KGI Asia Commentary

2024.04.10 09:47

Hang Seng Index rose 95 points on Tuesday

The Hang Seng Index rose 95 points or 0.6% to 16,828 on Tuesday. HSTECH rose 33 points or 1.0% to 3,478 and HSCEI rose 26 points or 0.4% to 5,895. Daily market turnover was HK$82.9bn.

U.S. markets in wait-and-see mode

The Dow ended little changed on Tuesday as investors stayed on the sidelines ahead of key U.S. inflation data. The Dow Jones index fell 9.13 points, or 0.02%, to 38,883.67 points. During the session, the Dow Jones fell 320.71 points to an intraday low. The S&P 500 index rose 0.14% to close at 5,209.91 points; the Nasdaq index rose 0.32% to close at 16,306.64 points. Chipmaker Nvidia fell 2%. Several large technology stocks also fell, with Meta and Netflix down about 0.5% and 1.6%, respectively. Intel unveiled its Gaudi 3 chip, saying it offers better performance and lower power consumption. Alphabet shares rose 1.13% as the company unveiled new customized ARM chips and established cloud business partnerships with certain companies ahead of its Google Cloud Next keynote.

Investors hope to get more clues about interest rate cuts from CPI inflation data and FOMC minutes

The March consumer price index (CPI) is scheduled to be released on Wednesday. Investors will be watching the data closely for clues on when the Federal Reserve will begin cutting interest rates. CME Group's Fed watch tool shows that current federal funds futures trading data implies a 42% chance that interest rates will remain stable in June. In addition, investors are also looking forward to the release of FOMC minutes.

Hong Kong Stock Connect had a net inflow of HK2.73bn on Tuesday, of which CHINFMINING (1258) had the largest net inflow, reaching HK$0.42bn; followed by Xiaomi (1810). HSBC (5) recorded the largest net outflow at HK$0.01bn, followed by CNOOC (883).

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Haier
06690

Haier Smart Home's sales and net profit increased by 7.3% and 12.8% yoy respectively to RMB261.4bn and RMB16.6bn last year. The gross profit margin rose from 30.63% in 2022 to 30.87%, an increase of 0.24 percentage points, driving the net profit margin expanded by 0.31 percentage points to 6.35%. The market currently has a positive view on the prospects of Haier Smart Home, as the group maintains its leading position in the country, with the domestic market share of refrigerators and washing machines exceeding 40%. In addition, overseas markets have improved in terms of profits, benefiting from the upgrade of product mix. Secondly, the dividend policy is attractive, and management aims to increase the dividend payout ratio to no less than 50% in 2026. The group currently declares a dividend of RMB0.804, with a dividend payout ratio of 45%. Overall, the signals of improvement in the manufacturing industry, substantial infrastructure investment, and a modest rebound in consumption collectively bolstered the economic aggregate in China. Policies such as the trade-in of consumer goods will continue to be the engine of economic growth this year. It provides catalyst for the consumer goods sector. Haier Smart Home can be benefitted. Target price: $30; Stop- Loss price: $22.7.

Wen Kit Kenny 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/AJF244/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.

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