On September 25th, Chinese concept stocks in the Hong Kong and U.S. stock markets experienced a surge, with a sea of red.

In the U.S. stock market last night, the NASDAQ Golden Dragon China Index rose by 9.13%, setting the largest single-day increase since 2022, and the China Internet ETF (KWEB) rose by 10.32%.

BOSS Zhipin (BZ) nearly increased by 20%, and Tencent Music (TME) increased by more than 16%, leading the gains.

In terms of popular Chinese concept stocks, Bilibili (BILI) rose by more than 17%, JD.com (JD) increased by 13.9%, Pinduoduo (PDD) rose by more than 11%, NetEase (NTES) increased by more than 8%, Alibaba (BABA) and Baidu (BIDU) both increased by more than 7%.

In the morning Hong Kong stock market, the Hang Seng Index opened up by more than 3%, with Bilibili (09626) and Kuaishou (01024) leading the gains, both rising by more than 5%, Meituan (03690), NetEase (09999), and JD.com (09618) all increased by more than 3%.

In terms of related ETFs, the China Internet ETF (513220) opened up by more than 5%, with a rise of 2.53% by the time of press release.

Guotai Junan released a research report suggesting that positive events both domestically and abroad have landed, and the upward signal in the Hong Kong stock market is evident.

Advertisement

Looking at valuation levels, the current Hang Seng Index's valuation is only around 12% in historical terms, compared to other major overseas stock indices, most of which are valued at more than 70% in historical terms, whether in developed or emerging markets, the Hong Kong stock market is in a low valuation area.

Major central banks overseas have successively started a cycle of interest rate cuts, and domestic policies to support the economy are increasing, which will support the Hong Kong stock market.

UBS China Equity Strategy Research Director Wang Zonghao, when mentioning China's stock strategy, believes that a series of measures planned by the government are expected to boost confidence and asset prices, which can build a bottom for market sentiment in the short term, and the financing costs of subsequent documents and credit tools may be the focus that investors need to pay attention to next.

On September 24th, the People's Bank of China, China Securities Regulatory Commission, and the State Financial Regulatory Administration held a joint press conference, announcing the latest stimulus measures to support the capital market and the real economy.

The important information from the press conference included: the CSRC will publicly solicit opinions on the market value management guidelines, aiming to enhance the value of listed companies; establish a regulatory framework to promote mergers and acquisitions; improve the profitability and governance level of listed companies to attract long-term capital; study the establishment of a market stabilization fund; establish a swap facility of up to 500 billion yuan, allowing eligible financial institutions to obtain additional liquidity to invest in the stock market; establish a 300 billion yuan re-lending mechanism for listed companies and major shareholders to repurchase stocks, with an interest rate of 2.25%.

"Although the impact on the real economy may take time to emerge, we believe these measures will be more beneficial to the stock market, including the most important measures such as improving the quality of listed companies, establishing credit tools to provide incremental liquidity to the stock market, providing funds to support companies to repurchase stocks, and studying the establishment of a stabilization fund."

Wang Zonghao said.

In terms of the impact of policies on the industry, considering the potential inflow of incremental funds, the increase in the scale of stock buybacks, and the long-term improvement in corporate governance, Wang Zonghao believes that these measures are overall favorable to the stock market.

High dividend stocks may benefit from the inflow of funds brought by the swap facility, and companies that repurchase stocks may also see an increase in stock prices.

"We maintain a constructive view of the market.

Against the backdrop of the MSCI China Index's valuation not being high and investors' positions being relatively low, we believe the press conference will bring surprises to the market because investors' expectations are low."

Wang Zonghao mentioned that UBS China maintains a barbell strategy, on the one hand, optimistic about high dividend stocks, and on the other hand, optimistic about the internet, semiconductor equipment, education, and some real estate-related stocks as beta targets.

The recent policy release has attracted the attention of many securities firms.

CITIC Construction Investment believes that the press conference of the State Council Information Office has announced a large number of future policies and measures, including the creation of two new monetary policy tools to support the stable development of the stock market.

"This policy turn has a profound impact on the market and will lay a solid foundation for the long-term stable development of the stock market.

Although the most fundamental logic of the stock market still depends on the economic situation, the current valuation of A-shares is at the bottom of the historical area."

Under the heavy stimulus of good news, CITIC Construction Investment said that the market is expected to usher in a wave of comprehensive valuation repair.

CICC believes that after the stock market's surge, there may be twists and turns in the short term, but the rebound is expected to continue.

The research report points out that the current valuation of the A-share market is already in a relatively extreme position, and the forward valuation of the CSI 300 Index is near the bottom of the historical one-time standard deviation.

In terms of trading and behavior, there are also common bottom characteristics in history.

Against this background, the emergence of positive policy signals is expected to boost investor sentiment.

After the recent surge in the stock market, there may be twists and turns in the short term, but the rebound is expected to continue.