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China Fund News Dawn

Hello everyone! It's another beautiful Friday. Let's pay attention to the market conditions and the latest information in the morning~

First, let's look at the central bank's actions: On July 26, the central bank announced that in order to maintain a reasonable level of liquidity in the banking system at the end of the month, it conducted a 7-day reverse repurchase operation of 358.05 billion yuan at a fixed interest rate and quantity bidding method, with an operating interest rate of 1.70%. Wind data shows that 59 billion yuan of reverse repurchases matured today.

In terms of market conditions, on July 26, the three major A-share indexes opened with mixed gains and losses: the Shanghai Composite Index opened 0.03% lower, the Shenzhen Component Index opened 0.45% higher, and the ChiNext Index opened 0.3% higher. After the opening, the market collectively rose, the Shanghai Composite Index turned positive, the Shenzhen Component Index and the ChiNext Index both rose by more than 1%, and more than 4,600 stocks rose.

On the market, affected by the new policy of "old for new", sectors such as home appliances, automobiles, and construction machinery rose collectively, concepts such as white appliances, air-energy heat pumps, new energy vehicles, and battery recycling soared, and the prosperity value of precious metals increased; sectors such as telecommunications, electricity, banking, and water affairs declined slightly.

The Hong Kong stock market opened slightly higher in the morning: the Hang Seng Index rose 0.44%, Hang Seng Technology rose 0.65%, and Hang Seng China Enterprises rose 0.56%. Hong Kong stocks rose and fell in the morning, and still maintained a certain increase as of press time; Haier Smart Home led the Hang Seng Index. Oriental Selection's stock price plunged, leading the decline of Hang Seng Technology.

See the details——

Home appliance sector saw daily limit rise

Auto stocks collectively exert their strength

On the morning of July 26, the household appliances sector opened higher, ranking first among the Shenwan first-level industries in terms of growth rate, with a total market value of nearly 1.38 trillion yuan.

In terms of individual stocks, Beiding shares quickly rose by 20CM after opening, followed by Marsman and Hongchang Technology, which also rose by 20CM; Kangsheng shares, Chunguang Technology, Hisense Home Appliances, Xueqi Electric and many other stocks also rose by the daily limit. Among the large-cap stocks, Haier Smart Home, Gree Electric and Midea Group all rose by more than 5%.

The automobile sector also rose, with many stocks such as Disunity, Tianrun Industrial, China National Heavy Duty Truck Group, and Weichai Heavy Machinery hitting their daily limit, and Weichai Power rising more than 9% during the session.

On July 25, the National Development and Reform Commission and the Ministry of Finance issued the "Several Measures on Strengthening Support for Large-Scale Equipment Renewal and Consumer Goods Trade-in", and arranged about 300 billion yuan of ultra-long-term special treasury bonds. Among them, support for the trade-in of household appliances, and provide a 15% subsidy on the sales price of eight categories of products such as refrigerators, washing machines, televisions, air conditioners, computers, water heaters, household stoves, and range hoods that meet energy efficiency and water efficiency standards of level 2 or above, and a 20% subsidy on the sales price of products that meet energy efficiency and water efficiency standards of level 1.

In the automotive field, for individual consumers who scrap their old cars and purchase new cars in accordance with the requirements of the "Implementation Rules for Car Trade-in Subsidies", the subsidy standard will be increased from 10,000 yuan for purchasing new energy passenger cars and 7,000 yuan for purchasing fuel passenger cars to 20,000 yuan and 15,000 yuan respectively.

CITIC Securities Research Report believes that the home appliance industry will benefit significantly from this measure. First, the subsidy threshold is low, and it is not necessary to scrap the original home appliances. Second, the unit subsidy is large. The measure proposes a subsidy standard of 15% of the product sales price. For products purchased with energy efficiency or water efficiency standards of level 1 or above, an additional subsidy of 5% of the product sales price will be given. Third, the total subsidy is large. It is estimated that the subsidy for the home appliance industry this time is expected to far exceed the market's 10 billion expectations. Fourth, the current stock prices of home appliance companies do not imply policy expectations, and there is a clear upward momentum in stock prices.

At the same time, the new version of the car trade-in policy is much stronger than market expectations, and the stimulus to the auto industry will be much better than the policy standard at the end of April. This round of "trade-in" policy is expected to release the demand for terminal holders to hold cash for purchase, and passenger cars, commercial vehicles, two-wheeled vehicles, power batteries and other sectors are expected to benefit comprehensively.

Official announcement of Dong Yuhui's resignation

Oriental Selection Dive

On July 26, Oriental Selection opened at HK$10.54 per share, and the lowest intraday price reached HK$8.92 per share, a drop of 28.06%. As of press time, Oriental Selection's share price still fell by more than 19%.

Yesterday evening, Oriental Selection issued an announcement stating that Dong Yuhui has decided to no longer serve as an employee of the company and senior management of a merged affiliated entity of the company. The resignation was due to Dong Yuhui's career ambitions, his commitment to his other careers and personal time arrangements, and took effect on the same day.

In addition, Dongfang Zhenxuan also stated in the announcement that Dong Yuhui (buyer), Beijing New Oriental Xuncheng Network Technology Co., Ltd. (seller) and Yuhui Tongxing (Beijing) Technology Co., Ltd. (target company) entered into a sales agreement. The seller agreed to sell, and the buyer agreed to acquire 100% of the target company's equity for RMB 76.5855 million.

Afterwards, Yu Minhong also released an "Open Letter to Shareholders and Friends of Oriental Selection". Yu Minhong said that in order to express his gratitude to Dong Yuhui, in addition to paying all the promised benefits, he had asked the board of directors and the remuneration committee and obtained their consent to reward Dong Yuhui with all the net profits of Huixingxing.

Dong Yuhui posted on his personal Douyin account, "Taking into account the current actual situation and development plan, after friendly consultation and unanimous decision of both parties, the company Yuhui Xingxing will begin to operate independently. Leaving the protection of the port, Yuhui Xingxing will sail alone to the vast sea from today. The future is unpredictable, and we can only go all out."

Although Dong Yuhui's fans flocked to the live broadcast room to congratulate Dong Yuhui, this move is not good news for shareholders. Dongfang Selection announced that it will hold a shareholder communication conference call at 3 pm (Hong Kong time) on July 26 (Friday).

Bocom International will exclude the commission income from the live broadcast room of Youhui Tongxing, and if the strategy of Oriental Selection's self-operated products and other matrix accounts remains unchanged, it is expected that the GMV/revenue/profit will be reduced by 34%/9%/20%+ in fiscal year 2025. Bocom International said that the sale of Youhui Tongxing will have an impact on the company's short-term financial performance, but the risk of public opinion may be reduced. After stabilization, the management can focus on developing self-operated strategies and multi-platform development, or achieve stable operations in the long term.

Citi Research also believes that the departure of Dongfang Zhenxuan's well-known anchor Dong Yuhui will reduce the company's reliance on celebrity live broadcasts and focus on the sustainable growth of its own brands, and maintains a buy rating on the stock. Dongfang Zhenxuan announced the divestiture of the Yuhui Tongxing live broadcast platform and a share repurchase plan of no more than RMB 500 million, which shows that the company is committed to simplifying operations and focusing on the booming own brand business to achieve sustainable growth through repositioning.

Editor: Xiaomo

Audit: Wooden Fish

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