Hong Zhenke: Henke is still hovering for a few days, but a high-value unit is not cheap enough to be held for a long time

ON JULY 9TH, HONG ZHUANG, SENIOR STRATEGIC ANALYST, LIANHUA FINANCE DIRECTOR ON 6 JULY, IN AN INTERVIEW WITH EXTERNAL SOURCES, HE SHARED HIS LATEST OBSERVATIONS AND JUDGEMENTS ON THE GROWING DIVISION BETWEEN THE IPO MARKET AND THE SECONDARY MARKET. THE MAIN POINTS ARE AS FOLLOWS:1 THE FUNDS TRADITIONALLY RESERVED FOR THE SECONDARY MARKET ARE NOW ALL FLOWING INTO THE IPO MARKET FOR “BRINGING NEW”, AND MANY OF THE NEW SHARES DO PERFORM VERY WELL, INCREASING SEVERAL TIMES IN THE FIRST DAY OF THEIR LISTING. WE ARE NOT SURPRISED THAT SUCH EXCELLENCE WILL CONTINUE IN THE COMING MONTHS. SO, I THINK THE IPO MARKET IS STILL ATTRACTING ALL THE ATTENTION, AND THE HEMONIC TECHNOLOGY INDEX IS STILL HOVERING. IT IS A GREAT RISK. BECAUSE MANY IPOS PERFORM WELL, THERE IS A VERY LIMITED FLOW STOCK OF BULK INVESTORS. THIS CAN EASILY LEAD TO PRICE MANIPULATION, AS WELL AS TO CROWDING OUT DISPERSED INVESTORS. SO, ONCE THESE LOCK-IN STOCKS ARE FULLY IN CIRCULATION, INCREASING THE VOLUME OF BULK STOCKS, I THINK THE PRESSURE TO SELL WILL COME. MOREOVER, MANY EQUITIES PERFORMED TOO WELL, AND SHAREHOLDERS HAD A VERY STRONG INCENTIVE TO PROFIT. 3. THE HONG KONG MARKET INDEX IS DOMINATED BY SOFTWARE, INTERNET PLATFORM COMPANIES, ETC., SUCH AS ALI, TELECOMMUNICATIONS, ETC. I BELIEVE THAT MANY OF THESE STOCKS ARE CONSIDERED “OBSOLETE” AND THAT THEY ARE NOT ACTIVE IN AI AND THEREFORE LAG BEHIND IN THE AI AREA. IF YOU LOOK AT SOME AI-RELATED STOCKS, THE MARKET VALUE IS AMAZING. ONCE THE LOCKS HAVE ENDED REGULARLY, THE RELEASE UNITS BECOME FREE-FLOW UNITS, PUTTING PRESSURE ON MANY OF THESE HIGH-PRICED STOCKS. 4 I THINK THE HONG KONG MARKET SOLD OUT LAST WEEK. FOR EXAMPLE, THE CONSTANT FINGER HAS FALLEN TO LEVELS UNKNOWN FOR UP TO A YEAR, AROUND 22,000. THE CURRENT VALUATION OF THE HONG KONG STOCK INDEX IS ABOUT 10 TIMES HIGHER, ALTHOUGH NOT THE LOWEST EVER, BUT ONE OF THE CHEAPEST. SO I THINK PEOPLE ARE TRYING TO FIND VALUE IN THESE OVERSOLD STOCKS. LAST WEEK'S REBOUND, I THINK, WAS BETTER CATEGORIZED AS A TECHNICAL REBOUND. BECAUSE IF YOU LOOK AT THE RELATIVELY STRONG AND WEAK INDICATOR, AND THE WAVE STRUCTURE OF THE HEINOGENEITY INDEX, IT HAS REACHED A LEVEL CONDUCIVE TO A REBOUND. I THINK THE REBOUND WILL LAST FOR A FEW DAYS, AND THEN PEOPLE MAY LOOK BACK AND REALIZE THAT PERHAPS THESE STOCKS ARE NOT CHEAP ENOUGH TO BE HELD FOR LONG. MANY MAINLAND COMPANIES ARE CHOOSING TO COME TO HONG KONG. I THINK THAT MANY CORPORATE OWNERS TEND TO SETTLE (REDUCE) SHARES AFTER THEY ARE LISTED, SO THIS IS A NEW DEVELOPMENT THAT YOU NEED TO NOTE. BECAUSE MANY OF THESE SHARES ARE OVERVALUED AND OVER-PURCHASED, AND I THINK THAT EVEN THE COMPANY OWNERS THEMSELVES MAY NOT BE ABLE TO SEE CLEAR FUTURE PROSPECTS THAT SUPPORT SUCH HIGH VALUATIONS, MANY OF THEM ACTUALLY OPT OUT OF OWNERSHIP. 7 FOR THE MOMENT, I BELIEVE THAT THIS MOMENTUM WILL CONTINUE FOR SOME TIME, GIVEN THE EFFECTIVENESS OF THE “NEW” STRATEGY THIS YEAR, BUT I BELIEVE THAT VALUE WILL EVENTUALLY RETURN AND PEOPLE WILL RETURN TO COMMON SENSE. (GRUNTING)