Market Overview and Key Insights - The Hong Kong stock market experienced a decline last week, with the Hang Seng Index dropping by 1.43% and the Hang Seng Technology Index falling by 2.03%. The Hang Seng China Enterprises Dividend Index decreased by 0.70% [1] - The information technology sector led the gains among Hang Seng's primary industries, while healthcare and energy sectors saw the largest declines [1] - There was a significant increase in passive foreign capital inflows, with a net inflow of $1.64 billion into Chinese stocks from foreign investors, compared to a net inflow of $0.03 billion the previous week [1] - Southbound capital also remained strong, with a net inflow of HKD 16.3 billion [1] Dividend Strategy and Outlook - The dividend yield of the Hang Seng China Enterprises Dividend Index reached 7.90%, significantly higher than the 5.56% yield of the CSI Dividend Index. The price-to-book (PB) ratio is 0.62, and the price-to-earnings (PE) ratio is 6.79 [2] - Since the beginning of 2021, the total return of the full return index has been 114%, outperforming the Hang Seng full return index by 113% [2] - The low interest rate environment and weak economic recovery in China are favorable for dividend strategies, with state-owned enterprises showing strong willingness and capability for dividend distribution [2] ETF Performance - The Huaan Hong Kong Stock Connect Central State-Owned Enterprises Dividend ETF (code: 513920) tracks the Hang Seng China Enterprises Dividend Index and aims to reflect the performance of high-dividend securities listed in Hong Kong with major shareholders being mainland state-owned enterprises [3] - The ETF is the first in the market to combine attributes of Hong Kong stocks, state-owned enterprises, and dividends [3] - The ETF had a scale of CNY 1.4856 billion and a weekly trading volume of CNY 1.012 billion [4] Top Holdings in the Dividend Index - The top ten weighted stocks in the Hang Seng China Enterprises Dividend Index include: - China COSCO Shipping (4.7% weight, 12-month dividend yield of 13.0%) - Orient Overseas International (4.5% weight, 12-month dividend yield of 11.4%) - New China Life Insurance (3.6% weight, 12-month dividend yield of 3.9%) - China National Offshore Oil (2.8% weight, 12-month dividend yield of 7.8%) [5]

Market Overview and Key Insights - The Hong Kong stock market saw gains last week, with the Hang Seng China Enterprises Index rising by 4.43% and the Hang Seng Index increasing by 0.75% [1] - The healthcare and materials sectors led the gains, while consumer and information technology sectors lagged [1] - There was a shift in capital flow, with passive foreign capital turning into inflows, and significant net inflows from southbound trading [1] Central State-Owned Enterprises (SOEs) Buyback and Dividend Trends - As of June 12, 2023, 65 central state-owned enterprises (SOEs) implemented buybacks totaling 8.672 billion yuan, while 53 companies saw shareholder increases amounting to 7.39 billion yuan, leading to a combined total of 16.062 billion yuan [2] - The dividend yield for the Hang Seng China Enterprises Index stands at 8.17%, significantly higher than the 5.62% yield of the CSI Dividend Index, with a price-to-book (PB) ratio of 0.62 and a price-to-earnings (PE) ratio of 6.77 [2] - The total return of the Hang Seng China Enterprises Index has reached 116% since early 2021, outperforming the Hang Seng Total Return Index by 113% [2] Investment Opportunities in High Dividend Strategies - The current low interest rate environment and weak economic recovery favor dividend strategies, with strong dividend willingness and capability among central SOEs [2] - The Huaan Hong Kong Stock Connect Central SOE Dividend ETF tracks the Hang Seng China Enterprises Dividend Index, reflecting the performance of high-dividend securities listed in Hong Kong with central SOEs as major shareholders [2] ETF Performance and Characteristics - The Huaan Hong Kong Stock Connect Central SOE Dividend ETF (513920) is the first ETF in the market combining the attributes of Hong Kong stocks, central SOEs, and high dividends [3] - The fund has a net asset value of 1.4995 and a scale of 3.242 billion yuan, with a weekly trading volume of 1.041 billion yuan [4] Sector-Specific Dividend Yields - Notable companies with high dividend yields include: - COSCO Shipping Holdings (4.5% yield, industrial sector) [5] - Orient Overseas International (4.5% yield, industrial sector) [5] - New China Life Insurance (3.5% yield, financial sector) [5] - China National Petroleum (3.1% yield, energy sector) [5]

Core Viewpoint - The management of state-owned enterprises (SOEs) in China has shifted from policy advocacy to substantive implementation, with expectations for valuation restructuring and market confidence enhancement as assessment mechanisms and supporting policies improve [1][5]. Group 1: SOE Value Management - The State-owned Assets Supervision and Administration Commission (SASAC) has emphasized improving the quality of SOEs' listed companies and enhancing value management to stabilize market expectations [1][4]. - Several SOEs have held performance briefings and investor engagement activities, committing to increase dividend payouts and enhance shareholder returns while focusing on core business improvement and innovation [1][2]. - China National Nuclear Corporation (CNNC) reported a market value of approximately 260 billion yuan, with a year-on-year increase of over 30%, highlighting its commitment to shareholder value through strategic investments [1][2]. Group 2: Dividend Policies - China National Power has maintained a cash dividend payout ratio exceeding 35% for ten consecutive years, with the 2024 dividend ratio reaching a historical high of 41.92%, totaling over 24 billion yuan in cumulative dividends [2]. - China Nuclear Technology has consistently returned cash dividends for 18 years, with a 2024 payout ratio of 32.43% and an average payout ratio exceeding 30% from 2020 to 2024 [2]. - China Huaneng Group is focused on enhancing dividend frequency and amounts across its listed companies to stabilize market value [2]. Group 3: Innovation and Reform - Accelerating innovation and deepening reforms are crucial for SOEs to enhance value management and improve the quality of listed companies [3][4]. - The State Grid Corporation is implementing multiple measures to promote high-quality development of its listed companies, focusing on energy transition and new power system construction [3]. - China Aerospace Science and Technology Corporation aims to enhance innovation capabilities and integrate technology and industry innovation to improve value creation [3]. Group 4: Regulatory Framework - The SASAC has issued guidelines to improve the market value management of SOEs, emphasizing the importance of maintaining investor rights and promoting healthy capital market development [3][4]. - Recent analyses indicate that value management is essential for listed companies to enhance intrinsic value and market performance through various compliant methods [4][5]. - SOEs are increasingly formalizing their value management practices, including the establishment of value enhancement plans and regular communication with investors [5].

Market Overview and Key Insights - Hong Kong stocks experienced significant volatility last week due to trade conflicts, with the Hang Seng Index dropping by 8.42% and the Hang Seng Technology Index falling by 7.58% [1] - All sectors in the Hang Seng Index declined, with non-essential consumer goods and energy sectors leading the losses, while essential consumer goods and telecommunications showed smaller declines [1] - Southbound capital inflow reached a new high since 2021, totaling approximately 78 billion RMB last week, compared to 59.4 billion RMB the previous week [1] - Foreign capital saw a net outflow of 320 million USD from Chinese stocks, with active foreign capital outflow increasing to 685 million USD [1] State-Owned Enterprises and Capital Support - The State-owned Assets Supervision and Administration Commission (SASAC) has initiated support measures for state-owned enterprises (SOEs), with two major state capital investment platforms collectively increasing their holdings by 180 billion RMB [1] - SASAC's actions include encouraging SOEs to increase share buybacks and purchases, with China Reform Holdings planning to invest 80 billion RMB and China Chengtong planning to invest 100 billion RMB in stock buybacks [1] Dividend Strategy and Performance - The Hong Kong SOE dividend sector has shown strong low-volatility characteristics, with a dividend yield of 7.78% compared to 6.39% for the CSI Dividend Index, and a price-to-book (PB) ratio of 0.56 and price-to-earnings (PE) ratio of 5.84 [2] - The total return of the Hang Seng SOE Dividend Index has increased by 80% since early 2021, outperforming the Hang Seng Total Return Index by 91% [2] - The current low interest rate environment and weak economic recovery are favorable for dividend strategies, with SOEs showing strong willingness and capability for dividend distribution [2] ETF Overview - The Huaan Hong Kong SOE Dividend ETF (code: 513920) tracks the Hang Seng SOE Dividend Index and aims to reflect the performance of high-dividend securities listed in Hong Kong with major shareholders being mainland SOEs [3] - This ETF is the first in the market to combine the attributes of Hong Kong stocks, SOEs, and dividends [3] Fund Performance Data - The Huaan Hong Kong SOE Dividend ETF has a net asset value of 1.3001 and a scale of 3.401 billion RMB, with a weekly trading volume of 1.471 billion RMB [4]