Northbound capital's Q3 report is freshly released.

On October 15th (the 5th trading day after the end of the quarter), northbound capital disclosed the stock holding data for the third quarter of 2024. This marks the first appearance of the northbound capital's quarterly stock holding data after the adjustment of the disclosure mechanism between Shanghai, Shenzhen, and Hong Kong. As a representative of the "smart money," the northbound capital's position changes have attracted much attention, coinciding with a round of rising market in the A-share market around the National Day.

Northbound capital's stock holding market value

Sets a new high for the past 4 quarters

According to the statistics from Securities Times • Data Treasure, as of the end of the third quarter, northbound capital held a total of 3,341 individual stocks, with a combined holding volume of 132.312 billion shares and a stock holding market value of 2.41 trillion yuan. Compared with August 16th, the day before the northbound capital's daily frequency data stopped updating, the northbound capital's stock holding volume increased by 7.212 billion shares, a sequential increase of 5.76%, and the stock holding market value increased by 496.525 billion yuan, a sequential increase of over 25%.

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Comparing the quarterly stock holding data changes, the stock holding volume increased by 5.65% sequentially, and the stock holding market value increased by 352.085 billion yuan sequentially, with a sequential growth rate of 17.13%. The latest stock holding market value has reached the highest level in the past 4 quarters (since October 2023).

Looking at the segments, all market segments received additional holdings from northbound capital. Among them, the stock holding volume of the STAR Market increased the most, with an increase of 15.86% by the end of the third quarter compared to August 16th; followed by the ChiNext board, with a stock holding volume increase of 8.76%.

High dividend, TMT, and large consumption segments

Northbound capital's increase in holding value ranks at the forefront

Statistics by industry show that compared with August 16th, as of the end of the third quarter, there are as many as 29 industries where the northbound capital's stock holding volume increased sequentially; among them, the banking industry's stock holding volume increased the most, with the latest holding of 24.917 billion shares, an increase of 1.184 billion shares sequentially. Other industries with a significant increase in stock holding volume include power equipment and public utilities, with an increase of 555 million shares and 537 million shares, respectively, sequentially.Based on amplitude statistics, there are 22 industries with a sequential increase in Northbound capital's shareholding volume of more than 5%, with 6 industries experiencing an increase of over 10%. Trade and retail, social services, and agriculture, forestry, animal husbandry, and fishing rank in the top three, with sequential increases in shareholding volume of 34.28%, 26.24%, and 24.97%, respectively. Meanwhile, the textile and garment, and home appliance industries were reduced during the same period, with the textile and garment industry's shareholding quantity reduced by more than 10%.

In terms of the amount of increase, calculated based on the average transaction price since August 16, combined with the transaction amount of Northbound capital, and after adjusting the shareholding quantity for rights and dividends, it can be seen that since August 16, "smart money" may have started the buying mode again.

The industries with the largest amount of increase mainly cover high dividend, TMT, and large consumer sectors. Fifteen industries have an increase amount of more than 10 billion yuan, with power equipment, food and beverage, and banking ranking in the top three, with increase amounts of 14.396 billion yuan, 12.618 billion yuan, and 12.092 billion yuan, respectively. In addition, the increase amounts for the pharmaceutical and biological, non-bank finance, and public utilities industries all exceed 5 billion yuan.

More than 130 stocks have been significantly increased by Northbound capital.

Looking at individual companies, among the stocks increased by Northbound capital, there are more than 130 stocks (based on the disclosed shareholding data on August 16) with an increase of more than 1% in the latest shareholding ratio compared to August 16. The top increases are Fuyuan Pharmaceutical, Yingke Medical, and Taotao Vehicle Industry, with shareholding ratios increased by 3.13 percentage points, 3.02 percentage points, and 2.9 percentage points, respectively.

Looking at the market performance, the overall market performance of companies with the largest increase in shareholding ratio compared to August 16 is relatively excellent. Companies with an increase of more than 0.5% have an average increase of more than 24% since September 24 (as of October 14); companies with an increase of less than 0.3% have an average increase of only about 23% during the same period.

Among the companies with an increase of more than 100% since September 24, three have been increased by Northbound capital by more than 0.5 percentage points. Runhe Software has the highest increase during this period, reaching 170.39%. The company's Northbound capital's latest shareholding ratio is 1.28%, an increase of 0.84 percentage points compared to August 16. The company has in-depth cooperation with Huawei, involving Huawei Euler, Huawei Ascend, and Huawei Kunpeng businesses. On the morning of October 15, the company's stock price once approached the "20cm" daily limit; as of the midday closing, the company's stock price increased by 6.7%.

RoboTech has been increased by 0.54 percentage points by Northbound capital, with an increase of more than 120% during this period. The company is a provider of intelligent manufacturing technology, and its products are mainly used in the photovoltaic field. Its stakeholder company ficonTEC cooperates with Huawei HiSilicon in optical testing and assembly businesses.

In addition, Sifang Jingchuang, Mengcao Ecology, and JieJie Microelectronics have been increased by Northbound capital by 0.47 percentage points, 0.41 percentage points, and 0.31 percentage points, respectively.Twelve Undervalued Stocks with Stagnant Growth

That Have Seen Continuous Increases for Three Consecutive Quarters

Upon further examination, according to data from Data Treasure, compared to the end of September, among the 244 stocks included in the Shanghai-Hong Kong Stock Connect that have seen continuous increases for three consecutive quarters, only 12 stocks have underperformed the CSI 300 Index (23.2%) since September 24th, have a latest price-to-earnings (P/E) ratio lower than their industry's P/E ratio, and have been researched by institutions since September. These include 2 public utility stocks, 2 machinery equipment stocks, and 2 pharmaceutical and biotechnology stocks.

In terms of valuation, China Railway Industry's latest P/E ratio is less than 11 times, which is more than 60% lower than the P/E ratio of 28.63 times for its machinery equipment industry. The latest P/E ratios for China Resources Double Crane and Jinbei Electric are around 15 times and 13 times, respectively, which are more than 50% lower than the P/E ratios of their respective pharmaceutical and biotechnology and power equipment industries.

Looking at market performance, Shaanxi Energy, China Resources Double Crane, Shanghai Electric Power, and four other companies have seen their stock prices increase by less than 15% since September 24th. Among them, Shanghai Electric Power has disclosed its Q3 report for 2024, with the company's net profit for the first three quarters of 2024 expected to increase by more than 80%. The main reasons are: firstly, the continuous improvement in the marginal benefits of coal-fired power generation, leading to increased profits for both controlled and participating coal-fired power enterprises; and secondly, the company has accelerated its green transformation and development, with an increase in the scale and benefits of clean energy power generation both domestically and internationally.

Regarding research, among the aforementioned 12 stocks, 10 have been researched by 10 or more institutions since September. Haoyang Shares has been researched by 54 institutions. The company mainly engages in the business of stage entertainment lighting equipment and architectural lighting equipment. In the research notes, the company stated that in the long term, it will focus on developing architectural art lighting business, but it does not rule out the possibility of continuing to undertake stage performance lighting projects.

In addition, Sanhuan Group and Bank of Hangzhou have both been researched by 40 or more institutions since September.