Daily Investment Strategy
Daily focus：Stella Holdings（1836）
China and the United States finally reached a trade negotiation agreement, with both sides agreeing to significantly reduce tariffs on each other's goods within the next 90 days. The US will temporarily reduce the combined tariffs on most Chinese imports from a maximum of 145% to 30%, while China will reduce tariffs on US goods from 125% to 10%. Stella holdings has approximately 47% of revenue comes from the U.S.. The agreement to reduce tariffs will lower Stella's costs and also reflects the possibility of tariff negotiations between the US and other countries become more visible. In terms of stock price performance, the current price has not yet recovered to the level before the tariff-related decline on April 2, indicating room for recovery. Besides committing to maintain a 70% dividend payout ratio from 2024 to 2026, the company also announced that it will return up to $60 million annually to shareholders through a combination of share buybacks and special dividends.
Preliminary Consensus Reached in China-US Trade Talks, High Tariffs Suspended
Yesterday, the preliminary consensus reached in the China-US trade talks, agreeing to temporarily significantly reduce high tariffs, boosted market sentiment, leading to better performance in both Hong Kong and US stock markets. In fact, the suspension of high tariffs marks the beginning of broader and more comprehensive negotiations. Although high tariffs are no longer in place, market uncertainty has not been removed. Further attention is needed on individual tariff details, but ultimately, tariffs are expected to be far below the over 100% tariff level.
On Monday, the Hong Kong Stock Connect recorded a net outflow of HK$ 185 million. Among them, BYD Electronics (285) recorded the highest net inflow of 121 million Hong Kong dollars, followed by China National Offshore Oil Corporation (883). The Tracker Fund of Hong Kong (2800) recorded the highest net outflow of 5.6 billion Hong Kong dollars, followed by Tencent Holdings (700).
Cheung Cho Shing, Joseph 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/ACQ030/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
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