{Market Preview}Investors can consider SHK PPT and NWD

[ET Net News Agency, 28 February 2024] The Hang Seng Index reported 16,745 in the
morning session, down 45 points or 0.3%. The main board recorded a turnover of nearly HKD
57.1 billion. The Hang Seng China Enterprises Index reported 5,762, a decrease of 44
points or 0.8%. The Hang Seng Tech Index reported 3,501, a decrease of 1 point or less
than 0.1%.
The top three traded stocks in the Hang Seng Index were Tencent (00700), Li Auto
(02015), and Meituan (03690). Tencent closed at HKD 280.2, down HKD 4.4 or 1.5%, with a
turnover of HKD 3.445 billion. Li Auto closed at HKD 182.1, up HKD 6.6 or 3.8%, with a
turnover of HKD 2.504 billion. Meituan closed at HKD 80, down HKD 1.65 or 2%, with a
turnover of HKD 1.485 billion. The top three traded stocks in the Hang Seng China
Enterprises Index were Tencent, Li Auto, and Meituan. The top three traded stocks in the
Hang Seng Tech Index were Tencent, Li Auto, and Meituan.

"Wan Kong Shing: for revocation factor, consider SHK PPT for stability and NWD for a more
aggressive approach"

Financial Secretary Paul Chan announced the latest budget, mentioning the revocation of
all residential property demand management measures. Starting today, there will be no
additional stamp duty, buyer's stamp duty, and new residential stamp duty for all
residential property transactions. The Hang Seng Index showed volatile performance this
morning, initially under pressure. When the budget was announced at 11 a.m., the index's
decline widened. However, when the "comprehensive revocation" was mentioned, property
stocks and the Hang Seng Index immediately attracted funds. The index briefly turned
positive but ended the morning session down by 45 points.
Wan Kong Shing, the Vice President of iFAST Global Markets, told ET Net News Agency that
the most direct way for the government to increase revenue is to sell land, which should
directly benefit property stocks with low valuations. With the comprehensive revocation
factor, the property sector is the most attractive concept in the budget. He suggested
that investors pay attention to blue-chip property stocks, considering SHK PPT (00016) for
stability and NWD (00017) for a more aggressive approach.
NWD's stock price has been hovering around HKD 10, even after the morning surge. He
believes that in terms of price-to-earnings ratio and price-to-book ratio, NWD is
currently undervalued. He mentioned that the market anticipates NWD's performance to
double this year, as the negative news related to the redevelopment of The Pavilia Farm
project in 2022 is expected to have been fully disclosed. The medium- to long-term target
price is around HKD 12.

"NetEase may see a pullback after earnings, but it is still optimistic for the year"

Regarding the overall market, Wan Kong Shing noted that the Hang Seng Index has not
touched the 100-day moving average for a long time, so the recent consolidation near that
level is reasonable. However, he believes that there are still high chances of a
breakthrough in the future, with an initial target of the 10-day moving average in case of
a pullback. Even if it retraces to the 50-day moving average, it is not considered too
weak.
NetEase (09999) is set to announce its full-year earnings today after the market closes.
Coupled with the recent issuance of a new batch of game licences in Mainland China, which
includes NetEase, the stock price has surged by over 5%. He believes that unless NetEase's
earnings bring a huge surprise, there is a tendency for the stock to consolidate at higher
levels after the announcement. A pullback is likely, but the extent of the adjustment is
expected to be small, with an initial target of around HKD 160.
He is optimistic that NetEase will break the HKD 185 level within the year and test HKD
200. The overall sentiment in the Mainland China gaming industry has improved, coupled
with policy support, making the sector more optimistic for this year.