[ET Net News Agency, 22 April 2024] Hong Kong stocks rose, with the Hang Seng Index
surging over 400 points at one point, reaching 16,506 in the morning session, up 282
points or 1.7%. The main board's turnover exceeded HKD 59.5 billion. The Hang Seng China
Enterprises Index reported 5,838, up 91 points or 1.6%, while the Hang Seng Tech Index
reported 3,342, up 63 points or 2%.
Sino Biopharm (01177) rose 7.3% to HKD 2.51, with a trading volume of approximately
54.94 million shares and a turnover of HKD 136 million. The stock reached a high of HKD
2.53 and a low of HKD 2.41 during the session. Cres Beer (00291) rose 5.4% to HKD 34.05,
ENN Energy (02688) rose 4.6% to HKD 64.2, and Li Ning (02331) rose 4.4% to HKD 17.48.
Li Auto (02015) bucked the trend and fell 6.5% to HKD 99.4, with a trading volume of
approximately 13.44 million shares and a turnover of HKD 1.356 billion. The stock reached
a high of HKD 104 and a low of HKD 99 during the session. Zijin Mining (02899) fell 3.8%
to HKD 17.06, and PetroChina (00857) fell 2.1% to HKD 7.33.

"Nip Chun Pong: HSI fluctuates between 16,200 and 16,800"

The situation in the Middle East has temporarily eased, and the market expects that
Israel's retaliatory attacks against Iran will not escalate into a larger conflict. Last
week, the Dow Jones Industrial Average repeatedly rose by more than 200 points. The HSI
opened high this morning and continued to rise, with the gain expanding to over 400 points
at one point. Nip Chun Pong, the Chief Strategist at Blackwell Global Asset Management,
told ET Net News Agency that in addition to the easing of the Middle East situation, the
more important factor for the morning market rise is the five capital market cooperation
measures announced by the China Securities Regulatory Commission (CSRC) last Friday. These
measures include expanding the range of eligible stock ETF products under the
Shanghai-Hong Kong Stock Connect, including REITs in the Connect, supporting RMB stock
trading counters to be included in the Stock Connect, optimizing mutual recognition
arrangements for funds, and supporting leading Mainland Chinese companies to list in Hong
Kong. These measures are beneficial for the long-term development of Hong Kong stocks and
have boosted the overall market today, as well as the insurance and brokerage sectors.
However, Nip Chun Pong pointed out that although there are positive news and stimuli,
there is still a time lag before the implementation of these measures. Therefore, whether
the HSI can continue to rise in the short term depends on whether it can stabilize near
the 100-day moving average (around 16,430) in the next two days. He expects the HSI to
hover around the range of 16,200 to 16,800.

"Tesla triggers another price war"

Following the price reduction in the United States, Tesla announced a comprehensive
price reduction for its vehicle models in the Chinese market, starting from 21 April. The
prices of all models have been reduced by nearly USD 2,000 (approximately RMB 14,000),
consistent with the reduction in the United States. Li Auto also announced today the
adjustment of prices for its 2024 models L7, L8, L9, and MEGA, with a maximum reduction of
RMB 30,000. Furthermore, starting from today, new and existing customers who have placed
orders can enjoy the new prices, and cash rebates will be provided to owners who have
already taken delivery of the 2024 Ideal L7, L8, L9, and MEGA models.
Li Auto (02015) fell against the market today, declining by 5%, and even fell below the
red line, reaching a low of HKD 99. Nip Chun Pong pointed out that Tesla's price reduction
has a greater impact on Li Auto and other pure electric vehicle makers. Companies like BYD
(01211), which also produces hybrid vehicles and has diversified risks with export
markets, are relatively less affected.
To further understand the impact of this price war, one can wait for the sales data
after the "May Day Golden Week." However, Li Auto' stock price has been declining since
late February and early March, with accumulated losses exceeding 40%. It is expected that
the stock price will hover around HKD 100 these two days, and if it continues to decline,
it may test the support level of HKD 90 in the short term.