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HSI -37pts (-0.1%) 25,379 HSCEI +5.8pts (+0.1%) 8,943 T/O HK$123.15bn (-11.1% DoD)
Markets opened flat and trading sideways
Import Prices Jul +15% YoY vs 12.9% Jun (F/cast was 13.2%)
Import Prices Jul +2.2% MoM vs +1.6% Jun (F/cast was +0.6%)
Consumer Confidence Aug 99 vs 100 Jul (F/cast was 100)
US Futures Indicating higher
AHEAD Personal Income & Spending, Goods Trade Balance, Wholesale Inventories, PCE Price Index, Core PCE Price Index, Michigan Data, Jackson Hole symposium, Baker Hughes Rig Count.
CHINA CSI 300 closed +25pt (+0.5%) @ 4,827
CSI 300 opened higher and rallied to briefly before re testing the opening level, then around 10am rallied to test 4,860, which it briefly cracked but then sold down into lunch 4,838. PM saw selling pressure, found support 4,815 which it tested a couple of times before a bounce into the close. News of more regulation and not allowing data heavy companies to list overseas worrying the market.
Shanghai Composite +21pts (+0.6%) @ 3,522 T/O US$84.3bn -2.5% DoD
Shenzhen Composite +21pts (+0.2%) @ 14,437 T/O US$115.9bn +0.7% DoD
ChiNext Composite Index -17pts (-0.5%) @ 3,536
China's National Health Commission reported 32 COVID-19 confirmed cases with 30 of them being imported cases and 2 being local infections (1 in Shanghai and 1 in Jiangsu).
Industrial Profits (YTD) Jul 57.2% vs 66.9% Jun (F/cast was +45%)
Pre market opened @ 25,338 -78pts vs -76pts ADR’s
Trended higher initially to 25,640 the first hour as China’s Industrial profits came in better than expected but then trended lower until around 3pm after which the market worked better into the close.
Alibaba -4% as its subsiduary is being embroiled in the investigation of the former Hangzhou party secretary.
PBoC continued to increase liquidity (highest in 7 mths) to ensure enough cash to meet month end demand.
Leaders Industrial, Energy and Consumer Discretionary
Laggards Healthcare, Info Tech, Conglomerates
Interestingly the Govt also announced the National Day Fireworks that historically take place on October 1.
EARNINGS companies due over the weekend: Chongqing Iron and Steel (1053), Hilong (1623), China Huarong AM (2799), TianjinPort (3382), Digital China (861).
HONG KONG DATA
HK reported 3 new covid cases; all imported.
SHORT SELLING Friday 18.4% vs 21.4% Thursday
Top shorts Bank Comm (3328) 64%, Country Garden (2007) 51%, HSBC (5) 47%, Ali Health (241) 46%, Hengan (1044) 43%, Bank of China (3988) 40%, CLP (2) 40%, CK Assets (1113) 37%, Sino Biopharm (1177) 35%, Wharf REIC (1997) 35%, AAC Tech (2018) 35%, Petrochina (857) 32%, Hang Seng Bank (11) 32%, AIA (1299) 32%, Baba (9988) 31%, CCB (939) 31%, New World Development (17) 30%, SHKP (16) 28%, BYD (1211) 28%, Galaxy (27) 27%, Sunny Optical (2382) 27%, Longfor (960) 26%, MTRC (66) 26%, HKEX (388) 25%, CSPC Pharma (1093) 25%.
RESULTS after market
PSBC (01658.HK) +0.130 (+2.434%) Short selling $107.49M; Ratio 42.260% announced interim result ended June 2021. The net profit amounted to RMB41.01 billion, up 21.8% year-on-year. EPS was RMB0.4. No interim dividend was declared.
SHANGRI-LA ASIA (00069.HK) announced interim result ended June 2021. The loss narrowed to US$59.77 million from US$283 million in the corresponding period of previous year. LPS was US1.673 cents. No dividend was declared.
ICBC (01398.HK) +0.020 (+0.463%) Short selling $112.17M; Ratio 22.655% announced the interim results. Net profit for the period soared 9.9% YoY to RMB163.473 billion, close to the upper end of the forecasts. EPS was RMB0.46. No interim dividend was declared.
BANKCOMM (03328.HK) +0.020 (+0.457%) Short selling $54.97M; Ratio 63.959% announced the interim results for the six months ended 30 June 2021. Net profit stretched 15.1% YoY to RMB42.019 billion. EPS was RMB0.54. No dividend was declared. The bank will not convert any capital reserve into share capital for the period.
AEON STORES(00984.HK) -0.020 (-1.266%) announced interim result ended June 2021. The revenue declined 6.8% year on year to HK$4.807 billion. The loss widened to HK$245 million from HK$72.029 million in the corresponding period of the previous year. LPS was HK94.38 cents. An interim dividend of HK3 cents was declared against a dividend of HK5 cents in the corresponding period of the previous year.
AFTER MARKET NEWS
POP MART (09992.HK) Short selling Ratio 26.165% had 215 retail stores and 1,477 roboshops as of the end of June. The blind box seller will strengthen its layout in tier-1, tier-2 and some major tier-3 Mainland Chinese cities going ahead to boost its brand appeal, said COO Si De.
Information from Macao's Statistics and Census Service (DSEC) indicated that Gross Domestic Product (GDP) rebounded by 69.5% year-on-year in real terms in the second quarter of 2021. The economy of Macao resumed positive growth on account of a relatively low base of comparison in the same quarter last year when local economic activities were limited due to the entry restrictions for visitors amid the COVID-19 pandemic. Exports of services ballooned by 555.6% year-on-year over 2Q21, of which exports of gaming services and other tourism services rocketed by 1,089.7% and 1,328.3% respectively.
GEELY AUTO (00175.HK) +0.650 (+2.584%) Short selling $399.81M; Ratio 24.210% announced that on 27 August, the Share Purchase Agreement was entered into among ZEEKR Intelligent Technology and five investors, pursuant to which ZEEKR Intelligent Technology agreed to place to such investors, in aggregate, 126 million Series Pre-A Preferred Shares, at the total consideration of US$500 million. The investors are namely a subsidiary of Intel Corporation (INTC.US), CATL (300750.SZ), CMOC (03993.HK) 's controlling shareholder CFC, Bilibili Inc. (BILI.US) (09626.HK) Related Investor, and Boyu Capital.
The Securities and Futures Commission (SFC) and Commercial Crime Bureau of the Police today conducted a joint operation against a Hong Kong-listed company and its former senior executives suspected of a series of corporate fraud related offences involving a total of $450 million.
Centa-City Leading Index (CCL) last posted 189.52, down 0.46% WoW. The index has lost a total of 0.95% over the last two weeks.
CCL Mass rose 0.14% WoW to post at 192.77.
CCL (small-and-medium units) last stood at 190.28, down 0.01% WoW. CCL (large units) dropped 2.81% WoW; last posted 185.47.
CCL Mass for the New Territories West hiked 2.27% WoW to post another record new high at 178.56. The index gained 1.02% over the past four weeks.
Guangzhou Futures Exchange and HKEX (00388.HK) signed a memorandum, signifying the future collaboration of the two parties on strengthening connection between Mainland China and Hong Kong markets while developing new business models that support a green and low-carbon economy, reported Chinese media. The two parties will explore the possibility of product collaboration in both Chinese and overseas markets, while sharing resources and experience in terms of exchange clearing, technologies, market advertising and investor education.
Market started lower dipping to 7,470 level before working higher to test yesterday’s close around noon and then ease back slightly and trade just below flat before selling down at the end to close -3pts (flat) @ 7,488. Wesfarmers -2.8% despite earnings good results. Earning still the main focus with Jackson Hole overhanging the market. Weak retail sales -VE for Consumer Discretionary
Data Retail Sales Prelim Jul -2.7% MoM vs-1.8% Jun (F/cast was -2.2%)
Pre market Tokyo inflation data weaker than expected
Nikkei opened lower and dipped to 27,500 in early trades before working better to 27,650 at lunch. PM opened lower but worked slightly better through the afternoon to close -101pts (-0.4%) 2 27,641.
Topix traded in a similar pattern to close -7pts (-0.3%) @1,929
Leaders were Shippers (Mitsui Osk +8.7%), Insurers, Chemicals and Services
Laggards Precision Instruments, Petro, Trading Companies and Rail.
Softbank -0.4% on news EU to probe Nvidia/Arm deal.
Tokyo CPI Aug -0.4% YoY vs -0.4% Jul revised from -0.1% (F/cast was -0.1%)
Tokyo CPI ExFresh Food Aug 0.0 YoY vs -0.3% Jul revised from -0.1% (Bberg survey was -0.1%)
Tokyo CPI ExFresh Food,Entertainment Aug -0.1% YoY vs -0.4% Jul revised from 0.0% (Bberg survey was -0.2%)
KDCA announced 1,841 new covid cases under 1,900 for a second day. T/O remains light. Brokers saw some interest but NCSoft -7.2% a second down day.
Kospi opened lower and initially traded sideways around 3,110, then around 10am starting to rallying (Foreigners buying futures prompting locals arb cash) to 3,140 before easing back and trading around flat to close +5pts (+0.2%) @ 3,134
Kosdaq traded in a similar pattern to close +3pts (+0.3%) @ 1,024
Market opened lower and tested the 17,000 which surprisingly held and stocks then worked higher to 17,230 level before easing back and trading sideways to close +143pts (+0.8%) @ 17,210.
Leaders Financials, Cement along with Tech (TSMC +0.7%, UMC +0.6% on proposed price hikes and Passive Components in focus)
T/O was US$11.28bn vs US$13.34bn Thursday
CECC reported 7 new covid cases all imported.
Northbound RMB 58,151m Sell 27,236m vs 30,915m Buy
Southbound HK$ 14,525m Sell 7,901m vs 6,624m Buy
Northbound RMB 67,416m Sell 32,446m vs 34,970m Buy
Southbound HK$ 15,098m Sell 8,592m vs 6,506m Buy
PING AN (02318.HK) +2.500 (+4.032%) Short selling $362.98M; Ratio 18.694% closed at $64.5, up 4%
BABA (09988.HK) -6.300 (-3.884%) Short selling $2.55B; Ratio 31.308% closed at $155.9, down 3.9%
AIA (01299.HK) +1.300 (+1.384%) Short selling $529.82M; Ratio 31.529% closed at $95.25, up 1.4%
TENCENT (00700.HK) -5.400 (-1.145%) Short selling $811.19M; Ratio 7.320% closed at $466.4, down 1.1%
MEITUAN (03690.HK) -1.800 (-0.794%) Short selling $386.74M; Ratio 8.026% closed at $225, down 0.8%
HSI & HSCEI Constituents on Move:
HANSOH PHARMA (03692.HK) -3.200 (-14.414%) Short selling $47.98M; Ratio 19.629% closed at $19, down 14.4%
ENN ENERGY (02688.HK) +8.100 (+5.978%) Short selling $82.63M; Ratio 17.822% closed at $143.6, up 6%
CHINA RES LAND (01109.HK) +1.450 (+5.282%) Short selling $78.25M; Ratio 12.875% closed at $28.9, up 5.3%
HAIDILAO (06862.HK) +1.250 (+4.570%) Short selling $79.31M; Ratio 23.337% closed at $28.6, up 4.6%
CSPC PHARMA (01093.HK) -0.410 (-4.084%) Short selling $192.07M; Ratio 24.461% closed at $9.63, down 4.1%
EVERGRANDE (03333.HK) +0.140 (+3.310%) Short selling $34.06M; Ratio 11.051% closed at $4.37, up 3.3%
HSMI & HSSI Constituents on Move:
DONGFENG GROUP (00489.HK) +1.000 (+14.045%) Short selling $22.81M; Ratio 4.457% closed at $8.12, up 14%
NETDRAGON (00777.HK) +1.800 (+11.538%) Short selling $6.25M; Ratio 7.301% closed at $17.4, up 11.5%
BOSIDENG (03998.HK) +0.390 (+6.878%) Short selling $82.49M; Ratio 24.881% closed at $6.06, up 6.9%, hitting new high
CHINA WATER (00855.HK) +0.350 (+4.667%) Short selling $923.60K; Ratio 1.058% closed at $7.85, up 4.7%, hitting new high
RESULTS at lunchtime
POP MART (09992.HK) announced interim result ended June 2021. The net profit amounted to RMB359 million, up 153.8% YoY. EPS was RMB26.04 fen. No dividend was declared.
KERRY LOG NET(00636.HK) announced interim result ended June 2021. The revenue rose 67.7% year on year to HK$36.709 billion. The net profit amounted to HK$3.38 billion, up 215.1% year on year. EPS was HK$1.88. An interim dividend of HK21.1 cents was declared against a dividend of HK11 cents in the corresponding period of the previous year.
YADEA (01585.HK) Short selling Ratio 23.098% announced interim result ended June 2021. The net profit amounted to RMB589 million, up 49.2% YoY. EPS was RMB20.6 fen. No dividend was declared.
CITIC(00267.HK) Short selling Ratio 18.052% announced interim result ended June 2021. The revenue rose 38% year on year to HK$352.921 billion. The net profit amounted to HK$44.175 billion, up 63.5% year on year. EPS was HK$1.52. An interim dividend of HK$0.15 was declared against a dividend of HK$0.1 in the corresponding period of the previous year.
SSY GROUP (02005.HK) announced interim result ended June 2021. The net profit amounted to HK$276 million, up 11.6% YoY. EPS was HK$0.091. An interim dividend of HK5 cents was declared, flattish YoY.
Shenzhen DeepRoute.ai Technology has included Alibaba (China) Network Technology Company as a new shareholder with its registered capital grew by 27.02% from RMB1.8935 million to RMB2.4052 million, reported Chinese media. Founded in 2019, DeepRoute.ai is a level 4 autonomous driving solution provider, according to data from qcc.com.
China plans to introduce new rules that could bar Chinese companies owning sea of sensitive consumer data from listing in the U.S., Wall Street Journal cited people with the knowledge of the matter. Chinese watchdogs have been recently informing certain companies and international investors that the new rules will ban companies with large amounts of sensitive consumer data from going public overseas, whilst such rules will also target foreign listing via units incorporated outside the country. That said, corporates holding less sensitive data, such as pharmas, could still obtain approvals for foreign listing very likely, revealed Chinese regulators. Under the new rules, China will launch a mechanism that allows firms needing to list overseas to file applications, and will set up a cross-departmental committee in the next few months to deal with the matter.
Beijing Consumer Association published a survey report, regarding transaction cancellation by sellers in the context of Internet consumption. The report highlighted that the issue of "order cancellation" remains common two years after the E-Commerce Law was introduced and is particularly apparent on e-commerce platforms for fresh food products or general online shopping. The report suggested that out of the 40 popular e-commerce platforms, 17 of them are offering unfair or unreasonable terms to users, including JD-SW (09618.HK), Amazon, Xiaomi Youpin, Missfresh, Dingdong and MEITUAN-W (03690.HK)'s Meituan Maicai.
China's size of online gamers reached 509 million as of June 2021, down 8.69 million users from that in December 2020, accounting for 50.4% of the total netizen number, according to China Internet Network Information Center (CNNIC)'s report.
Hong Kong's Secretary for Commerce and Economic Development Edward Yau held a meeting with Hong Kong business representatives after the government tightened the border control arrangements last week, during which certain business groups expressed that the abrupt tightening of pandemic restrictions and uncertain prospect of loosened quarantine measures may prompt some of the companies to consider leaving Hong Kong, reported Financial Times. Yau told Financial Times that the Hong Kong government values the opinions from the representatives and will reconsider relevant requests from the corporates, while stressing that it remains vital for the government to strike a balance between safeguarding public health and reopening the border.
TENCENT (00700.HK)'s WeChat Official Account rolled out a new function called "My Shop", allowing official account operators to insert product cards in articles upon activation, reported Chinese media. Operators who have yet to activate the feature may set up stores for free to guide fans to make orders in a more convenient way.
Crypto-related transactions are merely investment speculation, commented Yin Youping, Deputy Director of the Financial Consumer Rights Protection Bureau of the People's Bank of China (PBOC), alerting the public that virtual currencies such as Bitcoin are not legal tender and not supported by actual value. Yin further revealed that a regular working mechanism will be established in the next step so as to clamp down on crypto-related transactions.
PING AN (02318.HK) +2.050 (+3.306%) Short selling $173.67M; Ratio 21.625% 's net profit decreased 15.5% YoY to RMB58.005 billion in the first half of 2021. Stripping impairment on the CFLD (600340.SH) +0.14 (+3.694%) investment, the insurer's operating profit would have risen 18% YoY during the period, said Co-CEO Yao Bo. This indicated the group's financial conglomerate model is conducive to coping with different cycles. Equally, Co-CEO Jessica Tan believed the life insurance reform will have the effect visible next year. Chief investment officer CHAN Tak Yin expressed that the company expects the financial and asset market to remain volatile over 2H, with uncertainties surrounding the COVID-19 resurgence and higher-than-expected inflation. The market fluctuations, however, could offer investment opportunities, Chan added, stating that the group's investment in new economy has reached RMB700 billion.
NCI (01336.HK)'s vice president Yu Zhigang expressed during the result meeting that the company expects the strong regulation from the Chinese government to hang on for a certain period of time, anticipating new regulations on insurance products and agents to be announced soon.
Moody's kept PETROCHINA (00857.HK) +0.010 (+0.318%) Short selling $65.80M; Ratio 30.750% 's issuer rating at "A1" and outlook at Stable. As China's biggest oil and gas producer, PETROCHINA will maintain a robust financial profile in the coming 12-18 months, backed by its balanced upstream and downstream operation and massive operating scale, predicted Chenyi Lu, Moody's Vice President and Senior Credit Officer.
China's Cyber Administration of China (CAC) issued a new opinion on the regulation of algorithm recommendation in the Internet information service sector, stating that algorithm-suggested service providers should not use the algorithms to falsify or highjack traffic; to withhold information; to over-recommend or to manipulate relevant record charts.
The Rating and Valuation Department announced that the domestic price index for all classes hiked 0.46% MoM to post at 396.3, completing a seven-month rising streak and edging towards the record peak of 396.9 made in May 2019.
PRE MARKET NEWS
HKTVmall's parent company HK TECH VENTURE (01137.HK) is considering to set up the first unmanned shop in Europe in the first half of next year, mimicing Amazon (AMZN.US) 's automated retail stores, so as to reduce the cost of labor. The company's CEO Ricky Wong expressed that it is targeting to open 8-10 shops within next year in the developed European countries that have the highest labor wages.
The Chinese authority requested Guangdong Provincial Government to handle EVERGRANDE (03333.HK) +0.120 (+2.837%) Short selling $25.05M; Ratio 11.272% 's debt issue through marketization means, emphasizing they should maintain the stable operation of real estate projects of the company, Chinese media REDD reported. Besides, the authority also solicited opinions from major creditor banks on whether to establish a creditor committee for EVERGRANDE. The senior officials of the Guangdong Provincial Government have not agreed on how to resolve the debt issue of EVERGRANDE, report added. The Government ordered Yuexiu Group to suspend the acquisition of EVERGRANDE's headquarters in Hong Kong, which was originally scheduled to be signed off this Wednesday and announced this week.
KUAISHOU-W (01024.HK) Short selling Ratio 24.412% is in talks with NBA for their strategic partnership, where both sides plan for a comprehensive cooperation in content as well as brand commercialization, according to reports.
SF REIT (02191.HK) announced the results for the period from 29 April 2021 (date of establishment) to 30 June 2021. It recorded a revenue of HK$50.7 million. Total distributions to Unitholders reached HK$26.697 million. Distribution per unit was HK3.34 cents.
TENCENT (00700.HK)'s Tencent Cloud announced that it has reached a deepening partnership agreement with Zhuhai Gree Electric Appliances. Tencent Cloud will provide technological capabilities of AI and cloud computing to aid Gree in developing IoT application and fostering business innovation.
Foxconn's Zhengzhou factory expressed that it has to hire additionally 200,000 workers by the end of September to address the production demand as the launch of iPhone 13 is nearing, reported Chinese media.
The Cyberspace Administration of China published a notice to further step up governance of the chaos within "fanquan" (i.e. fan circles), where music charts of celebrities and artists will be cancelled.
In the meantime, further measures will be taken to ban minors from giving out rewards and spending money to support their idols.
STANCHART (02888.HK) announced that it had repurchased 1.3026 million shares in London yesterday (26th), at a weighted average price of GBX460.104 per share, involving GBP5.9933 million.
Hong Kong Deposit Protection Board (HKDPB)'s chairman Michael Hui expressed that the board has recently introduced certain electronic means for compensation. In the unfortunate case of the closure of banks, in addition to bank cheques, users can now receive their compensation through e-payment channels, which could hopefully reduce the shortest disbursement time from seven days to three days. Hui added that the board has no plan at the moment to alter the $500,000 upper limit for deposit protection of the scheme.
RAZER (01337.HK)'s Chairman Min-Liang Tan told CNBC that the company is pondering on the possibility of a secondary listing in the U.S. but has no details to disclose at the moment. Tan added that the company is currently concentrating on developing B2B fintech business as well as its gaming payment service -- Razer Gold, which is virtual credit points.
BYD COMPANY (01211.HK) +5.600 (+2.184%) Short selling $228.70M; Ratio 26.535% dodges upfront headwinds and seizes growth opportunities when many other automakers can't help but reduce or suspend their production, leveraging the company's long-term pre-emptive plan and self-production/ supply in the field of automotive-grade semiconductors, as Economic Information Daily cited the company's responsible person. Given the persistent improvement of the magnitude of electrification, intelligence and connectivity of automobiles, paired with the continuous increase in the value of automotive-grade semiconductors, the growth rate of the automotive-grade semiconductor industry will excel that of overall vehicle sales. The industry is foreseen to usher in a resonance of supply and demand.
For the first seven months of 2021, the total amount of profit recorded by SOEs in China amounted to RMB279 million, up 92.1% year-over-year and realizing an average growth of 14.2% in two years, according to data from the Ministry of Finance (MOF).
Shanghai Consumer Council revealed that TENCENT (00700.HK)'s Tencent Video TV drama "Crime Crackdown" requiring the consumers to pay for each episode in chronological order may involve bundling sales and disregard to the consumers' rights of choice.