Aug 26 HK WRAP HSI Flat but shorts remain elevated Earnings in focus.
HSI +6pts (unch) 25,492 HSCEI +9pts (-0.1%) 10,300 T/O HK$133.2bn (+3.4% DoD)
EUROPE markets to opened higher but trading sideways with the FTSE trading around flat with the DAX and CAC slightly higher
US Futures opened flat and have only risen slightly to +50pts with S&P slight -VE and NDX very slightly higher. Expect initial caution ahead of Jackson Hole Symposium starting. Data today MBA Mortgage Applications & 30 year Mortgage Rates, Durable Goods Order Data, EIA Oil Report.
CSI 300 Closed -56pts (-1.2%) @ 4,706 opened flat, saw an initial bounce to 4,780 level but then reversed and sold down to close at the morning low going into lunch. PM saw the market effectively trade sideways to close just below the lunchtime level. Expect to see selling pressure as Chinese investors raise cash for the Ant listing with the CSI 300 trading around the YTD highs.
HSI Market Opened in line with the ADR’s +34pts E commerce names +VE and stocks with good earnings rallying but other sectors remained cautious. Initially saw a rally to 25,600 but without the momentum to break out and retrenched first to yesterdays closing level and then to the morning low at 25,360 before a bounce into lunch. Earnings in focus and caution ahead of Jackson Hole symposium.
Interesting to note that a subsidiary of CK Asset (1113) that Li Ka Shing and Victor have been buying was an early investor into ANT.
EARNINGs due out Thursday include First Tractor (38 HK), Great Eagle (41 HK), Sichuan Expressway (107 HK), Cinda Int (111 HK), First Pacific (142 HK), China Everbright (165 HK), Minmetals (230 HK), Shun Tak (242 HK), Sino Golf (361 HK), Boyaa Interactive (434 HK), Lansen Pharmaceutical (503 HK), Guangshen Railway (525 HK), Samson (531 HK), Nanjing Panda Electronic (553 HK), China Oil And Gas (603 HK), Kerry Logistics (636 HK), Fosun Int (656 HK), TravelSky Tech (696 HK), Singamas Container (716 HK), Global Bio-chem (809 HK), Dynasty Fine Wines (828 HK), CIFI (884 HK), Emperor Watch (887 HK), Lees Pharma (950 HK), Shaw Brothers (953 HK), SMIC (981 HK), AEON Stores (984 HK), China CITIC Bank (998 HK), Dongfang Electric (1072 HK), COSCO Shipping (1199 HK), China LotSynergy (1371 HK), Bank of Tianjin (1578 HK), Kaisa Group (1638 HK), Tong Ren Tang Technologies (1666 HK), Macau Legend (1680 HK), Shandong Gold Mining (1787 HK), KWG (1813 HK), China New Higher Education (2001 HK), Best Pacific International (2111 HK), Luye Pharma (2186 HK), China Vanke (2202 HK), Ping An Insurance (Group) (2318 HK), Weichai Power (2338 HK), China Power INt (2380 HK), Chalco (2600 HK), Shanghai Pharmaceuticals (2607 HK), Win Hanverky (3322 HK), Legend (3396 HK), Greentown (3900 HK), NagaCorp (3918 HK), Inner Mongolia Yitai Coal (3948 HK), Greentown Management (9979 HK).
EARNINGS OUT After market
XIAOMI-W 1H20 Non-GAAP Adjusted NP Edges Down 0.7% to RMB5.67B, Beating Estimate. 1H20 NP +31.2% to RMB6.66B, Topping Forecast
CGN POWER (1816.HK) interim results for the period ended June 2020. Turnover+ 18.8% year-on-year to RMB31.507 billion. The net profit RMB5.205 billion, +3.6% year-on-year. EPS was RMB0.103. No dividend was declared.
RAZER (1337.HK) interim results ended June 2020. Revenue +25.3% year on year to US$448 million. The loss narrowed from US$48.076 million in the corresponding period of previous year to US$17.343 million. No dividend was declared.
MEITU (1357.HK) interim result ended June 2020. The revenues +20.1% year on year to RMB557 million. The loss narrowed from RMB371 million in the corresponding period of previous year to RMB15.953 million. LPS was RMB0.004. No dividend was declared.
HANSOH PHARMA (3692.HK) announced interim results for the period ended June 2020. The turnover -13.5% year-on-year to RMB3.98 billion. The net profit RMB1.222 billion, -5.7% year-on-year. EPS was RMB0.21. No dividend was declared.
WEIGAO GROUP (1066.HK) interim result ended June 2020. The revenue +3% year on year to RMB5.091 billion. The net profit amounted to RMB970 million, up 3.5% yearly. EPS was RMB0.22. An interim dividend of RMB0.062 was declared.
BOCOM INTL (3329.HK) interim result ended June 2020. The revenue +31.1% year on year to HK$931 million. The net profit amounted to HK$281 million, up 10.6% yearly. EPS was HK$0.1. No dividend was declared.
CHINA LIFE (2628.HK) interim results for the six months ended 30 June 2020. The total revenues rose 12.5% yearly to RMB504.431 billion. The net profit -18.8% yearly to RMB30.535 billion, in line. EPS. was RMB1.07. No dividend was declared. The value of half year’s sales was RMB36.889 billion, +6.7% year on year, in line.
SINO LAND (83.HK) annual results ended June 2020. Net profit was $1.688 billion, -75.6% yearly. Basic EPS equaled 24 cents. During the year, underlying profit receded 2.4% yearly to $4.557 billion. Underlying EPS equaled 65 cents. Final DPS was 41 cents, flattish yearly.
TST PROPERTIES (247.HK) annual result ended June 2020. The net profit amounted to HK$902 million, down 75.7% yearly. A final dividend of HK41 cents was declared, flattish year-on-year. A full-year dividend of HK55 cents was declared, flattish annually.
DURING MARKET HOURS
CG SERVICES (6098.HK) interim result ended June 2020. The net profit amounted to RMB1.315 billion, +61% yearly. EPS was RMB48.26 cents. No dividend was declared.
DAH SING BANKING (2356.HK) interim net profit -30.2% yearly to $946 million. EPS equaled $0.67. Interim DPS was 8 cents. During the period, net interest income -9% yearly to $1.857 billion.
DAH SING (440.HK) interim result ended June 2020. The net profit amounted to HK$745 million, -33.1% yearly. EPS was HK$2.33. An interim dividend of HK$0.27 was declared.
CHINA RES LAND (1109.HK) interim results ended June 2020. Net profit -9.3% YoY to RMB11.542 billion, with EPS of RMB1.62. Interim DPS was RMB0.15, against RMB0.129 in a year-ago period. Core profit excluding revaluation gain from investment properties reached RMB8.37 billion, +3.2% YoY.
CSPC PHARMA (1093.HK) interim results ended June 2020. Total revenue +12.6% year on year to RMB12.59 billion. Net profit amounted to RMB2.314 billion, +23.2% yearly. EPS equaled 30.97 fen. Interim DPS was HK6 cents. A bonus issue was proposed of three new shares for every five existing shares held by the shareholders.
LONGFOR GROUP (960.HK) interim result ended June 2020. The revenue +32.6% year on year to RMB51.141 billion. The net profit RMB6.339 billion, +0.5% yearly. EPS was RMB107.9 cents. An interim dividend of RMB0.4 was declared, +11.1% yearly.
CHINA COM SERVICE (552.HK) interim result ended June 2020. The total revenues -4% year on year to RMB53.834 billion. The net profit RMB1.588 billion, -7.2% yearly. EPS was RMB0.229. No dividend was declared.
Out PRE MARKET
SUNAC (1918.HK) interim result ended June 2020. The net profit amounted to RMB10.959 billion, +6.5% yearly. Basic EPS was RMB2.41. No dividend was declared.
CENTRAL CHINA (832.HK) interim result ended June 2020. The net profit RMB727 mn, +10.5% yearly. EPS was 26.43 fen. An interim dividend of HK11 cents was declared, against HK15.6 cents in the corresponding period of the previous year.
CONCH VENTURE (586.HK) interim results ended 30 June 2020. Net profit +10.4% yearly to RMB3.468 billion. EPS equaled RMB1.92. No interim dividend was declared.
CSC (6066.HK) results for the six months ended June 2020. Total revenue amounted to RMB13.009 billion, up 51% yearly. Net profit RMB4.578 billion, +96.5%. EPS equaled 58 fen. No interim dividend was declared.
JS GLOBAL LIFE (1691.HK) results for the six months ended June 2020. Gross profit US$662 million, +43.2% yearly. Net profit reached US$81.78 million, up 32 times. EPS equaled US2.5 cents. No interim dividend was declared.
KUNLUN ENERGY (135.HK) interim results for the six months ended 30 June 2020. Net profit -24.8% yearly to RMB2.363 billion. EPS equaled 27.29 fen. No interim dividend was declared.
HAIDILAO (6862.HK) interim results ended June 2020. The company swung into loss of RMB965 million, against net profit of RMB911 million in a year-ago period. LPS equaled 18 fen. No interim dividend was declared.
REGAL INT'L (78.HK) interim results ended June 2020. Loss was $853 million, against net profit of $379 million a year ago. LPS equaled 101.25 cents. No interim dividend was declared.
FOSUN PHARMA (2196.HK) interim results ended 30 June 2020. Net profit +13.1% yearly to RMB1.715 billion. EPS equaled 67 fen. No interim dividend was declared.
GUANGDONG INV (270.HK) interim results announcement for the six months ended 30 June 2020. The net profit fell 12.3% yearly to $2.369 billion. EPS was 36.24 cents. An interim dividend of 17.64 cents was declared.
AFTER MARKET NEWS
Huawei is urging to MediaTek and such other suppliers to advance their shipment as it seeks to stockpile 5G mobile processors, WiFi, display drivers, and other key components, before the US ban takes effect from 14 September the Nikkei reported.
SHUI ON LAND (272.HK) declared no interim dividend. Chairman Vincent Lo explained the reasons that the decision was made based on the market performance and 1H20 results, rather than the financial position of the company. Lo underscored that the company is absolutely capable of paying dividend given its $14 billion cash at bank, yet it would rather be more prudent in this regard, hoping to identify acquisition opportunities when the market environment displays adjustment. As to whether the company will declare dividend from its annual results, Lo foretold it will be contingent on decision of board of directors.
MEITU (1357.HK) 's 1H20 non-advertising income contribution +42.9% with the fastest growth seen in overseas premium subscription services, the company revealed during a teleconference on the interim results. The group is now launching subscription services in countries with higher ARPU and where users are more willing to pay, like Japan and the U.S.. It believed such services will be applicable to the China market as well in view of the ARPU uptrend and also more willingness of users to pay. The group also stressed that it has been complying with local laws and regulations and protecting customer privacy.
Vanguard Hong Kong informed unit holders in product announcement that it is going to exit the Hong Kong ETF business orderly with fund managers considering various possibilities related to trustee and subsidiary funds, including new investment managers for each subsidiary fund and trustee. The company explained that the decision to quit Hong Kong's ETF business aims to divert local human resources and capital to its strategic focal points.
CHINA LIFE (2628.HK) announced that the Company, CLP&C and Guangzhou Xinyue (each as a Limited Partner) intend to enter into the Partnership Agreement with Guangzhou Jinhui (as the General Partner) by 30 September 2020 for the formation of the Partnership. The total capital contribution by all partners of the Partnership shall be RMB2 billion, of which RMB1.5 billion shall be contributed by the Company. The Partnership will primarily invest in financial assets and related assets in the inclusive financing sector.
CG SERVICES (6098.HK)'s value-added service income contribution may grow by 1-2 times from the current 10%, said President Li Changjiang. The management does not expect much of the earnings from "Three Supplies and Property Management" in 2H20.
Market and Pre Market News at bottom of page.
JAPAN opened lower but initially rallied to 23,350 but then reversed and sold down to the opening level and traded sideways into lunch. PM opened lower but trended higher, regained yesterday’s close but then dipped into the close to end flat.
At lunch Leading Economic Index Final Jun 84.4 vs 78.2 May revised (F/cast was 85) highest reading in 3 mths as more businesses return to work Coincident Index Jun 76.6 vs 72.9 May (F/cast was 76.4) It consists of a range of data including factory output, employment, and retail sales, was at 76.6 in June of 2020, compared to a preliminary reading of 76.4 and after an eleven-year low of 72.9 in May. The latest figure came as business activity reopened and demand improved on the back of a relaxed coronavirus lockdown restrictions.
S KOREA opened flat but trended slightly lower until mid morning when it revered and started trending higher Kosdaq closed +0.6% and the Kospi +0.1%.
TAIWAN opened saw and initial dip but rebounded to 12,815 level and traded slightly lower mid day but then drifted higher at the end to close +0.6%
Short Selling HSI Wednesday 18.9% vs 19% Tuesday
Top Shorts Sino Land (83) 47%, China Shenhua (1088) 47%, Want Want (151) 47%, CLP (2) 44%, Hang Lung Ppty (101) 44%, Power Assets (6) 43%, HK & China Gas (3) 37%, HSBC (5) 35%, MTRC (66) 35%, Country Garden (2007) 34%, China Res And (1109) 34%, Hang Seng Bank (11) 33%, Ping An (2318) 32%, COONC (883) 32%, CCB (939) 31%, NWD (17) 31%, China Mobile (941) 29%, ICBC (1398 ) 29%, BoC HK (2388) 29%, Mengniu Dairy (2319) 28%, Petrochina (857) 28%.
CONNECT FLOWS (up DoD)
Northbound Rmb 44,494m Sell 22,133m : 22,361m Buy
Southbound HK$ 12,100m Sell 5,646m : 6,454m Buy
Northbound Rmb 61,575m Sell 31,490m : 30,085m Buy
Southbound HK$ 11,455m Sell 5,482m : 5,973m Buy
CHINA None due
Centre for Health Protection said there were 24 additional COVID-19 cases in Hong Kong today; (vs 19 cases Tuesday). All local infections
Balance of Trade Jul HK$-29.8b vs -33.3b Jun (F/cast was -27b)
Exports Jul -3% YoY vs -1.3% Jun
Imports Jul -3.4% YoY vs -7.1% Jun
HKEX (388.HK) +1.9%
TENCENT (700.HK) +1.3%
PING AN (2318.HK) -0.6%
AIA (1299.HK) -0.1%
HSI & HSCEI Constituents on the move
SHIMAO GROUP (813.HK) +8.2%, hitting new high
CHINA RES LAND (1109.HK) +6%
CHINA RES GAS (1193.HK) -5.4%
SHENZHOU INTL (2313.HK) +4.9%
CSPC PHARMA (1093.HK) +4.7%
ANTA SPORTS (2020.HK) -4.5%
CHINA TAIPING (966.HK) -3.7%
BYD COMPANY (1211.HK) +3.6%
HANG LUNG PPT (101.HK) +0.9%, hitting new high
HSMI & HSSI Constituents on the move
SIHUAN PHARM (460.HK) -14.3%
CHINA DONGXIANG (3818.HK) +13.4%
TONGCHENG-ELONG (780.HK) +4.7%, hitting new high
YIHAI INTL (1579.HK) +4.2%, hitting new high
UNITED LAB (3933.HK) +2.6%, hitting new high
*PETROCHEMS MIXED after Oil prices rise as a Hurricane approaches the US Gulf Coast and production is shut down. PLUS API data showed American crude stockpiles -4.52 million barrels last week, and gasoline supplies also dropped. PETROCHINA (857 HK -0.3%) CNOOC (883 HK +0.3%) SINOPEC (386 HK +0.8%)
CH OILFIELD (2883 HK -1.8%) ahead of earnings result.
KULUN ENERGY (135 HK -7%) after reported interim -25% YoY yesterday.
*CHINESE BANKS WEAK ahead of earnings at the end of the week as the PBOC says it expects 1H profit in the banking industry to fall 12% YoY to 2.4t yuan before the major mainland banks unveil their results. The drop is mainly due to banks giving up profits to release the burden on the physical economy and increasing provisions for loan losses, said the vice governor at PBOC. He said the capital adequacy ratio of the banking sector fell to 14.21% by the end of June, but still remained above the regulatory standard of 10.5%. CCB (939 HK -0.7%) ICBC (1398 HK -1%) ABC (1288 HK -0.7%).
*E-COMMERCE STRONG on the news that ANT Group filed for a dual listing IPO in HK & Shanghai. It will issue no less than 10% in new shares of its total capital, and is targeting a valuation of about $225b, based on an IPO of about $30b if markets are favourable. BABA (9988 HK +4%) JD.COM (9618 HK +6.6%) NTES (9999 HK +3.7%).
*TECH & COMPONENTS WEAK as outlook for mainland suppliers to Huawei worsens as a result of US sanctions Huawei Tech is short of chips and hang to cut back production. It is said to be trying to source chips from around the world as its major supplier, TSMC, will suspend the supply to Huawei after Sept 14 and other suppliers like MediaTek are now also prevented from supplying the company because of the US ban. Huawei is reportedly stockpiling 5G mobile processors, Wifi, radio frequency and display driver chips and other components from key chip developers. SMIC (981 HK -3.8%) HUA HONG (1347 HK -6%) FIT HONG TENG (6088 HK -6.9%).
*HK PROPERTY WEAK on political uncertainties and with uncertainty over the impact of covid
Li Ka Shing Foundation bought a total of 1.7m CK ASSET (1113 HK-0.2%) shares at avg px between HK$41.9796 to HK$42.84/shr last week.
HENDERSON LAND (12 HK unchg), HK FERRY and Imperium Group will launch the 4th batch sales of 76 units at its Seacoast Royale project in Tuen Mun, updated the price list by marking up the price compared to the first price list.
SINO LAND (83 HK -0.2%) ahead of earnings due out today.
SHKP (16 HK unch) KERRY PROP (683 HK -0.5%).
*CH PROPS MIXED sentiment impacted by the results out over lunch.
COUNTRY GARDEN SERVICES (6098 HK unch) said 1H net profit due to higher property sales, +61% YoY at 1.31b yuan.
CHINA RES LAND (1109 HK +7%) reported 1H core profit +3.2% YoY to 8.37b yuan; it also said HKEX has approved a possible spinoff of its prop management business and commercial operational service business.
LONGFOR PROP (960 HK +0.2%) 1H core profit +12% YoY to 5.27b yuan, net profit +0.45% YoY to 63.39b yuan.
SUNAC (1918 HK -2%) 1H core profit +3% YoY to 13.04b yuan.
*PHARMA MIXED on results
CSPC PHARM (1093 HK +4.5%) 1H net profit +23% YoY to 2.31b yuan.
SSY (2005 HK +8%) best day since 2011 after reported inline 1H earnings yesterday, and planned spin-off of bulk pharma businesses.
KANGJI MED (9997 HK-8.4%) interim net profit -3.4% YoY to 80.74m yuan.
TONG REN TANG (1666 HK +5.5%) ahead of tomorrow's earnings report with speculation of increased sales of its products during the pandemic.
LONGFOR GROUP (960.HK) CEO Shao Mingxiao voiced confidence that the company could achieve RMB260-billion sales target for the year given RMB410-billion saleable resources of the group. As to whether the group will consider spinning off its property management unit for listing, Shao said there is no such plan yet, viewing smart services have been growing steadily in recent year.
China is going to purchase a record amount of soybeans from the US this year as it seeks to ramp up purchases pledged under the phase-one trade deal, as Bloomberg learnt from people familiar with the matter. The Chinese government will order 40 million tonnes of U.S. soybeans this year, around 25% more than the 2017 level, said the insiders.
MacBook sales of Apple (AAPL.US) spiked 20% year-on-year in 3Q20, Taiwan-based DigiTimes reported, citing the persistent trend of working from home, which also drove up demand for Macbook parts for Taiwan-based diode makers. MacBook sales in Japan and the Asia-Pacific hit record high, it was also reported.
CHINA RES LAND (1109.HK) announced that CRL Wuhan, an indirect wholly-owned subsidiary of the Company, entered into the Agreement with CRCL, a controlling shareholder of the Company, for the acquisition of the entire registered capital of Hubei Runlian Property Management Company, for a consideration of RMB47.122 million.
Global expenditure on artificial intelligence is set to double over the next four years and grow from 2020's US$50.1 billion to 2024's US$110 billion, said IDC in a report.
Google (GOOGL.US) has acquired 20 hectares of land in Yunlin County, Taiwan to build its third data centre there, Taiwan's Economic Daily News reported. The estimated investment size is at least TWD20 billion (roughly HKD5.2 billion).
NCI (1336.HK) has no plan to revise down its FY20 target after delivering improved 1H20 operation performance satisfactory to the management, said CEO Li Quan at a call conference. Health insurance products, of which demand in China was unleashed amid the coronavirus pandemic, will form an "iron triangle" with high-worth annuity insurance and additional insurance, disclosed Li. The group will ramp up the sales of relevant products and sales via the bancassurance channel.
The PBOC conducted a seven-day RMB200 billion reverse repo today (26 August) with a bidding interest rate staying flat at 2.2%.
LINK REIT (823.HK) announced for the Completion of Acquisition of Office Property - 25 Cabot Square London, which was took place on 25 August 2020. Upon Completion, Link (through its SPVs) became the sole owner of the Target Property.
CIMC (2039.HK) announced that it had on 18 August 2020 received notices from COSCO SHIPPING, Broad Ride and Promotor Holdings, being shareholders of the Company, whom have been proposing to transfer part of their shareholdings in the Company. The four shareholders agreed to transfer part or all of their respective shares held in the Company to Shenzhen Capital Operation Group. Upon completion, the Transferee will hold 350 million A shares and 719 million H shares of the Company, representing 29.81% of the total share capital of the Company in aggregate, and will become the Company’s largest shareholder.
Tourism is the third largest export sector in the global economy, representing 7% of total international trade in 2019, UN Secretary-General Antonio Guterres stated. However, in the first five months of 2020, global tourism lost US$320 billion as the industry suffered blows from the pandemic, threatening more than 120 million jobs, he added.
PRE MARKET NEWS
Not in this mornings note
The United States Department of Agriculture (USDA) said Chinese importers procured the largest volume of American corn in almost a month after both countries reinstated their commitment to the phase one trade deal. USDA announced that Chinese importers bought 408,000 tons of corn and 204,000 tons of soybeans from America.
The worldwide smartphone sales shrank 20.4% yearly to 295 million units during the second quarter of 2020 amid the coronavirus shock, as Gartner wrote in a report. In terms of brands, the sales of Samsung -27.1% to 54.7594m and XIAOMI-W (1810.HK) -21.5% to 26.0952 m units, while Apple (AAPL.US)'s iPhone sales -0.4% to 38.3861 million units.
YUZHOU GROUP (1628.HK) was informed by Chairman Lam Lung On, a controlling shareholder of the Company, that he had on 25 August 2020 acquired 1 million shares on the market at an aggregate consideration of approximately HK$3.6743 million.
Trading in the shares of LEYOU TECH H (01089.HK) has been halted with effect from 9:00 a.m. on 26 August 2020 pending the release of an announcement pursuant to the Hong Kong Code on Takeovers and Mergers which constitutes inside information of the Company.
BABA-SW (9988.HK)'s affiliate company Ant Group disclosed the pre-listing investor list. CKH series of companies and Tung Chee-hwa's family had took part in the offshore equity financing in 2018. CKH HOLDINGS (1.HK)'s Hutchison Whampoa Europe Investments S.a r.l., CK ASSET (1113.HK)'s Active Noble Limited held 8.9127 million Class C shares respectively. Domenick Limited, which is held by Tung's children, held 1.7825 million Class C shares.
Tencent Cloud unveiled its latest 5G infrastructure progress, claiming to be China's first cloud manufacturer to have completed its 5G product matrix "cloud-edge-net-end", reported CNR. Tencent Cloud will wrap up the construction of 300 edge computing nodes by the end of year, predicted Wang Yachen, General Manager of Tencent Cloud Network.
The Securities and Futures Commission’s (SFC) latest Asset and Wealth Management Activities Survey found that the assets under management (AUM) of the asset and wealth management business in Hong Kong increased by 20% year-on-year to $28.77 trillion as at 31 December 2019. Hong Kong’s asset and wealth management business posted strong growth in 2019 despite the challenges facing global markets, said Ashley Alder, the SFC’s Chief Executive Officer. The performance of Hong Kong’s financial markets in the first half of 2020 showed that they remain resilient.
A Yangtze Delta developer alliance was founded in Shanghai yesterday, said Chinese press. The founding members include Alibaba, Huawei and ten other enterprises.
KERRY LOG NET (636.HK) announced that in relation to the proposed spin-off and separate listing of KERRY EXPRESS (THAILAND) PUBLIC COMPANY on the Stock Exchange of Thailand, it had on 25 August received a notice of acceptance of the application.
At a Beijing meeting to facilitate job retention, People's Bank of China emphasized the need to step up mid- to long-term financing support for the manufacturing industry, especially high-tech ones, to innovate financial products and services.
ZHENGTONG AUTO (1728.HK) PROFIT WARNING -VE It is expected that the Group would record a loss of not less than RMB1.331 billion for the six months ended 30 June 2020 as compared to the profit of RMB471 million for the corresponding period in 2019. The loss was mainly attributable to an impairment loss of the Group’s goodwill and intangible assets amounting to about RMB1.465 billion as well as decreases in operation profits caused by the outbreak of the COVID-19 since early 2020.