58 new
most of them have good performance and good market performance
According to the announcement of the Hong Kong Stock Exchange, on June 13, overseas investors can purchase 58 new A shares targets through the lunar Stock Connect. Among them, there are 30 , Shanghai-Hong Kong Stock Connect and 28 in Shenzhen-Hong Kong Stock Connect (see Table 1). Therefore, these individual stocks are expected to usher in the purchase of incremental funds, especially in the context of the current foreign capital strategy to go long for A-shares. Data shows that as of the close of June 10 (the same below), northbound funds have been net inflows into A-shares for 10 consecutive trading days. Among them, on May 31, June 6 and June 10, the scale of net inflows into A-shares of northbound funds were more than 10 billion. It is also driven by this that the market's sluggish transaction volume in the past month exceeded the trillion threshold on June 6.
Table 1 The latest shortlist of the Lukou Stock Connect
(sorted from high to low by the latest market value)
Data source: Hong Kong Exchanges; "Red Weekly" compiled
More importantly, the current market value of these individual stocks is generally not high, with an average market value of 41.209 billion yuan. After excluding China Mobile, which has a market value of over one trillion yuan, the average market value is only 17.383 billion yuan. Especially for the Shenzhen-Hong Kong Stock Connect, the average market value of these 28 stocks is as low as 14.289 billion yuan. In other words, the current net inflow of northbound funds exceeding 10 billion may have a more obvious impact on these targets.
Regarding the reasons for inclusion in these individual stocks, the Hong Kong Stock Exchange stated that in terms of the Shanghai-Hong Kong Stock Connect, the relevant changes were based on the changes in the constituent stock announced by the Shanghai Stock Exchange 180 and Shanghai Stock Exchange 380 on May 27 this year; in terms of the Shenzhen-Hong Kong Stock Connect, the relevant changes were based on the adjustments in the constituent stocks announced by the Shenzhen Securities Information Co., Ltd. on May 30 this year (including the Shenzhen Component Index, ChiNext Index, Shenzhen Component Index, Shenzhen Component 100 and other indexes). According to Wind data, constituent stocks have been included in the Shanghai Stock Exchange 180, Shanghai Stock Exchange 380 and other indexes with strong profitability, good growth and good liquidity.
and these companies generally perform better in these aspects. For example, in terms of profitability, 55 of these 58 companies achieved profitability in the first quarter of this year, accounting for 94.83%; 43 companies increased year-on-year, accounting for 74.14%.
In addition, most of these companies are popular tracks, so they have performed well in the recent market rebound. Data shows that since the market bottomed out and rebounded on April 27, the Shanghai Composite Index has closed up 13.80%, with the average increase of these companies being 27.12%, more than double the growth rate of the Shanghai Composite Index.
Among them, the highest increase was Gaote Shares in the photovoltaic industry chain, at 94.22%; Wencan Shares chasing behind with an increase of 81.26%.
But it should be pointed out that the targets that have newly entered the list of mainland stocks are generally relatively "young". According to the Red Weekly, 31 of these companies were listed in 2021 and beyond, accounting for 53.45%. The only companies listed before 2016 were Zangge Mining, Northern Copper, Dajin Heavy Industry , Kaimet Gas , Xinlai Yingmei and Mingtai Aluminum.
119 is only included in the "special list"
Foreign capital can only sell
At the same time, the Hong Kong Stock Exchange also included 119 individual stocks on the "special list", that is, only overseas investors are allowed to sell, and buying is not allowed (see Table 2). The reasons for "falling out of favor" are exactly the opposite of the reasons for inclusion. From the comparison of various requirements, these "falling out of favor" companies also contrast with the newly added companies in the Mainland Stock Connect. Typically, in terms of profitability, 90 of these 119 companies achieved profitability, accounting for 75.63%; 54 companies increased year-on-year, accounting for 45.38%, all of which were far lower than the newly added companies in the Mainland Stock Connect.
Table 2 The latest special list of the Mainland Stock Connect
(sorted from high to low by the latest market value)
Data source: Hong Kong Exchanges; "Red Weekly" compiled
"out of favor" means that these companies will lose some important incremental funds.Of course, this does not mean that these companies will "go downhill" in the secondary market. For example, Zhejiang Construction Investment was once the target of the "special list" in the Hong Kong Stock Exchange's last major adjustment (December 13 last year). However, since the last "special list" adjustment, Zhejiang Construction Investment has closed up 342.03%, leading the A-share market. However, based on the market performance of the "special list" of the Hong Kong Stock Exchange in the past, the winning rate of investing in these companies is not high.
For example, there are 141 companies that were included in the "special list" last time, and since December 13 last year, only 38 companies have closed up, accounting for less than one-third.
However, judging from the listing date, these companies are generally relatively "older". According to Red Weekly, these companies were listed in 2020 and before. Among them, 89 companies were listed in 2016 and before, accounting for 74.49%, and 4 companies were listed in 1992.
National porcelain materials , Eston and other
12 stocks are the most popular among foreign investors
Lu Stock Connect "whitelist" and "special list" companies have different situations, but they are not the favorite targets of northbound funds. Relatively speaking, foreign capital, including northbound funds, like 12 companies including Eston, Guoci Materials, Huace Testing , Pilot Intelligent and Sanhua Intelligent Control (see Table 3). According to Wind data, the total shareholding of these companies (total share capital) is above 24%. Among them, Eston and Guopin Materials are the most popular, with foreign holdings accounting for more than 28%.
Table 3 Latest list of foreign-funded "group pets" stocks
Data source: Wind
According to "Red Weekly", these companies have the characteristics of strong profitability and good growth. As data shows, in the first quarter of this year, these companies achieved profitability, and the net profit attributable to shareholders of Hongchuan Smart, which only focuses on comprehensive storage tank services, declined. But in fact, if we extend the statistical cycle, Hongchuan Wisdom's profitability is still considerable. For example, from its listing in 2018 to 2021, Hongchuan Wisdom's net profit attributable to shareholders has not only achieved positive growth every year, but also has an annual compound growth of 38.22%. During this period, the other 11 companies also achieved compound growth in net profit attributable to shareholders of .
may be due to the "group favor" of foreign capital. These companies have taken the lead in the rebound since April 27 this year, with an average increase of 21.74% during the period, far exceeding the Shanghai Composite Index. Among them, 11 companies achieved an increase, with Pioneer Intelligent's increase of up to 49.00%, and Eston caught up with a 42.35% increase.
(The individual stocks mentioned in the article are for example analysis only, and no trading suggestions are made.)
This article is from the securities market red weekly
