Aug 17 HK Wrap HSI +164pts T/O +25%, Shorts +22%
HSI +164pts (+0.7%) 25,347 HSCEI +119pts (+1.2%) 10,386 T/O HK$128.75bn (+24.6% DoD)
HK Observatory says it may issue a T1 standby signal tomorrow morning.
EUROPE markets opened slightly positive but saw initial selling before working back into the green and now trading sideways in choppy trading. Covid and US/China tensions overhanging the markets.
US Futures Dow opened +48pts rose to +72pts but have now eased back to +25pts, S&P and NDX also pointing higher. Investors will be watching to see if the S&P can break higher but may are worried the rally if showing fatigue. Key seems to be the next stimulus package which is currently stuck. Data today NY Empire State Manufacturing Index, NAHB housing Market Index, ForeignBond Investment, Net Long Term TIC flows, Overall Net Capital Flows.
CSI 300 Closed +111pts (+2.4%) @ 4,727 Market opened higher and worked higher through the morning. Despite the trade talks being postponed and the poor data out on Friday. Suggests that team China is active or that investors are expecting more stimulus. I doubt its stimulus hopes because to date investors have waited for announcements.
By sectors, banks +4.3%, non-banking financials +5.7% and brokers +6.2%. Nine of the related stocks hit the day limits, including China Life (601628.SH), NCI (601336.SH) and CMS (600999.SH).
Shanghai Composite Index +2.4% @ 3,439. T/O Rmb 537.4bn
Shenzhen Component Index +1.7% @ 13,716. T/O Rmb 16.5bn
ChiNext +1% @ 2,696
HSI Pre Market Pre market +29pts vs -59pts ADRs (25,124) With eCommerce names mixed Tencent +0.4%, Xiaomi +5%, Alibaba -1.7% and Meituan -4.8%. Wuxi Bio +6% on being included in the HSI. CANSINOBIO-B +11% on rumours its been granted an official patent.
Initial ticked lower and tested Fridays closing level but then worked higher in two large steps to around 25,500 and then worked sideways into lunch. PM saw a slight uptick as Europe came in, to the day high 25,589 but then sold down to the 25,350 level from where is saw a a bounce and worked back to 25,440 level at around 3pm but then trended lower into the close and ticked lower in the closing auction.
High turnover partly because of the HSI changes announced after market Friday but I also think Team China active to support the market as a sign of confidence after the trade talks were postponed. Interesting to note the increase in short selling today which suggests a lot of investors are not convinced either.
Autos weak after Geely earnings and concerns over Brilliance’s debt levels. A number of stocks moved post earnings and that is likely to continue this week.
EARNINGS DUE Tuesday include HK Ferry (50), Miramar Hotel (71), Kingdee (268), Fufeng (546), China Tian Yuan Healthcare (557), China Telecom (728), Huaneng Power (902), Chain Yurun Food (1068), RoadKing Infra (1098), Nexteer Auto (1316), 361 Degrees (1361), CITIC Telecom (1883), Solomon Systech (2878), Hengdeli (3389), Kingsoft (3888), China Feihe (6186)
EARNINGS OUT Monday After market
WEIMOB INC (2013.HK) interim results ended June 2020. Revenue +45.7% YoY to RMB957 million. Loss amounted to RMB544 million, against RMB289 million profit a year ago. LPS equaled RMB0.24. No dividend was declared.
SINO-OCEAN GP (3377.HK) interim results ended June 2020. Net profit amounted to RMB1.223 billion, down 34.8% yearly. EPS equaled 16.1 fen. Interim DPS was 5.6 fen, against 9.9 fen in the corresponding period of the previous year.
HK & CHINA GAS (3.HK) interim results ended June 2020. Net profit amounted to HK$2.667 billion, -31.4% yearly. During the period, operating profit of principal businesses after taxation amounted to HK$3.517 billion, -9.4% YoY
MAOYAN ENT (1896.HK) interim results for the period ended June 2020. The revenue -89.8% YoY to RMB203 million. The results swung into loss of RMB431 million. LPS was RMB0.38. No dividend was declared.
DURING MARKET HOURS
HUA MEDICINE-B (2552.HK) interim results ended June 2020. Loss narrowed to RMB174 million from RMB235 million in the corresponding period of previous year. LPS equaled RMB0.18. No dividend was declared.
GEELY AUTO (175.HK) interim results ended June 2020. Net profit -42.7% YoY to RMB2.297 billion, with EPS of 24.73 fen. No dividend was declared. The Group’s management decided to revise downward the 2020 full year sales volume target by around 6% from 1.41 million units to 1.32 million units.
CH OVS G OCEANS (81.HK) interim results ended June 2020. Revenue +45.7% YoY to RMB16.109 billion. Net profit amounted to RMB2.035 billion, up 28.5% yearly.
EPS equaled 59.4 fen. Interim DPS was HK7 cents, against HK6 cents in the corresponding period of the previous year.
CHINA RES POWER (836.HK) interim results ended June 2020. Turnover -5.3% YoY to HK$31.185 billion. Net profit amounted to HK$4.529 billion, +12.7% yearly. EPS equaled HK$0.94. Interim DPS was HK22.5 cents, against HK20 cents in the corresponding period of the previous year.
Q TECH (1478.HK) interim results ended June 2020. Revenue was RMB8.802 bn, +73.9% YoY. Net profit reached RMB336 million, +85.5% yearly. Basic EPS equaled 28.8 fen. No interim dividend was declared.
MI MING MART (8473.HK) Q1 results ended June 2020. Net profit amounted to HK$4.614 million, +17% yearly. EPS equaled HK0.41 cents. No dividend was declared.
Chinese drone giant DJI has made sweeping cuts to its sales and marketing team at the Shenzhen headquarters in recent months, shrinking the team members from 180 to 60, Reuters citing insiders.
XIAOMI-W (1810.HK) reported 50.53 million views and RMB210 million of sales through the founder Lei Jun's livestream sales on Douyin (internationally known as TikTok), both setting new highs on Douyin's record.
SHENZHENEXPRESS (548.HK) announced that the company, the general partner and the other limited partners entered into the partnership agreement, pursuant to which the parties shall contribute an aggregate amount of RMB4.01 billion for the establishment of the partnership fund, among which the company shall contribute RMB300 million. Upon establishment, the partnership fund will not become a subsidiary of the company. -VE
GEELY AUTO (175.HK) is going to develop electric vehicles as a next step of the company's development, said the company's executive director cum Zhejiang Geely's president An Conghui during a press conference. It will unveil its electric vehicle framework and electric cars under the new framework next year. The new products and techniques are expected to be displayed in the car exhibition in Beijing this September.
It also said it is also proceeding with its IPO plan in the Sci-tech Innovation Board (SSE STAR Mkt).
The company's executive director cum Zhejiang Geely's president An Conghui said that it had foreseen the year before the last that the sector would enter a correction phase and that the sales volume started proving this prediction last year. Overall, the market decline has intensified this year due to the pandemic. The company will try to outperform its peers in 2020 and the management is confident the adjusted sales target could be achieved.
Spot USD/CNY closed at 6.9417, up 81 bps. As at 16:42, USD/CNY rose 94 bps in the night session. USD/CNH stood at 6.9366, up 87 bps.
CHINA AOYUAN 03883.HK) For Jan-July achieved contracted sales of RMB60.4 bn, about 46% of the full-year target, said Chairman Guo Zi Wen. He is confident that the group can achieve FY20 contracted sales growth target at 12% yearly while the sales efforts will be ramped up over the next couple of months.
CHINA COAL (1898.HK) announced that production volume of commercial coal +9.1% YoY to 9.69 million tonnes in July. Sales volume of commercial coal +31.5% YoY to 23.73 million tonnes in the month.
BABA-SW (9988.HK)'s international footprints have covered over 190 countries with global active procurers reaching 20 million, it was revealed during a press conference. Hong Kong merchants from the Alibaba platform saw a yearly order growth of 111% in June 2020 with an annual turnover +92%. The sectors that recorded highest turnover included consumer electronics, home gardening, beauty and skincare, and clocks, watches and jewellery.
Airport Authority Hong Kong’s (AA) relief package for the airport community will extend for another two months to end of October 2020 in view of the ongoing impact of the COVID-19 pandemic. +VE for Airlines; especially Cathay Pacific
HKEX (388.HK) announced that Brian Lee has joined the company as Managing Director, Group Head of Technology Risk, reporting to Group Risk Officer, John Killian. Lee will work across the HKEX Group as part of the broader Group Risk team, with a focus on continuously improving HKEX’s cyber security and technology resilience; enhancing the Group’s policies and guidelines and performing risk assessments across the group. He will oversee the group’s cyber security protection, as well as its management and governance framework.
Market and Pre Market News at bottom of page.
JAPAN opened lower as GDP data came in weaker than expected. Market saw an initial uptick but then sold down to 23,100 and then traded sideways into lunch. PM saw it open around 23,100 but dip lower before working back to 23,150 level only to sell off at the end to close -0.8%.
S KOREA Market closed, re-opens Tuesday.
TAIWAN opened slightly higher as good local results keep investors focused. Market worked higher to around 12,935 and then has traded sideways for the rest of the day to close +1.3%
Short Selling HSI Monday 21.7% vs 20.5% Friday
Top Shorts Want Want (151) 48%, HK & China Gas (3) 47%, CLP (2) 47%, China Res Land (1109) 45%, Sino Land (83) 45%, Hang Lung PPTY (101) 41%, Ping An (2318) 39%, MTRC (66) 38%, Mengniu Dairy (2319) 35%, Hang Seng Bank (11) 34%, China Mobile (941) 34%, Power Assets (6) 33%, Wharf REIC (1997) 33%, Swire Pac A (19) 32%, NWD (17) 31%, China Shenhua (1088) 31%, Hengan (1044) 30%, Shenzhou (2313) 30%, ICBC (1398) 30%, HSBC (5) 29%, Sands China (1928) 29%, CCB (939) 27%, BOC HK (2388) 27%, Galaxy (27) 24%.
CONNECT FLOWS (significant increase today)
Northbound Rmb 57,016m Sell 26,441m : 30,574m Buy
Southbound HK$ 13,944m Sell 6,481m : 7,464m Buy
Northbound Rmb 68,602m Sell 33,511m : 35,091m Buy
Southbound HK$ 12,495m Sell 5,416m : 7,079m Buy
China's rare earth export -69.1% to only 1,620.3 tons in July from 5,243.4 tons over a year ago period, reported General Administration of Customs of the PRC. Japan's Kyodo News reported that rare earth may become a new battle fuse between the US and China as China may use it against Trump's administration as the latter is wiping out Chinese companies.
Centre for Health Protection said there were 44 additional COVID-19 cases in Hong Kong today; (vs 74 cases Sunday). 11 have unknown origins.
PING AN (2318.HK) +2.8%
HKEX (388.HK) +2.2%
CCB (939.HK) +1%
TENCENT (700.HK) -0.4%
AIA (1299.HK) +0.2%
HSI & HSCEI Constituents on the move
GEELY AUTO (175.HK) -6.3% after disappointing earnings
CHINA TAIPING (966.HK) +5.2%
CHINA LIFE (2628.HK) +5.2%
CM BANK (3968.HK) +4.7%
CITIC SEC (6030.HK) +4.5%
SHIMAO GROUP (813.HK) +4.1%
SINO LAND (83.HK) -3.8%
SINOPEC CORP (386.HK) +3.7%
HANG LUNG PPT (101.HK) +3.4%
WANT WANT CHINA (151.HK) -3.2%
HENGAN INT'L (1044.HK) +3.2%
CPIC (2601.HK) +3%
HSMI & HSSI Constituents on the move
PAX GLOBAL (327.HK) +13.6%, hitting new high post earnings
Q TECH (1478.HK) +13.3% post earnings
PACIFIC BASIN (2343.HK) +12.8%
XINYI GLASS (868.HK) +4.9%, hitting new high CEO buying shares
LI NING (2331.HK) +3.5%, hitting new high
KWG GROUP (1813.HK) +2.7%, hitting new high
COSCO SHIP HOLD (1919.HK) +1%, hitting new high
Alibaba Cloud tops its peers across the globe in terms of cloud computing by getting a 92.3% passing mark, representing a record high, Gartner reported. Amazon, Microsoft, Google and Oracle assumed the 2th to 5th ranks. Alibaba Cloud, as a leader in the global cloud computing market, provided diversified infrastructure services options, Gartner mentioned in the report.
Hong Kong Government extended social distancing measures, including the banning of dine-in at restaurants after 6:00 pm, prohibition of group gathering of more than two people and mandatory mask wearing, by seven days to August 25th. A spokesman for the Food and Health Bureau said in view of the still severe epidemic situation and taking into account the latest public health risk assessment, the Government considered it necessary to continue to maintain highly stringent social distancing measures.
WeChat Pay HK, under TENCENT (700.HK) announced a double-digit quarterly growth in transaction volume for the second quarter of year.
XINYI GLASS (868.HK) CEO Tung Ching Sai had on 13 August acquired 2.626 million shares at an average price of $12.6144 each.
Brilliance Auto Debt risks Media reports that it and its investors are seeking multi-pronged support from the Liaoning government across the media, capital and credit enhancement levels. It is now allegedly exposed to an unprecedented liquidity risk since its establishment. The Chinese automaker has received all rigid payment capital for the period from now till March 2023, as the officer in charge replied to the press.
IBM announced the launch of its new Power10 processor chip for data centers, which is able to handle three times its predecessor's workload. The Power10 chip will be made by Samsung Electronics' 7-nanometer technology and be meant for corporate use inside data centers.
FAST RETAIL-DRS (6288.HK) 's Uniqlo has recently opened 19 new stores across 18 Chinese cities, Xinhua News Agency reported.
PA GOODDOCTOR (1833.HK) announced that they are going to launch an innovative online working project named "studio of renowned doctors" (literal translation of "名醫工作室"), which will involve a number of experts in specific areas and renowned doctors, who will help drive the rapid development of the medical and health industry. The company has signed contracts with 15 renowned doctors in the first batch.
Apple is weighing a transfer of iPhone assembly lines to Vietnam after checking LUXSHARE-ICT (2475.SZ)'s plant in Bac Giang. However, the on-side dormitories and several other parts of the factory remain yet to live up to the US tech giant's expectations.
ZTE (763.HK) announced that its latest smartphone "A20 5G" with the world's first under-screen camera lens is poised to debut on 1 September. The model has no hole in the front face while the screen edges are slimmer, as seen on the poster released by the company.
CSRC Ex-Chair: Pilot 'T+0' Trading Risk for A-Shr Bluechips Manageable
T+0' settlements are not allowed in Chinese stock markets but permitted in bond, bond ETF and gold ETF trading, as Former CSRC Chairman Xiao Gang told Securities Times. Implementing 'T+0' in the A-share market could be a future direction for trading system reforms. With stable valuation and less volatility, Xiao saw manageable risk of piloting 'T+0' trading for bluechips.
Temasek unloaded half of its stakes in BABA-SW (9988.HK) to 12.1 million shares worth US$2.6 billion, Bloomberg citing the former's filings with the US SEC and boosted shares in BEIGENE (6160.HK)
JD-SW (9618.HK) announced a strategic alliance with Trip.com Group, which will plug in its core travel product chain to JD platform. Both parties will mount cooperation in user traffic, channel resources, cross-border marketing, business travel development, e-commerce and so on. It is expected that Trip.com products will be shelved on JD in eight months, as Chinese media quoted the online travel agency.
Shenzhen has met its goal to build 45,000 5G bases ahead of schedule and achieved 5G standalone full coverage, said Mayor Chen Rugui.
New Zealand Prime Minister Jacinda Ardern announced that the general election has been postponed by a month to 17 October as Auckland remains in coronavirus lockdown. New Zealand today confirmed nine additional cases of coronavirus contraction.
The People's Bank of China (PBoC) announced that it commenced the one-year Medium-term Lending Facility (MLF) of RMB700 billion today, with a flattish bidding interest rate of 2.95%.
XIAOMI-W (1810.HK) Chairman Lei Jun, promoting the company's products through the live streaming platform of DouYin for the first time, wooed over RMB100 million of payment after two hours, according to Chinese media. Satisfied with the popularity of the company's products, Lei will weigh on a second live streaming activity to sell more items.
SOUTHGOBI-S (1878.HK) 's trading in shares was suspended this morning, pending the publication of the audited annual results for the year ended 31 December 2019.
EVERGRANDE (3333.HK) PROFIT WARNING -VE expects a decrease in the net profit from the core business of the Group and the net profit for the six months ended 30 June 2020 as compared with the same period last year. The net profit from the core business is expected to be RMB19.3 billion, -37% from that of the same period last year, and the net profit is expected to be RMB14.7 billion, -46% from that of the same period last year.
In 1H20, a total of 59 online life insurers in China realized an aggregate premium income of RMB139.44 billion, +12.2% yearly, according to the report of Insurance Association of China (IAC).