The Hang Seng Index continued to fall after falling below 19,000 points, and the trend was somewhat surprising; however, after falling below this level, support began to emerge again, following the rebound of A shares on the mainland, but the turnover failed to keep up.
Borrow the concept of artificial intelligence to drive rebound
The market rebounded yesterday following speculation on the mainland. Many sectors, such as tech.com and electric vehicles, dropped sharply at the beginning of the week and then rebounded. The driver for A-shares is the artificial intelligence sector. Hong Kong artificial intelligence concept stocks soared, Baidu (9888) rose 3%, closing at 123.7 yuan; Kuaishou (1024) repurchased 937,000 shares, and the stock rose 6% to close at 54.5 SenseTime (020) rose 2% to close at 2.19 yuan; Alibaba (9988) rose 1.3% to close at 78.8 yuan.
Last week, the central government introduced policies to boost the artificial intelligence and chip industries, and prospects will come one after the other. The hype this time is that Beijing has announced a plan, proposing 16 key tasks to comprehensively promote domestic artificial intelligence chips to achieve breakthroughs. Beijing’s policy is a product of the downward direction of the big government. There is no great surprise, but the relevant stocks have been oversold, which prompted a reaction. Given that the funds in the market have not been particularly active, regardless of whether you are investing or speculating in this sector, it is not wise to do so when you are buoyant.
Stock markets in China and Hong Kong fell more than they rose in May, partly due to the expectation that the US will still have a chance to raise interest rates in June, and the chances of a recession or slowdown are not low . Amid the uncertain economic outlook, shipping stocks were weak, and dividend payer Orient Overseas (316) fell below 100 yuan after a series of losses.
OOCL announced its results at the end of March, and then distributed a high dividend of 35 yuan. The stock price followed suit, from 130 yuan to 170 yuan, a higher increase than the dividend. The stock price was ex-net this month, and the Baltic Index, which reflects the container freight rate, continued to fall, and the stock price finally fell below the 100 yuan mark.
Since the start of the new corona epidemic, freight rates have skyrocketed, and the shipping industry has entered a period of huge profits. The profits in one year can be more than the sum of the last 20 or 30 years. The industry has come in gradually. into an oligopoly, and the high freight rate has been maintained for almost 3 years. Shareholders of the shipping stock received a soft hand in collecting dividends. The sudden increase in logistics costs will push up global inflation, and the result will be counterproductive. The United States wants to fight recession and suppress demand, which will inevitably affect freight in the end. It is impossible to maintain freight rates. Therefore, the high interest rate of food stocks and ships to bear the risk of licking blood. While paying high dividends, OOCL management honestly predicted that the business had shown signs of slowing down, so the stock price fell after the ex-dividend, showing a pattern of dispersion.
OOCL share price breaks through 100
Judging from the numbers, OOCL’s interest rate is extremely high. Although the company currently has a lot of cash on hand, when the stock price falls below the psychological level, some investors will take advantage of the interest rate Is it safe to make money when it falls to this level, where? According to the report published by HSBC in the middle of the month, the weak global trade outlook is believed to have dragged down the performance of freight rates. The container freight rate has fallen steadily since May, it is expected to be due to weak market demand and sluggish container trade volume. The traditional peak season in the third quarter may be affected. The bank predicts OOCL’s net profit for the year will fall 92% year-on-year to US$792 million, and will fall a further 5% next year to US$756 million, but is expected to be higher than r level still. in 2019. Given that the industry will be more difficult in the future, it believes that the current valuation is relatively expensive compared to its peers, and the target price is lowered from 125 yuan to 90 yuan.
HSBC estimates that OOCL is worth 90 yuan. However, the target price set by major banks is usually not accurate. Flood has the ability to maintain high interest rates, but when the company’s profits fall significantly, the valuation will plunge, and it is not surprising that the stock price is even lower than the cash level. If you want to fish low, the current price will not be stable enough.
There is always a feast in the world, and Lu Yuren’s “Financial High Tea” column will bid farewell to “Headline Daily”. Starting from June 1, it will be broadcast exclusively on the paid online channel “Pomegranate Channel”, the website is podcast.bastillepost.com, please pay attention to readers.
Jin Riku
