Aug 5 HK WRAP HSI +156pts @ 25,103 but T/O -16% DoD
HSI +156pts (+0.6%) 25,103 HSCEI +53pts (+0.5%) 10,257 T/O HK$122.8bn (-15.9% DoD)
EUROPE Markets likely to open higher on good earnings. Services and PMI data was +VE but slightly below f/casts for Eurozone, Germany and France
US Futures Expect markets to open higher after good Disney numbers and +VE comments on the next stimulus package. Dow Futures +185pts S&P and NDX +VE too. May see some caution ahead of the ADP employment number and the PMI and ISM data.
EARNINGS include CVS Health, Humana Moderna, Wayfair, New York Times, Sempra Energy, Square, Zynga, Fitbit, AmerisourceBergen, Capri Holdings, BorgWarner, Regeneron Pharmaceuticals, Humana, Allianz, Cedar Fair, Tanger Factory Outlet, Marathon Oil, Etsy, Olin, Iamgold, Noble Corp, Wendy’s, CF Industries, CenturyLink, Varian Medical, Copa Holdings, American Water Works
CSI 300 Closed +1pts (+0.03%) @ 4,777 Market opened lower ahead of Caixin PMI data which missed and market sold down to day low around 10am. Then it worked higher and just broke back into the green ahead of lunch which was the day high (4,787). PM saw some initial selling then trade sideways around 4,765 level before a small push into the close.
Sentiment remains cautions over US/China relations and covid. Gainers include Beidou-concept names, 5G, Semiconductor makers and Shenzhen companies. Weakness in TikTok related names (Web related), and Insurers. Yuan was strong.
HSI Pre Market Opened +83pts @ 25,029 vs +60pts ADR’s at 25,006 despite the weak PMI reading, with most E commerce names +VE except Meituan -1.4%. SMIC +7% on Chinese tax break, GOLD miners +VE too. HSI then initially sold down into the red but then rallied back ahead of the Caixin data, Sold down to morning low (24,868) after the data but then worked higher through the morning to 25,120 around 11:30am before drifting lower into lunch. PM saw some further selling testing the 25k support a few times during the afternoon but then rallied into the close to hit the day high (25,167) about 10 mins before the close but then sold down into the close and then ticked 30pts lower in the closing auction.
CG SERVICES (6098.HK) PROFIT ALERT +VE announced that the Company’s unaudited consolidated revenue, profit before income tax and net profit for the six months ended 30 June 2020 are expected to record an increase by more than 50% as compared to that for the corresponding period in 2019. Mainly attributable to the increase in the area of properties managed by the Group, the comprehensive growth in revenue from community value-added services, value-added services to non-property owners , and “Three Supplies and Property Management” businesses.
XIAOMI-W (1810.HK) made up 10.1% of global smartphone market in 2Q20, maintaining its top four position among handset plants, according to Canalys’ report. The company even became the fastest growing smartphone manufacturer in European market, with an annual increment of 65% and market shares of 17%, beating Huawei as the third largest smartphone maker in Europe. +VE Tech component makers
FOSUN PHARMA (2196.HK) and BioNTech announced that the first 72 participants have already been dosed with BNT162b1 following IND approval by the Chinese regulatory authority, National Medical Products Administration (NMPA). FOSUN PHARMA and BioNTech are jointly developing the COVID-19 vaccine candidate in China. The trial is part of BioNTech’s global development program aimed at supporting a global supply upon regulatory approval.
POWER ASSETS (6.HK) interim profit contribution from the UK amounted to HK$842 million, -53.9% YoY. In Hong Kong, HK Electric Investments made a profit contribution of HK$271 million, +14.3% YoY
BJ CAPITAL LAND (2868.HK) July contracted sales RMB3.31 billion -17.9% YoY
SHIMAO GROUP (813.HK) July contracted sales RMB28.967 bn +45% YoY and the Group’s contracted sold area 1.6373 million sq.m., +45% YoY
CSPC PHARMA (1093.HK) VP Sun Jumin expected the group to commercialize some 50 new products in the coming three years, adding there could be at least 15 drugs with a market space of over $1 billion.
CKI HOLDINGS (1038.HK) interim results ended June 2020. The turnover +0.9% YoY to HK$18.241 billion. Net profit amounted to HK$2.86 billion, -51.9% YoY. EPS equaled HK$1.14. Interim DPS was HK$0.68, flattish yearly.
IGG (799.HK) interim result ended June 2020. The net profit amounted to US$133 million, up 87.8% yearly. EPS was US$0.1084. A total dividend of HK50.2 cents was declared, including an interim dividend of HK25.1 cents and a special dividend of HK25.1 cents
CITIC Bank International's call conference, Chief Economist Liao Qun stated that the coronavirus shocks came in beyond expectation. While the situation has gone muted in China and Europe, the pandemic remains rampant in Americas and Southern Asia. It may take a long time before the lockdown measures can be removed worldwide. Global economy was expected to slide 4.8% this year. Liao anticipated Chinese economy to grow 2.4% this year, as the only major economy posing positive growth, after picking up 3.2% growth in the second quarter. For Hong Kong, grave recession will likely happen this year, possibly followed by sluggish recovery in future.
HKT-SS (6823.HK) interim result ended June 2020. EBITDA -3% YoY to HK$5.546 billion. Net profit amounted to HK$1.898 billion, -12.2% YoY An interim dividend of HK30.1 cents was declared, against a dividend of HK30.01 cents in the corresponding period of the previous year.
LEADER EDU (01449.HK), to be listed tomorrow, opened at $2.3, up 9.5% against the listing price $2.1, and last stood at $2.11, up 1 cent against the listing price, on volume of 1.47 million shares, PhillipMart data showed.
Centa-Salesman Index (CSI) last printed at 43.34, -1.24 pts weekly, said Centaline Property. The index narrowed its loss from 9.14 pts two weeks ago to 1.24 pts this week, signally the market was not seeing more pessimism
Market and Pre Market News at bottom of page.
JAPAN opened lower despite the PMI data being better than forecast. Market tended lower through the morning but re-opened higher after lunch but still in the red; dipped mid afternoon but rallied back to close -0.3%
S KOREA markets opened higher, Foreign Exchange Reserves beat forecasts. Markets worked high through the session, retail sentiment still +VE. Kosdaq close +1.4% at day high and the Kospi +1.4% also day high.
TAIWAN opened higher having broken above the technical 12,700 level Tuesday. Did trade down to 12,740 mid morning but then worked higher +VE sentiment on Tech closed at day high despite a sell off at 1pm closed +0.7%
Short Selling HSI Wednesday 16.7% vs 17% Tuesday
Top Shorts HK & China Gas (3) 43%, Mengniu Dairy (2319) 37%, CCB (939) 33%, Want Want (151) 32%, Hang Seng Bank (11) 31%, NWD (17) 30%, CLP (2) 29%, Hang Lung PPTY (101) 29%, Bank of China (3988) 29%, Wharf REIC (1997) 26%, Power Assets (6) 26%, AAC Tech (2018) 25%, MTRC (66) 25%.
CONNECT FLOWS (continue to decline)
Northbound Rmb 49,686m Sell 26,466m : 23,220m Buy
Southbound HK$ 11,939m Sell 5,933m : 6,005m Buy
Northbound Rmb 68,446m Sell 33,590m : 34,856m Buy
Southbound HK$ 12,557m Sell 5,845m : 6,712m Buy
CHINA Caixin Data
Services PMI Jul 54.1 vs 58.4 Jun (F/cast was 56.0)
Composite PMI Jul 54.5 vs 55.7 Jun (F/cast was 55.0)
China saw intact recovery trends for its manufacturing and service sectors in July, with a particularly solid manufacturing revival, said Wang Zhe, senior economist at Caixin Insight Group. However, Wang was not upbeat on foreign demand and employment, citing subdued exports under COVID-19 outbreaks overseas.
Pre Market IHS Markit July 44.5 vs 49.6 June (F/cast was 50.4)
Private business conditions worsened sharply. In contrast to the gravest pandemic period during February-April, July's data was relatively mild, yet showed the recovery rhythm of private sector was jeopardized. Epidemic control was soured in July given surging new COVID-19 cases, further devouring the private companies. Not only corporate business, but also new orders, shrank drastically.
Centre for Health Protection said there were 85 additional COVID-19 cases in Hong Kong today;
HKEX (388.HK) +2.4%
TENCENT (700.HK) +2%
CCB (939.HK) -0.7%
AIA (1299.HK) -0.3%
PING AN (2318.HK) -0.2%
HSI & HSCEI Constituents on the move
PETROCHINA (857.HK) +4.5%
ANTA SPORTS (2020.HK) +3.3%
CHINA UNICOM (762.HK) +3.2%
CHINA TELECOM (728.HK) +3%
HSMI & HSSI Constituents on the move
VIVA BIOTECH (1873.HK) +19.6%
ZHOU HEI YA (1458.HK) +13.8%
FULLSHARE (607.HK) +12.1%
WEIMOB INC (2013.HK) +10.6%
TCL ELECTRONICS (1070.HK) +10.1%, hitting new high
BYD ELECTRONIC (285.HK) +8.2%, hitting new high
CHINA LONGYUAN (916.HK) +7.1%, hitting new high
COFCO MEAT (1610.HK) +6.8%, hitting new high
*PETROCHEMS FIRM as oil price climbed overnight to the highest level in nearly two weeks after an explosion at Lebanon's main port rocked the capital Beirut, stoking fears over instability in the region and a drop in US inventories. PETROCHINA (857 HK +4.5%) SINOPEC (386 HK +2.4%) CH OILFIELD SVS (2883 HK +2.4%).
*HK BANKS MIXED on earnings and dividend concerns. HSBC (5 HK +0.9%) to boost to its wealth management staff in China by 2,000 to 3,000 within 4 years, in a bid to lift its sagging profits and increased political tensions between Beijing and Western governments. STANDARD CHART (2888 HK +1.5%) rebound from recent drop (FT’s LEX yesterday suggested it was a better option than HSBC) BEA (23 HK -0.7%) HANG SENG (11 HK unch).
*E-COMMERCE/SOFTWEAR FIRM despite ALI HEALTH (241 HK -2.5%) pre market announced to place 498.75m new shares for HK$20.05 each, raising HK$9.96b, a 8.03% discount to yesterday's close.India bans more Chinese apps including ByteDance and Tencent, after the military clash between the two countries, MEITU (1357 HK -1.2%). TENCENT (700 HK +2%) up on the news that it is leading talks to merge China's biggest game-streaming platforms Douyu and Huya. KINGSOFT (3888 HK +3.9%) and KINGDEE (268 HK +2.8%) as Govt says it will support the domestic tech industry.
*TECH & COMPONENTS FIRM as China's to allow a 10-year tax-free new deal to accelerate the localization of semiconductors, a positive measure to develop integrated circuit & software industries. SMIC (981 HK +4.9%) HUA HONG (1347 HK +2.3%). The news that Huawei will shortly be launching several new products that are free of US technology, also boosted speculation on increased demand in Chinese components.
AAC (2018 HK +1.5%) SUNNY OPT (2382 HK +2.4%) SIM TECH (2000 HK+3.3%).
BYDE (285 HK +8.2%) on speculation it will produce more facial mask and medical equipment as demand for these products remain strong during the pandemic.
*AUTOS FIRM after China's vehicle sales +14.9% YoY in July to 2.08m units according to CAAM. It's the fourth month of increases. But YTD sales -12.7% YoY
GREAT WALL (2333 HK +4.4%) GAC (2238 HK +2.7%) GEELY (175 HK +1.3%).
*5G/TELCOS FIRM market speculation the integration of Beidou navigation and 5G tech could bring more and better application scenarios. ZTE (763 HK +1.9%) CH MOBILE (941 HK +2.4%) CH UNICOM (762 HK +3.5%) CH TEL (728 HK +2.6%) ).
*FOOD FIRM after NISSIN FOOD (1475 HK +11.6%) +VE profit-alert, it expects interim net profit +30% YoY, as sales on instant noodle increase during the pandemic lockdown. TINGYI (322 HK +1.8%) WANT WANT (151 HK +2.8%).
*BIOTECH MIXED. CK LIFE SCIENCES (775 HK -3%) said its 1H net profit -48.94% YoY to HK$87.441m. No interim dividend was declared. VIVO (1873 HK+19%) on strategic collaboration with Schrodinger in drug discoveryASCENTAGE (6855 HK +8.6%) rebound following placement in mid July.
Sony announced Q1 profit +53.3% to JPY233.2 billion The Japanese electronics giant expected profit to dip 12.4% to JPY510 billion this financial year.
China plans to cut back reliance on overseas markets and technology for economic buildout, given higher external risks under the pandemic and US hostility that will hamper long-term progress, Reuters citing Chinese government advisers.
MAOYAN ENT (1896.HK) and ByteDance's Ocean Engine jointly issued a movie-video marketing white paper. Based on the data obtained from TikTok, analysis will be made on the marketing value of video streams to movies.
Pricerite and HKBN (1310.HK) announced a long-term corporate strategic and business partnership. In the next five years, HKBN Enterprise Solutions will provide premier telecom service for Pricerite Group to strengthen the development of its New Retail service, while Pricerite Group will extend its exciting offerings to over 1 million HKBN customers.
TENCENT (700.HK) is nudging the merger between Huya and DouYu, the largest game streaming platforms in China, to cement the company's leading position, Bloomberg quoted sources. Holding 37% and 38% stake in Huya and DouYu, TENCENT has been negotiating with the two target companies in the last few months for the merger. Although details have not been nailed, the merger will make TENCENT the biggest shareholder if materialized. The transaction will manifest a giant owning over 300 million users and US$10-billion market cap, the report said.
HK&S HOTELS (45.HK) interim result ended June 2020. The revenue -52.2% YoY to HK$1.334 bn. The profit swung into loss of HK$1.197 bn, against a profit of HK$254 mn over a year ago. LPS was HK$0.73. No dividend was declared.
NISSIN FOODS (1475.HK) POSITIVE PROFIT WARNING expects to record a 30% YoY increase in the interim net profit for the six months ended 30 June 2020, primarily attributable to the increase in sales volume in mainland China and Hong Kong with increasing demand for instant noodles under the COVID-19, and cost reductions associated with increase in volume.
Microsoft is now in talks to buy overseas arm of TikTok under ByteDance, with the preliminary conditions including assurance for American user data to be stored in the US. Microsoft co-founder Bill Gates told Bloomberg TV that the US data of TikTok will be very safe in the hand of Microsoft.
Richard Chang, the founder cum former CEO of SMIC (981.HK), voiced confidence that the company could make up shortfalls as the US sanction is actually not that strong, yet it would not be too relaxed in this regard. If China keeps pioneering the 5G technology, it will topple the world in communications, artificial intelligence, cloud services and other arenas remarkably, the founder said, because China is highly capable of hi-tech applications.
TAL Education Group (TAL.US) has mounted negotiation with investment banks for a second listing in Hong Kong, pursuing up to US$2 billion, according to a Chinese media. The IPO is expected to be completed by the end of this year the quickest. Yet, Chinese media quoted the response of the educator that the group has not had any listing plan so far, and will focus on its own business.
IMPERIAL PAC (1076.HK) and MCC International Saipan: Three executives have been indicted by the US Justice Department on criminal charges like alleged money laundering and harboring illegal aliens.
Virgin Atlantic has lodged an application in the U.S. for bankruptcy protection. The UK-based airline disclosed that a recapitalization plan will be deployed in 18 months under the support from shareholders, new investors and existing creditors.
WTO Chief Roberto Azevedo expects the coronavirus shock to take global trade to a 13% slide this year, as compared with the most pessimistic scenario of a 32% slump in earlier forecast.
Novavax announced that its experimental novel coronavirus vaccine has produced high-level antibodies against the fatal respiratory disease, cited Reuters. The US biotech firm willy move forward to the third phase of large-scale trial as soon as end-September.
India Bans 47 Apps, Incl. Baidu, Weibo. The two flagship apps are reportedly asked to be taken off from Apple's App Store and Google Play, while internet service providers are told to block them. Baidu and Weibo are among the 47 apps barred by the Indian government from 27 July.
The latest policy guidance to encourage integrated circuit and software industries, Chinese State Council stipulated that integrated circuit manufacturers with 15+ years of operation history and circuit wire width less than 28nm will be entitled to corporate tax break from the first to tenth year. Other key integrated circuit design houses and software developers under the incentive program shall enjoy tax holiday from the first profitable year to the fifth and be subject to 10% corporate tax concession for the years thereafter.
CHINA JINMAO (817.HK) contracted sales RMB124.3 bn in January-July 2020, +34% YoY.
Apple's spokesperson clarified that the giant has no interest in taking over TikTok, according to foreign reports. Axios cited insiders earlier that Apple had expressed interest in vying with Microsoft for TikTok.
China and the United States to hold a high-level meeting on 15 August, said Reuters citing sources. US Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He will be reviewing the implementation of the phase-one trade pact that had activated six months ago. However, an insider claimed Chinese officials also hoped to discuss issues beyond the trade deal.
The HKMA announced that as USD/ HKD triggered the Strong-side Convertibility Undertaking again, it undertook a USD selling order during New York trading hours to inject HK$496 million into the market. The balance of the banking system of Hong Kong will increase to HK$187.732 billion on Thursday (6 August).
WYNN MACAU (1128.HK) results in accordance with IFRS for Q2 ended 30 June 2020. Operating loss amounted to US$300 million, against operating profit of US$202 million in the same period last year. The second-quarter loss was US$352 million against the net profit of US$169 million from a year ago.
I.T (999.HK) PROFIT WARNING supplemental announcement, expecting a net loss of not less than $100 million in the three months ended 31 May 2020, as compared to a net profit of $34 million in the corresponding period last year.
CHINA VANKE (2202.HK) contracted sales RMB59.02 bn in July 2020, +22.5% YoY