Aug 20 HK WRAP HSI -189pts , T/O back to normal, Shorts rise to 24%

24 Aug

Aug 20 HK WRAP HSI -189pts , T/O back to normal, Shorts rise to 24%

HSI -189pts (-0.7%) 25,179  HSCEI -112pts (-1.1%) 10,313  T/O HK$118.18bn (+39.7% DoD)  

EUROPE Opened lower in reaction the FOMC minutes which raised uncertainty over the US recovery. German PPI was slightly better than forecast, Data due EUROZONE Construction Output and UK CBI Industrial Trends
US Futures opened flat but have since dropped 207pts before recovering to -59pts as China says talks to be rescheduled shortly. S&P and NDX futures weaker too. Initial claims data will be closely watched other data: Philadelphia Manufacturing Index, CB Leading Index, EIA Natural Gas Report, 30 yr TIPS Action

CSI 300 Closed -62pts (-1.3%) @ 4,679
left Prime Loan rates unchanged pre market. Opened lower and sold down to 4,680 but then bounced but failed to regain the 4,700 level and sold back to 4,680 at lunch. PM opened slightly higher and traded sideways before selling down in the last 30 minutes to the day low 4,663 but then bounced into the close.
Shanghai Composite Index -1.3% @ 3,364.
Shenzhen Component Index -1.2% @ 13,321.

HSI Market Opened -123pts @ 20,055 vs -148pts ADRs @ 25,030 E commerce +VE except Alibaba ahead of earnings. HSBC and HK EX both weak but AIA +VE initially but sold down in early trading. Market then sold down sharply to test 24,800 and then trend lower finding some support around 24,660 level and traded sideways into lunch. PM saw the market initially testing slightly lower to 24,621 before working slowly higher through the afternoon to 24,840 level but then, in the last 20 minutes sold down into the close.
Chinese Banks weak on expectations of falling net profits and Autos also weak.

EARNINGS DUE Friday include Tian An China (28), Cross Harbour (32), Orient Overseas (316), Huabao (336), Yips Chemicals (408), SOHO China (410), Fountain Set (420), Shenzhen Expressway, (548), China Trad Chinese Medicine (570), Playmates Holdings (635), Haitong Int (665), Zhang An (672), Hopson Development (754), Playmates Toys (869), Anhui Conch (914), Vanke Overseas (1036), Sinopharm (1099), Mainland Headwear (1100), Brilliance China (1114), Zoomlion (1157), CC Land (1224), China Resources Cement (1313), PICC (1339), Xingda (1899), China Renaissance (1911), PICC Property and Casualty (2328), AviChina (2357), Sinopec Engineering (2386), CPIC (2601), Greentown Services (2869), China State Construction (3311), Fuyao Glass (3606), Meituan Dianping (3690), CanSino Biologics (6185)

EARNINGS OUT After market
HENDERSON LAND 1H20 Underlying Profit -23% to $5.18B; Interim DPS Kept at $0.5
HUADIAN POWER (1071.HK) interim results ended June 2020. Turnover -5.4% YoY to RMB40.943 billion. Net profit amounted to RMB2.411 billion, +47.2% yearly. EPS equaled RMB0.2. No dividend was declared.
CHINA OVS PPT (2669.HK) interim results ended June 2020. The net profit amounted to HK$280 million, up 12% yearly. EPS was HK8.52 cents. An interim dividend of HK2.2 cents was declared, against HK2.2 cents in the corresponding period of the previous year.
BOC AVIATION (2588.HK) interim results ended June 2020. Total revenues and other income +11.2% yearly to US$1.035 billion. Net profit amounted to US$323 million, +0.7% yearly. EPS equaled US47 cents. Interim DPS was US13.98 cents, up from US13.88 cents in the year-ago period.
PA GOODDOCTOR (1833.HK) interim results ended June 2020. Revenue +20.9% YoY to RMB2.747 billion. Loss narrowed from RMB273 million in the corresponding period of previous year to RMB214 million. LPS equaled RMB0.21. No dividend was declared.
ENN ENERGY (2688.HK) interim results for the period ended June 2020. The turnover -10.8% YoY to RMB31.543 billion. The net profit amounted to RMB2.693 billion, -19.9% yearly. EPS was RMB2.4. No dividend was declared.

At Lunch K. WAH INT'L (173.HK) interim results ended June 2020
. Net profit amounted to $2.556 billion, up 67.5% yearly. EPS equaled 81.77 cents. Underlying profit grew 85% yearly to $2.736 billion. Interim DPS was 7 cents, as compared with 6 cents in the corresponding period of the previous year.
At lunch COSCO SHIP INTL (517.HK) interim result ended June 2020. The net profit amounted to HK$132 million, down 12.3% yearly. EPS was HK8.59 cents. An interim dividend of HK6.5 cents was declared, against HK7 cents in the year-ago period.
At lunch BANK OF E ASIA (23.HK)interim result ended June 2020. The net profit amounted to HK$1.532 billion, up 53.2% yearly. EPS was HK$0.39. An interim dividend of HK$0.16 was declared, against HK$0.11 in the year-ago period.
At lunch COFCO PACKAGING (00906.HK) interim results ended June 2020. The net profit amounted to RMB183 million, up 7.4% yearly. A total dividend of HK14.4 cents was declared, including an interim dividend of HK9.1 cents and a special dividend of HK5.3 cents. The interim dividend was HK8 cents in the corresponding period of the previous year.
At lunch KERRY PPT (683.HK) interim results ended June 2020. Revenue declined 65.1% yearly to HK$3.918 billion. Net profit amounted to HK$1.074 billion, down 70.1% yearly.  EPS equaled HK$0.74. Interim DPS was HK$0.4, flattish with the corresponding period of the previous year.

AIA (01299.HK) results for the six months ended 30 June 2020.
Value of new business fell 37% YoY to US$1.41 billion on a constant exchange rate basis, missing estimates. AIA's 1H20 VONB may reach US$1.587 billion in median, down 30.2% YoY. The insurer's net profit plunged 34.6% YoY to US$2.197 billion in the first half of 2020, with EPS of US$0.18. Interim DPS rose 5% to HK35 cents.
KOWLOON DEV (34.HK) interim results for the six months ended 30 June 2020. The revenue dropped 34.1% yearly to $3.731 billion. The net profit sank 68.9% to $575 million. EPS was 49 cents. An interim dividend of 24 cents was declared. A special dividend was declared after the interim period in the form of a distribution in specie on the basis of 2.67 ordinary shares of POLYTEC ASSET (00208.HK) for every 1 ordinary share of the Company. The underlying net profit excluding revaluation changes from the Group’s investment properties net of tax and fair value changes on its interests in the property development projects fell 27.4% to $1.009 billion. The underlying net interim earnings per share were $0.86.
A-LIVING (3319.HK) interim results ended 30 June 2020. Net profit grew 40% yearly to RMB758 million. EPS equaled 57 fen. No interim dividend was declared.
BBMG (2009.HK) interim results for the six months ended 30 June 2020. Net profit declined 50% yearly to RMB1.524 billion. EPS equaled 14 fen. No interim dividend was declared.
SAMSONITE (1910.HK) results for the six months ended June 2020. Loss amounted to US$974 million, against US$49.10 million in net profit a year ago. LPS equaled US68 cents. No interim dividend was declared.
MMG (1208.HK) interim results ended 30 June 2020. The loss expanded to US$158 million from US$81 million over a year ago. LPS equaled US1.96 cents. No interim dividend was declared.
CHI MER LAND (978.HK) interim results for the six months ended 30 June 2020. Net profit declined 83.1% yearly to RMB82.86 million. EPS equaled 1.69 fen. No interim dividend was declared.
CHINA SCE GROUP (1966.HK) interim results ended June 2020. Net profit amounted to RMB2.114 billion, up 10.3% yearly. EPS was 50.6 fen. An interim dividend of HK11 cents was declared, against HK10 cents over a year ago.

CHINA UNICOM (762.HK) announced that the aggregate number of mobile billing subscribers in July was 309.6 million,
with a slower net addition of 26,000. Among which, the aggregate number of 4G subscribers was over 262 million, with a slower net addition of 1.659 million.
ANTA SPORTS (2020.HK) announced that it becomes a global strategic partner of the World Wide Fund for Nature (WWF) in China’s sports textiles industry. ANTA Sports will join hands with upstream and downstream partners to drive industry transformation and development of water management and packaging. They will also work with partners to develop and produce sportswear that meet the sustainable development requirement by advocating the concept of reuse and developing biodegradable raw materials to ultimately drive conservation of global biodiversity with consumers.
A number of Google applications including Gmail, Google Drive, Google Docs, Google Meet and Google Voice have faced services suspension. The issue happened in many regions across the globe, data from revealed. Google said the company is undergoing investigation and expects to provide an update on the incident later today.
In the month of July 2020, new leases for Grade A office buildings dipped 14% on a monthly basis and negative absorption has been recorded for twelve straight months, Jones Lang LaSalle (JLL) reported, citing uncertainties due to the outbreak of the third wave of the pandemic in Hong Kong. However, rental decline slowed in July with 0.9% drop month-on-month for Grade A offices, the first time the fall was less than 1% since February 2020.
Hotel chain Accor is reviewing the potential merger with its British competitor InterContinental Hotels, French Le Figaro newspaper reported. Although Accor's senior management agreed with the merger, the chairman cum CEO Sebastien Bazin has taken a cautious approach towards this deal, it was reported.

Market and Pre Market News at bottom of page.

Regional Markets
opened lower initially saw an up trend for the first 35 minutes but then reversed and sold down into lunch. PM the market opened below 22,900 and traded sideways around that level for the afternoon session to Close -1% Tomorrow morning we get Japan inflation and PMI data pre market.
S KOREA Markets opened lower following the US and with raised covid concerns as daily cases continue to rise.Kosdaq initially ticked higher to test yesterdays closing but failed to hold the reversed and is still trending lower to find support around the 790 level and then traded sideways around that level for the rest of the session. Closed -3.4%. PPI data out tomorrow pre market. Kospi following a similar pattern to the Kosdaq but drifted lower for the whole session to close -3.8%.
TAIWAN opened slightly lower and trended lower for the first couple of hours down to 12,144 before seeing a slight bounce back to 12,400 and then traded sideways; closed -3.3%After market Export orders Jul +12.4% YoY vs +6.5% Jun (F/cast was +2.5%)Current account Q2 $21.77b vs 18.11b prior Revised (F/cast was 13.5b)

Short Selling HSI Thursday 23.9 vs 20.5% Wednesday
Top Shorts
Sino Land (83) 55%, Power Assets (6) 41%, ICBC (1398) 40%, BOC (3988) 37%, Ping An (2318) 35%, Country Garden (2007) 34%, Want Want (151) 33%, CCB (939) 32%, China Shenhua (1088) 31%, CITIC (267) 30%, BOC HK (2388) 30%, China Res Land (1109) 28%, PetroChina (857) 27%, AIA (1299) 27%, Mengniu Dairy (2319) 27%, HSBC (5) 26%, Galaxy Ent (27) 26%, MTRC (66) 26%, Hang Seng Bank (11) 25%, Wharf REIC (1997) 25%, Shenzhou (2313) 25%.

Northbound Rmb 50,790m Sell 27,585m : 23,204m Buy
Southbound HK$ 9,115m Sell 4,601m : 4,514m Buy
Northbound Rmb 59,918m Sell 29,185m : 30,733m Buy
Southbound HK$ 9,126m Sell 4,329m : 4,797m Buy

CHINA Prime Loan Rate

1 year unchanged at 3.85%
5 year unchanged at 4.56%

Centre for Health Protection said there were 18 additional COVID-19 cases 
in Hong Kong today; (vs 26 cases Wednesday).
After Market
Inflation Rate 
Jul -2.3% YoY vs +07% Jun (F/cast was +0.5%)
Netting out the effects of all Government's one-off relief measures, the year-on-year rate of increase in the Composite CPI (i.e. the underlying inflation rate) in July 2020 was 0.2%, smaller than that in June 2020 (1.2%).
Looking ahead, both external and internal price pressures should remain subdued in the rest of the year amid the weak global and local economic conditions, said a Government spokesperson. The Government will continue to monitor the inflation situation and the risk of deflation closely.

Active Heavyweights
AIA (1299.HK) -3.3%
CCB (939.HK) -3.2%
PING AN (2318.HK) -1.1%
HKEX (388.HK) -0.7%
TENCENT (700.HK) +0.4%

HSI & HSCEI Constituents on the move
MENGNIU DAIRY (2319.HK) -3.7%
WHARF REIC (1997.HK) -3.3%
CITIC (267.HK) -3.1%
CHINA RES BEER (291.HK) -3.1%

HSMI & HSSI Constituents on the move
GCL-POLY ENERGY (3800.HK) +11.5%
GCL NEWENERGY (451.HK) +11.2%
CIMC (2039.HK) +1.2%, hitting new high
POWERLONG (1238.HK) +1%, hitting new high

Rare earth materials exports from January to July 2020 -20.2% YoY to 22,800 tons, 
the Ministry of Commerce, announced. During the period, the value of rare earth exports -26% YoY to US$211 million. The sector's performance reflected that there was an impact posed by the pandemic with slowing downstream business activities.
China has decided that HKSAR will suspend the mutual legal assistance pact with the United States due to the latter's erroneous act, declared Chinese Foreign Ministry Spokesman Zhao Lijian.
Waterdrop Inc. (also known as Shuidi) has taken in over USD200 million in the Series D funding round, led by Swiss Re with co-investors including TENCENT (700.HK) and IDG, reported Chinese media.
The Hong Kong Special Administrative Region (HKSAR) Government issued a severe reprimand today (August 20) against the United States (US) administration for its unilateral decision to suspend or terminate three bilateral agreements with the HKSAR.
Macau Government Tourism Office (MGTO) disclosed that there is no upsurge in the visitor figure yet despite the resumed travel pass granting for Zhuhai tourists, likely attributable to deterrence from COVID-19 NAT and permit endorsement required for inbound travel to the city, cited Radio Macau. Asked if the gambling hub is going to launch cross-border "travel bubble", MGTO replied that the government may launch the scheme subject to the coronavirus situation, medical condition, inbound and outbound travel requirements and transportation of the particular client market.
BANK OF E ASIA (23.HK) Continues Investing in Digitalisation; No Plan to Axe Jobs. With the backdrop of the coronavirus pandemic, the use of digital channels has increased, said Adrian David LI Man-kiu, Co-Chief Executive, adding that the bank will continue investing in related businesses and review branch network and human resources allocation. He stressed that there is no plan to axe jobs and the bank did apply for the government's Employment Support Scheme.
The Lands Department posted today (August 20) notices in accordance with section 4 of the Lands Resumption Ordinance for the resumption of land for the development of public housing and education facilities near Kei Lun Wai and Kwong Shan Tsuen in Area 54, Tuen Mun. A total of 54 private agricultural lots with a total area of about 21,300 square meters will be resumed.
AIA Despite yearly decline of 37% in 1H20 VONB under pandemic, AIA (01299.HK)'s management revealed during conference call that strong recovery was manifested between May and July because the company has initiated e-platforms as sales channels. Refusing to make forecast in 2H20's resumption, the management underscored their positive view. Jacky Chan, Regional Chief Executive of AIA, separately said there is still enormous insurance shortfall in Hong Kong market, although local sales were hijacked by almost zero Chinese tourist arrivals in 1H20. Chan emphasized Hong Kong remains the company's one of the most significant markets.
HENGAN INT'L (1044.HK) CFO Li Wai Leung, at the results conference, said the company's GPM hiked in 1H20, assuming there is still upside in 2H20. In segment of sanitary napkins and diapers in particular, the related cost in 1H20 rose as the petrochemical raw materials were used, which could also be used in making masks and medicare products. By adopting high-end strategy in the segment, the group hence was expected to reap more GPM upside.
The CFO furthered that the group's e-commerce operation made up around 20% of sales, versus about 25% of rivals, under the backdrop of certain adjustment in 1H20 addressing the reliance of B2B e-commerce mode. He also estimated the e-commerce sales of the company to increase in 2H20, with healthier long-term development following hiccups in 1H20.
CHINA MOBILE (941.HK) announced that 5G Package Customers reached 84.057 million in July, with the monthly net addition of 13.86 million, slackening from the net addition of 14.59 million in June.
Australia will not approve MENGNIU DAIRY (2319.HK)'s proposed buyout of Lion Dairy & Drinks, an Australian dairy unit of Japan’s Kirin Holdings, the Australian Financial Review reported. Australian Treasurer Josh Frydenberg opposes the Foreign Investment Review Board's advice to clear the AUD600 million deal, said the report.
All provinces across China jointly set up an ally for the third batch of central drug purchases, as CCTV learnt from National Healthcare Security Administration (NHSA).  The central drug bidding results are expected to release today (20 August) in Shanghai, involving 56 types of drugs, almost the sum of volume of the previous two batches. The drugs involved in the third batch of Group Purchasing Organization (GPO) are treatment for malignant tumors, hypertension, diabetes, mental illness and so on, report said.
U.S. and Chinese trade negotiators plan to hold a video conference in the next couple of days to discuss the progress in materializing the “Phase One” trade deal, as the Wall Street Journal learnt from officials from both nations.
Harbour BioMed has lodged a listing application in Hong Kong with Morgan Stanley, Bank of America and CITIC Securities among its sponsors. The Chinese biopharmaceutical firm remains yet to receive any sales gain from its products, according to its prospectus.

After the HKMA has relaxed counter-cyclical macro-prudential measures for mortgage loans on non-residential properties, 
HKMA Deputy Chief Executive Arthur Yuen illustrated that the conditions for relaxation on non-residential mortgages is different from those on residential ones, advising the market not to over-interpret the measures. He reinstated that there is no appropriate condition now to bring down the cap of loan-to-value ratio (LTV) for residential properties.
The US and China plan to reschedule the video conference for the review of phase one trade deal originally slated for last Saturday (15 August), Bloomberg cited people familiar with the matter. While both parties have not set any specific date for the meeting, it will be convened very soon.
LUK FOOK HOLD (590.HK) PROFIT WARNING -VE expecting substantial decline in the revenue and net profit of around 60% and 80% for the period from April to June 2020 as compared to the same period last year.

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