HSI -32pts (-0.1%) 23,798 HSCEI -13pts (-0.1%) 9,675 T/O HK$118.65bn (-12% DoD)
European opened higher as investors encourage by economies re-opening.
US futures indicating currently indicating a slightly lower open; ahead of Retail Sales, Retail Sales Ex Auto, NY Empire State, Industrial Production, Manufacturing Production, Capacity Utilisation, JOLTs Job Openings, Business Inventories, Michigan Data (Consumer Expectations, Current Conditions, Inflation Expectations, 5 Yr Inflation Expectations, Consumer Sentiment) Baker Hughes Oil Rig Count, Foreign Bond Investment, Overall Net Capital Flows, Net Long Term Tic Flows
US 85 companies reporting tonight as earnings season draws to a close with only 208 to report next week (for full list https://finance.yahoo.com/calendar/earnings/
Northbound RMB 23,444m Sell 11,778m : 11,666m Buy
Southbound HK$ 9,389m Sell 4,259m : 5,130m Buy
Northbound RMB 34,199m Sell 16,446m : 17,752m Buy
Southbound HK$ 7,772m Sell 3,283m : 4,489m BuyShort Selling HSI Friday 18.7% vs 16.2% ThursdayTop Shorts
Hang Seng Bank (11) 53%, Wharf REIC (1997) 47%, HSBC (5) 41%, ICBC (1398) 41%, Country Garden 33%, SHKP (16) 33%, Hengan (1044) 31%, Galaxy Ent (27) 30%, CCB (939) 28%, MTRC (66) 27%, Want Want (151) 27%, HKEX (388) 27%, CNOOC (883) 26%, NWD (17) 26%, BOC (HK) (2388) 25%, CK Asset 25%, BankComm (3328) 25%.IPOs Central China New Life
(9983.HK) closed at $8.37, up $1.52 +22% vs listing price of $6.85, on volume of 215 million shares and T/O of $1.778 billion. Excluding the handling fees, a book gain of $1,520 was reported per board lot of 1,000 shares.Peija Medical
(9996.HK) closed at $25.8, up $10.44 +68% vs listing price of $15.36, on volume of 93.14 million shares and turnover of $2.442 billion. Excluding the handling fees, a book gain of $10,440 was reported per board lot of 1,000 shares.DATA CHINA
Fixed Asset Investment (YTD) Apr -10.3% YoY vs -16.1% Mar (F/cast was -12.6%)
Industrial Production Apr +3.9% YoY vs -1.1% Mar (F/cast was +1%)
Retail Sales Apr -7.5% YoY vs -15.8% Mar (F/cast was -9.3%)
Unemployment Rate Apr +5.8% vs 5.9% Mar (F/cast was +6.3%)Industrial
production saw a broad based recovery except for power equipment. Key will be whether the trend continues over the next couple of months as China's exports react to the lock-dons in other countries.Retail sales
show the cautious nature of the Chinese consumer but Sales declined less for garments (-18.5% vs -34.8% March), jewelry (-12.1% vs -30.1%), home appliances (-8.5% vs -29.7%), furniture (-5.4% vs -22.7%), oil, oil products (-14.1% vs -18.8%), building materials (-5.8% vs -13.9%).
Autos flat, after -18.1% in March.
Sales that picked up for personal care (8.3% vs 0.3%), office supplies (6.5% vs 6.1%), and telecoms (12.2% vs 6.5 %), and cosmetics (3.5% vs -11.6%)
Still good news for cosmetic companies it seems once again that despite the bad news little luxuries are still being bought as seen in most downturns.HONG KONG Centre for Health Protection
said there was 1 new COVID-19 Infection, a male pilot aged about 40. After being tested positive to coronavirus, the patient has been admitted to Princess Margaret Hospital. He was believed unrelated to the infection cluster of Lei Muk Shue Estate.AFTER MARKET
GDP Growth Rate Flash Q1 -5.3% QoQ vs -0.5% prior (F/cast was -5.3%) [Q1 -8.9% YoY vs -3% prior (F/cast was -8.9%)]The recession deepened in Q1, covid-19an associated measures taken disrupted the local economy and supply chains in the region. To reflect the new data the Govt forecast rates of underlying and headline consumer price inflation for 2020 as a whole are revised downwards to 2.2% and 1.4% respectively, from 2.5% and 1.7% as announced in the budget. The govt thought a V shaped recovery unlikely and the recovery is likely to take time.RESULTS Next Week: Monday VTech (303). Tuesday Emperor Capital (717) Wednesday Lenovo (992), Xiaomi (1810), Thursday Parkson Retail (3368), Alibaba (9988).INDEXES
China CSI 300 -12pts (-0.3%) @ 3913 Opened higher following the US rally but sold down for the first hour after the pre market China data whilst better than f/cast was still weak and doesn’t really give clear trends at this stage. Morning/day low was 3,907 around 10:30am and then the market worked higher in choppy trading into lunch. PM saw an initial up tick but then the selling kicked in and the sold down into the close but managed to hold above the morning lows. Sentiment remains cautious over US/China relationship as Trump says he may cut ties, doesn’t want to talk to Xi and may punish Chinese companies listed in the US that don’t follow US accounting rules. Chinese investors are still reacting to his tweets whereas US investors are less inclined too, which may indicate they don’t expect him to be re-elected in November ?
HK Pre Market opened +4pts @ 23,834 vs +16pts ADRs @ 23,845 with Tencent & Alibaba up small, Meituan -0.8%, AIA weak as Q1 missed, Bossini +40% on news that a consortium lead by Viva China (8032) had bought its stock. Some initial short scoring but then the market trended lower on the China data down to the day low 23,670 level, before working all the way back up to the opening highs. PM saw an initial tick higher as Europe came in but with conviction and the market sold down to 23,780 level around 3pm (the Chinese close). After that there was a small rally back into the green but without momentum it petered out at the 23,840 level and sold down to again which it saw support again around the 23,780 level and a small bounce into the close but not enough to get back into the green. Another Friday of de-risking into the weekend as covid-19 and rumours of more anti-government protests this weekend overhang the markets.
TENCENT (700.HK) -1.9%
AIA (1299.HK) +1.6%
HSBC (5.HK) -0.3%
ICBC (1398.HK) -0.2%
CCB (939.HK) +0.2%
PING AN (2318.HK) -0.1%
HSI & HSCEI Constituents on Move:
AAC TECH (2018.HK) +6.5%
WH GROUP (288.HK) +4.5%
SUNNY OPTICAL (2382.HK) +3.2%
HSMI & HSSI Constituents on Move:
HENGTEN NET (136.HK) +22.6%
MAN WAH HLDGS (1999.HK) +19.3%
FIT HON TENG (6088.HK) +18.9%
COSMOPOL INT'L (120.HK) +13.6%
3SBIO (1530.HK) +11.7%
VIVA BIOTECH (1873.HK) +9%, hits new high
KINGDEE INT'L (268.HK) +8.7%, hits new high
TIANNENG POWER (819.HK) +5.7%, hits new high
FU SHOU YUAN (1448.HK) +3.6%, hits new high
CHINA KEPEI (1890.HK) +2.7%, hits new high
Japan opened higher but sold down and went into the red briefly before rebounding and closed Nikkei +0.6% Topix +0.5%S Korea opened higher but again markets sold down band then traded sideways around unchanged Kospi +0.12%, Kosdaq +0.2%Taiwan opened higher sold down for the first hour and the rallied back into the green and traded sideways closed +0.3% at 10,814. Investors still see 11,000 as resistanceAFTER MARKET NEWS
FAIRWOOD HOLD (52.HK) PROFIT WARNINGS expecting a significant decline of 65% to 75% in the profit for the year ended 31 March 2020, vs profit for the year ended 31 March 2019. Mainly attributable to the severe drop in foot traffic and revenue since the outbreak of novel coronavirus; the decline in gross profit margin that was mainly due to rising rental and labor costs; and the adoption of Hong Kong Financial Reporting Standard 16, “Leases”, which took effect on 1 January 2019.
HANG SENG INDEXES Review for the quarter ended 31 March 2020. All changes will come into effect on 8 June 2020 (Monday). HSI no change.
Hang Seng China Enterprises Index. Changes
Inclusions are CHINA UNICOM (762.HK), SHIMAO PROPERTY (813.HK)
and MENGNIU DAIRY (02319.HK)
Exclusions are NCI (1336.HK), CHINA COMM CONS (1800.HK) and HAITONG SEC (6837.HK).
CHINA SOUTH AIR (1055.HK) said in April 2020, passenger capacity (measured by available seat kilometres -64.86% YoY. In terms of cargo operations, cargo capacity (measured by available tonne kilometers) -27.91% YoY.
NETDRAGON (777.HK) said it with CHINA UNICOM (762.HK)
and National Engineering Research Center for E-Learning and National Engineering Laboratory For Educational Big Data reached a strategic cooperation agreement on the establishment of a smart education joint venture - Yunqi Smart Education Technology Company Limited, fostering education information 2.0 and achieving education modernisation.
PROPERTY There are thought to be 9 tenders for the site Lot No.1069 in Survey District No. 3, off Anderson Road, Kwun Tong, Kowloon which closed today. Sole-basis bids from Chinachem, GRAND MING (1271.HK), K. WAH INT'L (173.HK)
and SINO LAND (83.HK)
Joint-basis from the consortium of HENDERSON LAND (00012.HK), FE CONSORT INTL (35.HK)
and Empire Group.
CHINA OVERSEAS (688.HK) has submitted tender without disclosing its investment basis.
Centa-City Leading Index (CCL) last stood at 175.94, +0.54% weekly.
CCL Mass last recorded at 178.74, +0.62% WoW.
CCL (small-and-medium units) last posted at 176.67, +0.58% weekly.
The three major indices notched 11-week high, signalling property prices are gaining momentum to go up they said.
BOC HONG KONG (2388.HK) stated that multiple supportive measures have been introduced for its clients since the outbreak of coronavirus pandemic. Over 16,000 inquiries have been received year to date. There were over 2,800 successful applications, among which more than 1,400 filings for mortgage principal moratorium were approved.KINGDEE INT'L (268.HK) said that it formed a strategic cooperation with Tencent Cloud on in-depth platform research, product integration and reciprocal collaboration yesterday (14 May).
s-HR, the Human Resource Management Solutions of Kingdee, has built an integrated online recruitment platform by connecting with Tencent conference API. Enterprise clients can dispatch interview invitations via links embedded in the s-HR recruitment module, which directs them to Tencent conferences, providing contactless video interview experience for enterprises and candidates.
MAN WAH HLDGS (1999.HK) at Lunch FY ended 31 March 2020. The net profit +20% YoY @ HK$1.638 bn was HK 42.89 cents Final Dividend of HK 12 cents declared.CATHAY PAC AIR (293.HK) At lunch said Cathay Pacific and Cathay Dragon had in April 2020carried a total of 13,700 passengers, -99.6% YoY and carried 84,600 tonnes of cargo and mail, -48.3% YoY. It suffered loss of $4.5 billion for 4M20 in wake of COVID-19 outbreak, and gave a bleak financial outlook for the airline in at least the next few months. In April, the airline only maintained basic passenger flights to and from 14 destinations, as passenger demand declined sequentially with daily passenger carried less than 500. Most passengers were tourist arrivals Into Hong Kong from North America and the UK under government travel ban. At this juncture, they do not see amelioration in the situation and hence expected the daily passenger numbers in May to remain around 500, whereas business and leisure travel will remain stressed.AAC TECH (2018.HK) At lunch Q1 ended March 2020. Revenue -5.1% YoY to RMB3.56 bn. Net profit -87.8% YoY to RMB52.704 mn, EPS was RMB0.04. During the period, gross profit margin -7 ppts to 23.1%; net profit margin -10 ppts to 1.5%.AURNUTRIA (1717) hat Mygood is a third-party company and merely a dealer for AUSNUTRIA in response to reports that many Hunan toddlers are sickened by a solid drink called "Bei An Min" (倍氨敏), with some developing skull deformity resembling "big-headed babies", reported Chinese media. The fake infant formulas originated from Hunan Waverock Health Products, the actual owner of which was found to be a controlling shareholder of Mygood's Hunan arm. Ausnutria China holds 30% of Mygood's Hunan branch, according to shareholding structure.National Bureau of Statistics spokesperson cited the greater instability and uncertainty regarding export outlook. Against the backdrop of rising global recession risk, China is facing graver export headwinds and hence should not be too optimistic about the outlook, despite a 8.2% export growth for goods in April.PetroChina said the construction plan of mask production lines were overachieving by expanding the number of production lines to 22 from 21 with full-swing operation. As of 13 May, the total production reached 51.265 million masks with a maximum daily output of over 1.2 million.Asian Development Bank said the coronavirus pandemic will possibly inflict US$5.8-8.8 trillion in global losses, representing 6.4-9.7% of global GDP and deeper than US$2-4.1 trillion in April's projection. The plague may cost Asia US$1.7-2.5 trillion, and China US$1.1-1.6 trillion, said the bank.Overnight HIBOR last posted at 0.17214%, logging a 1-month low, according to HKAB. Meanwhile, the 1-Month HIBOR related to mortgage rate last stood at 0.64446%, down for 5 days, marking a 1-month low.Financial Secretary Paul Chan said the preparation for $10,000 cash handout is in full swing with an aim to accept application from end-June. Residents will receive the amount successively from July, and by August most people should get their money. Chan suggested that the most convenient way to collect the amount is through bank accounts, while finishing registration online.
AIA (1299.HK)’s VONB dropped in Q1 2020 YoY due to conoid-19. In March & April, governments in other markets across the Asia-Pacific region introduced or tightened containment measures. While containment measures remain in force, the insurer expects that they will have a significant negative impact on new business sales from its affected operations. In Mainland China, authorities have progressively relaxed some of their restrictions, resulting in a rebound in economic activity, although such activity remains below 2019 levels. Some of AIA's markets are experiencing a significantly lower interest rate environment and equity market declines which will, should these trends persist, present headwinds for its financial results.
BOSSINI INT'L (592.HK) and VIVA CHINA (8032.HK) (a substantial shareholder of LI NING (2331.HK)) announced that the Offeror Dragon Leap Developments (owned as to 80% by VIVA CHINA's indirect wholly-owned subsidiary VC Consumables, and 20% by Bosco Law's Keystar), the Vendor Law Ka Sing, and VIVA CHINA entered into the Share Purchase Agreement, pursuant to which Dragon Leap Developments would acquire over 1.093 bn BOSSINI INT'L shares from Law Ka Sing, representing approximately 66.6% of the entire issued share capital of BOSSINI INT’L. The Consideration for the Sale Shares is HK$46.62 million, equivalent to approximately HK$0.043 per Sale Share.
*TELCOS FIRM on the news that Facebook Inc. and some of the world’s largest telecom carriers including CH MOBILE (941 HK -0.4%) are joining forces to build a giant 37,000-km sub-sea cable to help bring more reliable and faster internet across Africa for just under $1b.
CH TEL (728 HK +0.4%) gets extension to June 8 to respond to threat by the US regulator to revoke its license to operate in US. CH UNICOM (762 HK +1.7%).
*INSURERS MIXED on earnings
AIA (1299 HK +1.6%) Q1 Value of New Business -28% YoY, slightly missed est -25.5% due to the impact on the businesses in HK/ China from COVID-19 outbreak.
PRUDENTIAL's (2378 HK unch) annual premium equivalent sales in Asia -24% YoY to US$986m during 1Q. PING AN (2318 HK-unch) YTD insurance premium -3% YoY to 321.2b yuan. Life Insurance premium -8.9% YoY to 210b yuan.
TAIPING (966 HK +2.3%) YTD insurance premuum -2.2% YoY to 78b yuan.
*TECH & COMPONENTS FIRM on recovery optimism.
FIH (2038 HK +3.5%) said Q1 net loss narrowed by 9.14% YoY to US$62.48m. But Revenue -41.04% to US$1.85b.
HUA HONG SEMI (1347 HK -0.7%) Q1 net income -57.2% YoY to US$20.3m.
AAC TECH (2018 HK +6.5%) at lunch reported net profit of Rmb53mn, -88% YoY, in line with its previous profit warning range. The net profit decline was mainly due to the decline in gross margin to 23.1% from 30.1% a year ago on the back of the negative impact from the COVID-19 on production.
SUNNY (2382 HK +3.2%) BYDE (285 HK +1.6%).
FIT HON TENG (6088 HK +19%) on the news Belkin works with The U of Illinois on FlexVent gas-operated ventilator in response to the Covid-19 crisis.
*HK PROPERTY WEAK on lower home prices worries.
CK ASSET (1113 HK -0.2%) after profit warning
SHKP (16 HK unch) released 140 flats in the first price list of Wetland Seasons Park Phase 2 in Yuen Long, at an average price of HK$11,368 psf after discounts.
HENDERSON LAND (12 HK +0.1% will sell 15 units at Double Cove by tender tomorrow.
Centaline reported 171 transactions at ten major housing estates in the first half of May, up by 76% MoM.
*AUTOS WEAK after Volvo Cars has decided to cancel payment of a SEK180m dividend to main owner GEELY (175 HK -1.4%) and other preference shareholders. Market also unimpressed that Auto sales were flat last month raising doubts about the recovery in ChinaGAC (2238 HK -0.3%) GREATWALL (2333 HK -1.1%) BRILLIANCE (1114 HK -0.6%).
*RETAILERS WEAK. After CK HUTCH (1 HK-0.7%) expects a 50% plunge in retail profit in 1H this year after the coronavirus pandemic shut its stores. It's retail units include its supermarket chain ParkNShop, electronics stores Fortress, health and beauty care chain Watsons and luxury perfumery ICI Paris.
SAMSONITE (1910 HK -2%) Q1 net sales $601.2m, 1Q loss $787.3m, adjusted loss $38.6m, adjusted Ebitda $4.9m.
SHIMAO PROP (813 HK +3.8%) said Sequoia Capital China invested $130m and Tencent invested $114m in unit Shimao Services Holdings.
AUSNUTRIA (1717 HK -5%) on news of fake baby formula in China; its denied its products are involved
MAN WAH (1999 HK +19%) after reporting earnings at lunch with a +20% earnings growth for the fiscal year ended March 31.