[ET Net News Agency, 31 October 2024] Mainland China's October PMI was better than
expected, driving the Hang Seng Index to 20,476 for half a day, up 95 points or 0.5%, and
the main board turnover exceeded HKD 83.3 billion. The Hang Seng China Enterprises Index
was at 7,328, up 41 points or 0.6%. The Hang Seng Tech Index reported at 4,553, up 39
points or 0.9%.
The two largest gainers in the Hang Seng Index were Xinyi Solar (00968) and Mengniu
(02319); Xinyi Solar reported HKD 4.12, up HKD 0.27 or 7%, with a turnover of HKD 544
million. The intraday high was HKD 4.15 and the low was HKD 3.82. ; Mengniu reported HKD
17.78, up HKD 0.96 or 5.7%, with a transaction volume of HKD 385 million.
In addition, Mainland China property stocks generally performed well. China Jinmao
(00817) rose 11.8% to HKD 1.23; Sunac (01918) rose 10.3% to HKD 2.79; CIFI Hold (00884)
rose 6.6% to HKD 0.405. ; Blue-chip real estate company China Res Land (01109) rose 4.2%
to HKD 26.2.

"Lee Wai Kit: The continued improvement of the economy depends on Mainland China property
and national trade barriers"

The National Bureau of Statistics announced that the manufacturing PMI in October was
50.1%, better than the expected 49.9%, hitting a 6-month high and returning to the
expansion zone. Lee Wai Kit, a director of the brokerage department at Huasheng
Securities, told ET Net News Agency that the manufacturing PMI in October indeed released
a positive signal, making the market more hopeful about the performance of the troika data
next month. He added that the performance of the troika is mainly passive in import and
export, and foreign trade is difficult to control, but infrastructure and consumption are
worth looking forward to, and may gradually improve due to the wealth effect. However, he
also pointed out that how long the current economic momentum can continue depends on the
resolution of the two major issues of Mainland China property and national trade barriers.
He reminded that in addition to paying attention to economic data, next week's National
People's Congress Standing Committee meeting will also be the focus, especially national
debt and specific figures will be the focus. If more policies are introduced or economic
data is satisfactory, the investment atmosphere in the investment market will be more
positive.

"A small gap in economic growth is acceptable in the end"

Talking about whether the GDP for the whole year can be "5% guarantee", Lee Wai Kit
admitted that there is a lot of pressure for "5% guarantee" in the fourth quarter. He
believes that if there is a small gap in the final data, the market will accept it. He
believes that gradually and effectively improving property problems is the longer-term
goal of the policy.
The recent performance of the Hang Seng Index has been dull. Lee Wai Kit said that the
Hang Seng Index is still following the Mainland China stock market. Only when the Mainland
China stock market performs well can Hong Kong stocks have a chance to rise. Moreover, the
market is currently waiting for next week's US presidential election, the results of the
Federal Reserve's interest rate meeting and the National People's Congress Standing
Committee meeting. He believes that only after the election is over and the U.S. policy
towards China is determined will we know the direction of the market outlook. Prior to
this, the Hang Seng Index will remain within the range of 20,000 to 21,000.

"Investor can consider Xiaomi's 20 SMA, BYD's HKD 270 has strong support"

Xiaomi (01810) reached an intraday high of HKD 27.05 in the morning, a new high since 13
August 2021. Lei Jun, founder and chairman of Xiaomi, revealed yesterday that 20,000 units
were delivered in a single month in October and is expected to complete the annual
delivery target of 100,000 units in November ahead of schedule. Lee Wai Kit believes that
Xiaomi can be held in the medium and long term. Currently, Xiaomi's three major businesses
(mobile phones, home appliances, and new energy vehicles) are doing very well. Xiaomi's
mobile phone sales rank among the top three in the world. Its home appliance business has
benefited from the Mainland China's home appliance subsidies, and the delivery volume of
new energy vehicles has also performed well.
As for when investors should buy Xiaomi, Lee Wai Kit pointed out that Xiaomi is
currently moving up along the 10-day and 20-day moving averages. It is a good idea to
enter the market around HKD 24.6 to 25.4 on the 20-day moving average while Xiaomi is
undergoing shock adjustments. He continued that Xiaomi is expected to challenge HKD 30 in
this round, but to stand firm at HKD 30, more good news are needed.
Also releasing good news today is BYD (01211). BYD announced that its net profit for the
third quarter ended 30 September was approximately RMB 11.6 billion, an increase of
11.47%, with earnings per share of RMB 4. BYD's performance was satisfactory, but its
stock price still fell 3.3% in half a day today. Lee Wai Kit believes that it is difficult
for BYD to grow rapidly with such a large base. There is also some pressure on the current
high adjustment. It is predicted that there will be strong support around HKD 270 to 273.
However, because its fundamentals are still strong and the mid- to long-term target price
is HKD 320, investors can consider buying it when it adjusts.