[ET Net News Agency, 18 November 2024] The CSRC issued the "Listed Company Supervision
Guidelines No. 10 - Market Value Management," once again promoting the reasonable
reflection of the investment value of listed companies in the quality of listed companies.
Chinese characteristics stocks surged, with the Hang Seng Index rising by over 300 points
at one point, reaching a peak increase of 355 points to 19,781 points, with resistance at
the 50-day moving average (around 19,879 points). The Hang Seng Index mid-day report was
at 19,655, up 229 points or 1.2%, with main board turnover exceeding HKD 78.5 billion.
The Hang Seng China Enterprises Index reported 7,084, up 104 points or 1.5%. The Hang
Seng Tech Index reported 4,371, up 43 points or 1%.

"Lee Wai Kit: Hang Seng at 19,300 should not be lost, dollar index under 105 is more
favourable for Hong Kong stocks"

The CSRC issued guidelines on market value management last week, requiring listed
companies to enhance company quality. By combining actual circumstances and legally
compliant use of various methods such as mergers and acquisitions, equity incentives,
employee stock ownership plans, cash dividends, investor relations management, information
disclosure, and share buybacks, the CSRC aims to promote the reasonable reflection of
investment value in the quality of listed companies.
The CSRC's explicit call to stimulate market funds immediately benefited the Chinese and
Hong Kong stock markets, with the Hang Seng Index rising by over 300 points at one point.
Lee Wai Kit, a director of the brokerage department at Huasheng Securities, told ET Net
News Agency that the Hang Seng Index is currently holding an important support level at
the 0.618 Fibonacci retracement level of 19,300 and is benefiting from the CSRC news
rebound. Today, many stocks are trading below net asset value, with Chinese
characteristics stocks receiving buying interest, and banking, infrastructure, and asset
management stocks performing well.
However, he pointed out that the short-term rebound of Hong Kong stocks has not yet
escaped the danger zone. It would be favourable to stabilize above the 20,000 level for
future performance, with the initial resistance at 19,700 for the short-term rebound. He
added that the future trend will be greatly influenced by fluctuations in the US dollar
exchange rate. A drop in the US dollar below USD 105 would be more favourable for the Hang
Seng Index to rebound.

"Alibaba Cloud escapes price war cloud, Alibaba's 100-day moving average awaits rebound to
50-day moving average"

Alibaba (09988) released its second-quarter results up to September, with adjusted net
profit falling by 9.13% year-on-year to RMB 36.518 billion, in line with market
expectations of RMB 36.4 billion. The company explained that the decline in net profit was
due to increased investment in e-commerce business, partly offset by revenue growth and
operational efficiency improvements. Lee Wai Kit believes that Alibaba's performance is
still in line with expectations. In the quarter, Alibaba Cloud's EBITA surged by 89%
year-on-year to RMB 2.661 billion, with public cloud revenue achieving double-digit
growth, and AI-related product revenue achieving triple-digit year-on-year growth for the
fifth consecutive quarter, raising market expectations for Alibaba Cloud's future
benefiting from the AI boom. Although Alibaba Cloud was affected by price wars earlier,
this performance proves that Alibaba Cloud has successfully turned the situation around
after lowering prices, much to the market's surprise.
Relative to this, Alibaba's Taobao e-commerce performance in the quarter was not strong,
but Lee Wai Kit pointed out that the market anticipates stronger sales in the fourth
quarter, hence the overall stability of the stock price today. Alibaba's stock price has
recently lagged behind the broader market, but there is support near the 100-day moving
average today. He suggests that those not holding positions may consider making an initial
entry near the 100-day moving average (around HK 85.5), with a short-term rebound target
around the 50-day moving average of about HK 94.6, hoping for a strong rebound driven by
favourable market conditions.