Baidu Surges On Robotaxi Optimism
5 Min. Read Time
Key News
Asian equities were mixed overnight as Singapore outperformed and Pakistan underperformed.
Mainland China and Hong Kong markets were both off overnight though the former more so than the latter. The STAR Board continued its momentum from yesterday despite the downdraft in broader Mainland indexes. Hong Kong opened higher but faded into the close. Southbound flows into Hong Kong were strong, at over $100 million, as Mainland investors try to catch the momentum in Hong Kong.
Baidu gained +12.5% overnight on heightened optimism surrounding autonomous vehicles. The government said that it will step up policy support for the company’s Apollo Go program. The autonomous vehicles, mostly used as taxis, could soon be expanding yet again in China. Apparently, government ministers said they would even support autonomous rental vehicles! The future appears to be now as Baidu is more advanced than Tesla in terms of miles driven autonomously, though the latter is more advanced in sensor driving without access to maps. At a conference, our team heard an interesting debate about Tesla’s technology compared to Baidu’s, with one speaker saying that autonomous will be the growth driver for Tesla. But it is already a significant driver for Baidu, which trades at a much lower multiple than Tesla.
China’s consumer price index (CPI) came in lower than expected for June, up only +0.2% versus an expected +0.4%, while the producer price index (PPI) was down -0.8%, which is relatively in line with expectations. This is the second time over the past year that pork price increases have led to speculation of higher inflation. Maybe consumers are diversifying their diets? Anyway, China’s unique economic situation means it is not enduring the high inflation of Europe, the US, and now Japan (somewhat). While this is good for stability, it does not induce consumers to spend today. This is something that could be addressed at the upcoming Third Plenum, which begins on Monday.
Earnings season is upon us in Mainland China as many companies are releasing semi-annual results. Approximately 60% of companies that have released earnings so far have reported an increased profit. Solar companies Tongwei Solar and TCL Technology were among notable reporting companies overnight. Tongwei issued a profit warning while TCL issued mixed guidance though an increase in profit for its photovoltaic panel business specifically.
The Hang Seng and Hang Seng Tech indexes both closed slightly lower by -0.29% and -0.01%, respectively, on volume that increased +8% from yesterday. Mainland investors purchased a healthy $111 million worth of Hong Kong-listed stocks and ETFs. The top-performing sectors were Consumer Staples, which gained +1.38%, Consumer Discretionary, which gained +0.58%, and Financials, which gained +0.48%. Meanwhile, the worst-performing sectors were Materials, which fell -4.08%, Energy, which fell -3.98%, and Utilities, which fell -2.55%.
Shanghai, Shenzhen, and the STAR Board closed -0.68%, -0.35%, and 0.07%, respectively, on volume that decreased -6% from yesterday. The top-performing sectors were Information Technology, which gained +0.67%, Financials, which gained +0.40%, and Consumer Discretionary, which gained +0.31%. Meanwhile, the worst-performing sectors were Energy, which fell -3.84%, Utilities, which fell -1.91%, and Communication Services, which fell -1.54%.
Last Night’s Performance
| Country/Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 0.3% |
| Hang Seng Tech | HSTECH Index | 0% |
| Hong Kong Turnover | HKTurn Index | 8.5% |
| HK Short Sale Turnover | HKSST Index | 13% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 110.7 |
| China (Shanghai) | SHCOMP Index | -0.7% |
| China (Shenzhen) | SZCOMP Index | -0.3% |
| China (STAR Board) | Star50 Index | 0.1% |
| Mainland Turnover | .chturn Index | -6.4% |
| Nouthbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Not Available |
| Jing Daily China Global Luxury Index | CHINALUX Index | 0.4% |
| Japan | NKY Index | 0.6% |
| India | SENSEX Index | -0.5% |
| Indonesia | JCI Index | 0.2% |
| Malaysia | FBMKLCI Index | 0.2% |
| Pakistan | KSE100 Index | -1.1% |
| Philippines | PCOMP Index | -1% |
| South Korea | KOSPI Index | 0% |
| Taiwan | TWSE Index | 0.4% |
| Thailand | SET Index | 0.3% |
| Singapore | STI Index | 1% |
| Australia | AS51 Index | -0.2% |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 154 | -0.3 |
| Communication Services | 9 | -0.3 |
| Consumer Discretionary | 29 | 0.6 |
| Consumer Staples | 13 | 1.4 |
| Energy | 7 | -4 |
| Financials | 24 | 0.5 |
| Health Care | 14 | -1.3 |
| Industrials | 18 | -1.3 |
| Information Technology | 11 | -1 |
| Materials | 11 | -4.1 |
| Real Estate | 6 | -1.4 |
| Utilities | 12 | -2.6 |
| China Listed | 487 | -0.5 |
| Communication Services | 13 | -1.5 |
| Consumer Discretionary | 41 | 0.3 |
| Consumer Staples | 32 | 0.1 |
| Energy | 17 | -3.8 |
| Financials | 68 | 0.4 |
| Health Care | 45 | 0 |
| Industrials | 74 | -1.2 |
| Information Technology | 93 | 0.7 |
| Materials | 80 | -1.4 |
| Real Estate | 7 | -0.9 |
| Utilities | 17 | -1.9 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -0.9 |
| Alibaba HK | 9988 HK Equity | 0.8 |
| JD.com HK | 9618 HK Equity | 1.7 |
| NetEase HK | 9999 HK Equity | -1.9 |
| Yum China HK | 9987 HK Equity | 1.3 |
| Baozun HK | 9991 HK Equity | 1.8 |
| Baidu HK | 9888 HK Equity | 10.1 |
| Autohome HK | 2518 HK Equity | 1.2 |
| Bilibili HK | 9626 HK Equity | 0.6 |
| Trip.com HK | 9961 HK Equity | 0.7 |
| EDU HK | 9901 HK Equity | 2.1 |
| Xpeng HK | 9868 HK Equity | 2.1 |
| Weibo HK | 9898 HK Equity | 1.8 |
| Li Auto HK | 2015 HK Equity | -2 |
| Nio Auto HK | 9866 HK Equity | -0.6 |
| Zhihu HK | 2390 HK Equity | 7.2 |
| KE HK | 2423 HK Equity | 1.6 |
| Noah HK | 6686 HK Equity | 0 |
| Tencent Music Entertainment HK | 1698 HK Equity | 3.1 |
| Meituan HK | 3690 HK Equity | 0.2 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| Tencent Holdings Ltd | -0.9 |
| Meituan | 0.2 |
| Baidu Inc | 10.1 |
| CNOOC Ltd | -3.5 |
| Alibaba Group Holding Ltd | 0.8 |
| China Construction Bank Corporation | 0.9 |
| AIA Group Ltd | 1.1 |
| China Mobile Ltd | -0.9 |
| BYD Ltd | 0.7 |
| China Shenhua Energy Ltd | 4.9 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| Seres Group Ltd | -4.7 |
| Anhui Jianghuai Automobile Group | 6.2 |
| BAIC BluePark New Energy Technology | -1.7 |
| Suzhou Dongshan Precision | 9.1 |
| Zhongji Innolight Ltd | 2.1 |
| Kweichow Moutai Ltd | 0 |
| ZTE Corp | -0.1 |
| IEIT Systems | 0.3 |
| Contemporary Amperex Technology | -1.6 |
| Luxshare Precision Industry | -0.8 |
Last Night’s Exchange Rates, Prices, & Yields
- CNY per USD 7.28 versus 2.27 yesterday
- CNY per EUR 7.88 versus 7.86 yesterday
- Yield on 1-Day Government Bond 1.24% versus 1.24% yesterday
- Yield on 10-Year Government Bond 2.27% versus 2.27% yesterday
- Yield on 10-Year China Development Bank Bond 2.36% versus 2.36% yesterday
- Copper Price +0.28%
- Steel Price -0.03%
