Aug 28 HK WRAP HSI +141pts T/O +10% DoD, Shorts elevated on earnings releases
HSI +141pts (+0.6%) 25,422 HSCEI -19pts (-0.2%) 10,183 T/O HK$165.28bn (+9.8% DoD)
EUROPE markets opened mixed (DAX lower, CAC & FTSE higher) after initial weakness they then worked higher in choppy trading in reaction to PM Abe’s resignation, weak German Consumer Confidence data, weak French Household spending and despite the Fed Chairman Powells announcement of a change in policy and an improvement in the Eurozone sentiment numbers.
US Futures opened +30pt and have worked higher to +150pts, S&P futures higher, NDX flat. Jackson Hole symposium continues. Data due today Personal Income and Spending, PCE Price Index, Goods Trade Balance, Wholesale Inventories, Core PCE Price Index, Chicago PMI, University of Michigan Final Data (Consumer Expectations, 5 year Inflation Expectations, Consumer Sentiment, Inflation Expectations, Current Conditions), Baker Hughes Total Oil Rig Count
CSI 300 Closed +123pts (+2.4%) @ 4,844 opened lower and but trended slowly higher though the morning. PM saw the trend increase with the market rising 80pts in 90 mins and then trade sideways into the close. Sentiment improved on the expectation that US interest rates are now going to remain lower for longer.Foreigners increased their net buying via the connect to the most since end of July. Gains in Pharma, Brokers and Consumer names.
HSI Pre market opened +50pts @ 25,330 vs -82pts ADR’s @ 25,199 with E-Commerce names weak along with Tech. Although SMIC was strong after results. After some initial selling but found support at yesterdays closing level and then the market worked higher to 25,560 level before easing slightly into lunch. PM the market saw a small initial dip but then rallied to 25,750 which is tested a few times but without momentum and then drifted lower for the next hour. Around 3pm the selling accelerated before finding support at 24,400. Small up tick into the close. Rotational trading as investors react to recent results. E-Commerce under pressure ahead of Ant listing as investors look to lock in recent gains.
EARNINGS OUT After market
ZTE (763.HK) interim result ended June 2020. Operating revenue +5.8% year on year to RMB47.199 billion. Net profit RMB1.857 billion, +26.3% yearly.
EPS was RMB0.4. No dividend was declared.
JOY CITY PPT (207.HK) interim result ended June 2020. Net profit RMB115 million, -86.9% yearly. EPS was RMB0.7 cents. No dividend was declared.
ANALOGUE HLDGS (1977.HK) interim results for the period ended June 2020. Turnover +17.4% year-on-year to HK$2.441 billion. Net profit HK$107 million, -0.8% yearly. EPS was HK8 cents. An interim dividend of HK3.82 cents was declared.
ASCLETIS-B (1672.HK) interim result ended June 2020. The loss widened to RMB51.465 million from RMB47.232 million in the corresponding period of the previous year. LPS was RMB4.94 cents. No dividend was declared.
CHINA RAIL CONS (1186.HK) interim result ended June 2020. Revenue +5.1% year on year to RMB370.789 billion. Net profit RMB9.316 billion, +0.3% yearly.
EPS was RMB0.62. No dividend was declared.
CTIHK (6055.HK) interim results for the period ended June 2020. Turnover -52.1% year-on-year to HK$1.885 billion. Net profit HK$57.2087 million, down 56.2% yearly. EPS was HK$0.08. No dividend was declared.
CNBM (3323.HK) interim results for the period ended June 2020. Turnover -4.8% year-on-year to RMB106.788 billion. Net profit RMB5.387 billion, -6.4% yearly. EPS was RMB0.639. No dividend was declared.
YANZHOU COAL (1171.HK) interim result ended June 2020. The sales income rose 6.3% year on year to RMB35.325 billion. Net profit RMB4.549 billion, -21.7% yearly. EPS. was RMB0.93.
CHINA COMM CONS (1800.HK) interim result ended June 2020. Turnover +2.5% year on year to RMB245.41 billion. Net profit RMB5.517 billion, -37.2% yearly. EPS. was RMB0.28. No dividend was declared.
SOCAM DEV (983.HK) interim result ended June 2020. The company swung into loss of HK$130 million from earnings of HK$11 million over a year ago. LPS was HK$0.35. No dividend was declared.
CM BANK (3968.HK) announced interim result ended June 2020. The net profit RMB49.788 billion, -1.6% yearly. EPS was RMB1.97. No dividend was declared.
CRRC (1766.HK) interim results for the period ended June 2020. Turnover -7% year-on-year to RMB89.403 billion. Net profit RMB3.693 billion, -22.8% yearly.
EPS was RMB0.13. No dividend was declared.
SHANGRI-LA ASIA (69.HK) interim results ended June 2020. Loss was US$283 million, against US$115 million in profit a year ago. LPS equaled US7.915 cents. No dividend was declared. In the first half of 2020, revenue from Hong Kong deflated 76.3% to US$41.50 million.
CHINA COAL (1898.HK) interim result ended June 2020. Revenue +0.6% year on year to RMB61.393 billion. Net profit RMB2.529 billion, -38.7% yearly.
EPS was RMB0.19. No dividend was declared.
MIDLAND HOLDING (1200.HK) interim result ended June 2020. The company swung into loss of HK$24.354 million from net profit of HK$93.597 million. LPS was HK3.39 cents. No dividend was declared.
TONGCHENG-ELONG (780.HK) interim result ended June 2020. The company swung into loss of RMB903,000 from earnings of RMB297 million over a year ago. EPS. was RMB0. No dividend was declared.
SINO BIOPHARM (1177.HK) interim results ended June 2020. Net profit RMB1.213 bn, -16% yearly. During the period, underlying profit +5.2% to RMB1.76 billion. EPS equaled 9.64 fen. Quarterly DPS was HK2 cents. Together with the first quarterly DPS of HK2 cents, the total dividend of first two quarters amounted to HK4 cents per share.
SHANGHAI IND H (363.HK) interim results for the period ended June 2020. Turnover -20.7% year-on-year to HK$13.211 billion. Net profit HK$803 million, -60.1% on a yearly basis. EPS was HK$0.725. An interim dividend of HK22 cents was declared. The company also planned to distribute one SH IND URBAN (563.HK) share for every five company shares owned as a special interim dividend.
CHONG HING BANK (1111.HK) interim results for the period ended June 2020. Net profit HK$715 million, -21% year-on-year. EPS was HK$0.64. An interim dividend of HK$0.11 was declared, against a payout of HK$0.17 the year-ago period.
CAR INC (699.HK) interim results ended June 2020. Loss amounted to RMB4.338 billion, against RMB279 million in profit a year ago. LPS equaled RMB2.046. No dividend was declared.
BANKCOMM (3328.HK) interim result ended June 2020. Net profit RMB36.505 billion, -14.6% yearly. Net interest income increased +5.41% on a year-on-year basis to RMB73.849 billion
AFTER MARKET NEWS
SHANGRI-LA ASIA (69.HK) said in its interim results report that the group had a very challenging first half of 2020 and it anticipated the rest of the year to continue to be volatile. As the group entered the latter half of 2020, it will continue to utilise this quieter period to provide skills training and learning opportunities for its colleagues. It has also taken the opportunity to restructure and streamline some of its teams.
The Lands Department (LandsD) announced today (August 28) that a site, Tung Chung Town Lot No. 45 at Area 57, Tung Chung, New Territories, in the 2020-21 Land Sale Programme will be disposed of by public tender. The tender invitation for the lot will commence on September 4 and close on October 16.
Tung Chung Town Lot No. 45 has a site area of about 12,335 square metres and is designated for non-industrial (excluding residential, hotel, godown and petrol filling station) purposes. The minimum gross floor area and the maximum gross floor area are 70,310 sq m and 117,182 sq m respectively.
Nestle announced the disposal of its Chinese bottled water business to Tsingtao Brewery Group, involving the "Dashan" brand, the "Yunnan Shanquan" brand, plus three bottled water factories in Kunming, Shanghai and Tianjin.
XTEP INT'L (1368.HK) saw satisfactory increase in product prices and discounts in its telecom unit after making certain changes, chairman cum CEO Ding Shui Po said. In the future, probably in 2H21, the company would look into transformation into conducting DTC (Direct To Consumer) marketing, said Ding, adding it would focus on forging new brand this year. CFO Yeung Lo Bun saw continued operation improvement in core Xtep brand, the retail sell-through slide of which improved to single digits in 2Q20 from over 20% in 1Q20. During July and August, the firm basically maintained its single-digit sales growth. Yeung anticipated better 2H20 sales HoH, seeing passable growth after the pandemic is brought under control.
China Buys Record Amt of Over 3,300 Tonnes US Beef Last Week, setting her largest weekly purchase record since 1999, said U.S. Department of Agriculture.
Centa-City Leading Index (CCL) last printed at 178.71, -1.21% weekly. Centaline Property, elaborated on the down trend that housing prices were obviously subdued during the first week of tightened social distancing measures at end-July. Transaction prices were low for individual cases, hampering market uptrend briefly. With tapering local epidemic in late August, the second-hand market recovered the vibrancy with rising deals. Going into September, they expected housing prices to pick up the growth.
JAPAN opened slightly higher following the US despite the weak Tokyo CPI data out pre market saw initial choppy trading, twice testing yesterdays closing level before working slightly higher into lunch. PM initially continued sideways but sold down dramatically 580pts just after 2pm on rumours PM Abe’s was going to resign. Market then bounced 300pts before selling down again. It then saw a 100pts bounce into the close. After market PM Abe revealed that he has been suffering with a chronic disease and will resign to ensure there isn’t a vacuum when the diet resumes in September.
Pre market Monday we get Retail Sales and Industrial Production.
Todays Pre Market CPI data
Tokyo Core CPI Aug -0.3% YoY vs +0.4% Jul (F/cast was +0.3%)
Tokyo CPI Aug +0.3% YoY vs +0.6% Jul (F/cast was +0.6%)
S KOREA opened higher and have trended higher with the Kosdaq hitting 850 at mid day. It tried to breakout but without success and then sold down to 838 before a small bounce and then trade sideways to close +0.6%. The Kospi saw see some initial weakness but worked higher following a similar pattern to close +0.4%.
Pre market Monday we get Industrial & Manufacturing Production and Construction output.
TAIWAN opened lower and traded lower but then bounced back but resistance at yesterdays closing and it the reversed and trended lower for the rest of the day to 12,675 before a small bounce; to close -0.5%.
Short Selling HSI Friday 20.4% vs 22.1% Thursday
Top Shorts Sino Land (83) 61%, Want Want (151) 43%, Wharf REIC (1997) 38%, China Res Land (1109) 36%, Power Assets (6) 34%, Ping An (2318) 34%, CLP (2) 32%, AAC Tech (2018) 31%, Techtronics (669) 30%, Hang Lung Ppty (101) 29%, BoC HK (2388) 29%, Hang Seng Bank (11) 28%, Country Garden (2007) 28%, China Shenhua (1088) 27%, Petrochina (857) 27%, HSBC (5) 25%,
Henderson Land (12) 25%, HK & China Gas (3) 25%.
CONNECT FLOWS (Up DoD)
Northbound Rmb 48,349m Sell 23,431m : 24,918m Buy
Southbound HK$ 14,106m Sell 6,190m : 7,916m Buy
Northbound Rmb 62,315m Sell 28,680m : 33,636m Buy
Southbound HK$ 13,218m Sell 5,340m : 7,879m Buy
CHINA No data due.
Pre Market Monday we get Manufacturing and Non Manufacturing PMI's
Centre for Health Protection said there were 21 additional COVID-19 cases in Hong Kong today; (vs 21 cases Thursday). 10 local infections 3 from unknown sources
AIA (1299.HK) +4.1%
TENCENT (700.HK) -3.1%
CCB (939.HK) -0.3%
HKEX (388.HK) +0.3%
PING AN (2318.HK) -0.1%
HSI & HSCEI Constituents on the move
MENGNIU DAIRY (2319.HK) +10.4%, hitting new high
TECHTRONIC IND (669.HK) +2.9%, hitting new high
HSMI & HSSI Constituents on the move
KB LAMINATES (1888.HK) +19.9%, hitting new high
NETDRAGON (777.HK) -15.5%
JINCHUAN INTL (2362.HK) +15.1%
NAGACORP (3918.HK) +13.1%
GREENTOWN CHINA (3900.HK) +10.8%
FIT HON TENG (6088.HK) +10.4%
HOPSON DEV HOLD (754.HK) +5.7%, hitting new high
SHOUCHENG (697.HK) +5%, hitting new high
*PETROCHEMS MIXED Oil declined after Laura barreled into Louisiana, largely sparing the Texas Gulf Coast from serious disruption to key energy infrastructure. Meanwhile, the UAE reportedly plans to exceed its OPEC+ quota by 900,000 barrels a day in October. That would mean global crude stockpiles could decline by just 400,000 barrels a day from July-October, vs a previous prediction of 1 million.
PETROCHINA (857 HK+1%) 1H IFRS loss 29.98b yuan.
CH OILFIELD (2883 HK-1.4%) interim net profit -76% YoY to 1.71b yuan.
CNOOC (883 HK-0.5%) delayed expansion of its North Sea Buzzard oil field to next year due to the virus.
*E-COMMERCE WEAK saw profit-taking from recent gains.
TENCENT (700 HK-2.9%) to offer up to HK$11.61b or HK$3.3219/Leyou Tech shares.
BABA (9988 HK-1%) JD.COM (9618 HK-2.4%).
NETDRAGON (777 HK -15.5%) reported 1H core profit -5.5%
HKTV (1137 HK -1.4%), the parent of HKTVmall, which has received HK$16.3m in a govt subsidy, recorded a first time net profit of HK$109m in the first half.
*CH FINANCIALS WEAK on earnings concerns.
PING AN (2318 HK -0.3%) 1H net income -30% YoY to 68.68b yuan.
CITIC SEC (6030 HK -0.5%) saw 1H net profit -9.77% to 25.54b yuan, dragged down by rising provisions for bad loans and financial investments amid the Covid-19 pandemic. The big CH Banks traded softer ahead of today's earnings results.
*HONG KONG and CHINA PROPERTY FIRM on speculation that interest rates would remain low for a long while. SHKP (16 HK +1.4%) HENDERSON LD (12 HK +1%) NWD (17 HK +1.6%), KAISA (1638 +3.6%) CIFI (884 HK +3.3%) LONGFOR (960 HK +2.3%).
*HK RETAILERS STRONG as HK started to lift some social distancing rules given a gradual drop in new Covid cases. SASA INTL (178 HK +3.9%) BONJOUR (653 HK +1.5%) LUK FOOK (590 HK +3.5%) CHOW TAI FOOK (1929 HK +3.6%) EMPEROR W&J (887 HK +3.6%).
*CHINA RESTAURANT CHAINS STRONG on speculation a lower interest rates environment will boost consumers spending. Plus recent leading indicators show China's economy is gradually recovering from the Covid outbreak. HAIDILAO (6862 HK +5.6%) XIABUXIABU (520 HK +9.9%) JIUMAOJIU (9922 HK +5%).
*BIOPHARM FIRM amid progress on vaccine development. JACOBSON PHARMA (2633 HK +5.4%) signed a letter of intent with FOSUN PHARM's (2196 HK -0.6%) unit on the supply and distribution of a virus vaccine in HK and Macau. LOI is potentially for 10m doses of the BioNTech BNT162 vaccine candidate targeting Covid-19.
SINO BIOPHARM (1177 HK +1.5%) INNOVENT (1801 HK +4.5%) 3SBIO (1501 HK +3.9%) CANSINO (6185 HK -3.5%).
*MORE POST-EARNINGS MOVERS:
SHUN TAK (242 HK-5.5%) suffered a 1H net loss of HK$279m. That came with a 85-percent, year-on-year drop in its real estate business profit. Revenue fell 82 percent while hospitality losses widened by 4.12 times.
GT EAGLE (41 HK+7.5%) recorded an interim net loss of HK$6.51b while declaring an interim dividend of 33 HK cents and a special dividend of HK$1.5/shr.
LUYE PHARM (2186 HK-8.8%) said 1H net inocme -26% YoY and not distributing an interim dividend.
CH MENGNIU (2319 HK+10%) jumped after brokers lift their prices targest following 1H results beat.
MARKET HOURS NEWS
CHINA MER PORT (144.HK) delivered notably better results in 2Q20 than in 1Q20, said Chairman Deng Renjie. The group is striving for stable performance this year, with work and production resumption in 2H20 and container business revival on peak season, added Deng. It would like to generate investment synergy by asset disposal and equity participation, said Deputy General Manager Lu Yongxin, adding these investments were not simply made out of financial purpose. Despite Washington's removal of preferential treatment for Hong Kong, CHINA MER PORT Chairman saw minimal impact on Mainland China from the unilateral sanctions, as the group's Americas route accounts for less than 5% of the total.
KWG GROUP (1813.HK)'s 2H20 domestic land acquisition will still be focused on Yangtze River Delta and Pearl River Delta, said Chairman Jianmin Kong at the interim result conference. Equally, he foresaw more chances of land acquisition in the market in 2H20 and 1H21. Regarding property management spin-off, KWG GROUP's Senior Consultant Xu Jintian claimed the ratio of distribution in specie of KWG Living shares to the group's shareholders remained undecided.
CSOP HS TECH (3033.HK) Issues Risk Reminder. (CSOP Hang Seng TECH Index (ETF, the Sub-Fund) is listed on HKEX today. CSOP Asset Management Limited, the manager of the Trust and the Sub-Fund, reminded the unitholders of the Sub-Fund of the market trading risks, including but not limited to large premiums of the secondary market price. The Net Asset Value per unit of the Sub-fund was HKD7.5409 as of 27 August 2020. The last Net Asset Value per unit and the intra-day estimated Net Asset Value per unit of the Sub-Fund are published on the website of the Sub-Fund http://www.csopasset.com/en/products/co-chst.
PING AN (2318.HK)'s interim dividend growth, Co-CEO Yao Bo told reporters that shareholders' emphasis of payout and return was intelligible, adding the annual payout would still be linked with operating profit growth. Regarding 1H20 net profit slide, Yao said PING AN has been the only Chinese insurer adopting IFRS 9, hence subject to sharper earnings volatility. CIO Chen Dexian said that the gap between assets and liabilities is now narrowed to 4.3 years, notably less than the 8 years earlier, whilst the solvency capability is also maintained at a stable level. The company is committed to keeping higher investment income for 2020 than 2019, the CIO added.
CIFI HOLD GP (884.HK) CEO Lin Feng, voiced confidence of overachieving the 2020's contracted sales target of RMB230 billion without adjusting the target due to pandemic. The company has been maintaining sturdy growth, and management expects to retain more than 15% growth in next three years under the new business model. Further, the company foresaw the land market to become more reasonable in 2H20 with more investment opportunities popping up.
XIAOMI-W (1810.HK) showcased its under-screen camera technology of the third generation. Founder Lei Jun introduced that the phone screen will become transparent when front camera is turned on after adopting the new technology, allowing adequate light to penetrate to the camera. When the front camera is switched off, the screen will resume normal display. The third generation as announced in August achieved mass production phase, Lei added.
FOSUN INTL (656.HK) Senior Vice President Gong Ping justified the interim dividend halt, saying such decision was based on the pandemic and citing overall payout ratio growth in the past few years. Gong highlighted 2020 as a special year, anticipating to maintain steady payout for the year.
A batch of beef imported from Australia was tested positive for a prohibited drug in both China and Australia, General Administration of Customs of the PRC (GAC) revealed. Exports from Australian beef producer John Dee Warwick Pty. Ltd. have been suspended. The problematic batch of products have been destroyed.
Yum China (YUMC.US) made confidential filings for listing with Stock Exchange two days ago, expecting to clear listing hearing in a day or two, Chinese media citing sources. The restaurant company may start IPO next week and go public in September. Yum China aims to raise US$2 billion in funds, with Goldman Sachs, Citigroup, UBS and CMBI as sponsors, according to the report.
The worldwide smartphone shipment is set to shrink 9.5% yearly to 1.2 billion units this year, as the International Data Corporation wrote in a report. While the 2Q20 figure came in slightly ahead of expectations, the market was still down by 17% yearly, which is a visible sign of economic concerns, said the report.
Overnight HIBOR last posted at 0.35%, logging a 1-month high, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.36732%, marking a 1-month high.
CHINA VANKE (2202.HK)'s results release conference, President Zhu Jiusheng said the market has been springing back since May, which was deemed phased demand recovery from suppression. The group will spare no efforts although the President cannot make bold prediction on 2H20 outlook. As for GPM slide in 1H20, Executive Vice President Han Huihua explained that the GPM was at a relatively high level in the previous year. While GPM downsides are within the industry trend, she foresaw a small-scale recession was expected by end-2020. However, the GPM may still fall onto a reasonable range.
Under a recent regulation to restrict oil imports from neighboring countries, Indian state refiners have halted crude purchases from China-linked companies including CNOOC (883.HK), SINOPEC CORP (386.HK) and PETROCHINA (857.HK , Reuters citing insiders.
Chief Agricultural Negotiator in the Office of the U.S. Trade Representative (USTR), was positive on meat sales to China, claiming U.S. pork exports had surged to a record high in the first half of year. Beijing has recently purchased loads of corn and ramped up procurement of soybeans, which have returned to pre-trade war levels, Doud added.
As the biggest barley buyer in Asia, China starts turning to Argentina for barley instead of Australia, being the first time since 2016, Reuters reported.
PRE MARKET NEWS
Not in this mornings report
China Foreign Exchange Trade Center announced, on 28 August, the central parities in the interbank forex market of transaction currencies, including the dollar against CNY, are as follows: USD/CNY = 6.8891, up 12 bps from yesterday's central parity, setting an over-seven-month high.
TikTok may announce the disposal of its businesses in the United States, Canada, Australia and New Zealand in next few days with an offer price between US$20-30 billion, CNBC cited people with the knowledge of the matter.
Yet, TikTok has not decided on the ultimate buyer. On another note, Walmart confirmed to join with Microsoft for the bid of TikTok US.
Oracle has offered cash and stocks worth US$20 billion to acquire TikTok's operations, TheWrap citing insiders. The proposed deal comprises US$10 billion in cash, US$10 billion in Oracle stocks and 50% of the app's annual profit to flow back to its owner ByteDance for two years.
CHINA COMM CONS (1800.HK) announced that the Bureau of Industry and Security in the Department of Commerce of the United States of America added 24 Chinese companies to the Entity List for their role in helping build military islands in the South China Sea. The Company noticed that five of them are its subsidiaries, namely CCCC Dredging and its three subsidiaries – China Communications Construction Company Tianjin Waterway Bureau, China Communications Construction Company Shanghai Waterway Bureau and China Communications Construction Company Guangzhou Waterway Bureau, and China Communications Construction Company Second Navigation Engineering Bureau. The Company is conducting a thorough assessment on the potential impacts of the Decision on the business and operation of the Company.
BEIGENE (6160.HK) and Singlomics (Beijing DanXu) Biopharmaceuticals announced Thursday that the companies have executed an exclusive license agreement for BeiGene to develop, manufacture and commercialize globally outside of greater China Singlomics’ investigational anti-COVID-19 antibodies, including DXP-593 and DXP-604.
As USD/ HKD hit the Strong-side Convertibility Undertaking during New York trading hours, the HKMA injected US$150 million (approximately HK$1.162 billion) into the market. The balance of the Hong Kong banking system will therefore rise to HK$193.067 billion next Monday (31 August).
In his guidance on the social relief program, Chinese Premier Li Keqiang stated that the social relief program is fundamental to implementing "stability in six fields" and "security of six aspects", cited Xinhua News Agency. The top priority now is ramping up the support on those beleaguered by the coronavirus pandemic and floods and brushing up livelihood security for the low-income groups. Concerted efforts should also be paid on protecting and securing the well-being of the troubled residents.
YONGDA AUTO (3669.HK) announced that three executive directors, including the controlling shareholder and chairman, Cheung Tak On, the vice chairman Cai Yingjie, and the vice chairman Wang Zhigao respectively acquired 2 million shares, 1 million shares and 500,000 shares of the Company in the open market on the last trading day (27 August).