U.S. stocks are speculating on Christmas consumption, and the three major indexes are all doing well, but they have little connection with Hong Kong. Hong Kong stocks yesterday were mainly driven by the continued rise of state-owned enterprises and the rebound of technology stocks. Large state-owned enterprises have always been slow to heat up, so the market rose moderately. The Hang Seng Index closed at 17,523 points, up 99 points, the State Index closed at 5,945 points, up 43 points;
Large-scale state-owned enterprise stocks continued to speculate and revalued
Yi Huiman, who is considered to have the opportunity to take over as the next president of the People’s Bank of China, suggested that the valuation of state-owned enterprises is relatively low, and the mainland should form a valuation system with its own characteristics, which has made state-owned enterprises perform well for two consecutive days. The mainland regards state-owned enterprises and private enterprises as having different operating styles. The former is conservative, while the latter is aggressive. Those who buy stocks naturally want to be aggressive. Therefore, the valuation of private enterprises is dominant. Especially in the early years when technology and Internet stocks exploded, Internet finance leveraged the capital market and even challenged state-owned banks. status, but with the downfall of the regulatory stick, the situation has reversed in the past two years, and the theory of the country advancing and the private retreating has returned.
The motivation for economic development in the Mainland is different from that of capitalism. When self-confidence is getting stronger, they want to have their own valuation methods to match the development model. However, Yi Huiman did not explain in detail how the concept can be implemented. The market speculates first. In addition, don’t dare to make too much effort. Large state-owned enterprises such as telecommunications, China Bank and Sanbarrel generally performed well, and Chinese infrastructure stocks still saw the largest gains. China Zhongzhi (1618) rose 2.6% to close at 1.61 yuan; China Railway Group (390) rose 3.7% to close at 4.16 yuan; China Railway Construction (1186) rose 4% to close at 4.49 yuan; China CRRC (1766) rose 2%, to close at 3.02 yuan; China Communications Construction (1800) rose 3%, to close at 3.73 yuan. This sector was once hyped during the golden period of high-speed rail expansion, but now it is believed that it is difficult to travel to the old peak.
Link REIT (823) announced that it issued guaranteed convertible bonds due in 2027 with a fixed annual interest rate of 4.5%, raising 3.3 billion yuan. The stock price fell by nearly 5% against the market and closed at 50.65 yuan, making it the worst performing blue chip stock. When Link REIT announced its results earlier, it revealed that it has stopped the pace of mergers and acquisitions. Now we are pumping money to raise funds, reflecting the impact of interest surges on the company in the past few months.
According to the conditions of this bond issuance, holders can receive 4.5% interest, and when the maturity expires in 2027, they can exchange shares at 61.92 yuan, which may have a 16% premium to the stock price at the time of announcement. In other words, the holder can collect the interest first, and only see if the stock price is higher than this level when it expires before exchanging shares for profit. The current interest rate of Link is 6%. There are two reasons for holders not to buy Link to collect the interest rate: one is that the 4.5% bond interest rate is stable, and the other is that Bo’s stock price rises and there is no loss. Otherwise, if you buy the underlying stock, you will risk the stock price downside risk.
Thinking about it from another angle, this time Link REIT did not issue bonds with a specific acquisition target. For example, it was looking for an asset that could provide a return of 4.5% and an appreciation of more than 16%. An estimate of the value of the company’s assets. Seeing that the management is willing to issue shares at 61.92 yuan in 2027 to raise funds, the market immediately sells it as a respect. Therefore, many investors who are intoxicated by the long-term rise in Link REIT’s share price should take time to review this idea.
The major shareholder of Tencent’s son-in-law has a heart like iron
The valuation of stocks will change with the objective environment, and you can’t just read a book and get old. This kind of thinking of looking forward and not clinging to the past is the way to success for many big investors. It seems that Tencent (700) is the same as Warren Buffett. They can sit and make money all the time while holding shares, but they are cruel to the end when they sell goods, and they will not miss the past glory of the stock price. Tencent distributed the main shares of Meituan (3690), and the stock price rose another 1.6%, closing at 282 yuan. The major shareholder in South Africa seemed to be as determined as iron, and insisted on breaking up with Tencent, indicating that Meituan would not stay after receiving it. After receiving the shares of Meituan, they will consider selling them. As a result, the stock price of Meituan rose first and then recovered, closing at 138.4 yuan, down 1%.
Similarly, BYD (1211) was again reduced by Berkshire Hathaway, the investment flagship of stock god Buffett, and cashed out 630 million yuan. BYD bucked the trend and fell 1.8% to close at 175 yuan. Weilai (9866), which has no major sellers, rose 4.6% to close at 79.8 yuan; Ideal Automobile (2015) rose 2.6% to close at 67.2 yuan.
In any case, the market is a bit dull, with little ups and downs, and a bit of a cowhide waiting to change.
Jin Riku