1.4 channel system. After over 12 months and more than 40 rounds of internal and external comparisons and optimizations, XPeng MONA M03 delivers an audio experience far superior to its peers, even comparable to the audio systems of luxury cars priced above RMB 300,000.

MicroPort Scientific Corporation (00853.HK) gained over 5%. In terms of news, MicroPort Scientific announced that it expects revenue for the six months ended June 30, 2024, to increase by approximately 17% year-on-year, with a significant reduction in net losses. This is mainly attributed to revenue growth of 34%-37% in MicroPort NeuroTech, 25%-30% in MicroPort CardioFlow Medtech, approximately 22%-28% in MicroPort CardioFlow, and approximately 103%-108% in MicroPort Robotics; as well as further consolidation of competitive advantages and stable revenue growth in other major businesses.

Xiaomi Corporation (01810.HK) gained 3.47%. During an interaction with Xiaomi fans, Xiaomi's product manager Wei Siqi confirmed that this month's Xiaomi MIX Fold 4 and Xiaomi MIX Flip launch event will be hosted by Lei Jun. In the comments section, Xiaomi fans expressed their anticipation. In February, the Xiaomi 14 Ultra launch event was hosted by Lu Weibing, as Lei Jun focused more on Xiaomi's automotive business at the time. Lei Jun also emphasized that the mobile phone business remains Xiaomi's core business, and he will continue to invest sufficient energy in it.

Now that Lei Jun is returning to the mobile phone launch event, this event will simultaneously introduce the foldable screen phone and the Redmi K70 Supreme Edition, marking Xiaomi's most important new product launch event in the second half of the year. According to information revealed by bloggers, the Xiaomi MIX Fold 4 has been significantly slimmed down, challenging the limits of thinness. With a thickness of less than 10mm when folded and a weight of less than 230g, it will be the thinnest and lightest large foldable screen phone in the industry. Notably, the Xiaomi MIX Fold 4 will be produced at Xiaomi's new smart factory, which the company describes as an industry-leading fully digitalized smart factory.

Hong Kong Exchanges and Clearing Limited (00388.HK) gained 2.82%. CICC released a research report stating that the Hong Kong Exchanges and Clearing will announce its second-quarter results in late August. The current forecast is for revenue to reach RMB 5.41 billion, representing year-on-year and quarter-on-quarter growth of 8% and 4%, respectively. Excluding investment income, revenue related primarily to transaction fees is expected to grow by 9% to RMB 4.12 billion. Quarterly profit is expected to increase by 7% year-on-year to RMB 3.11 billion and by 5% quarter-on-quarter.

CICC forecasts that the Hong Kong Exchanges and Clearing's revenue for the first half of the year will remain flat year-on-year at RMB 10.61 billion, while profit is expected to decline by 4% year-on-year to RMB 6.08 billion. With expectations of stable investment income from internal funds, the bank predicts that second-quarter investment income will increase by 6% year-on-year to RMB 1.21 billion. As the market has recently warmed up, the bank has revised its profit forecasts for the Hong Kong Exchanges and Clearing upwards by 3% and 2% for this year and next year, respectively, to RMB 12.6 billion and RMB 13.6 billion. The bank maintains an "outperform" rating with an unchanged target price of HKD 310, corresponding to forecast price-to-earnings ratios of approximately 31 times and 29 times for this year and next year, respectively.

Zijin Mining Group Co., Ltd. (02899.HK) gained 2.09%. UBS released a research report giving Zijin Mining a "buy" rating. In the first half of this year, the company's gold production was approximately 35.4 tons, up 9.6% year-on-year; copper production was approximately 518,000 tons, up 5.3% year-on-year. Price increases and improved cost control have brought surprises to the company's performance. Due to the performance exceeding market expectations, the bank expects a positive investor reaction and sets a target price of HKD 22.3.

The report stated that the company expects its net profit for the first half of the year to reach RMB 14.55 billion to RMB 15.45 billion, up 41% to 50% year-on-year, representing 51% to 54% of UBS's RMB 28.5 billion forecast for fiscal year 2024 and 50% to 53% of the market's RMB 29.1 billion forecast. This implies second-quarter earnings of RMB 8.3 billion to RMB 9.2 billion, exceeding UBS's forecast of RMB 8.1 billion and the market's forecast of approximately RMB 8 billion.

Source: Hong Kong Stock Research Society