Hong Kong Hot Stock Analysis: Dazhong Public Utilities (01635.HK)

Dazhong Public Utilities (01635.HK) is a stock in the Hong Kong Stock Exchange’s utilities sector, mainly engaged in gas supply and sewage treatment businesses, with a market capitalization of approximately HK$22.9 billion [3]. The core driver behind it being on the Hong Kong hot stock list is the continuous increase in holdings by Southbound capital: as of December 1, the Southbound capital shareholding ratio rose from 68.60% to 69.90%, an increase of 1.30%, making it the second highest holding ratio in Stock Connect (second only to China Telecom) [2][4]. Year-to-date, the company’s stock price has increased by 98.04%, far outperforming the Shanghai Composite Index’s 16.22% during the same period [3].

1. Significant impact of Southbound capital
   : The high shareholding ratio of 69.90% indicates strong interest from mainland investors in this stock, possibly related to the A/H share premium (the A-share code 600635.SS has a higher price), forming valuation attractiveness [0].
2. Low valuation and low volatility characteristics
   : Current PE is 19.18x and PB is 1.28x, which is relatively low compared to the utilities sector; a beta value of 0.63 indicates its volatility is lower than the market average [3].
3. Liquidity concerns
   : On December 2, the trading volume was only 10.876 million shares, approximately 10.7% of the 3-month average volume; thin trading may lead to difficulty in liquidation [3].

• Liquidity risk: The daily trading volume is far below average, which may affect the efficiency of capital inflow and outflow [3].
• Correction risk: The significant year-to-date increase (98.04%) has accumulated some profit-taking, and there is a lack of new catalysts (no major company announcements or industry developments recently) [1][5].
• Market sentiment dependency: The stock price trend is highly dependent on the continuous inflow of Southbound capital [2][4].

• Valuation advantage: Low PE and PB ratios have long-term investment attractiveness [2][3].
• Stable cash flow: The utility nature provides relatively stable business fundamentals [0].

Dazhong Public Utilities (01635.HK) current price is HK$4.220 (as of December 2, 2025), 52-week range is HK$1.630-HK$4.950, 20-day moving average is approximately HK$4.006 [2][3]. Support level is HK$4.200 (day’s lowest price), resistance level is HK$4.310 (day’s opening/highest price) [3]. Investors need to pay attention to changes in trading volume, Southbound capital flow, and company fundamental dynamics.