CATL Shares Fall Despite Strong Earnings, Mainland Outperforms Hong Kong
4 Min. Read Time
Key News
Asian equities were mixed overnight as investors awaited today's decision from the US Federal Reserve, as Taiwan and Vietnam outperformed, while Hong Kong and Indonesia underperformed.
Battery giant Contemporary Amperex Technology (CATL) fell over -5% in Mainland trading despite strong earnings. The company reported a net income increase of 34% year-over-year in the first quarter of 2025. CATL is the world's largest battery maker, supplying Tesla worldwide. The company's results are a counter argument to the narrative of slowing electric vehicle (EV) adoption outside of China. They are also impressive amid all of discussion of overcapacity in China's automobile sector.
CATL investors are concerned about Tesla's partnership with another battery maker based in South Korea. Tesla likely just needs to balance its supply chain exposure. In our opinion, CATL still has the superior technology with the best range on its batteries, which is what counts for adoption, after all.
Mainland investors were net buyers of Alibaba and internet stocks broadly on weakness and they were net sellers of recent outperformers in health care as well a technology hardware stocks, such as Semiconductor Manufacturing (SMIC). Overall, Southbound flow was positive as Mainland investors bought a net $1.5 billion worth of Hong Kong -listed stocks and ETFs, following multiple billion dollar-plus days, which is positive.
There was little new news on the trade front as representatives wrapped up their Stockholm meeting. Investors would like more clarity on this, as there have been some conflicting signals. Trump's pressure on Russia is a benefit to trade negotiations, in my opinion. The US can ask China to help bring Russia to the negotiation and/or cease fire table.
Mainland-listed A shares significantly outperformed Hong Kong stocks, a rare divergence and some welcome momentum in the Mainland market, which has been lackluster in terms of returns so far this year, compared to Hong Kong's meteoric rise and outperformance versus most global stock markets.
Last Night's Performance
| Country/Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | -1.4% |
| Hang Seng Tech | HSTECH Index | -2.7% |
| Hong Kong Turnover | HKTurn Index | 19.7% |
| Hong Kong Short Sale Turnover | HKSST Index | 25.5% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 14.1% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 1500 |
| China (Shanghai) | SHCOMP Index | 0.2% |
| China (Shenzhen) | SZCOMP Index | -0.7% |
| China (STAR Board) | Star50 Index | -1.1% |
| Mainland Turnover | .chturn Index | 2.3% |
| Nouthbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Not Available |
| Jing Daily China Global Luxury Index | CHINALUX Index | 0.1% |
| Japan | NKY Index | 0% |
| India | SENSEX Index | 0.2% |
| Indonesia | JCI Index | -0.9% |
| Malaysia | FBMKLCI Index | 0% |
| Pakistan | KSE100 Index | 0.5% |
| Philippines | PCOMP Index | -0.1% |
| South Korea | KOSPI Index | 0.7% |
| Taiwan | TWSE Index | 1.1% |
| Thailand | SET Index | 0.8% |
| Singapore | STI Index | -0.2% |
| Australia | AS51 Index | 0.6% |
| Vietnam | VNINDEX Index | 1% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 141 | 131 |
| Advancing Stocks | 32 (HSI) | 145 (CSI 300) |
| Declining Stocks | 49 (HSI) | 151 (CSI 300) |
| Outperforming Factors | Value | Value |
| Underperforming Factors | Growth | Growth |
| Top Sectors | Energy, Consumer Staples, Utilities | Materials, Energy, Utilities |
| Bottom Sectors | Consumer Discretionary, Information Technology, Real Estate | Industrials, Consumer Discretionary, Information Technology |
| Top Subsectors | Petroleum & Petrochemicals, Health Care Equiment, Steel | Pharmaceuticals, Steel, Insurance |
| Bottom Subsectors | Electrical Equipment, Automotive, Semiconductors | Diversified Financials, Electric Power Grid, Office Supplies |
| Southbound Connect Buys | Li Auto, Meituan, Alibaba | N/A |
| Southbound Connect Sells | SMIC, Innovent Biotechnology, Guotai Junan | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 152 | -1.21 |
| Communication Services | 9 | -0.97 |
| Consumer Discretionary | 30 | -2.87 |
| Consumer Staples | 13 | 0.94 |
| Energy | 7 | 2.4 |
| Financials | 23 | -0.1 |
| Health Care | 13 | -0.98 |
| Industrials | 19 | -0.66 |
| Information Technology | 10 | -1.5 |
| Materials | 10 | -0.32 |
| Real Estate | 6 | -1.05 |
| Utilities | 12 | 0.67 |
| Mainland China Listed | 432 | -0.17 |
| Communication Services | 9 | 0.44 |
| Consumer Discretionary | 31 | -0.84 |
| Consumer Staples | 27 | 0.64 |
| Energy | 16 | 0.75 |
| Financials | 63 | 0.03 |
| Health Care | 40 | 0.49 |
| Industrials | 69 | -1.7 |
| Information Technology | 85 | -0.61 |
| Materials | 68 | 1.03 |
| Real Estate | 7 | -0.39 |
| Utilities | 17 | 0.71 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -1.1 |
| Alibaba HK | 9988 HK Equity | -3 |
| JD.com HK | 9618 HK Equity | -2.7 |
| NetEase HK | 9999 HK Equity | -0.5 |
| Yum China HK | 9987 HK Equity | -0.3 |
| Baozun HK | 9991 HK Equity | 5.3 |
| Baidu HK | 9888 HK Equity | -2 |
| Autohome HK | 2518 HK Equity | 0.4 |
| Bilibili HK | 9626 HK Equity | -0.1 |
| Trip.com HK | 9961 HK Equity | -0.8 |
| EDU HK | 9901 HK Equity | -1.7 |
| Xpeng HK | 9868 HK Equity | -5.7 |
| Weibo HK | 9898 HK Equity | -0.5 |
| Li Auto HK | 2015 HK Equity | -12.8 |
| Nio Auto HK | 9866 HK Equity | -5.6 |
| Zhihu HK | 2390 HK Equity | -4.1 |
| KE HK | 2423 HK Equity | -1.1 |
| Tencent Music Entertainment HK | 1698 HK Equity | -1.2 |
| Meituan HK | 3690 HK Equity | -0.9 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TENCENT HOLDINGS LTD | -1.1 |
| ALIBABA GROUP HOLDING LTD | -3 |
| BYD CO LTD-H | -5.8 |
| XIAOMI CORP-CLASS B | -1 |
| LI AUTO INC-CLASS A | -12.8 |
| SEMICONDUCTOR MANUFACTURI-H | -5.9 |
| MEITUAN-CLASS B | -0.9 |
| HSBC HOLDINGS PLC | -3.8 |
| INNOVENT BIOLOGICS INC | -1.5 |
| CSPC PHARMACEUTICAL GROUP LT | 2.3 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| CHINA NORTHERN RARE EARTH -A | 0.4 |
| CONTEMPORARY AMPEREX TECHN-A | -5 |
| EOPTOLINK TECHNOLOGY INC L-A | -1.6 |
| INNER MONGOLIA BAOTOU STE-A | 10.2 |
| EAST MONEY INFORMATION CO-A | -1.5 |
| TIBET TIANLU CO LTD-A | 3.9 |
| WUXI APPTEC CO LTD-A | 0.2 |
| SHENGHE RESOURCES HOLDINGS-A | -8.1 |
| ZHONGJI INNOLIGHT CO LTD-A | 0.3 |
| VICTORY GIANT TECHNOLOGY -A | 1.5 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 7.19 versus 7.18 yesterday
- CNY per EUR 8.24 versus 8.29 yesterday
- Yield on 10-Year Government Bond 1.72% versus 1.75% yesterday
- Yield on 10-Year China Development Bank Bond 1.80% versus 1.82% yesterday
- Copper Price -0.52%
- Steel Price -1.94%
