To The Moon

In April, with flowers blooming and birds singing, Hong Kong stock market is also booming.

The $HSI(HSI)$ surged 7.39% in April, ranking first among major global indices, surpassing 20% from its lowest point, entering a technical bull market! Meanwhile, overseas markets like the US and Japanese stocks are in a slump.

What's the secret behind Hong Kong stocks' independent rally?

Big News

On the news side, there's no big news both at home and abroad.

1. Domestically, the import-export data in March declined year-on-year, and profits of industrial enterprises above a designated size also fell, ending the recovery trend since last August.

2. Abroad, the US economy was robust in the first quarter, with core CPI higher than expected, making it unlikely for the Fed to cut interest rates soon.

3. On the funding side, southbound funds inflow was significant at HK $80.4 billion in April, slightly lower than the HK $86 billion in March. But in the past two years, except for a small outflow of HK $5.85 billion in June 2023, southbound funds has maintained a net inflow in all other months.

   

So, it seems the April rally wasn't solely driven by southbound funds, but also foreign capital.

At the start of the Hang Seng Index rally, UBS, an international investment bank, released a report explaining the return of foreign capital. The report mentioned that the bear market in Hong Kong stocks was mainly due to valuation declines, not fundamentals.

EPS in the internet and consumer sectors have been growing in the past year and a half, and the impact of the real estate crisis has been exaggerated. Plus, consumer data has rebounded, and listed companies have increased dividends and buybacks.

Highlight of individual stocks

Looking at the performance of individual stocks, internet companies led the gains in April, with $TENCENT(00700)$ $Tencent Holding Ltd.(TCEHY)$ rising 14.3%, $MEITUAN-W(03690)$ $MEITUAN(MPNGF)$ up 13%, and $KUAISHOU-W(01024)$ $KUAISHOU TECHNOLOGY(KUASF)$ gaining 14%...

After the continuous rally, the Hang Seng Index's price-to-earnings ratio is only 9 times, still lower than the average in the past 10 years and significantly lower than overseas markets.

Looking ahead to May, tech giants like Tencent and Meituan will announce their first-quarter earnings reports. If they exceed market expectations, it could further ignite the Hong Kong stock market!

Key Events in Hong Kong Stocks in April

1. China's CPI growth rate narrowed to 0.1% year-on-year in March, while PPI fell more sharply to 2.8% year-on-year;

2. The US CPI data in March was higher than expected, and the hope of interest rate cut in June was basically dashed;

3. Spot gold broke through $2,400 per ounce, hitting a new record high;

4. Hong Kong stock buybacks rose 211% year-on-year to HK $51.1 billion in the first quarter;

5. China's GDP grew by 5.3% year-on-year in the first quarter, exceeding market expectations;

6. Israel retaliated against Iran and the situation in the Middle East worsened;

7. UBS upgrades MSCI China index to overweight;

8. Hong Kong's first batch of cryptocurrency ETFs listed;

9. Brent crude oil above the $90 / barrel mark;

10. The Political Bureau of the CPC Central Committee held a meeting and decided to hold the Third Plenary Session of the 20th CPC Central Committee in Beijing in July.

Five Stocks Worth Attention Among Top Trading HK Stocks in April

Top1: $XIAOMI-W(01810)$ $Xiaomi Corp.(XIACY)$ . On March 28th, Xiaomi's first car, the SU7, was officially launched, with over 70,000 orders locked in. Its production capacity for the year is sold out, driving up the stock price;

Top2: $SENSETIME-W(00020)$ . The company released a large model SenseNova 5.0, which rivals GPT-4 Turbo in comprehensive capabilities, causing a surge in its stock price;

Top3: $TENCENT(00700)$ $Tencent Holding Ltd.(TCEHY)$ . The company share price soared, including 5.46% on April 22, the largest increase in 10 months;

Top6: $Li Auto(LI)$ $LI AUTO-W(02015)$ . On April 18th, the company released a new model L6, but the market response was underwhelming, the stock price continues to be depressed;

Top7: $China Vanke Co., Ltd.(CHVKF)$ . Affected by the downturn of the real estate market, Vanke reported a loss in net profit in the first quarter and its share price plummeted.