Hong Kong Investment Bankers Get Busy, Week In Review

Week in Review

• Asian equities were mostly lower for the week, except for Indonesia, Hong Kong, and Vietnam, while Malaysia, Thailand, and Japan underperformed.
• The Mainland-listed Contemporary Amperex Technology (CATL), the world's largest battery maker, listed shares in Hong Kong on Tuesday, marking the largest IPO globally so far this year.
• The People’s Bank of China (PBOC), China’s central bank, cut the 1-Year Loan Prime Rate (LPR) to 3.0% from 3.1% and the 5-Year LPR to 3.5% from 3.6%.
• It was another busy week for earnings, as Baidu, Full Truck Alliance, and Xpeng all beat expectations on earnings per share (EPS) and top-line revenue, and the electric vehicle maker Xpeng increased revenue by an astounding 142% year-over-year (YoY).

Key News

Asian equities were mixed overnight as the Philippines and India outperformed with gains, while Mainland China and Taiwan underperformed.

The real fireworks today were after the close with President Trump’s European Union (EU) tariff and Apple comments. I suspect the US’ increased policy volatility will expedite foreign capital outflows from the US.

Apple was a Mainland news item for offering deep iPhone discounts.

CNBC reported that China’s Vice Foreign Minister Ma Zhaoxu and US Deputy Secretary of State Christopher Landau spoke yesterday. The lack of Western media attention, except for CNBC, likely indicates things are going well!

The big news today was the Hong Kong IPO of Jiangsu Hengrui Pharmaceuticals (1276 HK, 600276 CH), which gained +25.2% after raising $1.3 billion from investors. This is another strong signal of Hong Kong’s rebound: more mainland companies are relisting in Hong Kong, following CATL’s IPO on Tuesday.

Hong Kong had a good day, except for CATL’s bout of profit-taking, which sent the stock down by -2.24%, despite an afternoon drop in the Mainland that weighed on Hong Kong shares as well. Meanwhile, Hong Kong-listed internet names were mixed, though they did not fall nearly as much as their US-listed counterparts yesterday.

The electric vehicle (EV) ecosystem had a good day, led by BYD, which gained +1.97% on news of the company outselling Tesla in Europe, and strong May preliminary auto sales. Tesla’s China sales continue to be pressured by local companies.

The Mainland market was having a decent day until a sharp sell-off in the afternoon, which pushed indices into the red. Speculation on reasons for the sell-off included US-Iran talks not going well, Israel wanting to attack Iran’s nuclear facilities, and the G7 targeting China, though, again, no clear driver. The afternoon fall was interesting, as the PBOC's strong capital injection into the financial markets and chatter of China’s insurance companies buying Mainland stocks should be seen as catalysts. Filling the Liberation Day gap continues to be a resistance level for the market.

Premier Li presided over a State Council meeting focused on the “green and low-carbon development of the manufacturing industry” with an emphasis on promoting the implementation of green technologies. President Xi had a phone conversation with German Chancellor Merz.

The UFC will return to China with an August event in Shanghai for the first time since 2019. It is interesting that UFC founder Dana White is a supporter of President Trump.

JP Morgan's Jamie Dimon met with PBOC Governor Pan Gongsheng today, as the investment bank held its China conference.

After the close, discount retailer Miniso Group (9896 HK, MSO US) missed Q1 estimates while online travel agency Tongcheng (780 HK) beat analyst expectations for Q1. Meituan will report Q1 financial results on Monday.

Last Night’s Performance

Country / Index	Ticker	1-Day Change
China (Hong Kong)	HSI Index	0.2%
Hang Seng Tech	HSTECH Index	-0.1%
Hong Kong Turnover	HKTurn Index	2.7%
Hong Kong Short Sale Turnover	HKSST Index	-1.5%
Short Turnover as a % of Hong Kong Turnover	N/A	16.6%
Southbound Stock Connect Net Buy/Sell (US $ Millions)	N/A	140.3
China (Shanghai)	SHCOMP Index	-0.9%
China (Shenzhen)	SZCOMP Index	-0.9%
China (STAR Board)	Star50 Index	-1%
Mainland Turnover	.chturn Index	4.9%
Northbound Stock Connect Net Buy/Sell (US $ Millions)	N/A	Not Available
Jing Daily China Global Luxury Index	CHINALUX Index	-1%
Japan	NKY Index	0.5%
India	SENSEX Index	1%
Indonesia	JCI Index	0.7%
Malaysia	FBMKLCI Index	0.5%
Pakistan	KSE100 Index	0%
Philippines	PCOMP Index	1.7%
South Korea	KOSPI Index	-0.1%
Taiwan	TWSE Index	-0.1%
Thailand	SET Index	0.3%
Singapore	STI Index	0.1%
Australia	AS51 Index	0.1%
Vietnam	VNINDEX Index	0%

Indicator	Hong Kong	Mainland China
Today's Volume % of 1-Year Average	110	93
Advancing Stocks	225	1503
Declining Stocks	232	3480
Outperforming Factors	Low Volatility, Large Caps, Dividend Yield	Low Volatility, Growth, Liquidity
Underperforming Factors	Growth. Liquidity, Buybacks	Momentum, Value, Buybacks
Top Sectors	Energy, Health Care, Financials	Consumer Discretionary, Health Care, Materialas
Bottom Sectors	Real Estate, Technology, Consumer Staples	Technology, Utilities, Financials
Top Subsectors	Pharmaceuticals, Biotech, Autos, Steel	Autos, Precious Metals, Health Care
Bottom Subsectors	Household & Personal Products, Electrical Equipment, Consumer Durables, Apparel	Leisure Products, Office Supplies, Ports
Southbound Connect Buys	Meituan (Large), Innovent Biologics (Moderate)	N/A
Southbound Connect Sells	Hong Kong Tracker ETF (Large), Tencent (Large), Alibaba, Xpeng (Moderate	N/A

MSCI China All Shares Index	# of Stocks	Average 1-Day Change (%)
Hong Kong Listed	151	0.17
Communication Services	9	0.34
Consumer Discretionary	28	0.11
Consumer Staples	13	-0.49
Energy	7	0.88
Financials	23	0.35
Health Care	13	0.56
Industrials	20	0.33
Information Technology	10	-0.53
Materials	10	0.28
Real Estate	6	-0.86
Utilities	12	-0.35
Mainland China Listed	404	-0.49
Communication Services	6	-0.42
Consumer Discretionary	31	1.1
Consumer Staples	24	-0.24
Energy	13	-0.86
Financials	64	-0.88
Health Care	31	0.5
Industrials	64	-0.82
Information Technology	91	-1.07
Materials	58	0.13
Real Estate	6	-0.45
Utilities	16	-0.93

US & Hong Kong Dually Listed	Ticker	1-Day Change (%)
Tencent HK	700 HK Equity	0.3
Alibaba HK	9988 HK Equity	-0.3
JD.com HK	9618 HK Equity	-0.5
NetEase HK	9999 HK Equity	1.1
Yum China HK	9987 HK Equity	0.3
Baozun HK	9991 HK Equity	-4.4
Baidu HK	9888 HK Equity	0.5
Autohome HK	2518 HK Equity	0.6
Bilibili HK	9626 HK Equity	4.3
Trip.com HK	9961 HK Equity	0.5
EDU HK	9901 HK Equity	-0.7
Xpeng HK	9868 HK Equity	-3.9
Weibo HK	9898 HK Equity	2.7
Li Auto HK	2015 HK Equity	1.1
Nio Auto HK	9866 HK Equity	-1.8
Zhihu HK	2390 HK Equity	0.8
KE HK	2423 HK Equity	1.1
Tencent Music Entertainment HK	1698 HK Equity	1
Meituan HK	3690 HK Equity	0.7

Hong Kong's Most Heavily Traded by Value	1-Day Change (%)
XIAOMI CORP-CLASS B	-0.4
TENCENT HOLDINGS LTD	0.3
ALIBABA GROUP HOLDING LTD	-0.3
MEITUAN-CLASS B	0.7
BYD CO LTD-H	2
JIANGSU HENGRUI PHARMACEUTIC	25.2
CHINA CONSTRUCTION BANK-H	0.9
CONTEMPORARY AMPEREX TECHN-H	-2.2
INNOVENT BIOLOGICS INC	4.2
XPENG INC - CLASS A SHARES	-3.9

Shanghai and Shenzhen's Most Heavily Traded by Value	1-Day Change (%)
SERES GROUP CO L-A	10
BYD CO LTD -A	1.6
CONTEMPORARY AMPEREX TECHN-A	-1.3
HYDSOFT TECHNOLOGY CO LTD-A	-2.2
EAST MONEY INFORMATION CO-A	-2.1
KUNLUN TECH CO LTD-A	-2.3
ANHUI JIANGHUAI AUTO GROUP-A	1.6
ZHEJIANG SANHUA INTELLIGEN-A	2.9
KYLAND TECHNOLOGY CO LTD-A	13.2
KWEICHOW MOUTAI CO LTD-A	-0.5

Last Night's Exchange Rates, Prices, & Yields

• CNY per USD 7.18 versus 7.21 yesterday
• CNY per EUR 8.14 versus 8.13 yesterday
• Yield on 10-Year Government Bond 1.72% versus 1.72% yesterday
• Yield on 10-Year China Development Bank Bond 1.71% versus 1.71% yesterday
• Copper Price -0.10%
• Steel Price -0.13%