Rates Unchanged With Fiscal Stimulus Possible, NetEase Misses Estimates In Q3
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Key News
Asian equities cheered Nvidia’s earnings results, except for Mainland China and Hong Kong, which underperformed.
Investors also cheered Kuaishou’s Q3 results reported after yesterday’s Hong Kong close, as the stock gained +2.28%. We noted, with a bit of surprise, that CATL managed to close higher yesterday despite its six-month IPO lock-up expiring. The hammer appeared to drop a day late as the stock fell by -5.66%.
The 1- and 5-year Loan Prime Rates remained at 3% and 3.5% as anticipated. Despite leaving interest rates unchanged in today's decision, China's Housing Ministry is said to be mulling a host of new fiscal measures to revive the industry, including mortgage subsidies for new homebuyers, raising income tax rebates for existing mortgage holders, and reducing housing transaction costs. The first homebuyer subsidies would be the first of their kind in the country. This measure could amount to increasing the social safety net for households and families, which is also good for domestic consumption.
Mainland investors bought a healthy net $2 billion+ worth of Hong Kong-listed stocks and ETFs overnight on weakness. This was the highest net inflow from the Southbound Stock Connect since October 13th, and brings the 5-day total inflow to about $6.6B. Top buys were growth stocks on weakness, including Xiaomi and Alibaba.
Xiaomi said its electric vehicle business made a profit for the first time in the third quarter, a significant milestone for the smartphone and vehicle maker. It now expects to deliver more than 400,000 vehicles in 2025. The electric vehicle sector, as a whole, was notably weaker as Nio fell -3.20%, Li Auto fell -1.80%, Leapmotor fell -5.90%, and Xpeng fell -4.50%.
Hong Kong was flat while Mainland China was lower. Mainland China's STAR Board was down by -1.20% due to weakness in the technology sector, despite holding its own in several recent sessions. Shanghai closed lower by -0.40%, while Shenzhen fell by -0.80%.
NetEase Q3 Earnings Overview
NetEase came short of analyst expectations in its third quarter earnings report after the Hong Kong close. Lofty estimates came into conflict with a lack of new hit titles and an expensive overseas expansion.
- Revenue increased by +8.20% to RMB 28.4B ($4B) from RMB 26.2B and versus analyst expectations of RMB 29.2B.
- Adjusted Net Income increased to RMB 9.5B ($1.3B) from RMB 7.5B and versus analyst expectations RMB 9.5B.
- Adjusted EPS increased to RMB 14.73 ($2.07) from RMB 11.63 and versus analyst expectations RMB 14.76.
- The board of directors approved a dividend of US$0.114 per share (US$0.57 per ADS) for the third quarter of 2025 to holders of ordinary shares and holders of American Depositary Shares (ADSs) as of the close of business on December 5, 2025.
- As of September 30, 2025, approximately 22.1 million ADSs had been repurchased under this program for a total cost of US $2.0 billion.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 0% |
| Hang Seng Tech | HSTECH Index | -0.6% |
| Hong Kong Turnover | HKTurn Index | 15.9% |
| Hong Kong Short Sale Turnover | HKSST Index | 40.4% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 24% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 2,042.38 |
| China (Shanghai) | SHCOMP Index | -0.4% |
| China (Shenzhen) | SZCOMP Index | -0.8% |
| China (STAR Board) | Star50 Index | -1.2% |
| Mainland Turnover | .chturn Index | -1% |
| 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 | 2.6% |
| India | SENSEX Index | 0.5% |
| Indonesia | JCI Index | 0.2% |
| Malaysia | FBMKLCI Index | -0.2% |
| Pakistan | KSE100 Index | 0.1% |
| Philippines | PCOMP Index | 2% |
| South Korea | KOSPI Index | 1.9% |
| Taiwan | TWSE Index | 3.2% |
| Thailand | SET Index | 0.8% |
| Singapore | STI Index | 0.1% |
| Australia | AS51 Index | 1.2% |
| Vietnam | VNINDEX Index | 0.4% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume as % of 1-Year Average | 100 | 102 |
| Advancing Stocks | 239 | 1385 |
| Declining Stocks | 235 | 3612 |
| Outperforming Factors | Buybacks, Value, Liquidity | Value, Dividend Yield, Low Volatility |
| Underperforming Factors | Momentum, Dividend Yield, EPS Revisions | Liquidity, Growth, Buyback |
| Top Sectors | Real Estate, Healthcare, Financials | Real Estate, Financials |
| Bottom Sectors | Tech, Energy, Discretionary | Energy, Industrials, Materials |
| Top Subsectors | Construction Materials, Household Appliances, Consumer Staples Distribution | Building Materials, Household Products, Gas |
| Bottom Subsectors | Electrical Equipment, REITs, Consumer Durables/Apparel | Office Supplies, Daily Chemicals, Energy Equipment |
| Southbound Connect Buys | Alibaba, Xpeng, Xiaomi | N/A |
| Southbound Connect Sells | Xiaomi, Pop Mart, Ganfeng Lithium | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 151 | -0.18 |
| Communication Services | 9 | -0.14 |
| Consumer Discretionary | 28 | -0.87 |
| Consumer Staples | 13 | 0.05 |
| Energy | 7 | -1 |
| Financials | 23 | 0.8 |
| Health Care | 13 | 1.12 |
| Industrials | 20 | -0.16 |
| Information Technology | 10 | -1.89 |
| Materials | 10 | -0.14 |
| Real Estate | 6 | 3 |
| Utilities | 12 | 0.69 |
| Mainland China Listed | 404 | -0.59 |
| Communication Services | 6 | -0.19 |
| Consumer Discretionary | 31 | -0.85 |
| Consumer Staples | 24 | -0.42 |
| Energy | 13 | -1.9 |
| Financials | 64 | 0.25 |
| Health Care | 31 | -0.78 |
| Industrials | 64 | -1.07 |
| Information Technology | 91 | -0.88 |
| Materials | 58 | -0.98 |
| Real Estate | 6 | 1.08 |
| Utilities | 16 | -0.22 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -0.2 |
| Alibaba HK | 9988 HK Equity | -1 |
| JD.com HK | 9618 HK Equity | 0 |
| NetEase HK | 9999 HK Equity | -1.4 |
| Yum China HK | 9987 HK Equity | 1.3 |
| Baozun HK | 9991 HK Equity | 0.3 |
| Baidu HK | 9888 HK Equity | 2.4 |
| Autohome HK | 2518 HK Equity | 0.3 |
| Bilibili HK | 9626 HK Equity | -2.7 |
| Trip.com HK | 9961 HK Equity | -3.6 |
| EDU HK | 9901 HK Equity | -0.2 |
| Xpeng HK | 9868 HK Equity | -4.5 |
| Weibo HK | 9898 HK Equity | -0.6 |
| Li Auto HK | 2015 HK Equity | -1.8 |
| Nio Auto HK | 9866 HK Equity | -3.2 |
| Zhihu HK | 2390 HK Equity | 2 |
| KE HK | 2423 HK Equity | 5.3 |
| Tencent Music Entertainment HK | 1698 HK Equity | 1 |
| Meituan HK | 3690 HK Equity | 0.5 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| XIAOMI CORP-CLASS B | -2.9 |
| ALIBABA GROUP HOLDING LTD | -1 |
| TENCENT HOLDINGS LTD | -0.2 |
| CONTEMPORARY AMPEREX TECHN-H | -5.7 |
| SEMICONDUCTOR MANUFACTURI-H | 0.7 |
| POP MART INTERNATIONAL GROUP | -2.5 |
| KUAISHOU TECHNOLOGY | 2.3 |
| XPENG INC - CLASS A SHARES | -4.5 |
| HUA HONG SEMICONDUCTOR LTD-H | -3 |
| BYD CO LTD-H | -0.9 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ZHONGJI INNOLIGHT CO LTD-A | 0.7 |
| EOPTOLINK TECHNOLOGY INC L-A | 1.7 |
| CONTEMPORARY AMPEREX TECHN-A | -3 |
| SUNGROW POWER SUPPLY CO LT-A | 0.5 |
| BEIJING TEAMSUN TECHNOLOGY-A | 3 |
| FOXCONN INDUSTRIAL INTERNE-A | 1.4 |
| ADDSINO CO LTD -A | 10 |
| TIANQI LITHIUM CORP-A | -2 |
| SHANNON SEMICONDUCTOR TECH-A | -9.6 |
| GUANGZHOU TINCI MATERIALS -A | -1.2 |
Last Night’s Exchange Rates, Prices, & Yields
- CNY per USD 7.11 versus 7.10 yesterday
- CNY per EUR 8.20 versus 8.23 yesterday
- Yield on 10-Year Government Bond 1.81% versus 1.81% yesterday
- Yield on 10-Year China Development Bank Bond 1.88% versus 1.88% yesterday
