[ET Net News Agency, 20 November 2024] Russia-Ukraine conflict escalated. Russia issues
nuclear threats again, risk aversion rises, coupled with Trump nominating hawkish figure
Howard Lutnick as Commerce Secretary, Hong Kong stock sentiment is under pressure.
Mainland China's latest LPR does not cut rates, in line with expectations. The rebound
momentum of the Hang Seng Index is interrupted, with fluctuating performance in the
morning, closing at 19,641, down 22 points or 0.1%, The main board turnover was nearly HKD
60.5 billion. Hang Seng China Enterprises Index reported 7,065, down 16 points or 0.2%.
Hang Seng Tech Index reported 4,396, up 1 point or less than 0.1%.

"Hong Kong stocks go sideways but are not expected to plummet; Central government is
expected to stabilize market"

Although tensions rise in Russia-Ukraine conflict, the international financial markets
have responded moderately. The Hang Seng Index fluctuated narrowly this morning, with the
range temporarily maintained within 200 points. It is uncertain whether the optimistic
trend of the past two days can continue. Cheung Chi Wai, a joint managing director at
Prudential Brokerage Ltd, told ET Net News Agency that the People's Bank of China
announced this morning to maintain the market quotation rates for 1-year and 5-year loans
at 3.10% and 3.60%, indicating that the Mainland China government is not currently
prepared to further stimulate the stock market. Since Trump's re-election as the new U.S.
president, there has been market caution, fearing adverse effects on China's economic
development, coupled with the continuous depreciation of the renminbi, which limits the
upside potential in Chinese and Hong Kong stock markets.
However, Cheung pointed out that the situation is not one-sided because the central
government will timely announce new measures to support the stock market. For example, the
China Securities Regulatory Commission recently issued a document promoting market value
management, requiring listed companies to reflect reasonable valuations that mirror the
quality of listed companies. The policy announcement has boosted the Hong Kong stock
market. In addition, there have been numerous companies buying back shares and increasing
dividend payouts recently, which also supports the stock market. Cheung expects that Hong
Kong stocks will continue to trade sideways in the range of 19,000 to 21,000 points.

"Trip.com's fourth quarter orders is expected to rise in price and volume"

Trip.com (09961) announced its quarterly results yesterday, with a net profit
attributable to shareholders of the company of RMB 6.8 billion in the third quarter, up
nearly 48% year-on-year; quarterly, it surged 79%. During the period, the group's total
revenue was RMB 15.9 billion, an increase of 15.6% year-on-year and 24.3%
quarter-on-quarter, mainly due to the increasingly strong demand for travel and seasonal
factors. Trip.com's Board Chairman Liang Jianzhang stated that in the third quarter of
2024, both domestic and international travel showed strong growth momentum, with the
surging confidence of consumers and enthusiasm for travel, the company maintains an
optimistic attitude towards the continued growth of the tourism industry.
Cheung stated that Trip.com's third-quarter performance was impressive, especially with
a significant increase in the number of inbound and outbound flight tickets and hotel room
bookings during the quarter, with the quantity even exceeding 20% of the peak value in
2019 before the pandemic. Although the Mainland China has not completely emerged from the
situation of consumption downgrade, Trip.com can act countercyclically, unaffected by the
domestic downturn, which is indeed rare. Cheung continued, stating that with the
continuous increase in inbound overseas tourists, hotel room prices in the Mainland China
are rising. The trend of Mainland China tourists going to the Asia-Pacific region is also
on the rise, and it is expected that Trip.com's revenue in the fourth quarter remains
optimistic, with the possibility of a rise in both price and volume. In addition, several
major banks have raised their target prices for Trip.com after the performance
announcement, with Morgan Stanley looking at over HKD 600, Jefferies at HKD 603, BOCOM
International at HKD 605, and Daiwa raising the target price to HKD 675, indicating that
there is still more than a 30% upside potential in the stock price.
However, Trip.com's stock price rose by 5.8% yesterday after the earnings announcement,
but it experienced a pullback today, dropping to a low of HKD 491.60 this morning. Cheung
stated that Trip.com's low point was around HKD 450 on 17 October and around HKD 460 on 15
November. Significant support is expected in that range.