[ET Net News Agency, 20 December 2024] The People's Bank of China announced today that
the one-year and five-year or above LPR (loan market quoted interest rates) in December
remained unchanged at 3.1% and 3.6% respectively. Hong Kong stocks traded within a narrow
range in the morning, with a range of less than 200 points. After the Hang Seng Index
opened tens of points lower this morning, the trend was volatile in the early part.
A-shares turned higher, and the Hang Seng Index once turned around and rose over 100
points, but it lacked the ability to sustain its highs. The Hang Seng Index was at 19,774
in the half-day report, up 21 points or 0.1%, and the main board turnover exceeded HKD
84.4 billion. The Hang Seng China Enterprises Index was at 7168, up 16 points or 0.2%. The
Hang Seng Tech Index reported at 4468, up 28 points or 0.6%.

"Ryan Chan: The Fed's hawkish signal has not been digested, and HSI will fluctuate between
19,000 and 20,000"

The external panic index fell back. After opening 55 points lower today, the Hang Seng
Index rose over 100 points. Ryan Chan, an executive director of Eddid Financial, told the
ET Net News Agency that Hong Kong stocks have not yet digested the hawkish signal from the
Federal Reserve. In addition, as the new year is approaching, the atmosphere in Hong Kong
stocks has become cold. No short-term stock market catalysts have been seen, and the Hang
Seng Index is expected to fluctuate between 19,000 and 20,000 in the short term.
He pointed out that the market interpreted the Fed's hawkish signal more positively,
believing that it reflected the improvement of the U.S. economy and inflation. However,
the rebound in external sentiment may not necessarily be good for the Chinese and Hong
Kong stock markets. The current economic interaction between U.S. stocks and Hong Kong
stocks has decreased. The most powerful way for the Federal Reserve's signal to affect
Hong Kong stocks is on the financial side, and the slowdown in the Fed's interest rate
cuts will cause market funds to flow from Hong Kong stocks to U.S. stocks, so it is mostly
negative for Hong Kong stocks.

"The opening of the 'gift sending' function in WeChat stores will become a revenue growth
point for Tencent"

Late at night on 18 December, the WeChat team announced that the WeChat store has
officially launched a grayscale test of the "gift sending" function. Except for jewellery
and education and training categories, products with original price of no more than RMB
10,000 will support "gift sending" function by default. A-shares and Hong Kong stocks have
started to speculate on "WeChat store" concept stocks. Tencent said that it is upgrading
its entire e-commerce strategy around WeChat stores and hopes to build a larger e-commerce
foundation through the entire WeChat ecosystem, including considering integrating Moments,
Search, Mini Programs, etc. with WeChat stores.
Ryan Chan said that looking back at Tencent's most important value-added service revenue
in the first nine months of this year, it only increased by 4.7%. Compared with other
technology stocks, Tencent's value-added service revenue grew slowly. Currently, Tencent
(00700) is in urgent need of a new revenue growth point. And it happened that Tencent
chose the WeChat store to enable the "gift sending" function.
He further pointed out that compared with other e-commerce giants, such as Alibaba
(09988), Tencent's biggest advantage is social networks. Tencent has nearly 1.4 billion
WeChat Pay users. The "gift sending" function expands the usage scenarios of WeChat Pay
and increases the interaction of WeChat users, thus increasing the user stickiness of
WeChat Pay users and attracting traffic to WeChat stores. Based on such a large user base,
it is expected that it will be similar to the "red envelope war" ten years ago and will
increase Tencent's market share and bring objective revenue growth to Tencent.
He added that the current "gift sending" function is just a small test, and the focus is
on increasing transaction volume to reflect the positive effect of activating WeChat
payment user groups. Looking forward to Tencent seizing a favourable position in "social +
e-commerce", which may pose a threat to existing e-commerce, the stock price rose 3.1% in
half a day to HKD 428; other e-commerce platform stocks fell in response, Kuaishou (01024)
fell 4.6% to HKD 43.10 ; Alibaba fell 3.3% to HKD 80.2; JD (09618) fell 2% to 138.8.
Benefiting from the official launch of the "gift sending" function in WeChat stores,
Weimob surged by more than 30% yesterday and continued to rise by more than 20% today.
Ryan Chan said that the commercial activities brought about by the "gift sending" function
also have a positive effect on advertising. The share prices of marketing services and
advertising companies have risen due to conceptual hype. In the short term, Weimob (02013)
is expected to reach a peak of HKD 2.83 of October. But in the long run, this news is
essentially the best for Tencent.