Nvidia’s RTX6000D Not Banned, Just “Not That Good”
5 Min. Read Time
Key News
Asia stocks were mixed overnight as the US dollar strengthened, Japan, Taiwan, and South Korea outperformed, while Mainland China and Hong Kong underperformed.
Both markets gave up morning gains as weakness in robotics spread to other growth stocks and sub-sectors. The selling momentum garnered speed, leading to a stampede of profit taking, with few buyers stepping in as decliners vastly outnumbered advancers on high volumes. Reminds me of The Economist cartoon below.
Yesterday, we voiced skepticism of the Financial Times article stating the Chinese government internet regulator had banned companies from buying Nvidia’s RTX Pro 6000D Chip, according to “people familiar with the matter”. Today, a reporter asked the Ministry of Foreign Affairs spokesperson Lin Jian if this was true. The response was “We have always opposed discriminatory practices against specific countries on economic and technological issues …. RTX6000D is mainly designed for AI inference tasks, but due to its limited function,” the response from Chinese buyers was “cold”. Additionally, “the performance of domestic self-developed chips is getting better and better.” In contrast, the Nvidia chip is expensive and “its performance lags behind the RTX5090 graphics card, which is prohibited from exporting to China”. There you have it! Expensive and not very good, so Chinese companies didn’t buy it.
On the topic, Huawei announced production for its Ascend AI chips and AI infrastructure node called TaiShan950 SuperPoD, comprised of 8,192 computing cards, will launch in Q4 of this year. Mainland and Hong Kong-listed chip makers, along with Mainland tech hardware and Hong Kong pharmaceuticals, were one of the few areas of strength. Mainland investors were buyers of the Hong Kong dip via Southbound Stock Connect, with $808mm of net buying, with Alibaba seeing its 20th straight day of net buying.
Over the last ten years, though, the increase in charging stations from 53.5% YoY to 17.348mm is impressive. One funding source for the technology push will come from China’s asset management industry, as another round of fourteen tech bond funds was launched in China, raising RMB 407 billion. According to the Ministry of Science and Technology, there is not a large number compared to the RMB 3.6 trillion of social R&D in 2024. Markets took a breather, though I’m sure headlines will make it appear like the world is ending. Tomorrow will be a big trading day for passive funds, as the S&P, Russell & FTSE indices rebalance. Hong Kong and China are small net sellers, but nothing to be worried about, in my opinion.
In yesterday's tax revenue announcement, securities stamp tax revenue increased +226% YoY to RMB 25.1B from August 2024’s RMB 7.7B. Is this a way to gauge investor participation? At the peak of the 2015 bubble, stamp revenue was RMB 39 billion, though stamp tax revenue exceeded RMB 30 billion a month twice in 2021, which was hardly a banner year, with the Shanghai Composite up +4.8%. The charts do move together, though, so it's worth watching. There is more work to be done, but one could conclude that the re-rating/bull market has plenty of runway.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | -1.4% |
| Hang Seng Tech | HSTECH Index | -1% |
| Hong Kong Turnover | HKTurn Index | 14.7% |
| Hong Kong Short Sale Turnover | HKSST Index | 25% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 12.2% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 1205.67 |
| China (Shanghai) | SHCOMP Index | -1.2% |
| China (Shenzhen) | SZCOMP Index | -1.2% |
| China (STAR Board) | Star50 Index | 0.7% |
| Mainland Turnover | .chturn Index | 32% |
| Northbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Not Available |
| Jing Daily China Global Luxury Index | CHINALUX Index | 0.2% |
| Japan | NKY Index | 1.1% |
| India | SENSEX Index | 0.4% |
| Indonesia | JCI Index | -0.2% |
| Malaysia | FBMKLCI Index | -0.8% |
| Pakistan | KSE100 Index | 1.3% |
| Philippines | PCOMP Index | 0.4% |
| South Korea | KOSPI Index | 1.4% |
| Taiwan | TWSE Index | 1.3% |
| Thailand | SET Index | -0.7% |
| Singapore | STI Index | -0.3% |
| Australia | AS51 Index | -0.8% |
| Vietnam | VNINDEX Index | -0.3% |
| Indicator | Hong Kong | Mainland |
|---|---|---|
| Today's Volume % of 1-Year Average | 174 | 192 |
| Advancing Stocks | 104 | 1035 |
| Declining Stocks | 390 | 4054 |
| Outperforming Factors | ||
| Underperforming Factors | EPS Revisions, Large Caps, Growth | Value, Dividend Yield, EPS Revisions |
| Top Sectors | Healthcare | Tech, Healthcare |
| Bottom Sectors | Communication, Financials, Real Estate | Materials, Energy, Financials |
| Top Subsectors | Consumer Durables/Apparel, Semis, Household/Personal Products | Catering/Tourism, Semis, Communication Equipment |
| Bottom Subsectors | Software, Coal, Textiles | Base Metals, Precious Metals, Leisure Products |
| Southbound Connect Buys | Alibaba, Meituan, Pop Mart (Large), Xiaomi (Moderate), East Buy, UBTech Robotics (Small) | |
| Southbound Connect Sells | Hua Hong Semis, SMIC (Large), Tencent (Moderate) |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 152 | -1.83 |
| Communication Services | 9 | -2.59 |
| Consumer Discretionary | 28 | -1.58 |
| Consumer Staples | 13 | -1.49 |
| Energy | 6 | -1.97 |
| Financials | 24 | -2.21 |
| Health Care | 12 | 0.57 |
| Industrials | 21 | -1.11 |
| Information Technology | 10 | -1.12 |
| Materials | 10 | -2.03 |
| Real Estate | 7 | -2.14 |
| Utilities | 12 | -1.08 |
| Mainland China Listed | 395 | -1.21 |
| Communication Services | 7 | -1.54 |
| Consumer Discretionary | 29 | -1.04 |
| Consumer Staples | 24 | -1.71 |
| Energy | 13 | -2.53 |
| Financials | 64 | -2.4 |
| Health Care | 32 | 0.16 |
| Industrials | 61 | -1.65 |
| Information Technology | 90 | 0.96 |
| Materials | 54 | -2.57 |
| Real Estate | 6 | -2.29 |
| Utilities | 15 | -1.25 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -2.9 |
| Alibaba HK | 9988 HK Equity | -2 |
| JD.com HK | 9618 HK Equity | -1.8 |
| NetEase HK | 9999 HK Equity | -2.4 |
| Yum China HK | 9987 HK Equity | -1.8 |
| Baozun HK | 9991 HK Equity | -3.2 |
| Baidu HK | 9888 HK Equity | 1.4 |
| Autohome HK | 2518 HK Equity | 0.3 |
| Bilibili HK | 9626 HK Equity | -3 |
| Trip.com HK | 9961 HK Equity | -1.4 |
| EDU HK | 9901 HK Equity | -2.4 |
| Xpeng HK | 9868 HK Equity | -4.2 |
| Weibo HK | 9898 HK Equity | -1.3 |
| Li Auto HK | 2015 HK Equity | -2.6 |
| Nio Auto HK | 9866 HK Equity | -1.3 |
| Zhihu HK | 2390 HK Equity | -3.1 |
| KE HK | 2423 HK Equity | -1.4 |
| Tencent Music Entertainment HK | 1698 HK Equity | -2.5 |
| Meituan HK | 3690 HK Equity | 0.3 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ALIBABA GROUP HOLDING LTD | -2 |
| TENCENT HOLDINGS LTD | -2.9 |
| SEMICONDUCTOR MANUFACTURI-H | 7.1 |
| MEITUAN-CLASS B | 0.3 |
| XIAOMI CORP-CLASS B | 2.5 |
| HUA HONG SEMICONDUCTOR LTD-H | 8.6 |
| BAIDU INC-CLASS A | 1.4 |
| POP MART INTERNATIONAL GROUP | 4.6 |
| SENSETIME GROUP INC-CLASS B | 15.8 |
| UBTECH ROBOTICS CORP LTD-H | -1.5 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| CAMBRICON TECHNOLOGIES-A | 0.1 |
| EAST MONEY INFORMATION CO-A | 1.8 |
| SEMICONDUCTOR MANUFACTURIN-A | 6.9 |
| ZHONGJI INNOLIGHT CO LTD-A | 0.8 |
| ZHEJIANG SANHUA INTELLIGEN-A | 6.8 |
| FOXCONN INDUSTRIAL INTERNE-A | 2.3 |
| CONTEMPORARY AMPEREX TECHN-A | 6.7 |
| SUNGROW POWER SUPPLY CO LT-A | 0.5 |
| HYGON INFORMATION TECHNOLO-A | 0.5 |
| VICTORY GIANT TECHNOLOGY -A | -3.8 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 7.10 versus 7.10 yesterday
- CNY per EUR 8.40 versus 8.40 yesterday
- Yield on 10-Year Government Bond 1.85% versus 1.83% yesterday
- Yield on 10-Year China Development Bank Bond 1.93% versus 1.91% yesterday
- Copper Price -1.14%
- Steel Price -0.19%
