Zhitong Hong Kong stock market unravels | Gaming boom boosts NetEase (09999) surges, influenza hits, medicine is sought after

[Anatomy Dashboard]

The mood in US stocks has been better in the past two days, mainly because Trump's trip to the Middle East was very rewarding. According to reports, Trump, who is visiting the Middle East, said on May 15 that in the past, Middle Eastern countries were abandoned by the US, and China took away America's opportunities in the field of trade. This situation will not happen again. Recently, there has been no improvement in Hong Kong stock trading volume. The average is around 220 billion dollars, and it is difficult to achieve a breakthrough without more than 300 billion dollars. Hong Kong stocks continued to adjust today, closing down 0.46%.

Currently, both markets are relatively weak. The reason is that after the Sino-US talks, there was a lack of new incentives. There are basically no big expectations at the policy level; stability is the main focus. However, with regard to the statement that policy adjustments triggered public funds to allocate large financial resources, many public fundraisers: This statement is inaccurate and unprofessional. Even if the performance comparison benchmark is to be optimized in the future, the adjustment is the benchmark itself. The purpose is to make fund products more “worthy of the name,” and there is no need for large-scale position adjustments at all. Combined with the news that major funds are starting to charge floating fees, it is basically possible to determine that the direction of subsequent increases will not necessarily depend on the benchmark; otherwise, there is no way to obtain excess income. As a result, the driving force of big finance is relatively limited.

Looking at Trump's actions, according to reports on the 15th, during a meeting with business executives in Doha, the capital of Qatar, that day, Trump said that he had made it clear to Apple CEO Cook that he did not want the US tech giant to produce products in India. He also criticized Apple's practice of dispersing production lines from China to other regions, and urged it to shift its production focus to the mainland of the United States. As mentioned earlier, as soon as the US slows down, it will return to its general direction and guide the manufacturing industry back to the US.

Today, it is also rumored that the US warned Hong Kong banks not to fund the Iranian oil export deal to China. It can be seen that the nature of the continuing game between the two sides has not changed. We have not relaxed controls either. Does China plan to lift or adjust rare earth export controls? Foreign Ministry Lin Jian said, “For the specific questions you have asked, it is recommended that you ask the competent Chinese authorities.”

The market gathered for Russian-Ukrainian negotiations. Russia-Ukraine Istanbul negotiations began at 5:30 p.m. Hong Kong time. Ukrainian diplomatic sources said that the Ukrainian delegation will discuss a possible meeting between Zelensky and Putin during talks with the Russian delegation in Istanbul. Kiev sees a cease-fire as a priority in talks with the Russian delegation. Since Putin did not attend this meeting, Trump is not expected to attend in person, but since Europe is involved behind his back, it is estimated that there will be some results.

Europe is quite urgent this time, because it can't carry on anymore, and seeing that the US has received many orders in the Middle East, it is very dangerous for Europe not to change. It is expected that we will only be able to “borrow from Dongfeng” in the future. Cooperation between China and Europe is the only direction for both sides to achieve a win-win situation.

Hungary took the lead. BYD Co., Ltd. (01211) held an official announcement ceremony for the European headquarters in Budapest, Hungary. Hungarian Foreign Minister Sialdo announced on the same day that the total investment of the project is 100 billion forints (about 248 million euros), of which the Hungarian government plans to provide 20 billion forints of support. Cialdo said the project will create 2,000 jobs. According to information released by BYD, the European headquarters carries the three core functions of sales and after-sales, vehicle certification and testing, and model localization design and function development. This cooperation has laid a good foundation for BYD to open up the European market. Today, BYD (01211) rose by more than 3%, reaching a record high, which is of great significance.

According to the Securities Times, recently, the much-publicized mandatory national standard “Technical Requirements and Test Methods for Automatic Emergency Braking Systems for Light Vehicles” was drafted and entered the public consultation stage. The standard will replace the current national standard GB/T 39901-2021. The deadline for consultation is June 30, 2025. Compared to the current standard, the standard was changed from recommended to mandatory, and the scope of application was expanded, that is, from M1 passenger cars to N1 class cargo vehicles. This means that after the mandatory national standard is implemented, all passenger cars must be equipped with automatic emergency braking systems, and large-scale front-mounted automatic emergency braking systems for cars in the Chinese market will enter the countdown. This directly benefits Nexteer (01316): The company launched SBW related products in 2017 and is in a leading position in the world. As of November 2024, 4 SBW mass production orders have been received worldwide. Today it surged more than 9%.

In the past two days, several major companies have announced financial reports. Yesterday it was Tencent (00700), and today there is Alibaba (09988). The basic e-commerce market is quite stable. Revenue has increased by about 10%, gross margin has increased by 5.1%, the cloud business is in line with expectations, and there are losses in local lifestyle services. If JD continues to make takeout efforts, this loss may increase, so today it fell by more than 4%.

NetEase (09999), on the other hand, has strong financial reports. Although there are no new exploits, it is still able to maintain growth, indicating that the industry is booming, the economy is not good, and gaming is increasing. Another major reason is that AI continues to improve the sense of experience. NetEase (09999) surged more than 13%, driving Mindong (02400) to rise nearly 3%, which also hit a yearly high. On May 16, Zulong Entertainment (09990) developed by Zulong Entertainment (09990) and built with the Unreal 4 engine, the first 3D mobile game “Walking the Wind”, debuted today and is up nearly 5% today.

Some restaurant stocks are doing well, such as Zhou Heiya (01458), along the way, and cooking circles (02517). Catering is actually very popular. All that can come out are varieties that have undergone changes. At the same time, shareholders are also very supportive if they do not reduce their holdings. Green Tea Group (06831) listed today: About 30% of the shares offered in the company's IPO were old shares, not new shares issued by the company.

Musk predicted at the Saudi-US investment forum in Riyadh that the number of humanoid robots will eventually reach tens of billions. The fourth paradigm of related varieties (06682) increased by more than 11%, and Preferential Choice (09880) increased by more than 4%.

Looking at the holdings of the bosses, attitudes towards technology stocks are divided. Buffett is still sticking to Apple. Soros increased his Nvidia inventory and cleared ultra-microcomputers, while Qiaoshui reduced his holdings of Google, Nvidia, Meta, etc. As for China Securities, the hedge fund boss David Tepper, who once boasted that he “bought all Chinese assets,” was cautiously optimistic. Although Ali's holdings were reduced, he still maintained his position as the largest holding.

Qiaoshui, on the other hand, resolutely increased its holdings in JD in the first quarter and increased its holdings in Alibaba and Baidu. Duan Yongping's latest position adjustment trends: reducing holdings in Apple and Google, increasing holdings in Pinduoduo, and opening positions at Microsoft, Nvidia, and TSMC. Actually, it's also quite messy; they all went in and out. Shows differences in current market conditions.

Note that in a new round of adjustments to the Hang Seng Index, the Hong Kong Hang Seng Index will join Midea Group (00300) and Zhongtong Express (02057). BYD shares (01211) will be added to the Hong Kong Hang Seng Technology Index, excluding Reading Group (00772). Hong Kong's Hang Seng Composite Index will include Bruco (00325), Gu Ming (01364), and Snow Ice City (02097).

[Section Focus]

According to the recent surveillance situation at the national acute respiratory infectious disease sentinel released by the China Center for Disease Control and Prevention: The positive COVID-19 test rate during the monitoring period (March 31 to May 4, 5 weeks in total) showed an upward trend. Among outpatient emergency influenza-like cases, the COVID-19 positive rate rose from 7.5% to 16.2%; among hospitalized cases of severe acute respiratory infections, the COVID-19 positive rate rose from 3.3% to 6.3%.

Currently, the COVID-19 positive rate is at its peak. Chen Yixun postponed his concert due to COVID-19 infection, so everyone should take good care when traveling.

Related varieties: Shandong Xinhua Pharmaceutical (00719), Cansino Biopharmaceuticals (06185), China Biopharmaceuticals (01177), Tongrentang Technology (01666).

[Individual Stock Mining]

China Biopharmaceutical (01177): Revenue returns to double-digit growth, innovative drug approved by FDA

Chinese biopharmaceuticals will present 45 new research results at the 2025 American Society of Clinical Oncology (ASCO) Annual Meeting. There are reports that the incidence of inflammatory bowel disease (IBD) in China is increasing at an accelerated pace. Global research shows that China has entered a period of growth in the incidence of IBD. In 2024, the company achieved revenue of 28.87 billion yuan (+10.2%).

Comment: The company's revenue growth has returned to double digits, and the innovation pipeline continues to be realized, driving the accelerated growth of innovative products. Revenue in 2024 reached $12.06 billion (+21.9%). Generic drug collection risks were basically cleared, and annual revenue of 16.81 billion yuan (+3.1%) was achieved, returning to positive growth. The company's operating efficiency continued to improve, with a gross profit margin of 81.5% for the whole year, an increase of 0.5 pts over the previous year.

Notably, the innovative drug has been approved by the FDA, and the differentiated PD-1 monoclonal antibody Anicol® (pimiprizumab injection) jointly developed by Chinese Biopharmaceuticals has been approved and marketed by the US Food and Drug Administration (FDA) for first-line treatment of recurrent or metastatic nasopharyngeal cancer and for two indications of metastatic nasopharyngeal cancer where platinum-based chemotherapy has failed. This is the company's first innovative pharmaceutical product approved for marketing in the US.

By the end of 2024, the number of the company's innovative products had reached 17, and will continue to expand at a pace of 4-7 approvals each year, providing a strong impetus for the company's rapid revenue growth. In 2025, a number of potential FIC and BIC pipelines, including JAK/ROCK inhibitors, CDK2/4/6 inhibitors, and meloxicam, a long-acting analgesic NSAID, are expected to be approved for marketing.

In terms of generic drugs, the company still maintains stable investment and plans to report production of more than 40 items by 2027. As the number of IBD patients in China increases, the layout of Chinese biopharmaceuticals in the field of inflammatory bowel disease is expected to become a new growth point for the company in the future.