Daily Investment Strategy
Daily focus：CG Service（6098）
The company reported revenue of RMB 23.1855 billion in the first half of 2025, a 10.2% increase year-on-year, but its gross profit declined by 3.5% to RMB 4.2991 billion. Net profit attributable to equity holders was RMB 996.6 million, a 30.8% decrease year-on-year. Adjusted basic earnings were RMB 1.5677 billion, a 14.8% decrease year-on-year, with adjusted basic earnings per share at 39.4 cents and a basic profit margin of 6.8%. Management has increased the basic dividend payout ratio for the 2025 financial year from 32.6% to 60% and launched a share buyback program of at least RMB 5 billion to enhance shareholder returns and mitigate the risk of a change in control. Management expects that industry visibility will improve as the parent company's debt restructuring and property delivery processes progress.
China's 7-day reverse repo rate remains unchanged
The divergence in monetary policy between the US Federal Reserve's resumption of interest rate cuts and the People's Bank of China's inaction highlights the differing approaches. Following the US rate cut of 25 basis points, market expectations for a future easing cycle have risen, leading to significant inflows of capital into stock markets and risk assets. Meanwhile, China's decision to maintain its 7-day reverse repo rate reflects its heightened concern over exchange rate stability and capital outflow risks. This has prompted the market to reassess the relative attractiveness and risk premium of emerging markets, with investors closely monitoring the impact of the two major economies' monetary policy adjustments on capital flows and global risk appetite.
On Friday, the Hong Kong Stock Connect saw a net inflow of HKD 9.8 billion, with Shing Kong Holdings (412) recording the largest inflow at HKD 2.24 billion, followed by Alibaba (9988). On the other hand, Tencent Holdings (700) saw the largest net outflow at HKD 620 million, followed by Xiaomi Corporation (1810).
Leung Kai Tong is a SFC licensed person accredited to KGI Group to carry on regulated activities (for details, please refer to https://apps.sfc.hk/publicregWeb/indi/ADU276/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
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