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28/03/2024 12:15

{Market Preview}Investors can consider China Res Mixc

[ET Net News Agency, 28 March 2024] Hang Seng Index reported a rise of 267 points or
1.6% in the morning session, reaching 16,660 points. The main board turnover exceeds HKD
60.5 billion. The Hang Seng China Enterprises Index reported a rise of 125 points or 2.2%,
reaching 5,853 points. The Hang Seng Tech Index reported a rise of 129 points or 3.8%,
reaching 3,523 points.
Among the top three traded stocks in the Hang Seng Index, Tencent (00700), Meituan
(03690), and AIA (01299) take the lead. Tencent closes at HKD 308.6, rising HKD 6.6 or
2.2%, with a turnover of HKD 4.41 billion. Meituan closes at HKD 97.7, rising HKD 6.6 or
7.2%, with a turnover of HKD 3.209 billion. AIA closes at HKD 52.5, dropping HKD 0.05 or
less than 0.1%, with a turnover of HKD 3.166 billion. Among the top three traded stocks in
the Hang Seng China Enterprises Index, Tencent, Meituan, and Alibaba (09988) take the
lead. Alibaba closes at HKD 71, rising HKD 2.2 or 3.2%, with a turnover of HKD 1.796
billion. Among the top three traded stocks in the Hang Seng Tech Index, Tencent, Meituan,
and Alibaba take the lead.

"Yip Sheung Chi: market adopts a wait-and-see approach for the effectiveness of central
policies, expecting cautious market conditions in April"

The performance of the Hang Seng Index has been fluctuating. Today, the Hong Kong stock
market opened slightly soft and declined in the morning session after the expiration date
of the futures. However, funds flowed into the technology and consumer sectors, driving
Meituan (03690) and JD.com (09618) to rise over 6% in the mid-day session. This led to the
Hang Seng Index's increase of over 200 points. Yip Sheung Chi, the Chief Strategist of
First Shanghai Securities, told ET Net News Agency that the market tends to adopt a
wait-and-see approach after the Two Sessions to assess the implementation of policies.
After the monthly economic data is released, the market will measure the effectiveness of
policy implementation before making further decisions. It is expected that the market will
continue to fluctuate. Yip Sheung Chi initially defines the trading range for the Hang
Seng Index this month as 16,095 to 17,214 points and believes that a clear breakthrough is
needed within this range to provide indicators for the future market trend.
However, overall, since hitting a low of 14,794 points in January, the Hang Seng Index
has shown a rebound with a higher low pattern. Therefore, the market sentiment is still
favourable, and there is anticipation of upward movement in the second quarter. However,
due to the market's cautious stance on economic data, the upward momentum is expected to
be slower.

"Diminished advantages of state-owned property companies, focus on performance for
evaluation"

As the earnings season nears its end, the performance of several stocks has been
announced. Among them, the performance of property management stocks has varied. The
latest announcement shows that CG Services (06098) recorded an 85% decline in net profit
to RMB 292 million, with a final dividend of 29.46 cents per share. As a result, its stock
price drops by approximately 3% in the mid-day session. In contrast, CIFI ES Service
(01995), a private company, recorded a net profit of RMB 434 million, only a 9.5%
decrease, and increased its year-end dividend by 85% to 9.14 Hong Kong cents per share.
Yip Sheung Chi pointed out that previously, the market classified property companies and
property management stocks into state-owned and private enterprises. However, with the
gradual reduction of advantages associated with state-owned companies after the real
estate market consolidation, the distinction between state-owned and private enterprises
has become less relevant. The market now focuses more on evaluating performance. Although
CIFI ES Service shows ideal performance and dividends, its parent company, CIFI Hold GP
(00884), is currently suspended from trading, and its stock price lacks a breakthrough
trend. Therefore, it is not recommended to invest in CIFI ES Service at the moment.

"Property management stocks with good performance are also susceptible to the drag of
parent companies. It is advisable to choose China Res Mixc"

Yip Sheung Chi emphasizes that the performance of property management stocks is often
closely related to the trends of their parent companies. Therefore, if the parent company
performs poorly, it is difficult for its property management stocks to have good
performance as well. Recently, after China Overseas (00688) showed poor performance, the
stock price of China OVS PPT (02669) plummeted by nearly 25% in a single day, following
the release of its annual net profit, which rose by 22.8% to RMB 1.343 billion.
Therefore, Yip Sheung Chi further recommends the blue-chip stock China Res Mixc (01209),
as it is part of the China Resources conglomerateand a blue-chip stock, which has greater
assurance. In terms of trends, he believes that China Resources Mixc is expected to break
through the resistance level of HKD 25. However, similar to the overall market, the stock
price requires time for upward recovery. Positions can be deployed below HKD 25, with a
stop-loss level set at HKD 23.

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