Aug 25 HK/CHINA WRAP Asia gives up initial gains ahead of Jackson Hole

25 Aug

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HSI -34pts (-0.1%) 25,983 HSCEI -23pts (-0.3%) 9,076 T/O HK$163.34bn (-4.9% DoD)

Market opened flat after Asia gave up intital gains.
German Ifo Data
Business Climate Aug 99.4 vs 100.7 Jul revised (F/cast was 100.5)
Current Conditions Aug 101.4 vs 100.4 Jul (F/cast was 100.4)
Expectations Aug 97.5 vs 101 Jul revised (F/cast was 100.7)
France due later
Unemployment Benefit Claims, Jobseekers Total
US Futures
Opened higher DOW +30pts, S&P +0.1% and NDX+0.5%
Ahead MBA Mortgage Applications and 30yr Mortgage Rate, Durable Goods Orders data, EIA Oil data.
Earnings:- SalesForce,  Royal Bank of Canada, Snowflake, Box, Autodesk, Express, Dick’s Sporting Goods, Shoe Carnival, NetApp, Splunk, Pure Storage

CSI 300 closed +10pt (+0.2%) @ 4,898
CSI 300 opened flat but bounced to 4,899 before trending lower in stepped trading, support at 4,866 and bounced into lunch -6pts (-0.1%) @ 4,883. PM saw the market trend higher in choppy trading with Team China in support.
Key reasons
PBOC in the morning injected Rmb40bn into open market.
Headlines saying that Wall St veterans and Chinese officials were seeking to de-escalate past tensions and that US Trade Rep had been in touch.
Leaders Liquor, Energy and Industrials

Shanghai Composite +26pts (+0.7%) @ 3,540 T/O US$92.5bn -2.8% DoD
Shenzhen Composite +34pts (+0.2%) @ 14,698 T/O US$110.6bn -9.6% DoD
ChiNext Composite Index +14pts (+0.4%) @ 3,625

China's National Health Commission reported 20 COVID-19 confirmed cases 
yesterday (24th), with 16 imported cases and four local cases (2 in Shanghai, 1 in Jiangsu, 1 in Yunnan).

Pre market opened @ 25,930 +202pts vs +134pts ADR’s with good interest in Ecommerce; except Baba. Traded sideways for 15 mins before trending lower, initial support at Tuesday’s close  bounced but then sold off to 25,600 and effectively then traded sideways into lunch -94pts (-0.4%) @ 25,634.  PM worked higher to test Tuesdays close which proved resistance and market eased back to 25,570 before working slightly better into the close.
Laggards Communication, Developers, Financials and Consumer Discretionary
Leaders Shipping, Consumer Staples, IT, Industrial,

EARNINGS HK due Thursday includes:  
Great Eagle (41), Sino Land (83), Xingfa Aluminium (98), Sichuan Expressway (107), Chow Sang Sang (116), Poly Property (119), China Everbright (165),  Minmentals (230), Greenland (337), WingTai Property (369), Fountain Set (420), Boyaa Interactive (434), Dongfeng Mtr (489),  TravelSky (696), Singamas Container (716), Net Dragon (777), CIFI (884), Lee’s Pharma (950), CSPCPharm (1093),  Sing Tao News (1105), Dream Int (1126), CGN Mining (1164), COSCO Shipping Ports (1199), Midland (1200),  Sino Hotels (1221), New China Life (1336),  Modern Chinese Medicine (1643), Shandong Gold (1787), Shandong Chenming Paper (1812), CGN Power (1816), SIM Tech (2000),  Best Pacific (2111), Yantai North Andre Juice (2218), CosmoLady (2298),  PingAn Ins (2318), Comba Telecom (2342), Win Hanverky (3322),  Anton Oilfield Sev (3337), Hengdeli (3389), China BlueChem (3983), ZhongAn Online P&C (6060), Haitong Sec (6837), and others

HK reported 5 new covid cases; all imported.
SHORT SELLING Wednesday 14.9% vs 15% Tuesday
Top shorts 
Bank Comm (3328) 55%, Ali Health (241) 54%, Country Garden (2007) 50%, Sunny Optical (2382) 45%, Henderson Land (12) 44%, New World Development (17) 39%, Haidilao (6862) 37%,  AIA (1299) 36%, Mengniu Dairy (2319) 34%, CCB (939) 33%, Bank of China (3988) 33%, CLP (2) 33%,  Hang Lung Ppty (101) 32%, BYD (1211)  31%, Power Assets (6) 31%,  HSBC (5) 30%,  Hengan (1044) 29%,  Longfor (960) 28%, CK Asset (1113) 27%, Wharf REIC (1997) 27%, HKEX (388) 27%,  Xiaomi (1810) 26%, CKI (1038) 25%, SHKP (16) 25%, CSPC Pharma (1093) 25%.

RESULTS after market

BOCOM INTL(03329.HK)  announced interim result ended June 2021. 
The revenue rose 22.9% year on year to HK$1.145 billion. The net profit amounted to HK$559 million, up 99% year on year.  EPS was HK$0.2. No dividend was declared.

KUAISHOU-W Interim Loss Trims to RMB64.79B; Non-IFRS Adj. Net Loss RMB9.69B

LONGFOR GROUP (00960.HK) 's CEO Shao Mingxiao expressed during the result announcement conference that he believes the recent strengthened regulation on the real-estate sector is aimed at achieving the ultimate goal of healthy and orderly growth for the sector by 2024.  Shao stated that the company had been operating in full compliance to the government's policies and within the parameters of "three green lines" since five years ago. Shao further stressed his confidence that the company will be able to realize the full-year sales target of RMB310 billion, given that the group's contracted sales have hiked 20% YoY to RMB161.65 billion in the first seven months this year.

Regional Markets

Market opened higher and rallied to 7,542 in the first hour, talk of shorts being squeezed but then trended lower before finding support at 7,510 and then worked slightly higher to close  +29pts (+0.4%) @ 7,532.
Leaders Mining (Iron ore prices rose +VE Rio Tinto, Fortescue Metals, Mineral Resources and BNP), banking titans and CSL. Tech also strong. Shareholders rewarded the reporting Wisetech Global (soared 58% intraday but closed +29%), Medibank, and Orocobre. Oil names also +VE. Earning in focus; Afterpay -1.2% earnings fell on higher marketing costs and investment, as it ramps up its global expansion and push ahead with Square merger. Telcos weak.
Data : Construction Work Done Q2 +0.8% QoQ vs +2.4% Q1 (F/cast was +2.5%). Thursday we get Private Capital Expenditure.
Nikkei opened higher at 27,768 and ralliied to test 27,900 in early trades the morning high was 27,898 but then eased back and traded 27,808/38 for the rest of the morning before selling down to 27,700  before an uptick into lunch +1pt (unch) @ 27,733. PM opened lower after Govt announced extending the State of Emergency and traded sideways around flat to close -7pts (unch) @ 27,725.
Leaders Miner, Auto’s, Steel (Toyota pre market said would increase steel prices to suppliers and Daiken to cut copper useage by 50% and use aluminium). Re-opening names still +VE . Fanuc and Sony supportive but Tech weak.
Laggards Retail (Nitori -2.8% on weak SSS) , Pulp & Paper and Chemicals.
Murata -1.7% as its Fukui plant closed due to a covid cluster.
Topix traded in a similar fashion closed +2pts (+0.1%) @ 1,936
Data out PM
Coincident Index Final Jun 94.5 vs 92.1 May (F/cast was 94.0)
Leading Economic Index Final Jun 104.1 vs 102.6 May (F/cast was 104.1)
S Korea
KDCA reported 2,155 new covid cases. Some caution ahead of BoK rate decision with many expecting a hike but its likely to be a close decision.
Foreigners started as buyers but have turned sellers. Phama weak. EV Battery bounces after 2 down days. Tech +VE after Samsung capex announcement
Kospi opened higher and tested 3,161 in early trades but pulled back to flat and then traded in tight range for the next 90 minutes 3,140/50 before selling down to 3,124 and trading sideways until 1:45pm and then worked higher to close +9pts (+0.3%) @ 3,147.
Kosdaq Opened 1,017 but initially sold down to 1,008 before a bounce to 1,014 but failed to consolidate and sold down to 1,007 and then traded sideways before working better to close +5pts (+0.5%) @ 1018
Taiex opened higher 16,821 and worked higher through the morning before seeing resistance at 17,000 and eased back to 16,950before pushing higher to close +227pts (+1.4%) @ 17,046 .
TECH +VE with talk of a price hike from TSMC and UMC. GlobalWafers gave a +VE oulook.
Laggards Petro, Paper and Financials.
Shipping flat.
T/O was US$12.86bn vs US$14.81b Tuesday
CECC reported no new covid cases.
TSMC (TSM.US) is considering to hike the chip OEM prices from 1Q22, ramping up the prices for 7nm chips and other more advanced processes by 10% and those for 16nm chips or above by 10-20%, in order to address the soaring production costs induced by inadequate capacity, reported Taiwanese media Commercial Times.

Northbound RMB 59,161m Sell 29,338m vs 30,823m Buy
Southbound HK$  18,059m Sell   9,309m vs   8,749m Buy
Northbound RMB 70,229m Sell 34,648m vs 35,581m Buy
Southbound HK$   17,813m Sell   8,984m vs  8,830m Buy

Active Heavyweights
MEITUAN (03690.HK)  Short selling $531.79M; Ratio 8.628%   closed at $227, up 2.3%
BABA (09988.HK) Short selling $1.26B; Ratio 24.162% closed at $164.1, down 1.4%
PING AN (02318.HK) Short selling $128.89M; Ratio 14.160% closed at $63.5, down 1.1%
TENCENT (00700.HK) Short selling $387.92M; Ratio 2.930% closed at $474.6, up 0.6%
AIA (01299.HK) Short selling $219.34M; Ratio 34.400% closed at $95.4, down 0.2%
HKEX (00388.HK)  Short selling $217.96M; Ratio 22.000%   closed at $491, up 0.2%

HSI & HSCEI Constituents on Move:
NTA SPORTS (02020.HK)  Short selling $197.42M; Ratio 10.500%    closed at $159.5, down 6.8%
XINYI SOLAR (00968.HK) Short selling $54.77M; Ratio 12.148% closed at $17.24, up 6.4%
JD (09618.HK) Short selling $697.88M; Ratio 24.863% closed at $294, up 5%
KUAISHOU-W (01024.HK) Short selling $193.62M; Ratio 11.015% closed at $77.5, down 3.5%
SHIMAO GROUP (00813.HK) Short selling $4.04M; Ratio 9.546% closed at $15.9, up 3.5%
CITIC (00267.HK) Short selling $10.34M; Ratio 13.685% closed at $8.59, up 3.4%
JD HEALTH (06618.HK) Short selling $311.73M; Ratio 25.438% closed at $75.8, up 3.2%

HSMI & HSSI Constituents on Move:
KINGSOFT (03888.HK)  Short selling $168.59M; Ratio 11.408%   closed at $31.15, down 21%
ZHOU HEI YA (01458.HK) Short selling $14.48M; Ratio 14.920% closed at $7.11, up 11.8%
AK MEDICAL (01789.HK) Short selling $2.49M; Ratio 4.529% closed at $8.12, down 11.4%
CIMC ENRIC (03899.HK) Short selling $4.49M; Ratio 3.388% closed at $11.4, up 11.3%
CHINA POWER (02380.HK) Short selling $17.37M; Ratio 3.455% closed at $3.07, up 8.9%, hitting new high
DONGYUE GROUP (00189.HK) Short selling $12.91M; Ratio 4.483% closed at $22.9, up 5.3%, hitting new high
PACIFIC BASIN (02343.HK) Short selling $16.77M; Ratio 10.200% closed at $4.07, up 3.6%, hitting new high
CHINA WATER (00855.HK)  Short selling $470.70K; Ratio 4.177%   closed at $7.24, up 1.5%, hitting new high

RESULTS at lunchtime
RAZER (01337.HK)  Short selling $5.54M; Ratio 31.476%   announced interim result ended June 2021.
The company swung into profit of US$33.979 million from a loss of US$17.343 million in the same period a year ago. EPS  was US$0.004. No interim dividend was declared.
LONGFOR GROUP Interim  The revenue for the period amounted to RMB60.615 billion, up 18.5% YoY. 
Net profit hiked 17% YoY to RMB7.419 billion. EPS was RMB125.9 fen. An interim dividend of RMB0.47 was declared.
DAHSING BANKING (02356.HK) interim Net profit for the period jumped 17.4% YoY to HK$1.11 billion. EPS was HK$0.79. An interim dividend of HK$0.1 per share was declared.
DAH SING (00440.HK interim results Net profit for the period amounted to HK$881 million, up 18.3% YoY. EPS was HK$2.76. An interim dividend of HK$0.33 per share was declared.
CG SERVICES (06098.HK) interim net profit amounted to RMB2.113 billion, up 60.7% yearly. EPS was RMB69.87 fen. No dividend was declared.
AAC TECH (02018.HK) interim results ended June 2021. The Group's revenue was RMB8.609 billion, up 9.9% year-over-year. GPM was 28.1%, up 4.9 ppts YoY. Net profit was RMB921 million, up 187.4% YoY. EPS was RMB0.76. Interim DPS was HKD0.2, compared with HKD0.1 in the same period last year.
Q TECH(01478.HK) interim result ended June 2021.The revenue rose 6.1% year on year to RMB9.336 billion. The net profit amounted to RMB571 million, up 70.1% year on year. EPS was RMB48.5 fen. No dividend was declared.


NTES-S (09999.HK)  Short selling $142.13M; Ratio 26.165%   's NetEase Cloud Music made inroads into BABA-SW (09988.HK)'s second-hand marketplace Idle Fish 
by opening a "Cloud Village grocery store" to offer playlist customization and other services.

China's 14th Five-Year Plan has clearly affirmed Hong Kong's pivotal function and position in the overall national development, wrote Christopher Hui, Secretary for Financial Services and the Treasury, in a blog post.  Accordingly, the Plan maps out the financial sector buildout that underpins Hong Kong's elevation of its status as an international financial hub, Hui added.

XIAOMI-W (01810.HK)  Short selling $246.55M; Ratio 23.547%   has replaced the trademark "MI" which the brand has utilized over the past ten years with a new brand logo "xiaomi" on its MIX 4 smartphone launched earlier this month, 
reported foreign media Neowin.  Reports from Chinese media cited a statement issued by XIAOMI-W to XDA Developers that the company has confirmed to discard the logo "MI" and it will no longer be used on any products to be launched in the future.
Later Wang Hua from Xiaomi’s Public Relations Department stated the "MI" logo has the most significant presence in all of the company's applications and is used throughout the world for brand recognition. Wang remarked that the logos of "Xiaomi" and "Redmi" are generally used for catagorization, packaging and promotion of the products and that the statement alluding that Xiaomi is about to stop using the "MI" brand logo is purely unfounded.

U.S. Trade Representative Katherine Tai held a meeting with the U.S.-China Business Council and the U.S. Chamber China Center Advisory Board yesterday (24th), reported CNBC.  Tai said at the meeting that the Biden-Harris Administration and the Office of the U.S. Trade Representative are running a comprehensive review of their Sino-U.S. trade policy, according to the two business associations.

HKD Index once peaked at 7.7821 this morning (25th), leading the spot USD T/T rate to 7.7846.
  HKMA announced to suitably increase the issuance size of Exchange Fund Bills by HK$40 billion during the eight regular tenders between September and October 2021

.JD HEALTH (06618.HK)  Short selling $311.73M; Ratio 25.438%   's CEO Lijun Xin expressed during an interim result phone meeting that investors need not to be overly concerned about the recently strengthened regulation on the online healthcare industry and that the government continues to provide long-term support to the development of the industry. Xin contended that the regulation is beneficial to the long-term growth of the sector.  The CEO further remarked that the Chinese government maintains its supportive attitude to the development of “Internet + Healthcare”. Xin reiterated his confidence in the prospect of the industry, believing that the regulation would bring positive impact on the business.

EVERGRANDE (03333.HK) Short selling $21.04M; Ratio 18.013% has recently made Wo Shang Wai project available for sale on gray market with a tentative price of approximately $8 billion, 
Sing Tao Daily reported. While there is/ are developer(s) expressed interests in the project, the price will be referred to the land premiums of Kwu Tung, Northeast New Territories and Yuen Long.

The Hong Kong Monetary Authority (HKMA) announced to suitably increase the issuance size of Exchange Fund Bills to meet the ongoing demand for Exchange Fund paper by banks amidst the abundance of liquidity in the banking system.  HKMA plans to increase the issuance size of 91-day Exchange Fund Bills by HK$5 billion in each of the eight regular tenders on 7, 14, 21 and 28 September and 5, 12, 19 and 26 October 2021. If all the eight planned increases are executed, the issuance size of the Bills will be increased by HK$40 billion in total.

Global PC shipment is predicted to grow by 14.2% YoY for this year to 347 million units, lower than the estimate made in May, mainly due to the persisting challenges on supply chain and logistics, according to a report published by IDC. The forecast for tablet shipment growth for this year, on the other hand, was kept at around 3.4%, added the report.

SHK PPT (00016.HK)  Short selling $14.09M; Ratio 21.073%   laid out the 5th price list for Wetland Seasons Bay, offering 123 units at a discounted price of $4.9608-8.382 million each, representing an average price of $15,176 per sq.ft.  The developer also unveiled the sales arrangement for the 2nd log, where 312 units will go on sale this Saturday (28 August).

The U.S. authority has granted suppliers licenses to sell vehicle component chips used in screens and sensors to Huawei
, likely involving hundreds of millions of U.S. dollars, Reuters citing two insiders.  In response to media enquiries, Huawei said it is verifying the news with relevant business departments.


Korean cosmetics brand MISSHA announced to form a strategic alliance with BABA-SW (09988.HK) 
Short selling $1.26B; Ratio 24.162%   's e-commerce platform Tmall. Through the partnership, MISSHA will develop new products specifically targeting the Chinese market based on big data from Tmall and venture into the e-commerce market in China.

"Stock market goddess" Cathie Wood said she is more upbeat than pessimistic about China in the long term,
seeing the Asian country as a very entrepreneurial society, reported Bloomberg. Despite increasing regulation and rules, she believed the Chinese government does not want to halt growth or progress.

The People's Bank of China (PBoC) today (25 August) carried out RMB50 billion seven-day reverse repos, with a single-day net investment of RMB40 billion. The successful bidding rate was flattish at 2.2%.

STANCHART (02888.HK) announced that it has repurchased 1.2522 million shares 
in the London market yesterday (24th), at a weighted average price of GBX447.706 per share, involving GBP5.6062 million.

China's State Administration for Market Supervision (SAMR) announced the list of concentration of business operators cases with unconditional approval during 16-22 August, 
including TENCENT (00700.HK)'s acquisition of stakes in Tianjin Animation Hall.

KUNLUN ENERGY (00135.HK)  Short selling $23.80M; Ratio 14.288%   announced the interim results for the six months ended 30 June 2021.
Net profit increased by 766% yearly to RMB20.461 billion. EPS was 236.3 fen. No interim dividend was declared.

GREENTOWN CHINA (03900.HK)  Short selling $14.66M; Ratio 30.173%   announced the interim results for the six months ended 30 June 2021. Net profit increased by 15.4% yearly to RMB2.418 billion. EPS  was 71 fen. No interim dividend was declared.

CHALCO (02600.HK) announced the interim results for the six months ended 30 June 2021.
Revenue for the period amounted to RMB120.736 billion, up 43.5% YoY. Net profit leaped 85.1x to RMB3.075 billion.
EPS was RMB17.4 cents. No interim dividend was declared.

CRRC TIMES ELEC (03898.HK)  Short selling $17.55M; Ratio 6.625%   announced that the A share issue price was determined at RMB31.38 per share. The company will issue 240 million new A shares.

GTJA (02611.HK) announced the interim results for the six months ended 30 June 2021. 
Total revenue and other income amounted to RMB27.772 billion, up 33.2% YoY. Net profit stretched 46.9% to RMB8.013 billion.  EPS  was RMB89 fen. No interim dividend was declared.

JD HEALTH (06618.HK)  Short selling $311.73M; Ratio 25.438%   announced the results for the six months ended June 30, 2021.
The loss narrowed to RMB455 million from RMB5.359 billion in the same period last year, with LPS of 15 fen. No interim dividend was declared.

TENCENT (00700.HK) statement disclosed that, on 24 August, it has repurchased 22,600 shares on the Stock Exchange, at a price ranging between $450.6-451.6, involving approximately $10.20 million.  Year to date, the company has repurchased a total of 672,600 shares, accounting for 0.00701% of the company's share capital.

CKH HOLDINGS (00001.HK)  Short selling $18.82M; Ratio 24.175%   's statement disclosed that, on 24 August, it has repurchased 350,000 shares in the Stock Exchange, at a price ranging between $56.95-57.35, involving approximately $20.007 million in total.  Year to date, the company has repurchased a total of 13.9775 million shares, accounting for 0.3624% of the company's share capital.

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