Zhitong Hong Kong Stock Exchange Unravels | Overseas economies have fallen into a strange circle of stagflation and it is difficult to negotiate with the Hong Kong Securities Regulatory Commission to rectify the chaos

[Anatomy Dashboard]

US stocks have ushered in the “Three Witches Day”. Goldman Sachs estimates that nominal options exposure of more than 4.7 trillion US dollars will expire on the 21st, including 2.8 trillion US dollars in SPX options and 645 billion US dollars in nominal individual stock options. On this kind of delivery day, the market generally fluctuates sharply. In particular, US stocks are in a downward trend, and the market is worried that they will fall by inertia. As a result, both markets are very cautious today, and Hong Kong stocks fell 2.19% today.

The Turkish stock market is also worrying. On March 21, Turkey's main stock index fell 5%, triggering a fusing mechanism. Turkey's major banking indices continued to decline, falling by 8%. On Thursday (March 20) local time, the Bank of Turkey's monetary policy committee held an interim meeting. After the meeting, it was announced that the bank's overnight loan interest rate would be raised by 200 basis points (2 percentage points) to 46%. The Turkish stock market resumed trading, and the benchmark index fell 7.2%. In addition to various internal demonstrations, the reason for Turkey's sharp decline was inflation anxiety, which weakened expectations for further interest rate cuts.

The Federal Reserve did not cut interest rates, causing the Bank of England to then abandon its interest rate cut trend on Thursday, while the Bank of Sweden directly announced that its easing cycle had ended, citing the complexity of the international context. This is equivalent to the fact that after the US has held up the US dollar, other countries would not dare to relax in order to stabilize the exchange rate, and the tariff war will inevitably cause the economy to slow down. This has fallen into a vicious cycle. Stagflation is scary, but there seems to be no solution. The more realistic question is that the Trump administration will begin imposing reciprocal tariffs on April 2. This will be a huge test for the world.

What is most nervous is Europe. Europe has also taken corresponding countermeasures, but it is not that they have the courage to argue with the US that they have doubts; they are still hoping that the US can let go. According to reports, on March 20, local time, Maros Shevcovic, who is in charge of trade and economic security affairs at the European Commission, showed goodwill to the US, claiming that the US and Europe should work together to deal with the so-called “overcapacity” problem in China, while putting pressure on Chinese companies, claiming that Chinese electric vehicle and battery manufacturers should prepare for technology transfer if they want to invest in the EU. Yesterday, it was also said that Europe should clearly understand the situation and respond positively; they did not expect to continue to act like this.

Once upon a time, when China cooperated with European car dealers in the oil truck era, there were no hard rules on technology transfer. It was the result of voluntary negotiations between enterprises. This blatant practice of stealing technology was really difficult to understand. Now that they say this, the market is also worried.

The sale of the port by Li Ka-shing continues to fester. Ip Lau Suk-yee, the convener of the Hong Kong Executive Council, quoted business and legal figures in a social media post saying that it is difficult to reverse the agreement, and at the same time, it is impossible to see any laws in Hong Kong that can prevent this transaction from being carried out. Since Changhe is registered in the Cayman Islands and does not involve any assets within China, it is quite difficult to prevent it from being sold. On the face of it, this is a commercial transaction, but it actually has an impact. Because it involves many ports along the “Belt and Road”, China has been operating for more than 10 years since 2013, and after the sale, it meant that China lost valuable strategic assets.

The reason this matter has attracted widespread attention is because it is quite difficult to handle. It involves a group of merchants and a business environment similar to those who have invested overseas. How to balance the pros and cons is a major issue. Due to the controversy, the stock prices of Li Ka-shing's companies fell, and Changhe (00001), Changshi Group (01113), and Hehuang Pharmaceutical (00013) dropped significantly. The market value of Li Ka-shing's company evaporated HK$32.36 billion. Market sentiment will naturally be affected.

In addition, supervision is also being strengthened to crack down on crimes involving the illegal operation of securities and futures businesses. The Ministry of Public Security announced 5 typical cases. It mainly involves the direction of illegal off-market fund allocation. The allocation of funds is a disguised usury loan act. The leverage is very high. Under high pressure, related illegal investment will sell stocks in order to avoid the limelight, causing disruptions to the market.

The Hong Kong Securities Regulatory Commission is also taking action simultaneously, issuing the “Circular to Licensed Corporations — Regarding Initial Public Offerings and Financing Services”, which mainly targets the three core risks in IPO subscription and financing: uncontrolled customer leverage, chaotic fund management, and lax identity checks. Reduce the new leverage limit for licensed institutions from the “100x carnival” to a maximum of 10x.

This means that 100x leverage will be history. In the land of Hong Kong's projectile, there are as many brokerage firms as rice shops, and so many small brokerage firms use various methods to win over customers. Among them, leveraging new ones is a trick. There is a huge risk hidden behind this. In 2024, 70 new Hong Kong shares were issued; 24 were broken on the first day of listing, accounting for 34.3%; by the end of the year, 38 were broken, accounting for 54.3%. High leverage is like a double-edged sword; it amplifies profits while also amplifying risk. Indeed, this chaos should be rectified. After the implementation of the new regulations, the competitive pattern of Hong Kong brokerage firms will change, large brokerage firms will continue to expand their share, and small brokerage firms will struggle. Only after survival of the fittest will we usher in healthy development.

Back in the market, the strongest robotics sector weakened. The National and Local Joint Construction Humanoid Robot Innovation Center officially released an open fund on March 21, 2025, with a total scale of 3 million yuan, with an average funding amount of 300,000 to 500,000 yuan for a single project. The fund is mainly aimed at outstanding young scholars from domestic universities, scientific research institutions and enterprises to carry out basic research and cutting-edge exploration in four major fields and 17 segments.

Some people think this scale is too small. In fact, this fund is not an industrial investment fund, but rather focuses on special support for young scientific research talents. The aim is to encourage innovative ideas and technological breakthroughs. The initial phase of 3 million yuan was a pilot project, and the scale will gradually expand later.

As far as the robotics industry is concerned, it is clear that the market will not stop easily. At Tesla's first quarter general meeting today, Musk revealed that the humanoid robot Optimus (Optimus) has been manufactured on the trial production line at the Fremont factory and will enter the trial production phase this year. Tesla aims to produce 5,000 Optimus units this year, and the parts already ordered are sufficient to support the production of 10,000-12,000 units this year. The goal is to produce 50,000 Optimus units in 2026. Obviously, Musk is betting on robotic direction.

Furthermore, the national and local humanoid robot innovation centers, together with Shanghai University and Tsinghua University, jointly released the “Grid”, a personalized intelligent simulation platform to promote humanoid robot technology from laboratories to industrialization. In the future, there will also be a variety of exciting news.

There are few varieties that have risen in the market today. The ones that have performed well are mainly performance lines, such as Gaowei Electronics (01415): revenue in 2024 reached about US$2,494 million, an increase of about 170.0% year on year; net profit of US$119 million, an increase of about 155.54% year on year. Mainly due to increased customer orders for new back-end camera modules. Today it surged more than 8%.

Other include Tongcheng Travel (00780): 2024 revenue increased 45.8% year over year. Up more than 4%. Yihuatong (02402) is driven by both its major asset restructuring plan and favorable hydrogen energy industry policies. By integrating Xuyang Hydrogen Energy, the gross margin of its fuel cell system is expected to increase, and losses may narrow significantly in 2025. Today's increase is over 7%.

[Section Focus]

Since March 2025, cement prices in the three eastern provinces, Yangtze River Delta, and Hebei have generally risen, and the average price of cement across the country has rebounded for two consecutive weeks. Enterprises improve price self-discipline through erroneous production and collaborative production cuts, compounding seasonal recovery in demand, and driving prices close to the cost line.

Deepening supply-side reforms: the industry plans to reduce actual clinker production capacity by about 20% by supplementing excess production capacity, accelerate the clearance of backward production capacity by superimposing carbon emission restrictions, optimize the medium- to long-term supply and demand pattern; increase policy incentives and infrastructure investment;

Strong fiscal policy: The 2025 government work report clearly shows that special debt will increase to 4.4 trillion yuan and ultra-long-term special treasury bonds to 1.3 trillion yuan, focusing on supporting infrastructure and urban renewal projects. The scale of local bond issuance reached a three-year high in the first 2 months, and infrastructure funds were in place to speed up the commencement of the project.

Main varieties: Huaxin cement (06655), conch cement (00914), China Resources Building Materials Technology (01313).

[Individual Stock Mining]

Goldwind Technology (02208): Fans account for nearly half of the export capacity and have sufficient orders in hand

Recently, the National Energy Administration released national power industry statistics for January-February. By the end of February, the country's cumulative installed power generation capacity was 3.4 billion kilowatts, an increase of 14.5% over the previous year. Among them, the installed capacity of wind power was 530 million kilowatts, an increase of 17.6% over the previous year. Among them, the export performance was particularly impressive. In 2024, the new export capacity of wind turbines reached 5193.7 megawatts, and 904 new wind turbines were exported, with a capacity of 5193.7 megawatts, an increase of 41.7% over the previous year, reaching another record high.

Comment: In 2024, Goldwind Technology exported 450 wind turbines to 15 countries, with a capacity of 2478.4 megawatts, accounting for nearly half of China's total wind power export capacity. The export capacity of fans continues to rise, and the market share continues to increase. Goldwind Technology consistently ranked first in terms of export share. The unit price for Vestas orders has increased from less than 0.9 euros/W in 2021 to 1.1 euros/w in 24Q3.

Goldwind Technology has sufficient order reserves. As of the end of the third quarter of 2024, the company had 44.28 GW of orders in hand, including 5.5 GW overseas. Domestic seabreeze shipments are 1 GW in 2024, and will reach 2 GW in 2025; in terms of international business, the full 4 GW order in 2024 will actually be delivered, and 3 GW will exceed 5 GW in 2025. It is expected that the company's fan shipments will continue to grow in 2025. The average gross margin of the company's international crew is over 12%. As the delivery ratio of international and offshore fleets increases, and costs decrease due to the increase in the proportion of high-speed models, the overall gross margin of the fleet is expected to continue to improve in 2025.

The company exports to the Asian, African and Latin American markets on a large scale. Southeast Asia plans to speed up wind power with Vietnam as the lead, and wind power is growing steadily in the Latin American market. Goldwind Technology has entered the list of the world's top five power supply fan suppliers in both Latin America and South Africa. It has also developed markets in Australia. Southeast Asia has also entered Vietnam, Central Asia, and the Middle East. Goldwind Technology is supplying projects under construction in all of these markets. Goldwind Technology and TBC, a leading renewable energy company in Southeast Asia, signed an agreement for the Kalayaan 2 wind power project, with a total installed capacity of 100.8 MW.

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