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At the critical moment, blue chip stocks take action!

This morning, the Shanghai Composite Index hit an intraday low of 2839.34 points, a new low in this round of adjustment, and the Shenzhen Component Index and the ChiNext Index hit new lows. However, the market's depressed mood was quickly reversed:11:05-11:10 time period, the three major indexes continued to rise, the Shanghai Composite Index and Shenzhen Component Index turned positive, and the ChiNext Index rose to near flat.

11:15-11:20 time period, heavyweight stocks soared significantly: Ping An of China, Midea Group, CATL, Industrial Bank, CITIC Securities and other heavyweight stocks rose sharply, and insurance, securities and other major financial sectors exerted their strength. The three major A-share indices expanded their gains.

As of the closing, the Shanghai Composite Index rose 0.28%, the Shenzhen Component Index rose 0.37%, and the ChiNext Index rose 0.06%.

In terms of sectors, Huawei concepts exploded, and concept sectors such as Huawei HiSilicon, Huawei Ora, Huawei Kunpeng, and Huawei Ascend rose collectively. Among them, Huawei HiSilicon concept had the strongest trend. Uboxun, Century Dingli, China Electronics Port and other stocks rose sharply. The leading stock Shenzhen Huaqiang hit the daily limit and ushered in its 7th consecutive day.

Insurance sector strengthens

Recently, the insurance sector has continued to be active. This morning, the insurance sector rose again, with Ping An of China rising 4.05%.

On the evening of August 22, Ping An of China announced its performance in the first half of 2024. Data showed that in the first half of the year, Ping An of China achieved an operating profit of 78.482 billion yuan attributable to shareholders of the parent company, a slight decrease of 0.6% year-on-year; and achieved a net profit of 74.619 billion yuan attributable to shareholders of the parent company, an increase of 6.8% year-on-year. As of the end of June, the company's total assets were nearly 12.23 trillion yuan, an increase of 5.6% compared with the end of last year.

The interim dividend plan announced by Ping An of China shows that the company will distribute RMB 0.93 per share in cash (including tax) to shareholders, with a total distribution amount of approximately RMB 16.8 billion (including tax).

Regarding the insurance industry, China Merchants Securities said that the semi-annual reports of listed insurance companies in 2024 are expected to exceed expectations. In terms of life insurance, with the continued strong supply and demand of savings insurance and the active optimization of product and channel structures by various companies, it is expected that the new business value of listed insurance companies in the first half of 2024 will continue to grow by double digits on a high base.

Many leading stocks fell sharply

Yesterday, many industry leaders or blue chip stocks plummeted, including Aimei, Mingzhi Electric, Shanghai Jahwa, Shede Wine, Homa, Inspur, and Seres. This morning, Kanghong Pharmaceutical, China Micro, Gan & Lee Pharmaceutical, EVE Energy, Dangsheng Technology, and Huaneng Hydropower fell sharply. In addition, NetEase, a Hong Kong-listed company, also plummeted this morning.

In this regard, analysts said that part of the reason was that the performance was not as good as expected. For example, China Micro released its semi-annual performance report on the evening of August 22, saying that its operating income in the first half of 2024 was about 3.448 billion yuan, a year-on-year increase of 36.46%; the net profit attributable to shareholders of listed companies was about 517 million yuan, a year-on-year decrease of 48.48%. NetEase recently released its unaudited financial results for the second quarter of 2024, with revenue of 25.5 billion yuan in the second quarter, a year-on-year increase of 6.1%; net profit of 6.8 billion yuan, a year-on-year decrease of 17%; net profit under non-GAAP was 7.8 billion yuan, a year-on-year decrease of 13.3%.

Another reason is that many industry leaders are heavily held by funds, and the market is worried about the volatility caused by fund redemption pressure. In recent days, the most discussed issue in the market is that during the peak of public offerings in 2021, a batch of 3-year holding period products were established, which will face concentrated maturity in August-September 2024. Therefore, some institutions may adjust their positions in advance to cope with redemption pressure.

Liu Chenming, chief strategy analyst at GF Securities, believes that from a practical point of view, concentrated maturity is indeed true, but its potential impact may be overestimated. First, the scale of concentrated maturity products is not high. During the small peak of public offerings from July to September 2021, the weekly issuance scale was more than 20 billion yuan as a whole, but the three-year holding period products, both in terms of quantity and scale, did not account for too high a proportion. Among them, there were only 8 products issued from August to September 2021, with an issuance scale of 22.5 billion yuan, concentrated in late August and late September 2024. There are even fewer holding period products of 12 months, 18 months, and 24 months that expire in the same period, with a total issuance scale of only 2.7 billion yuan.

Second, after maturity, concentrated redemption may be triggered, but the impact on the market is controllable. Based on the median return rate of the eight products since their establishment, the remaining scale of the 22.5 billion yuan issuance is about 11.9 billion yuan. Even if all redemptions are made, it is difficult to bring systemic risks to the market.