Investment Daily

3 December 2020

Major Market Indicators Market Overview 2 Dec 1 Dec 30 Nov

Mkt. Turn.(mn) 181,700 153,100 240,700 Kong Stock Likely to Range Trade; Initial Support at 20 Stock Advances 750 1,029 721 Day SMA Stock Declines 1,025 747 1,110 Although US stock market hit new high on Tuesday, concern of fund raising pressure from share HSI 26,533 26,568 26,341 placement and IPO activities has hurt market sentiment. Hang Seng Index fluctuated on Change -35 +226 -553 Wednesday but found support at 20 Day SMA(26,366). The Hang Seng Index closed 35 points HSI Turn.($bn) 82.97 61.76 92.40 lower at 26,533. Market turnover was HK$181.8bn. (1810) placed 1bn shares at HSCEI 10,574 10,660 10,546 HK$23.7 per share, its share price fell 7.1%. Longfor Group (960) placed 100mn shares at Change -86 +113 -244 HK$47.00, its share price fell 11.8% to HK$44.80. On the other hand, US long term treasury HSCEI Turn.($bn) 94.59 70.05 99.02 yield rise, favor banking stocks. HSBC(0005) rose 3.7% to HK$42.50.

Batted by weaker-than-expected private sector jobs report for November, US stock market HSI Technical Indicators opened lower on Wednesday. The Dow once fell 220 points. However, U.S. House Speaker 10-days MA 26,570 Pelosi and Senate Minority Leader Schumer backed the bipartisan US$908 billion stimulus deal, 50-days MA 25,083 triggered hope that a new fiscal package agreement could be reached. Together with US 250-days MA 25,372 approved temporary emergency use authorization for Pfizer’s COVID 19 Vaccine, US stock 14-days RSI 61.38 rebounded in late session. The three US stock index closed mixed on Wednesday, with the Dow Primary resistance 26,800 index rose 0.2% while Nasdaq index fell slightly. Of which, energy and financial sector Primary support 26,366 performed well. On the other hand, fund continue to flow away from treasury market, 10 Year US treasury yield rose 3 basis points to 0.95%. HS CEI Technical Indicators 10-days MA 10,622 Biden says he will not immediately remove Trump's tariffs on China. Besides, investors also 50-days MA 10,091 concerned that Trump might launch further unfriendly measures against China during the 250-days MA 10,182 transition period. Together with fund raising pressure from share placement and IPO market, 14-days RSI 55.41 stock is likely to remain range trade, Hang Seng Index initial support at 20 Day SMA Primary resistance 10,700 (26,366). Primary support 10,400 Xiaomi(1810) raised HK$23.7bn through share placement yesterday. Besides, Jack Ma has also reduced its holding of Alibaba (9988) by near HK$80bn in the past year. Since lots of tech stocks HSI Futures has accumulated significant gain year-to-date, related fund raising concern will impact the sector 2 Dec 1 Dec 30 Nov share price in the near term. On the other hand, EV concept stock retreated obviously in the past

Dec 26,535 26,589 26,432 few days. However, as the sector will begin high growth stage, investors could accumulate Volume 95,566 85,724 115,027 (0175) and Minth Group (0425). Technical Analysis Open interests 130,357 133,982 135,870 Jan 26,544 26,604 26,447 The Hang Seng Index fell with a black candlestick on Wednesday, closed below 10 Day SMA Volume 722 742 271 (26,557) but found support at 20 Day SMA(26,366). On the other hand, MACD still in the Open interests 1,302 798 206 negative territory while the negative trend further intensified. Technical trend remained not strong in the near term. The first support level of the Hang Seng Index is the 20 day HSCEI Futures SMA(26,366), and the second support level is 26,000 points. In addition, the first resistance level 2 Dec 1 Dec 30 Nov is 26,800 points and the second resistance level is 27,000 points.

Dec 10,575 10,646 10,578 HSI Chart Volume 76,627 68,822 98,888 Open interests 218,085 224,798 228,327 Jan 10,581 10,645 10,584 Volume 1,410 372 196 Open interests 1,868 476 192

Sources ：Google Investment Daily Daily Focus China Overseas (0688): Latest Update

 China Overseas (0688) has won a residential site at Kai Tak for HK$4.27 billion, or 13,009 per square feet, which is nearly 10% higher than upper end of market China Overseas (0688) Info forecast. Closed price 19.3

 In fact, China Overseasis a active participant in Kaitak. In the past 2 years, China Expected P/E (X) 5 Overseas has solely or by consortium, secured 6 sites in the areas. Total land cost Expected Dividend 5.3 reached HK$60bn. yield (%) 52 week high 29.98  On the other hand, China Overseas November sales in China rose 52.4% to Rmb34bn. For the first eleven months of 2020, total sales in China rose 6.1% yoy 52 week low 17.56 to Rmb320bn, which is close to its full year target of Rmb360bn. 14RSI 49  Although price competition remained keen in China, China Overseas could still maintain 30% gross margin in 2020. Besides, China Overseas balance sheet is strong, with net gearing ratio below 40%. Morever, its land reserve in Hong Kong reached HK$130bn, the positive vaccine news is positive to HK property market which will also benefit China Overseas. We expect China Overseas net profit could achieve around 10% CAGR during 2020-2022.  However, China Overseas share price substantially lagged behind the market. It is mainly due to China Overseas parent company is one of the 31 Chinese companies which is said to related to Chinese military (according to US government). Although its share price still have some short term uncertainties, but the banning (if effective) will not impact China Overseas fundamental. Its current valuation is 5x prospective P/E, dividend yield is 6%. Valuation is attractive, suggest to accumulate for medium term investment, target price is HK$23.00.

Analyst: Samuel Chua, CFA

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Investment Daily

Shanghai /Shenzhen -Hong Kong Stock Connect Statistics SH Connect SZ Connect Combined Southbound Balance (RMB bn) 51.90 54.15 78.42 Balance as % of Quota Amount 99.8 104.1 93.4

Top 10 Most Actively Traded Stocks(SH-HK Connect Southbound) Stock Name Stock code Buy Trades (HKD) Sell Trades (HKD) Turnover (HKD) XIAOMI-W 1810 2,058,404,910 500,864,140 2,559,269,050 -W 3690 914,294,360 758,985,260 1,673,279,620 700 1,020,302,650 475,374,650 1,495,677,300 SMIC 981 276,384,800 577,158,800 853,543,600 GEELY AUTO 175 219,888,550 237,759,850 457,648,400 HUA HONG SEMI 1347 329,995,950 90,683,300 420,679,250 941 382,746,375 15,407,375 398,153,750 SINO BIOPHARM 1177 87,652,870 292,413,820 380,066,690 NCI 1336 86,512,210 258,090,275 344,602,485 GREATWALL MOTOR 2333 153,642,210 148,140,080 301,782,290 Sources: HKEx Top 10 Most Actively Traded Stocks(SZ-HK Connect Southbound) Stock Name Stock code Buy Trades (HKD) Sell Trades (HKD) Turnover (HKD) MEITUAN-W 3690 809,219,000 1,424,319,767 2,233,538,767 XIAOMI-W 1810 1,680,910,020 172,698,430 1,853,608,450 GEELY AUTO 175 75,311,750 708,733,500 784,045,250 TENCENT 700 525,403,100 242,768,100 768,171,200 BYD COMPANY 1211 245,358,250 314,731,050 560,089,300 GCL-POLY ENERGY 3800 300,074,430 224,988,340 525,062,770 SMIC 981 229,680,725 146,416,975 376,097,700 SMOORE INTL 6969 79,844,200 210,866,850 290,711,050 HUA HONG SEMI 1347 181,569,850 89,780,150 271,350,000 CHINA MOBILE 941 61,205,600 176,387,025 237,592,625 Sources: HKEx Other Statistics

Ten Most Actively Traded Stocks Stock Name Code Change Closed Price Turnover(Million) XIAOMI-W 1810 -7.08% 24.30 376.46 MEITUAN-W 3690 -3.94% 277.80 109.77 TENCENT 700 -0.69% 574.00 77.50 LONGFOR GROUP 960 -11.81% 44.80 62.05 PING AN 2318 0.80% 95.05 48.38 BABA-SW 9988 -0.78% 255.20 44.79 BYD COMPANY 1211 -7.89% 172.80 40.71 GEELY AUTO 175 -4.16% 20.75 29.88 HSBC HOLDINGS 5 3.66% 42.50 24.37 EVERG SERVICES 6666 0.00% 8.78 20.26

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Investment Daily Ten Short Sell Stocks

Stock Name Code Short Selling Turnover Short Selling Ratio Turnover XIAOMI-W 01810.HK 2.47B 37.65B 6.55% PING AN 02318.HK 1.76B 4.84B 36.28% TRACKER FUND 02800.HK 1.52B 3.37B 45.27% MEITUAN-W 03690.HK 1.15B 10.98B 10.45% BYD COMPANY 01211.HK 972.37M 4.07B 23.89% TENCENT 00700.HK 770.44M 7.75B 9.94% CCB 00939.HK 572.98M 1.68B 34.11% HSBC HOLDINGS 00005.HK 571.06M 2.44B 23.43% ICBC 01398.HK 385.52M 1.35B 28.46% AIA 01299.HK 344.27M 1.77B 19.48% Source: AA Stocks Economic Calendars

Date Country Event Survey Prior Mon China Nov. NBS Manufacturing PMI 51.5 51.4 Hong Kong Sino Biopharm (1177), Meituan (3690) Results Tue US Nov. Markit Manufactuing PMI 56.7 Nov. ISM Manufacturing 57.6 59.3 Euro Zone Nov. Markit Manufactuing PMI 53.6 53.6 Nov. CPI Estimate YoY -0.2% -0.3% China Nov. Caixin Manufacturing PMI 53.5 53.6 Thu US Initial Jobless Claims (Till Nov 28) 778k Continuing Jobless Claims (Till Nov 21) 6071k Euro Zone Oct. Retail Sales YoY 2.4% 2.2% Fri US Nov. Change in Nonfarm Payrolls 500k 638k Oct. Trade Balance -$64.8b -$63.9b Hong Kong Huazhu (1179) Result

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