[ET Net News Agency, 07 August 2024] The Hang Seng Index was at 16,864 in the morning
session, up 217 points or 1.3%, with main board turnover of nearly HKD 47.1 billion. The
Hang Seng China Enterprises Index was at 5,931, up 78 points or 1.3%. The Hang Seng Tech
Index was at 3,381, up 39 points or 1.2%.
The three largest traded stocks in the Hang Seng Index were Tencent (00700), Alibaba
(09988) and Meituan (03690); Tencent reported HKD 361.8, up HKD 7.4 or 2.1%, with a
turnover of HKD 2.578 billion; Alibaba reported HKD 77, up HKD 1.75 or 2.3%, with a
turnover of HKD 1.488 billion; Meituan reported HKD 106.3, up HKD 0.7 or 0.7%, with a
turnover of HKD 1.108 billion. The three largest traded stocks on the Hang Seng China
Enterprises Index are Tencent, Alibaba and Meituan. The three largest traded stocks on the
Hang Seng Tech Index were Tencent, Alibaba and Meituan.

"Lee Wai Kit: there is still a risk of shock in the external stock market"

U.S. stocks stabilized overnight, with the Dow rising 294 points; the S&P 500 rising 53
points; and the Nasdaq rising 166 points. Major stock markets in Asia-Pacific performed
well today, with stock markets in Japan, South Korea and Taiwan temporarily rising between
2 and 3%. The Hang Seng Index opened tens of points higher this morning and then rose
higher and higher, reaching a maximum of 16,903 points. Lee Wai Kit, a director of the
brokerage department at Huasheng Securities, told the ET Net News Agency that the external
stock market crashed on Monday, and the decline in Hong Kong stocks was relatively small.
However, the Hang Seng Index peaked around 16,900 in the past two days and fell back.
Monday's high was 16,944 and yesterday's high was 16,908, indicating that some short-term
speculators made profits and left before 17,000 points. This external stock market crash
started due to the unwinding of Japanese yen positions, and it is expected that the shock
is not over yet. At present, the Hang Seng Index is still in the downward channel formed
since May, but it still rebounds in the falling market, with initial resistance at 17,000
points.
Lee Wai Kit pointed out that the trend of Hong Kong stocks is passive. In addition to
being affected by external stock markets, it is also affected by Mainland China policies
and A-share trends. On the external front, recent speculation has focused on the U.S.
cutting interest rates by 0.5% in September and by 1% this year. However, investors must
pay close attention to further information from the Federal Reserve. If the rate cut is
less than expected, it may have an impact on the stock market. The many projects launched
by the Mainland China to stimulate consumption earlier have not achieved significant
results, and the Third Plenary Session of the Central Committee of the Communist Party of
China did not introduce further supporting economic policies. Recently, the RMB has
appreciated along with Asian currencies, but A-shares have not risen sharply as a result,
indicating that the RMB has become less sensitive to the stock market. He predicted that
the Hang Seng Index would fluctuate between 16,300 and 17,700 points.

"Yum brands are unique in the market"

Yum China (09987) announced its second quarter results yesterday (6th). The unaudited
results for the second quarter ended 30 June recorded a net profit of USD 212 million, an
increase of 8% over the same period last year, and earnings per share was USD 0.55, an
increase of 17%. Total revenue increased by 1% year-on-year to USD 2.68 billion, and
operating profit increased by 4% to USD 266 million. The company paid a dividend of USD
0.16 per share. Lee Wai Kit pointed out that in the face of multiple unfavourable factors
such as the Mainland China's economic slowdown and weak consumption, many catering
companies have issued profit warnings recently. It is considered good for Yum China to
achieve growth in the second quarter.
The key to Yum China's success lies in strong management capabilities and the ability to
adjust to social changes. Stores with poor performance will be decisively closed or
transformed. Moreover, its brands are unique in the market and have a wide range of
choices. In addition to KFC, there is also Pizza Hut. It provides popular catering and
also high-priced dining options. Compared with a single catering enterprise such as hot
pot, it can adapt to the different needs of the current society. Lee Wai Kit is optimistic
about Yum China, but the stock price has risen for two days in a row after the results
were announced, and exceeded the 50-day moving average (approximately HKD 250). He
suggested buying below HKD 250, with a target price of HKD 327 and stop loss at HKD 225.