March 10 HK/CHINA WRAP HK rallied, China Flat up but after market Loan data +VE


10 Mar

HSI +134pts (+0.5%) 28,908  HSCEI +87pts (+0.8%) 11,060  T/O HK$190.47bn (-31% DoD) 
EUROPE 
Markets FTSE opened lower but initially worked higher but seeing resistance at yesterday’s closing level. CAC and DAX opened flat but also working higher. The after market loans data out of China +VE for sentiment. Also watching the progress of the US stimulus bill which should be ready for Biden to sign by the weekend
Inditex, the owner of ZARA, weak after results for the fiscal year ended January 2021 showed Net income -70% YoY to EUR1.11 billion (around US$1.318 bn).
Earnings due from Adidas, Geberit, Just Eat, G4S, National Express, The Restaurant Group, Balfour Beatty and Foxtons.
Data out
FRANCE  
Industrial Production Jan +3.3% vs -0.7% Dec revised (F/cast was +0.5%)
US Futures 
Opened slightly higher in Asian time but have eased back and currently Dow flat, S&P and NDX -0. 2% (from +0.1% earlier).
Apple announced a plan to establish a silicon design center in Munich for the development of Apple Silicon.
Data Core Inflation Rate, Inflation Rate, EIA Oil Change Report, Monthly Budget Statement
Earnings Campbell Soup, Oracle, Vera Bradley, Tupperware, United Natural Foods, Cloudera, Bumble, Fossil, Lending Club, Express, AMC Entertainment

CHINA 
CSI 300 closed +32pts (+0.7%) @ 5,004
CSI 300 opened higher at 5,047 and traded sideways through the morning. PM opened towards to lower side of the morning range and traded sideways.
Investors concerns on Government policy, seems little chance of stimulus and focus on dealing with debt. Today price action suggests team China is still trying to support the market. Sector wise leaders were liquor, coal, carbon neutral, and power. Laggards were mining services, dye, shipping, and steel sectors.
NPC closes tomorrow but markets likely to rally after China release new loans data after market that was better than forecast.
Shanghai Comp -2pts (unch) @ 3,358
Shenzhen Comp +88pts (+0.7%) @ 13,563
ChiNext +8pts (+0.3%) @ 2777
CHINA DATA 
On the open
Inflation Rate Feb -0.2% YoY vs -0.3% Jan (F/cast was -0.3%)
Inflation Rate Feb +0.6% MoM vs +1% Jan (F/cast is +0.5%)
PPI Feb +1.7% YoY vs +0.3% Jan (F/cast was +1.7%)
Second month of deflation as both food and non food item prices fell. Pork prices declining faster MoM.
PPI the second month of increase and the steepest since Nov 2018 as the domestic economy recovers from covid.
AFTER MARKET 
New Yuan Loans Feb CNY 1360bn vs 3580b Jan (F/cast was 1050bn)
Outstanding Loan Growth Feb +12.9% YoY vs 12.7% Jan (F/cast was 12.7%)
Total Social Financing Feb CNY 1710b vs 5170b Jan (F/cast was 980b)
M2 Money Supply Feb +10.1% vs 9.4% Jan (F/cast was 9.3%)

HSI 
Opened @ 29,255 +482pts vs +157pts ADR’s
On a strong rebound of Ecommerce names and China Telecom after results but market sold down in early trades, initial support at 29,000 but then further selling to yesterday’s close before a bounce back to 29,000 but unable to hold and sold down into lunch. PM opened at Tuesday’s closing level and traded sideways.
Ecommerce names still leading, Chinese Financials seeing weakness along with HK property developers after comment from Vice Premier Han Zheng about resolving HK’s housing problems; which some take to mean that Beijing will start addressing developers’ hegemony obviously they believe it to be part of the problem behind the anti government protests.
HONG KONG DATA 
The Centre for Health Protection reported 8 new covid cases (vs 21 Tuesday) 3 from unknown sources.
SHORT SELLING Wednesday 13.5% vs 12.7% Tuesday
Top Shorts Ping An (2318) 48%, Bud Apac (1876) 42%, HSBC (5) 40% (Moodys put on Watch list for downgrade), Bank of China (3988) 39%, AIA (1299) 38%, Sands China (1928) 31%, Wharf REIC (1997) 31%, BankComm (3328) 30%, China Life (2628) 29%, Galaxy Ent (27) 28%, Sunny Optical (2382) 28%, Sinopec (386) 27%, Henderson Land (12) 26%, Country Garden (2007) 26%.
Earnings due Thursday incl Swire Pac A (19) and B (87 ) MTRC (66), China Everbright Environ (257), RREEF China Commercial Trust (625), Giordano (709), China Unicom (762), Vakue Partners (806), Sunac (1918), Swire Properties (1972), BOC Aviation (2588), Beijing Tong Ren Tang (3613)
IPO 
CHEERWIN GP (06601.HK), On debut, closed at $7.99, down $1.21 or 13% against the listing price of $9.2, on volume of 216 million shares andturnover of $1.7 billion. Excluding the handling fees, a book loss of $605 was reported per board lot of 500 shares.
KWONG LUEN ENG (01413.HK), to be listed tomorrow, opened at $0.6 in
gray market
, up 11% against the listing price of $0.54, PhillipMart data showed. It last posted at $0.55, up 1.9%, on volume of 4.16 million shares.

AFTER MARKET NEWS 
CHINA PENGFEI (03348.HK) Positive Profit Alert announced that the Group expected to record a substantial increase of not less than 50% in profit for the year ended 31 December 2020 as compared to the year ended 31 December 2019.
YUE YUEN IND (00551.HK) announced that the net consolidated operating revenue (i.e. equal to the total sales less sales discount and sales return) of the Company for February at USD755 million, up approximately 77% yearly.
The Urban Renewal Authority (URA) said its Oak Street / Ivy Street Development Project has received 41 Expressions of Interest (EOIs) upon closure today (10 March).  According to earlier on-site witness, suitors included TOP SPRING (03688.HK), CHEVALIER INT'L (00025.HK) and Chinachem, COUNTRY GARDEN (02007.HK), CIFI HOLD GP (00884.HK), EMPEROR INT'L (00163.HK), ITC PROPERTIES (00199.HK), Nan Fung, WANG ON PPT (01243.HK), SEA HOLDINGS (00251.HK), SINO-OCEAN GP (03377.HK) and RYKADAN CAPITAL (02288.HK)
The MPFA wrote in a statement that given the announcement by the Government of the Hong Kong Special Administrative Region on 29 January 2021 that BN(O) passport was no longer recognized as a valid travel document as well as proof of identity. Thus, scheme members cannot rely on BN(O) passport or its associated visa as evidence in support of an application for early withdrawal of MPF.   The MPFA pointed out that MPF trustees have the duty to observe Hong Kong laws when handling the administrative matters of MPF schemes. When processing applications for early withdrawal of MPF on the ground of permanent departure from Hong Kong, MPF trustees must act as gate-keeper by reviewing all evidence provided by applicants, and the totality of facts and information.
CATHAY PAC AIR (00293.HK) Chairman Patrick Healy said the company will continue to scout the possibility of increasing capital by commercial means, stressing the airline is now holding $28.6 billion liquidity, which is a healthy level. CEO Augustus Tang complemented that they has no intention to strip off and list HK Express. It also revealed passenger and cargo capacity receded 60% and 25%, respectively, due to the latest isolation measures on air crew, said Group Chief Customer and Commercial Officer Ronald Lam. It is in close talks with the Government in hopes of relaxing these controls, Lam added.
The American Chamber of Commerce published a business climate report yesterday (9 March), having surveyed 345 US companies in China. 75% of the respondents stayed optimistic on the Chinese market outlook for next two years.   Chinese Foreign Ministry Spokesperson Zhao Lijian said the report indicated the mutually beneficial and win-win nature of China-US trade relations.
MARKET COMMENT 
*PETROCHEMS WEAK As oil price fell in NY and the API report after market in NY showed a much higher inventory build than had been expected CNOOC (883 HK -2.6%) CH OILFIELD (2883 HK -2.8%)  SINOPEC (386 HK -1.6%).
*CHINA BANKS MIXED ahead of China new lending data which came out after market.  The Chinese government is focusing efforts on the crackdown on the inflow of personal spending loan and operating loans into the property market. Some commercial banks in Beijing according to official notices asked their clients to advance repayment of illegal credit loans that had flown into the home market, Beijing Business Today reported. Plus news that some of the big Chinese banks have issued an increasing sum of special financial bonds for small and micro-sized enterprises this year amid rising issuance costs while aiming to offer more loans to small companies. CCB (939 HK -1%) ABC (1288 HK +1.6%) CMB (3968 HK +3.7%) ICBC (1398 HK -0.4%).
*E-COMMERCE STRONG rebound from recent selloff as Treasury yield eased overnight. TENCENT’s (700 HK+2.3%) unrealized gains last year from its minority stakes in roughly 100 publicly listed companies amounted to $120b, news reported. At end of 2020 Tencent’s shareholdings in listed companies, excluding consolidated subsidiaries Tencent Music and China Literature, were worth about $184b, more than doubling from $64b a year earlier.
ALIBABA (9988 HK +2%) JD (9618 HK +4.4%) MEITUAN(3690 HK +5%).
*TECH & COMPONENTS STRONG  following positive monthly data. SUNNY (2382 HK +6.2%) reported handset lens set shipments for Feb. +34% YoY to 129.7m vs. 96.5m. SIM TECH (2000 HK unch) Feb. Core business revenue +67.5% YoY. AAC (2018 HK +2.6%)  BYDE (285 HK +1.9%) Q TECH (1347 HK +3.3%) FIT HON TENG (6088 HK +2%).
*PHARMA STRONG on optimism following recent consolidation. CSPC PHARM (1093 HK +4.7%), on the news that CSPC Shanghai will  pact with Beta Pharma, to have exclusive commercialization rights for BPI-7711 in China, for cure of non-small cell lung cancer. CANSINO (6185 HK +4.8%) The Ad5-nCoV vaccine it co-developed in Russia by with Russia's Petrovax, obtained very promising test data from the phase three clinical trial, Zhang Hanhui, Chinese Ambassador to Russia, told Interfax. CANSINOBIO-B has applied for registration in Russia, pending approval from relevant department.SINO BIOPH (1177 HK +3.2%) WUXI BIO (2269 HK +5.7%).
*AUTOS FIRM on strong sales data in Feb. GAC (2238 HK +2.1%) says it is continuously strengthening communication with suppliers to secure chips and other core parts and ensure normal operations. GREATWALL (2333 HK +3.6%) GEELY (175 HK +2.7%). BYD (1211 HK +5.2%) and EVERGRANDE EV (708 HK +3.9%)  on the news that US-listed Chinese EV makers Li Auto, Nio and Xpeng plan to list in HK as soon as this year.
*SOLAR ENERGY STRONG  after XINYI GLASS's (868 HK +12%) chairman increase stake in the company. XINYI SOLAR (968 HK +4.3%) GCL-POLY (3800 HK +4.6%) COMTEC (968 HK +8.4%).


Regional Markets
AUSTRALIA
ASX 200 unable to sustain early gains and closed -57pts (-0.8%) @ 6,714 with the energy sector weak as oil prices remained under pressure. The heavily-weighted financials subindex as well as the materials index were also weak
JAPAN 
No data markets reacting to the US moves overnight and general inflation/growth concernsNikkei opened higher after the US rally but sold down to Tuesday’s closing level and traded sideways into lunch. PM started slightly higher, sold down but then rallied to the opening level but eased back to flat and closed 9pts (unch) @ 29,037 Topix followed a similar pattern and closed +2pts (unch) @ 1,920
S KOREA  
No data but bank delinquency rates inched higher in January and covid cases rose to 470 the highest in 19 days.
Kosdaq opened higher and rallied initially to 911 but failed to hold and trended lower though session to close just off the day lows -6pts (-0.7%) @ 890
Kospi traded in a similar pattern, testing 3,014 in early trades but then trending lower, some support at yesterday’s closing level but then dipped below and closed -18pts (-0.6%) @ 2,958.
TAIWAN 
Opened higher a traded data showed continued growth and the ministry expects it to continue in March. Also a number of good local results. Market tested 15,986 in early trading but with regional market easing back failed to get to 16,000 and trended lower with support around 15,860 worked higher but then around midday reversed and drifted lower to close +58pts (+0.4%) @ 15,912
After market news.
TSMC announced that on a consolidated basis, net revenues for February 2021 were approximately TWD106.534 billion, -15.9% MoM but +14.1% YoY
Taiwan Ministry of Health and Welfare announced that the quarantine period on Hong Kong inbound passengers of short-term business trips will be shortened from 14 to 7 days with immediate effect, in view of the gradually controlled pandemic situation of the city.
CONNECT FLOWS (much lighter flows)
Shanghai 
Northbound RMB 55,093m Sell 25,552m : 29,541m Buy
Southbound HK$ 21,723m Sell 11,805m : 9,919m Buy
Shenzhen 
Northbound RMB 60,328m Sell 29,546m : 30,782m Buy
Southbound HK$ 24,518m Sell 13,484m : 11,034m Buy

Active Heavyweights
MEITUAN (03690.HK) +5%
TENCENT (00700.HK) +2.3%
BABA (09988.HK) +2%
CCB (00939.HK) -1.1%
HKEX (00388.HK) +0.9%
AIA (01299.HK) -0.3%
PING AN (02318.HK) +0.1%

HSI & HSCEI Constituents on Move:
SUNNY OPTICAL (02382.HK) +6.2%
JD HEALTH (06618.HK) -6.2%
WUXI BIO (02269.HK) +5.7%
NTES (09999.HK) +5.1%
CSPC PHARMA (01093.HK) +4.7%
JD (09618.HK) +4.4%
CM BANK (03968.HK) +3.7%
CHINA TOWER (00788.HK) -3.3%
SINO BIOPHARM (01177.HK) +3.2%
WH GROUP (00288.HK) +3.2%
CHINA RES BEER (00291.HK) +3.1%
CKH HOLDINGS (00001.HK) -3.1%
MTR CORPORATION (00066.HK) +1%, hitting new high

HSMI & HSSI Constituents on Move:
XINYI GLASS (00868.HK) +12.2%
ZHOU HEI YA (01458.HK) +11.9%
CHINA LONGYUAN (00916.HK) +10%
CHOW SANG SANG (00116.HK) +7.6%, hitting new high
DAHSING BANKING (02356.HK) +5.1%, hitting new high
CHINA MER PORT (00144.HK) +4.3%, hitting new high
REALORD GROUP (01196.HK) +4.2%, hitting new high

MARKET HOURS NEWS
CPIC (02601.HK)'s Shanghai branch issued the city's first digital yuan insurance policy to Lingang Group's economic development project company in the Lingang Special Area, reported Chinese media.
China Securities Regulatory Commission is considering tightening the threshold for listing on Shanghai's STAR market by requiring applicants to be more tech-oriented, Bloomberg learnt from insiders. The Chinese market watchdog will release the amended regulations as soon as next month.
Sinopharm Group Chairman Yu Qingming projected the group's COVID-19 vaccine output to exceed 1 billion doses in the second half of 2021, while reaching 3 billion shots next year, reported Chinese media.
XIAOMI-W (01810.HK) Chairman Lei Jun announced the official introduction of Mi 10S, priced from RMB3,299 and open for public sales from 10am this Friday.
The fourth session of the 13th National Committee of the Chinese People's Political Consultative Conference (CPPCC) closed at the Great Hall of the People this afternoon.  Chinese President Xi Jinping and other leaders attended the closing ceremony of the above session.
Henderson Property Agency Limited unveiled the 7th price list for Skypoint Royale on Monday (8th), offering 72 units measuring 184-388 sq.ft.  The company will launch 112 units on a first-come, first-served basis at 6-11pm on Friday (12th). The project has sold 337 flats so far, pocketing around $1.527 billion.
China Mobile and CBN are further realizing their co-building and co-sharing of 700MHz 5G network, The Paper reported. From 1 March 2021, all smartphone models priced above RMB4,000 shall support 700MHz, and all new models shall support so from 1 October 2021.
Hong Kong Housing Authority expects to introduce Kai Chuen Court, the latest project under the Green Form Subsidised Home Ownership Scheme in Diamond Hill, in May. Kai Chuen Court, in salable area of 184-481 sq. ft., may be priced at $1.18-3.85 million, equivalent to a 50% discount to the market level, sources said.
XINYI GLASS (00868.HK)  Chairman Yin Yee Lee added 500,000 shares of the Company on 8 March, involving approximately $10.9 million, according to HKEX's information. Upon completion, his shareholding hiked to 22.81%.  XINYI GLASS' shares closed the midday at $24.05, up 10.6%.
CLP HOLDINGS (00002.HK)  announced that EnergyAustralia, a wholly-owned subsidiary of the company, entered into an agreement with the State Government of Victoria, Australia on the advanced retirement of Yallourn coal-fired power station located in the Latrobe Valley, Victoria. Yallourn coal-fired power station has a gross capacity of 1,480MW.  The orderly retirement of Yallourn will start in 2028, four years prior to the end of its technical life; EnergyAustralia will deliver by 2026 a new utility-scale battery capacity of 350MW in Victoria; and EnergyAustralia will provide a comprehensive workforce transition package.
At Lunch Cathay Pac FY20 Annual Results. Loss was $21.648 billion, against $1.691 billion in FY19 profit; loss attributable to ordinary shareholders was $21.876 billion; profit attributable to preference shareholders was $228 million. LPS equaled 424.3 cents. No dividend was declared. Chairman Patrick Healy wrote that the group experienced the most challenging 12 months of its more than 70-year history in 2020. All cash preservation measures will continue unabated. Executive pay cuts will remain in place throughout 2021. The airline expected to operate at well below a quarter of pre-pandemic passenger flight capacity in the first half of 2021 with improvement in the second half of the year, added Healy. This assumed that vaccines would prove to be effective and would be widely adopted in key markets by summer 2021. Consequently the group expected to operate at well below 50% passenger capacity overall in 2021.
BioNTech CEO Ugur Sahin expected to ramp up the Covid-19 vaccine capacity to 3 billion doses with the firm's partner Pfizer next year, reported Bloomberg. Both drugmakers have pledged to supply 2 billion shots of their vaccine this year
Overnight HIBOR last posted at 0.03952%, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.1678%, marking a 1-month high.
Alfred Sit, Secretary for Innovation and Technology, said the relevant government departments have discussed the arrangements of e-consumption voucher distribution with operators of different Stored Value Facilities (SVFs). With at least a dozen systems available, the government will find a convenient and simple way to hand out the coupons as soon as possible, he added.
CHINA MOBILE (00941.HK)  issued the China Mobile 2021 Terminal Product Strategy White Paper, predicting the sales volume of mobile phones in China's market to tower 350 million units in 2021, of which 5G handsets will exceed 280 million units.  China Mobile is forecast to sell more than 200 million 5G mobile phones in the network this year.
The Ad5-nCoV vaccine co-developed in Russia by CANSINOBIO-B (06185.HK) and Russia's Petrovax, obtained very promising test data from the phase three clinical trial, Zhang Hanhui, Chinese Ambassador to Russia, told Interfax. CANSINOBIO-B has applied for registration in Russia, pending approval from relevant department.
The Government announced that so far a cumulative total of about 113,500 persons have received the first dose of vaccination, including about 110,500 persons receiving the Sinovac vaccine and about 3,000 persons receiving the Comirnaty vaccine.  For the past 24 hours ended at 0000 hours yesterday, there were seven cases of ambulance transfer to hospital and all were discharged.
PRE MARKET HOURS NEWS
Tencent through its minority shareholdings in around 100 listed companies gained about US$120 billion last year, six times its projected profit last year, according to internal data reviewed by The Information.
Macao Statistics and Census Service (DSEC) released survey results of Manpower Needs and Wages of the Gaming Sector for the fourth quarter of 2020. Survey coverage excludes junket promoters and junket associates. At the end of the fourth quarter of 2020, there were 56,613 full-time employees in the Gaming Sector, a decrease of 1,612 year-on-year. In December 2020, average earnings (excluding bonuses) of the full-time employees in the Gaming Sector were MOP23,440, down by 4.9% year-on-year.
The Chinese government is focusing her efforts on the crackdown on the inflow of personal spending loan and operating loans into the property market. Some commercial banks in Beijing according to official notices asked their clients to advance repayment of illegal credit loans that had flown into the home market, Beijing Business Today reported.
Moody's put HSBC HOLDINGS (00005.HK)'s Hongkong and Shanghai Banking Corporation and HANG SENG BANK (00011.HK on the watch list for possible downgrading.  The rating agency elaborated that the two banks were highly connected to other businesses of their parent company HSBC HOLDINGS, viewing HSBC HOLDINGS' financial capability may turn feeble, which would negatively impact Hongkong and Shanghai Banking Corporation and HANG SENG BANK.
Alibaba has recently established the MMC business group (BG) to lay stress on community group buying operations by consolidating the relevant unit of Ling Shou Tong (LST) and Hema Supermarket, reported China's LatePost. The BG is headed by the group's partner Trudy Dai. There will be no upper limit on the community group buying inputs, said Dai at a March 1's meeting.
MAANSHAN IRON (00323.HK) made the preliminary results announcement for the year of 2020. Net profit burgeoned 75.8% yearly to RMB1.983 billion, with an EPS of 25.75 fen.
Q TECH (01478.HK) announced that Total Sales Volume of Camera Modules in February 2021 was 31.873 million units, up 129.3% yearly but down 12.5% monthly.

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