HSI +31pts (+0.6%) 29,319 HSCEI -1pts (unch) 11,560 T/O HK$185.80bn (-22.5% DoD)
Markets opened higher following the US after a mixed session in Asia. No major earnings today but covid still overhangs the market with news that the contagious variants continue to spread. German Industrial Production was weaker than expected. Most sectors in the green except Telco. Media and F&B.
Dialog Semiconductor strong after Renesas Electronics Corp said it had agreed to buy the Frankfurt-listed chip designer for 4.9 billion euros ($5.90 billion) in cash.
Veolia weak after a French court blocked any hostile takeover of its smaller rival Suez, also weak in early trading
Industrial Production Dec 0% MoM vs +1.5% Nov revised (F/cast was +0.2%)
Opened higher in Asian time and have built on those gains; Dow +100pts, S&P and NDX both higher.
Data Consumer Inflation Expectations
Earnings: Hasbro, KKR, Loews Corp., Softbank, Dun and Bradstreet, Take Two Interactive, Nuance, Leggett and Platt, Simon Property Group
CHINA CSI 300 Closed +81pts (+1.5%) @ 5,565
CSI 300 opened slightly higher but drifted lower in early trades before rallying sharply to the day high just before lunch. PM saw the market trade sideways around the lunchtime level. I think Team China actively supporting the market ahead of the Chinese New Year holiday. CHINEXT saw with non-ferrous metals and chemical stocks strong. Kweichow Moutai led the SHCOMP gainers. Retail buying of holidays-related stocks ahead of the Lunar New Year holiday.
Recently battered non-ferrous and chip makers both rebound strongly. Insurers remained weak on concerns about debt exposures after Ping An’s declaration last week.
Shanghai Comp +36pts (+1%) @ 3,533
Shenzhen Comp +262pts (+1.8%) @ 15,270
Chinext Price Index +85pts (+2.6%) @ 3,278
China confirmed 14 additional COVID-19 cases yesterday (7th), without local infections, reported by National Health Commission.
Pre market opened@ 29,629 +340pts vs +122pts ADR’s much stronger than I was expecting. With Ecommerce names strong on the State Council adding the "picking one from two" rule to its platform economy antitrust guidance. SinoBioPharm strong on its covid vaccine getting conditional approval.Market initially worked lower to 29,470 before rallying back to 29,600 only then to sell down into lunch. After lunch market trended lower in choppy trading to the day low 29,293 around 3:30pm before seeing a rebound only to sell down and bounce before seeing a 30pt down tick in the closing auction.
E Commerce firm despite the new anti monopoly rules announced by State Administration for Market Regulation (SAMR). Ping An and Baba still weak. Macau names seeing interest along with Chinese infrastructure plays Sany and Zoomlion.Concerns about liquidity with turnover dropping significantly and tomorrow the Southbound Connect halts ahead of the Lunar New Year holiday in China.
HONG KONG DATA Centre for Health Protection said there were 32 new COVID-19 cases in Hong Kong today; (vs 27 Sunday) with 6 of unknown origin,
BASECARE-B (02170.HK), on debut closed concluded the day at $27.7, up 34 cents or 1.2% against the listing price $27.36, on volume of 50.89 million shares and turnover of $1.544 billion. Excluding the handling fees, a book gain of $170 was reported per board lot of 500 shares.
SHORT SELLING Monday 22.5% vs 18.3% Friday
Top Shorts: Shenzhou Int (2313) 42%, Country Garden (2007) 38%, CCB (939) 37%, Bank of China (3988) 37%, Hengan (1044) 36%, Anta (2020) 36%, Hang Lung Ppty (101) 34%, AIA (1299) 32%, Tencent (700) 31%, ICBC (1398) 30%, Bud Apac (1876) 30%, HSBC (5) 29%, BankComm (3328) 29%, Wharf REIC (1997) 28%, AAC Tech (2018) 28%, CKI (1038) 28%, Meituan (3690) 27%, Henderson Land (12) 26%, Ping An (2318) 25%, CLP (2) 25%, HK & China Gas (3) 25%, Hang Seng Bank (11) 25%.
AFTER MARKET NEWS
BlackRock boosted 5.0235 million shares of BYD COMPANY (01211.HK) at an average price of $261.4113 last Tuesday (2nd), according to HKEX. Upon completion, BlackRock's shareholding in BYD COMPANY rose from 4.57% to 5.05%.
Hang Seng Indexes Company Limited announced that KUAISHOU-W (01024.HK) meets the Fast Entry Rule of various indexes and will be added to the following indexes after market close on 22 February 2021 (Monday): Hang Seng Composite Index (Hang Seng Composite Industry Index – Information Technology, Hang Seng Composite LargeCap Index and Hang Seng Composite LargeCap & MidCap Index); Hang Seng China Enterprises Index (Hang Seng China Enterprises Equal Weighted Index, Hang Seng China Enterprises Smart Index and HSCEI ESG Index); Hang Seng TECH Index, and Hang Seng Internet & Information Technology Index. All changes will come into effect on 23 February 2021 (Tuesday). The weightings of KUAISHOU-W in HSCEI 5% and HSTI 8%.
The Government is seriously weighing, based on the pandemic situation, a mandatory order on users of designated premises to scan "Leave Home Safe" QR code before entry, said Secretary for Innovation and Technology Alfred Sit. The mobile apps, displayed at 69,000 premises, has to date recorded 520,000 installs, furthered Sit.
The production volume of China's broad-sense passenger vehicles amounted to 1.866 million units in January, up 31.8% YoY, according to data from China Passenger Car Association (CPCA). The sales volume of broad-sense PVs climbed 25.6% YoY to 2.18 million units
.TENCENT (00700.HK) announced that it has recently signed a corporate payment cooperation agreement with BANKCOMM (03328.HK) for partnership in industrial finance. Pursuant to which, BANKCOMM shall be the first banking partner of Tencent Financial Technology's business version of TenPay.
SUNNY OPTICAL (02382.HK) announced that in January 2021, handset lens sets shipment grew 36.1% yearly to 148 million units; vehicle lens sets shipment rose 53.9% to 7.346 million units.
GEELY AUTO (00175.HK) announced that the total sale volume for the month of January 2021 was 156,300 units, being an increase of approximately 40% from the same period last year, and a
LONGFOR GROUP (00960.HK) announced that in January 2021, the Group recorded contracted sales of RMB19.51 billion, up 93% yearly, with contracted sales in terms of GFA amounting to 1.171 million sq.m..
SoftBank Group unveiled the first three fiscal quarters' profit before tax of JPY3.36 trillion, up 1.33 times given tech stock investment gains and turnaround of the Vision Fund unit. In the third quarter alone, net profit burgeoned over 20 times to JPY1.17 trillion (around US$11.09 billion), far topping consensus of JPY171 billion.
*E-COMMERCE MIXED State Administration for Market Regulation (SAMR) released new guidelines on anti-monopoly behavior targeting internet platforms; saying it will not allow companies to use data or algorithms to abuse market dominance. It added that practices such as "choose one from two" will be among the restricted transactions. That benefits the smaller players: MEITUAN (3690 HK +1.2%) JD (9618 HK -0.6%) NTES (9999 HK +1.3%) ALIBABA (9988 HK -0.6%).
TENCENT's (700 HK +0.9%) on news Tencent Music Entertainment has selected banks to arrange its planned second listing in Hong Kong, which could raise US$5b, news reported.
KUAISHOU TECH (1024 HK -0.5%) raised another HK$5.75 billion after exercising the over-allotment option, lifting its initial public offering size to HK$47 billion. It’s to be included in MSCI effective from 1st of March.
*HK LANDLORDS FLAT after SWIRE PACIFIC (19 HK -1.3%) and SWIRE PROP (1972 HK-0.5%) jointly announced that retail sales in The Mall, Pacific Place -31.2% YoY in Q4 ended December 2020. Retail sales in Cityplaza -17.6% and Citygate Outlets -16.1%. HANG LUNG (101 HK -0.5%) HYSAN (14 HK +0.9%) WHARF (4 HK +0.9%) SHKP (16 HK +0.1%).
*CHINA PROPERTY FIRM on good sales data.
SHIMAO PROP (813 HK +2%) Jan. contracted sales +96% YoY to 20.02b yuan. SUNAC (1918 HK +1%) Jan. contracted sales +89% YoY to 35.17b yuan
*AUTO MAKERS MAINLY FIRM after GREAT WALL AUTO (2333 HK +9.7%) reported Jan sales volume increased 73% YoY to 139,012 units, and could venture into the chip-making field by by investing in Horizon Robotics (see Market News below).
DONGFENG MOTOR (489 HK+ 2.1%) Jan. vehicle sales +22% to 276,008 units vs. 225,665 YoY.
GAC (2238 HK +4.4%) BRILLIANCE (1114 HK +1.3%).
*MACAU CASINOS STRONG on the news that a total of 100,000 doses of COVID-19 vaccines made by SINOPHARM were delivered to Macau on Saturday. The Govt will provide them free to citizens. A couple of broker upgrades on the outlook too after the results from WYNN (1128 HK +2.6%) on Friday. MELCO (200 HK +3%)SJM (880 HK +2.7%) GALAXY (27 HK +2.7%) MGM (2282 HK+2.1%).
*HK RETAILERS STRONG on vaccination hopes;. CHOW TAI FOOK (1929 HK +5%) SA SA INTL(178 HK +0.8%) LIFESTYLE (1212 HK +3.2%) GIORDANO (709 HK +1.5%).
*LUXURY BRANDS STRONG after cosmetic brand Estee Lauder announced a big earnings beat as mass vaccinations rollout continues and global Covid cases are seen easing. L'OCCITANE (973 HK +6.9%) SAMSONITE (1910 HK +10%) PRADA (1913 HK +2%)
*MACHINERY STRONG after on more Govt infrastructure stimulus hopes as ZOOMLION (1157 HK +8.9%) gave strong sales guidance, said January sales surged circa 130%YoY, with tower cranes tripling. SANY (631 HK +15.2%), WEICHAI POWER (2338 HK +4.7%).
*PHARMA/VACCINE MAKERS WEAK on consolidation, except CANSINO BIO (6185 HK +8.9%) after it applied for a license to use its Covid vaccine in Mexico. SINOPHARM (1099 HK -1.4%) WUXI BIO (2269 HK -1.5%) 3SBIO (1530 HK -4.8%).
Nikkei 225 opened higher pre market data was in-line and market rallied initially to 29,200 level and then worked higher into lunch. PM is drifted slight lower ahead of the Eco Watchers data which was slight better and then traded sideways with an uptick at the end to close +609pts (+2.1%) @ 29,389
Topix following a similar trading pattern to close +33pts (+1.8%) @ 1,924
Current Account Dec Yen 1165.6b vs 1878.4b Nov (F/cast wa 1110b)
Bank Lending Jan 6.1% vs +6.2% Dec (F/cast was +6.1%)
Eco Watchers Outlook Jan 39.9 vs 37.1 Dec (F/cast was 34)
Eco Watchers Current Jan 31.2 vs 35.5 Dec (F/cast was 32).
Kosdaq opened lower and sold down to 957 in the first hour before working back to the opening level 967 but failed to break into the green and drifting slightly lower through the afternoon to close: -7pts (-0.7%) @ 961
Kospi followed. Similar trend but with chopper trading and did briefly break into the green before selling down to close -30pts (-0.9%) @ 3091.
Auto’ weak on news that Apple in talks with other manufacturers outside S Korean not Huundai or Kia. Signs of foreign selling. Tech also seeing some weakness but Pharma seeing buying. Institutions and Foreigners sold again today for a third session.
The local manufacturing domestic supply index stood at 108.3 in the October-December period, down 1.1% YoY , according to the data compiled by Statistics Korea.
Market Closed all week.
Balance of Trade Jan $6.19b vs 5.76b Dec (F/cast was 4.9b)
Exports Jan +36.8% YoY vs +12% Dec (Consensus was +15%)
Import Jan +29.9% YoY vs +0.9% Dec (Consensus was +14.7%)
Exports mainly boosted by electronic product (47.5%); information, communication and audio-video products (42.9%); base metals and articles of base metal (27.2%); plastics & rubber and articles thereof (51.1%) and machinery (26.9%). Imports increased 29.9% to also hit a new high of USD 28.1 billion, due to electronic product (48.9%); machinery (10.7%); chemicals (37.3%); information, communication and audio-video products (70%). Sales to China jumped 57%, ASEAN countries 40.7% and 21.5% to Japan. Imports from China surged 46.9%. Lunar new year holidays follow in February in 2021 compared to January in 2020.
Northbound Rmb 53,452m Buy 25,494m vs 27,958m Sell
Southbound HK$ 24,314m Buy 9,799m vs 14,516m Sell
Northbound Rmb 68,503m Buy 31,519m vs 36,984m Sell
Southbound HK$ 30,318m Buy 11,725m vs 18,594m Sell
MEITUAN (03690.HK) +1.2%
PING AN (02318.HK) -0.8%
BABA (09988.HK) -0.6%
TENCENT (00700.HK) +0.5%
AIA (01299.HK) +0.4%
HKEX (00388.HK) +0.3%
HSI & HSCEI Constituents on Move:
ENN ENERGY (02688.HK) -4.9%
TECHTRONIC IND (00669.HK) +3.6%
SMIC (00981.HK) -3.3%
GALAXY ENT (00027.HK) +2.8%, hitting new high
PSBC (01658.HK) +1.9%, hitting new high
HSMI & HSSI Constituents on Move:
ENGTEN NET (00136.HK) +49.1%, hitting new high
MEITU (01357.HK) +23%, hitting new high
CHINA RISUN GP (01907.HK) +15.3%
SANY INT'L (00631.HK) +15.2%, hitting new high
HUAZHU (01179.HK) +14.8%, hitting new high
RAZER (01337.HK) +14%, hitting new high
COFCO JOYCOME (01610.HK) +13.7%
CHINA ZHONGWANG (01333.HK) +13.6%
SAMSONITE (01910.HK) +10.1%
MARKET HOURS NEWS
HKELECTRIC-SS (02638.HK) announced that, to alleviate the continuing impact of the COVID-19 pandemic on small and medium enterprises (SMEs) and underprivileged families, the company has expanded the scope of its relief measures and energy-saving programmes to cover part of the customers hit hardest by the pandemic. Together with the distribution of dining coupons again this year, this new round of relief measures will benefit around 500 SMEs and more than 40,000 underprivileged families.
TENCENT (00700.HK) has awarded 100 shares of the company, in a market cap of $73,300 based on Friday's closing price of $733 each, to each of its employees as year-end bonus, Chinese media learnt from inside sources. The Chinese tech giant replied that the bonus issue was not meant for every worker but those who made especial contributions to the company
Huawei had generated FY20 profit of USD9.9 billion, up 10.4%, said Chinese media. DPS was RMB1.86, down RMB0.25 yearly.
The Macau government announced free vaccination for local citizens, as well as foreign domestic helpers, non-local students and prisoners, under the novel coronavirus vaccination program, Radio Macau reported. Other non-local citizens who lawfully stay in the gambling hub may receive dosages, priced at MOP250 each, at their own expense.
WeSure, an insurance platform under TENCENT (00700.HK), announced that it registered more than 10 million active users for its WeFit Health Award Scheme.
MEITUAN-W (03690.HK)'s Shanghai Lutuan Technology struck a strategic partnership with Senmiao Technology. Both sides will provide ride-hailing drivers with comprehensive solutions, including financing arrangements, rentals and safety equipment integration, to drive Senmiao's proprietary online ride-sharing platform.
GREATWALL MOTOR (02333.HK) may break into chip industry soon by investing in Horizon Robotics, a smart vehicle chip startup in China, according to mainland media. Both parties may also unfold major cooperation in Advanced Driver Assistance Systems (ADAS), high-level autonomous driving, smart cockpit, and so on.
China will permit the unloading of Australian coal cargoes by some vessels stranded at ports for a long time, Bloomberg citing insiders. However, this will not imply a relaxed ban on Australian coal imports.
TENCENT (00700.HK) said its anti-epidemic health code, withholding electronic health record, has been launched for one year in Shenzhen. So far, the code has serviced over 1 billion users nationwide with more than 24 billion taps.
Sony PlayStation in China announced on Weibo that the domestic version of its PS5 console will be launched between April and June.
XIAOMI-W (01810.HK) Chairman Lei Jun revealed at the Mi Fans event that the company had in last year pumped RMB10 billion in R&D, and that it will keep amplifying investment in the field this year with the budget hiked by 30-40%. He added that the company will further hire engineers in future and plan to engage 5,000 more this year.
Chinachem Group unveiled the first price list for Mount Anderson yesterday (7th), offering 68 units with saleable area of 377-831 sq.ft. Prices on the list range $9.9113-22.173 million. Deducting the maximum discount of 20%, the selling prices range $7.929-17.7384 million, i.e. $20,363 per sq.ft. on average.
Two highlighted projects were launched last weekend, shoring up new home sales. 440 first-hand residential transactions were tracked at the weekend, up around 50% weekly to a nearly 12-week high, according to market sources.
Skypoint Royale, jointly developed by HK FERRY (HOLD) (00050.HK) and Empire Group, sold 243 of the 281 units launched last Saturday, pocketing over $1.078 billion.
LP10, co-developed by Nan Fung and MTR CORPORATION (00066.HK), sold 142 flats in the entire log of 179 flats rolled out last Saturday.
Following output cuts by Volkswagen, Toyota, Nissan and Subaru amid chip shortage, France's Renault and Stellantis have announced production chop last week. Renault will suspend output at a French production base this week, and two bases in Morocco and Romania for several days.
PRE MARKET NEWS
GCL NEWENERGY (00451.HK) announced that the Group had continued to dispose of its solar power plants during the year ended December 31, 2020. It is expected that the Group’s non-cash impairment loss and loss on disposal arising from the Disposals during the Year to account for not less than RMB800 million. The Company recorded a foreign exchange gain of approximately RMB300 million for the Year due to appreciation of RMB against USD for its USD denominated indebtedness, based on its preliminary assessment.
LENOVO GROUP (00992.HK) CFO Wong Wai Ming expected, with an approval from the shareholders' meeting, that the firm's listing on Sci-tech Innovation Board would be completed in half a year following training of directors and senior management, prospectus preparation and regulatory approval. The group strived to go public at the earliest if possible. LENOVO GROUP anticipated to invest in cloud infrastructure and new IT fields, Wong added, who viewed the mainland market valuation and share price may be better than Hong Kong's.
SINO BIOPHARM (01177.HK) announced that the application for registration of the inactivated novel coronavirus vaccine (brand name: CoronaVac) developed by Sinovac LS, an associate of the Group, has been approved with conditions by the National Medical Products Administration of the People’s Republic of China.
GREATWALL MOTOR (02333.HK) announced that the total sales +73.2% YoY and production volume +80.3% YoY for the month of January 2021 to 139,000 and 138,000 vehicles.
SUNAC (01918.HK) announced that it had in January 2021 achieved contracted sales value of RMB35.17 billion, representing year-on-year increase of 89%.
BYD (Shenzhen) Supply Chain Management Co., Ltd. underwent a business change with registered capital rising to RMB3.5 billion, up 600% from the initial size of RMB500 million, according to Tianyancha. The company's business scope includes supply chain management and supporting businesses; supply chain channel management and design; logistics plan design; trade brokerage; import and export business, etc., and is wholly-owned by BYD COMPANY (01211.HK)
Beijing Intellectual Property Court has recently accepted and is processing Douyin's antitrust lawsuit against TENCENT (00700.HK), marking the first inter-online-platform antitrust lawsuit of China.T
he Anti-Monopoly Committee of the State Council issued antitrust guidelines on platform economy. Under which, the authorities shall make decisions over the cluster of operators who would or may eliminate and restrict competition in accordance with Article 28 of the Anti-Monopoly Law of the PRC. When analyzing if a deal constitutes an exclusive dealing, the Committee may consider, among others, asking operators to pick one competitive platform from two.
XINYANG MAOJIAN (00362.HK) announced that for the six months ended 31 December 2020, loss deepened to $74.29 million from $46.77 million a year ago. LPS equaled 5.39 cents. No interim dividend was declared.