[ET Net News Agency, 24 September 2024] Stimulated by the People's Bank of China's heavy
easing measures, Hong Kong stocks rose more and more in the morning market. Currently,
only five blue-chip stocks fell. The Hang Seng Index reported a half-day of 18,845, up 598
points or 3.3%, and there was a large transaction volume. In only half a day of trading,
the main board turnover has reached HKD 117.9 billion.
The Hang Seng China Enterprises Index reported at 6,641, up 251 points or 3.9%. The Hang
Seng Tech Index was at 3,853, up 155 points or 4.2%.

"Wan Kong Shing: The Hang Seng Index has a great chance to hit a new high"

The People's Bank of China launched a major easing package this morning, including
cutting the required reserve ratio by 0.5 percentage points to release RMB 1 trillion in
liquidity, further lowering existing mortgage interest rates by about 0.5 percentage
points, and further lowering the minimum down payment ratio for second homes nationwide
from 25% to 15%. Multiple arrows spurred Hong Kong stocks to rise above the 18,500 index
futures mark, and the Hang Seng Index's half-day gain expanded to about 600 points, a new
high in the past four months. Wan Kong Shing, the Chief Investment Officer of iFAST Global
Markets, told ET Net News Agency that the Hang Seng Index is currently in good momentum
and is expected to have sufficient upward momentum for the rest of the year. It has a
great opportunity to repeatedly challenge this year's high of 19,700 set in May, and is
expected to reach 20,000 mark before the end of the year.
He pointed out that after the U.S. officially cut interest rates, the U.S. dollar fell
back, the RMB trend strengthened, and the central government quickly launched a rescue
package in conjunction with the interest rate cut. He believes that this rally will be
similar to the one in April. The market will first bet on expectations of positive
policies, and then wait and see the effectiveness of the policies, that is, whether the
economic data improves. Otherwise, there is still a chance of profit-taking.

"China's housing demand is low, stock prices are running rampant. China's banks are under
reduced funding pressure, but their business is under pressure"

The interest rates on existing mortgages and the minimum down payment ratio for second
homes were lowered again, which benefited Mainland China real estate stocks and rose.
However, the gains of individual stocks that surged in early trading narrowed, and China
Vanke (02202) even fell. Wan Kong Shing pointed out that although the policies are good,
the demand for housing in the Mainland China is still low. With the huge stock of housing
and the large amount of inherited assets to fill the demand, the demand for new housing
will be difficult to increase in the future. We still cannot be too optimistic about this
at present. He believes that the market outlook for China's housing market will still be
affected by monthly sales data, but he expects that China's housing market may not fall
sharply again in the short term and will mainly be in a narrow range.
In addition, Chinese banking stocks, which help solve China's housing problems, also
benefited from the "requirement reduction", which is expected to alleviate funding
pressure. In the morning market, Chinese banking stocks performed well across the board,
with CM Bank (03968) soaring 9%. Wan Kong Shing frankly admitted that the interest rate
cut is not good for the Mainland China banks. It will only benefit the Mainland China
banks if bad debts are reduced. Although the current funding pressure is expected to be
reduced, lowering the existing mortgage interest rates may further weaken the net interest
margin, and domestic banking stock business will still be under pressure in the
short-term. Take China Construction Bank (00939) as an example. The current price is close
to the August high of HKD 5.86. It is expected that there will be greater resistance if it
rises to HKD 6. If investors buy it at the current price, they will lose money. Interested
parties should wait for the stock price to fall back to the 50-day moving average of about
HKD 5.5 before buying.

"Yonghui must solve the problem of profit regression, or it may affect the half-year
growth of Miniso"

In addition, Miniso (09896) announced the acquisition of approximately 2.668 billion
shares of Yonghui Superstores (Shanghai: 601933) for approximately RMB 6.27 billion.
However, Yonghui Superstores's net profit fell by more than 26% in the first half of the
year, and the market was not optimistic about the acquisition. As a result of the action,
Miniso's stock price plummeted this morning, falling by more than 30% in half a day. Wan
Kong Shing clearly stated that the market trend is leaning toward online shopping. Miniso
is buying an offline supermarket at this time. It is really difficult to be optimistic
because of the current market conditions. Moreover, Yonghui Superstores's 850 supermarkets
are not small in size. Miniso is buying at a low price. After taking equity ownership,
there is an urgent need to reverse the decline of Yonghui Superstores. Let's see what
plans Miniso has.
From a technical point of view, the narrowing of the decline after Miniso fell by 30%
reflects that funds have been used to catch the bottom. However, the domestic demand
sector to which Miniso belongs is weak, and the company's own performance has been good,
and the market expects a 50% to 60% growth in the second half of the year. If Yonghui's
entry into the account drags down the company's growth, Miniso may lose more than it
gains.