Meituan Receives Outsized Mainland Flow, Week in Review
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Week in Review
- Asian equities were mostly higher for the week as Korea outperformed and Thailand underperformed in a shortened week for Mainland China's markets due to the market holiday celebrating the Dragon Boat Festival on Monday.
- Markets cheered the first phone conversation between Trump and Xi on Thursday, during which the two leaders were said to discuss technology restrictions, rare earth exports, and giving the go-ahead to negotiators to hammer out a deal.
- China reported mixed economic indicators for May as services sectors fared better than manufacturing, according to both the official purchasing managers’ indexes (PMIs) and the private surveys.
- Health care stocks were a bright spot in both Mainland China and Hong Kong this week after Innovent Biologics’ successful completion of a phase one trial of its new obesity medication.
Key News
Asian equities ended a positive week mixed, led by India following a larger-than-expected rate cut (0.50% vs. 0.25%). South Korea was closed for Memorial Day, and Indonesia, Pakistan, and the Philippines were closed for Eid al-Adha, also known as the Feast of Sacrifice, “a festival to honor the willingness of the Prophet Ibrahim to follow the command of Allah to sacrifice his son.”
Hong Kong and Mainland China saw profit taking in recent growth and technology outperformers despite the Trump-Xi call, as some pointed to a lack of details, though President Trump confirmed the US would be represented by Bessent, Lutnick, and Greer at a yet-to-be-determined location. The markets had risen on the chatter of a call in another example of markets' forward-looking nature, i.e., buy the rumor and sell the news.
Short-video platform Kuaishou Technology gained +8.44% as the company announced its Kling AI, an AI online video generator, will generate $100 million in revenue by February of 2026.
E-commerce names, including Alibaba and JD.com, which fell -1.44% and -1.45%, as several provinces, including Jiangsu and Chongqing, announced they had run out of home appliance subsidies to be used in the 618 (June 18) E-Commerce sales event. I suspect the issue will be resolved in short order.
Electric vehicle (EV) stocks, including BYD, which fell -2.18%, Xiaomi, which fell -2.12%, Li Auto, which was flat, and XPeng, which fell -1.77%, were mostly lower on yesterday’s news of the Ministry of Industry and Information Technology’s (MIIT) price war warning. It seems like a positive to me!
Value plays such as telecom and precious metals outperformed. Mainland investors bought the dip in Hong Kong, with $862 million worth of net buying via Southbound Stock Connect. Meituan saw another day of strong net inflow, as 13.54% of shares are now held by Mainland investors, up from only 11% earlier this year. I don’t know what’s driving Mainland investors' significant Meituan inflows, at 200 million shares bought, but it is interesting. Like Hong Kong, value stocks outperformed growth stocks in Shanghai and Shenzhen, as oil, precious metals, and aerospace stocks rallied.
May’s consumer price index (CPI) and producer price index (PPI) will be reported on Sunday.
The US Treasury did not label China a currency manipulator, though it does highlight the strength of the Renminbi versus the US dollar, recently. CNY hit a low of 7.34 CNY per USD on April 9th following Liberation Day, though CNY has rallied to 7.18 (CNY is quoted USD per CNY, so a decline is appreciation versus the US dollar). More surprising is that Hong Kong and US-listed China stocks haven’t rallied more due to the appreciation of the underlying businesses, as their revenues are denominated in Renminbi. Hopefully, we'll see this move soon!
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | -0.5% |
| Hang Seng Tech | HSTECH Index | -0.6% |
| Hong Kong Turnover | HKTurn Index | 6.1% |
| Hong Kong Short Sale Turnover | HKSST Index | 2.2% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 14.6% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 140.3 |
| China (Shanghai) | SHCOMP Index | 0% |
| China (Shenzhen) | SZCOMP Index | -0.1% |
| China (STAR Board) | Star50 Index | -0.5% |
| Mainland Turnover | .chturn Index | -10.6% |
| Northbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Not Available |
| Jing Daily China Global Luxury Index | CHINALUX Index | -0.5% |
| Japan | NKY Index | 0.5% |
| India | SENSEX Index | 0.9% |
| Indonesia | JCI Index | 0.6% |
| Malaysia | FBMKLCI Index | -0.1% |
| Pakistan | KSE100 Index | 0% |
| Philippines | PCOMP Index | 0% |
| South Korea | KOSPI Index | 1.5% |
| Taiwan | TWSE Index | -0.1% |
| Thailand | SET Index | -0.4% |
| Singapore | STI Index | 0.4% |
| Australia | AS51 Index | -0.3% |
| Vietnam | VNINDEX Index | -0.9% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 124 | 91 |
| Advancing Stocks | 223 | 2143 |
| Declining Stocks | 238 | 2752 |
| Outperforming Factors | Dividends, Low Volatiity, Buybacks | Value, Low Volatility, Dividend Yield |
| Underperforming Factors | Momentum, Liquidity, Growth | Liquidity, Momentum, Quality |
| Top Sectors | Materials, Healthcare, Industrials | Materials, Utlities, Energy |
| Bottom Sectors | Technology, Consumer Discretionary, Real Estate | Consumer Discretionary, Consumer Staples, Financials |
| Top Subsectors | Non-Ferrous Metals, Aerospace, Media & Entertainment | Fertilizer, Precious Metals, Forest Industry |
| Bottom Subsectors | Consumer Services, Semiconductors, Household & Personal Products | Offic Supplies, Leisure Products, Daily Chemicals |
| Southbound Connect Buys | Meituan, Alibaba, CSPC Pharma, Kuaishou | N/A |
| Southbound Connect Sells | Tencent, Xiaomi | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 151 | -0.52 |
| Communication Services | 9 | 0.16 |
| Consumer Discretionary | 28 | -1.47 |
| Consumer Staples | 13 | -0.54 |
| Energy | 7 | 0.15 |
| Financials | 23 | -0.49 |
| Health Care | 13 | 2.04 |
| Industrials | 20 | 0.71 |
| Information Technology | 10 | -1.81 |
| Materials | 10 | 2.15 |
| Real Estate | 6 | -0.57 |
| Utilities | 12 | 0.4 |
| Mainland China Listed | 404 | -0.03 |
| Communication Services | 6 | -0.22 |
| Consumer Discretionary | 31 | -0.45 |
| Consumer Staples | 24 | -0.23 |
| Energy | 13 | 0.5 |
| Financials | 64 | -0.23 |
| Health Care | 31 | -0.13 |
| Industrials | 64 | 0.12 |
| Information Technology | 91 | -0.19 |
| Materials | 58 | 0.85 |
| Real Estate | 6 | 0.06 |
| Utilities | 16 | 0.53 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | 0 |
| Alibaba HK | 9988 HK Equity | -1.4 |
| JD.com HK | 9618 HK Equity | -1.5 |
| NetEase HK | 9999 HK Equity | -1.1 |
| Yum China HK | 9987 HK Equity | 0.5 |
| Baozun HK | 9991 HK Equity | -0.8 |
| Baidu HK | 9888 HK Equity | -0.4 |
| Autohome HK | 2518 HK Equity | 2.1 |
| Bilibili HK | 9626 HK Equity | 0.6 |
| Trip.com HK | 9961 HK Equity | -3.3 |
| EDU HK | 9901 HK Equity | -0.4 |
| Xpeng HK | 9868 HK Equity | -1.8 |
| Weibo HK | 9898 HK Equity | 0.6 |
| Li Auto HK | 2015 HK Equity | 0 |
| Nio Auto HK | 9866 HK Equity | -3.3 |
| Zhihu HK | 2390 HK Equity | 1.8 |
| KE HK | 2423 HK Equity | -0.8 |
| Tencent Music Entertainment HK | 1698 HK Equity | -2.4 |
| Meituan HK | 3690 HK Equity | -1.9 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| BYD CO LTD-H | -2.2 |
| KUAISHOU TECHNOLOGY | 8.4 |
| ALIBABA GROUP HOLDING LTD | -1.4 |
| XIAOMI CORP-CLASS B | -2.1 |
| TENCENT HOLDINGS LTD | 0 |
| MEITUAN-CLASS B | -1.9 |
| NETEASE INC | -1.1 |
| CSPC PHARMACEUTICAL GROUP LT | 12.7 |
| LI AUTO INC-CLASS A | 0 |
| SEMICONDUCTOR MANUFACTURING | -4.9 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ZHONGJI INNOLIGHT CO LTD-A | 0.6 |
| EOPTOLINK TECHNOLOGY INC L-A | 2.9 |
| VICTORY GIANT TECHNOLOGY -A | -0.8 |
| SHENZHEN FORMS SYNTRON INF-A | -7.6 |
| CONTEMPORARY AMPEREX TECHN-A | -1 |
| FUJIAN SNOWMAN GROUP CO-A | -1.2 |
| KWEICHOW MOUTAI CO LTD-A | -0.5 |
| AVIC CHENGDU AIRCRAFT CO L-A | 3.9 |
| GIGADEVICE SEMICONDUCTO-CL A | 4.7 |
| EAST MONEY INFORMATION CO-A | -1.1 |
Last Night’s Exchange Rates, Prices, & Yields
- CNY per USD 7.19 versus 7.19 yesterday
- CNY per EUR 8.19 versus 8.21 yesterday
- Yield on 10-Year Government Bond 1.65% versus 1.67% yesterday
- Yield on 10-Year China Development Bank Bond 1.70% versus 1.71% yesterday
- Copper Price 0.88%
- Steel Price 0.81%
