Value Rules The Day, Midea To Release Household Robots In 2-3 Years
6 Min. Read Time
Key News
Asian equities had a strong start to the week and month despite a slightly firmer US dollar, except for Japan, which was closed for Culture Day.
The US and China eased tariff and rare earth export controls following the Trump-Xi meeting. The US and Chinese militaries reinstating lines of communication is an understated positive. Sure, we had Treasury Secretary Bessent flexing on tariffs, though that’s meant for a domestic audience. Far more important were President Trump’s positive comments on China and President Xi on 60 Minutes. Have you seen the White House’s Trump Xi video on X and Twitter? In poker, they call that a tell.
The October privately tracked purchasing manager’s index (PMI) survey for manufacturing, compiled by Rating Dog and formerly by Caixin, was released overnight. The Manufacturing PMI was 50.6 versus September’s 51.2 and expectations of 50.7, as employment increased from September. The PMI did not meet expectations, though only six economists provided an estimate.
OPEC’s anticipated production cut lifted the energy sector in Hong Kong, where it gained +2.86%, and Mainland China, where it gained +2.48%, which inserted a value bias into today’s market action. Hong Kong grinded higher on strong breadth, though volumes were a touch light.
Growth heavyweights were off on no news, as Alibaba fell -1.15%, Tencent fell -0.16%, CATL fell -0.63%, and Semiconductor Manufacturing International (SMIC) fell -2.87%, though Xiaomi gained +3.52% after President Xi gave Korea’s Lee one of their phones. Internet media and entertainment stocks had a good day, with Kuaishou up +1.52% and Tencent Music Entertainment up +1.5%. Financials, including banks, insurance, and capital markets companies were higher. General autos and electric vehicles (EVs) were mixed based on October sales data. BYD fell -1.49% despite selling 441,706 EVs and hybrids, which represents a decline of -12.13% YoY and +11.47% month-over-month (MoM).
There were a couple of new product updates in the robotics and autonomous fields overnight. Xpeng gained +4.59% as it moves closer to mass production of its flying car called Aridge and humanoid robot mass production beginning in 2026. Midea fell -1.9% despite the company debuting its Mei La housekeeping humanoid robot that is due to arrive in two to three years. How do I get on the early delivery list?
Precious metals were off on China’s retail gold value-added tax (VAT) rules, which effectively increase the tax on gold purchases.
Baidu gained +0.77% after reporting more than 250,000 autonomous taxi rides last week, which brings the total cumulative rides to 17 million across twenty-two cities. Baidu’s Apollo Go reports one airbag deployment for every 10.14 million kilometers (6.3 million miles) versus Waymo’s one per 4.54 million kilometers. Human drivers experience 1.65 airbag deployments per million miles versus Waymo’s 0.35, which is 79% lower, and Baidu’s 0.16 per million miles.
Auto and auto parts maker Seres Group’s Hong Kong IPO will raise $1.8 billion, with more than 300 institutions participating. Pony.ai’s Hong Kong IPO will be priced at HKD 139.
It was a similar situation on the Mainland as Hong Kong in terms of value sectors outperforming growth. Energy and financial names were strong, while semiconductors, autos, and non-ferrous metals names were all weak. Technology hardware and clean energy were mixed, as Foxconn gained +4.01% and LONGi gained +6.77%.
Shanghai will host the 8th Annual China International Import Expo starting on Wednesday, which will kick off with a speech from Premier Li.
The quarterly holdings of the “National Team”, institutional investors associated with China’s sovereign wealth, which include China Securities Finance Co., Central Huijin Investment, CSF Asset Management, and the Social Security Fund, were released. The three investment managers held 800 stocks at the end of the third quarter, including 33 with the value held exceeding RMB 10 billion. The three largest holdings are the Agricultural Bank of China, with a value of RMB 1.1 trillion held, the Bank of China, with a value of RMB 1.03 trillion held, and ICBC, with a value of RMB 1.02 trillion held, as these stocks make up a significant percentage of Mainland indices. LONGi, Mindray, and BYD were also Among the growth stocks owned.
The Wall Street Journal (WSJ) had a good article titled “How the U.S. Economy Has Defied Doomsday Predictions on Tariffs”. Companies using their pandemic-inflated prices to eat margins and far more exemptions occurring than headlines acknowledge are among the interesting insights.
Last Night’s Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 1% |
| Hang Seng Tech | HSTECH Index | 0.2% |
| Hong Kong Turnover | HKTurn Index | -11.2% |
| Hong Kong Short Sale Turnover | HKSST Index | 1.9% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 17.5% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 698.83 |
| China (Shanghai) | SHCOMP Index | 0.5% |
| China (Shenzhen) | SZCOMP Index | 0.4% |
| China (STAR Board) | Star50 Index | -1% |
| Mainland Turnover | .chturn Index | -9% |
| Northbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Not Available |
| Jing Daily China Global Luxury Index | CHINALUX Index | -0.1% |
| Japan | NKY Index | 2.1% |
| India | SENSEX Index | 0% |
| Indonesia | JCI Index | 1.4% |
| Malaysia | FBMKLCI Index | 0.8% |
| Pakistan | KSE100 Index | 0.7% |
| Philippines | PCOMP Index | -1.7% |
| South Korea | KOSPI Index | 2.8% |
| Taiwan | TWSE Index | 0.4% |
| Thailand | SET Index | 0% |
| Singapore | STI Index | 0.4% |
| Australia | AS51 Index | 0.1% |
| Vietnam | VNINDEX Index | -1.4% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume as % of 1-Year Average | 95 | 125 |
| Advancing Stocks | 362 | 3419 |
| Declining Stocks | 115 | 1621 |
| Outperforming Factors | Low Volatility, Dividend Yield, Value | Dividend Yield, Value, Multi-Factor Score |
| Underperforming Factors | Liquidity, Growth | Momentum, EPS Revision |
| Top Sectors | Energy, Tech, Financials | Energy, Communication, Utilities |
| Bottom Sectors | Materials, Discretionary | Discretionary, Healthcare, Materials |
| Top Subsectors | Petroleum, Coal, Media/Entertainment | Forest, Oil/Gas, Coal |
| Bottom Subsectors | Semis, Non Ferrous Metals, Household Appliances | Soft Drink, Precious Metals, Base Metals |
| Southbound Connect Buys | CNOOC, Xiaomi (Large), 3SBio, Innovent Bio (Small), Pop Mart (Tiny) | N/A |
| Southbound Connect Sells | Alibaba, SMIC (Large), Hua Hong Semis (Moderate), Tencent (Small) | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 151 | 0.53 |
| Communication Services | 9 | 0.16 |
| Consumer Discretionary | 28 | -0.48 |
| Consumer Staples | 13 | 1.05 |
| Energy | 7 | 2.86 |
| Financials | 23 | 1.82 |
| Health Care | 13 | 1.04 |
| Industrials | 20 | 1.71 |
| Information Technology | 10 | 2.15 |
| Materials | 10 | -0.52 |
| Real Estate | 6 | 0.22 |
| Utilities | 12 | 0.56 |
| Mainland China Listed | 404 | 0.25 |
| Communication Services | 6 | 1.7 |
| Consumer Discretionary | 31 | -0.97 |
| Consumer Staples | 24 | 0.2 |
| Energy | 13 | 2.47 |
| Financials | 64 | 0.49 |
| Health Care | 31 | -0.91 |
| Industrials | 64 | 0.55 |
| Information Technology | 91 | 0.35 |
| Materials | 58 | -0.44 |
| Real Estate | 6 | 0.07 |
| Utilities | 16 | 0.76 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -0.2 |
| Alibaba HK | 9988 HK Equity | -1.2 |
| JD.com HK | 9618 HK Equity | -0.3 |
| NetEase HK | 9999 HK Equity | 1.5 |
| Yum China HK | 9987 HK Equity | 1.3 |
| Baozun HK | 9991 HK Equity | -5.4 |
| Baidu HK | 9888 HK Equity | 0.8 |
| Autohome HK | 2518 HK Equity | 0 |
| Bilibili HK | 9626 HK Equity | 1.5 |
| Trip.com HK | 9961 HK Equity | 1.7 |
| EDU HK | 9901 HK Equity | -1.6 |
| Xpeng HK | 9868 HK Equity | 4.6 |
| Weibo HK | 9898 HK Equity | 0.9 |
| Li Auto HK | 2015 HK Equity | 1.4 |
| Nio Auto HK | 9866 HK Equity | 4.2 |
| Zhihu HK | 2390 HK Equity | 1.4 |
| KE HK | 2423 HK Equity | -1.3 |
| Tencent Music Entertainment HK | 1698 HK Equity | 1.5 |
| Meituan HK | 3690 HK Equity | 0.3 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ALIBABA GROUP HOLDING LTD | -1.2 |
| XIAOMI CORP-CLASS B | 3.5 |
| TENCENT HOLDINGS LTD | -0.2 |
| SEMICONDUCTOR MANUFACTURI-H | -2.9 |
| AIA GROUP LTD | 6 |
| CNOOC LTD-H | 3.5 |
| POP MART INTERNATIONAL GROUP | 2.3 |
| MEITUAN-CLASS B | 0.3 |
| HUA HONG SEMICONDUCTOR LTD-H | -3.5 |
| BYD CO LTD-H | -1.5 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| SUNGROW POWER SUPPLY CO LT-A | 5.1 |
| ZHONGJI INNOLIGHT CO LTD-A | 1.5 |
| FOXCONN INDUSTRIAL INTERNE-A | 4 |
| EOPTOLINK TECHNOLOGY INC L-A | 0.7 |
| VICTORY GIANT TECHNOLOGY -A | 1.4 |
| GIGADEVICE SEMICONDUCTO-CL A | 4.6 |
| ZHEJIANG SANHUA INTELLIGEN-A | -2.3 |
| CONTEMPORARY AMPEREX TECHN-A | -0.5 |
| 360 SECURITY TECHNOLOGY IN-A | 7.5 |
| SEMICONDUCTOR MANUFACTURIN-A | -3.2 |
Last Night’s Exchange Rates, Prices, & Yields
- CNY per USD 7.12 versus 7.12 yesterday
- CNY per EUR 8.20 versus 8.20 yesterday
- Yield on 10-Year Government Bond 1.79% versus 1.80% yesterday
- Yield on 10-Year China Development Bank Bond 1.87% versus 1.87% yesterday
- Copper Price -0.15%
- Steel Price -0.68%
