China concept stocks, which have fallen for many days, ushered in a strong rebound.
On March 16, the Hang Seng technology index staged a Jedi counterattack, rising by more than 20%, becoming the largest one-day increase since the index was launched. Many stocks were outstanding, including Jingdong group, US group and Kwai Yue, which rose more than 30%. Tencent holdings and Alibaba increased by more than 20%.
Previously, in the overnight US stock market, China concept stocks also soared all the way. As of the close, the NASDAQ index rose 2.9% to 1294862, and the NASDAQ Jinlong China Index closed up nearly 5%. In terms of individual stocks, ideal car and Tencent music closed up more than 12%, and pinduoduo and jd.com closed up about 7%.
Positive factors on the news side boosted the market upward.
According to Xinhua news agency, on March 16, the financial stability and Development Commission of the State Council held a special meeting to study the current economic situation and capital market problems.
The meeting mentioned that with regard to China concept shares, at present, the regulatory authorities of China and the United States have maintained good communication, have made positive progress, and are working to form a specific cooperation plan. The Chinese government continues to support all kinds of enterprises to list abroad.
Driven by the favorable information, does China concept stock usher in a good opportunity to copy the bottom? From the perspective of medium and long term, what kind of target has investment value?
Strong rebound
On March 16, the financial stability and Development Commission of the State Council held a special meeting to study the current economic situation and capital market problems.
The meeting stressed that relevant departments should earnestly assume their responsibilities, actively introduce policies conducive to the market and prudently introduce contractionary policies. We should respond to the hot issues concerned by the market in a timely manner. All policies that have a significant impact on the capital market should be coordinated with the financial management department in advance to maintain the stability and consistency of policy expectations. The financial commission of the State Council will strengthen coordination and communication according to the requirements of the Party Central Committee and the State Council, and hold accountable when necessary. Financial institutions must proceed from the overall situation and firmly support the development of the real economy. Long term institutional investors are welcome to increase their shareholding ratio.
With regard to China concept shares, the meeting mentioned that at present, the regulatory authorities of China and the United States have maintained good communication, have made positive progress, and are committed to forming specific cooperation plans. The Chinese government continues to support all kinds of enterprises to list abroad.
Affected by this news, Hong Kong stocks made a counterattack across the board, and the “zhonggai Internet ETF”, dominated by zhonggai shares, rose directly in the intraday limit.
As of the close, the Hang Seng index returned to above 20000 points and closed at 200875 points, up 9.08%; The Hang Seng technology index closed up 22.2% at 424339, the highest one-day closing gain in history.
Technology stocks also soared, with JD group up 35.54%, meituan up 32.08%, Alibaba up 27.30% and Tencent holdings up 23.15%.
At the same time, in the US stock market, popular Chinese concept stocks also soared before trading, including iqiyi rose by more than 28%, pinduoduo rose by more than 29% and Alibaba rose by more than 18%.
UBS believes that the recent sell-off of shares of Chinese technology companies is an overreaction to the threat of delisting from the sec. It is expected that China and the United States can reach an agreement on audit disclosure within the next year.
In fact, listed companies are also actively responding to risk management.
On March 15, Jinshan cloud announced that with the changing market and regulatory environment, Jinshan cloud is seeking to list common shares on the main board of the Hong Kong Stock Exchange in order to provide better liquidity and protection to the company’s shareholders. The specific situation will depend on the approval of the regulatory authorities and the market situation.
At the same time, Jinshan cloud will continue to focus on maximizing shareholder value through innovation and technology and promoting its sustainable development as a US listed company.
Fundamentals of Chinese stocks
The strong counterattack of China concept stocks is coming. Is it a good time to copy the bottom?
Hong Hao, managing director and head of Research Department of BOCOM international, said that there was no problem with the fundamentals of Hong Kong listed companies. The sentiment was dominating the market trend, and there was no need for investors to panic. Although Hong Kong stocks are very cheap, they need to endure up and down fluctuations if they intervene, and investors don’t need to worry.
On March 15, JPMorgan released a research report on Chinese Internet companies. JPMorgan believes that Chinese Internet companies are not attractive in the short term and have no valuation support, but the recent stock selling is driven by emotional and technical reasons rather than fundamentals.
If there is a three-year shareholding period, JPMorgan believes that the market value of at least 10 stocks of the companies covered by its research can double in three years, and the long-term fundamentals will correct panic and technical factors.
“At present, although the fundamentals of zhonggai shares are not poor and the valuation is not high, there is still great uncertainty in the follow-up trend.” People related to 10 billion private Xingshi investment told the 21st Century Business Herald reporter that some enterprises were included in the “temporary identified list”, which triggered the market’s concern about the policy risk of zhonggai shares, which was the direct reason for the decline. At the same time, under the background of general decline in the global capital market and extremely low market sentiment, this policy risk has been further amplified, and the follow-up trend still has great uncertainty. Therefore, the investment in zhonggai shares may need to be more cautious.
Zhonggai shares usher in differentiation
When some institutions are bearish, Duan Yongping, known as “Chinese Buffett”, said on March 15, “tomorrow we are going to exchange BRKB (Berkshire Hathaway) for Tencent holdings. It won’t wait.”
Earlier, on March 8, Duan Yongping said that Tencent planned to increase its position every 10%. On February 28, Duan Yongping said, “Tencent is lower than the price I bought last time. I’m going to buy some more tomorrow.”
As of the closing on March 16, Tencent holdings rose 23.15% to close at HK $367 / share.
A private equity fund related person in Shenzhen believes that for a long time, the final market trend of zhonggai shares is still determined by the fundamentals of each company, “In the future, we are optimistic about these two types of medium share enterprises. The first is the head Internet giants similar to Tencent, including jd.com and pinduoduo, which have good revenue growth, stable cash flow and strong anti risk ability; the second is the sunrise industry stepping on the tuyere of the times, such as Weilai, ideal automobile and other listed enterprises among the new forces of car making.”
Previously, a number of new energy vehicle enterprises announced the report card of vehicle production in January 2022, among which ideal car, Xiaopeng car and Nezha car ranked among the top three “new forces of vehicle production”, and the delivery volume exceeded 10000, 12268, 12922 and 11009 respectively, with a year-on-year growth rate of 128%, 115% and 402% respectively. Weilai delivered 9652 vehicles in January, a year-on-year increase of 33.6%.
Huaxi Securities Co.Ltd(002926) said that as the CSRC stated that it was actively carrying out dialogue and was willing to solve the regulatory problems of the United States through regulatory cooperation, the general direction of mutual opening and integration of China and the United States capital markets remained unchanged; With the gradual normalization of platform supervision, the long-term fundamentals of equity companies in the Internet have not changed, and they are optimistic about the return of their fundamental values.
