China Last Night powered by KraneShares is a daily note produced by KraneShares research team led by Chief Investment Officer Brendan Ahern. The note covers top news and events that moved China’s capital markets last night while you were probably sleeping.
What you will receive every day
Daily color on what drove China’s equity, fixed income, and currency markets' performance last night
Aggregated local broker insights
Daily analysis of important policy, trade, public company news / announcements
Sector level performance analysis across Mainland, Hong Kong, and US stock exchanges
Tencent Beats On Top & Bottom Line Despite AI Spending
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4 Min. Read Time
Tencent Q2 Earnings Overview
Revenue +15% to RMB 183.6B ($25.5B) versus estimate RMB 178.9B ($24.8B)
Net Income RMB 51.8B ($7.2B)
Margin 28%
Earnings per Share (EPS) RMB 6.8 ($0.8) versus estimate 6.6 ($0.7)
Tencent beat analyst estimates on both its top and bottom lines. Analysts were expecting a slight hit to profit growth due to AI investments, but the company was able to manage expectations and come out ahead. Nonetheless, its report noted multiple new features within games and WeChat, its social media platform, driven by AI. Top-line revenue growth also accelerated slightly quarter-over-quarter, even though analysts were expecting a slowdown there.
Key News
Asian equities were mostly higher overnight as Hong Kong, Thailand, and Australia outperformed, while Pakistan and Australia underperformed. Hong Kong had one of its best days since May last night. Trade optimism and earnings were key catalysts, as was Tencent's beat, which kicked off internet earnings season. Earnings reports for top internet companies will be top of mind for markets and continue for the rest of August.
Mainland investors were net sellers of Hong Kong-listed stocks and ETFs via Southbound Stock Connect today to the tune of $1.1 billion. The high net selling was likely due to profit-taking on the strong overnight movement. Tencent was one of the top net sales on its stellar earnings.
Internet stocks overall were mostly higher in Hong Kong. Alibaba recovered significantly from the past few sessions, gaining +6%, while JD was up +4%. Electric vehicles were mixed with NIO falling -3% and Li Auto gaining 3%. Semiconductor stocks had another good day.
Consumer-facing stocks and health care sector players also benefitted from a new stimulus measure. The government will subsidize some payments on certain types of personal loans, to a cap. This is an interesting and welcome development as China needs to encourage more borrowing. Despite rock-bottom interest rates, credit growth has been lackluster.
Last Night's Performance
Country / Index
Ticker
1-Day Change
China (Hong Kong)
HSI Index
2.6%
Hang Seng Tech
HSTECH Index
3.5%
Hong Kong Turnover
HKTurn Index
31.9%
Hong Kong Short Sale Turnover
HKSST Index
1.7%
Short Turnover as a % of Hong Kong Turnover
N/A
12.7%
Southbound Stock Connect Net Buy/Sell (US $ Millions)
N/A
-1059
China (Shanghai)
SHCOMP Index
0.5%
China (Shenzhen)
SZCOMP Index
1.3%
China (STAR Board)
Star50 Index
0.7%
Mainland Turnover
.chturn Index
14.4%
Northbound Stock Connect Net Buy/Sell (US $ Millions)
N/A
Not Available
Jing Daily China Global Luxury Index
CHINALUX Index
1.8%
Japan
NKY Index
1.3%
India
SENSEX Index
0.4%
Indonesia
JCI Index
1.3%
Malaysia
FBMKLCI Index
1.2%
Pakistan
KSE100 Index
-0.2%
Philippines
PCOMP Index
0.6%
South Korea
KOSPI Index
1.1%
Taiwan
TWSE Index
0.9%
Thailand
SET Index
1.5%
Singapore
STI Index
1.2%
Australia
AS51 Index
-0.6%
Vietnam
VNINDEX Index
0.2%
Indicator
Hong Kong
Mainland
Today's Volume as % of 1-Year Average
115
132
Advancing Stocks
79 (Hang Seng)
149 (CSI 300)
Declining Stocks
5 (Hang Seng)
138 (CSI 300)
Outperforming Factors
Growth
Growth
Underperforming Factors
Value
Value
Top Sectors
Communication Services, Health Care, Consumer Discretionary
Information Technology, Health Care, Materials
Bottom Sectors
Utilities, Energy, Industrials
Energy, Real Estate, Consumer Staples
Top Subsectors
Media & Entertainment, Consume Discretionary, Pharmaceuticals
Communication Equipment, Electronic Components, Biotechnology
Bottom Subsectors
Paper & Packaging, Environmental Protection, Coal
Banks, Coal, Office Supplies
Southbound Connect Buys
Innovent Bio, Li Auto, Fit Hon Teng
N/A
Southbound Connect Sells
Tencent, Alibaba, Meituan
N/A
MSCI China All Shares Index
# of Stocks
Average 1-Day Change (%)
Hong Kong Listed
151
3.19
Communication Services
9
4.74
Consumer Discretionary
28
3.95
Consumer Staples
13
1.93
Energy
7
0.48
Financials
23
1
Health Care
13
4.72
Industrials
20
0.76
Information Technology
10
2.93
Materials
10
3.11
Real Estate
6
1.77
Utilities
12
0.12
Mainland China Listed
404
1.06
Communication Services
6
0.6
Consumer Discretionary
31
0.47
Consumer Staples
24
-0.2
Energy
13
-0.48
Financials
64
0.16
Health Care
31
2.15
Industrials
64
1.03
Information Technology
91
3.43
Materials
58
1.29
Real Estate
6
-0.23
Utilities
16
-0.18
US & Hong Kong Dually Listed
Ticker
1-Day Change (%)
Tencent HK
700 HK Equity
4.7
Alibaba HK
9988 HK Equity
6.1
JD.com HK
9618 HK Equity
3.8
NetEase HK
9999 HK Equity
5.4
Yum China HK
9987 HK Equity
0.8
Baozun HK
9991 HK Equity
1.5
Baidu HK
9888 HK Equity
4.1
Autohome HK
2518 HK Equity
2
Bilibili HK
9626 HK Equity
7.4
Trip.com HK
9961 HK Equity
2.6
EDU HK
9901 HK Equity
1.5
Xpeng HK
9868 HK Equity
-2.7
Weibo HK
9898 HK Equity
5.4
Li Auto HK
2015 HK Equity
3.3
Nio Auto HK
9866 HK Equity
-2.9
Zhihu HK
2390 HK Equity
0.4
KE HK
2423 HK Equity
2.2
Tencent Music Entertainment HK
1698 HK Equity
15.6
Meituan HK
3690 HK Equity
4.1
Hong Kong's Most Heavily Traded by Value
1-Day Change (%)
TENCENT HOLDINGS LTD
4.7
ALIBABA GROUP HOLDING LTD
6.1
XIAOMI CORP-CLASS B
3
MEITUAN-CLASS B
4.1
BYD CO LTD-H
3.3
SEMICONDUCTOR MANUFACTURI-H
1.8
KUAISHOU TECHNOLOGY
4.7
PING AN INSURANCE GROUP CO-H
1.6
AIA GROUP LTD
3
HONG KONG EXCHANGES & CLEAR
2.3
Shanghai and Shenzhen's Most Heavily Traded by Value
1-Day Change (%)
EAST MONEY INFORMATION CO-A
2.5
EOPTOLINK TECHNOLOGY INC L-A
15.5
ZHONGJI INNOLIGHT CO LTD-A
11.7
CAMBRICON TECHNOLOGIES-A
1.3
CONTEMPORARY AMPEREX TECHN-A
3.9
FOXCONN INDUSTRIAL INTERNE-A
10
WUXI APPTEC CO LTD-A
7.2
KWEICHOW MOUTAI CO LTD-A
-1.2
CHINA GREATWALL TECHNOLOGY-A
10
VICTORY GIANT TECHNOLOGY -A
9.7
Last Night's Exchange Rates, Prices, & Yields
CNY per USD 7.17 versus 7.18 yesterday
CNY per EUR 8.40 versus 8.38 yesterday
Yield on 10-Year Government Bond 1.73% versus 1.73% yesterday
Yield on 10-Year China Development Bank Bond
Copper Price -0.10%
Steel Price -0.95%
Featured Tweets:
The U.S.–China trade truce has cooled tensions, but the real test is endurance.
A lasting agreement could reshape manufacturing flows, commodity demand, and regional investment trends. pic.twitter.com/NjcpYWjR9X
Reduced tariff pressure is giving global industries breathing room.
If the U.S. and China turn this pause into a durable pact, trade-linked sectors could see a stronger, more predictable backdrop. pic.twitter.com/iAcdTN6RHm
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