Ministry of Commerce Pledges To “Vigorously Boost Consumption”, Week In Review
7 Min. Read Time
Week in Review
- Asian equities were mostly higher for the week as Korea and Vietnam outperformed, while the Philippines and Mainland China's STAR Board underperformed.
- Market regulators made multiple statements this week on reducing overcapacity in the battery industry and curbing over-competition, or "involution", in instant commerce.
- China's currency, the renminbi (CNY), notched another 52-week high against the US dollar, leading the People's Bank of China (PBOC) to increase its fixing to keep the currency stable.
- Robotics stocks were top performers this week on multiple catalysts, including a US Commerce Department push to bring advanced robotics manufacturing to the US, which some speculate will involve technology licensing deals with China-based manufacturers.
Key News
Asian equities ended a moderately higher week mixed, as South Korea outperformed, Japan underperformed, and Thailand was on holiday for the deceased King Bhumibol Adulyadej’s birthday.
Hong Kong volumes were light despite the Hang Seng rebalance today on mixed breadth (advancers vs. decliners). Nonetheless, the Hang Seng Index did close back above the 26,000 level.
Baidu gained +5.01% on rumors that the company will spin off its Kunlun AI chip business via a Hong Kong IPO. In our webinar yesterday, we mentioned Baidu could spin off of businesses. A sum of the parts analysis of Baidu creates a strong incentive for such a move, in our opinion.
Moore Threads Technology’s STAR Board IPO rose +425%, raising RMB 8 billion ($1.13 billion), making it the second largest IPO in Mainland China in 2025. The IPO was fast-tracked against the backdrop of US chip export restrictions. The Nvidia comparisons are clickbait, as Moore is not profitable compared to Nvidia’s cash flow machine.
Meituan gained +0.97% and JD.com gained +0.78% after both companies responded that they would adhere to yesterday’s statement from the State Administration of Market Regulation (SAMR) on “irrational competition” in restaurant delivery. Highly-subsidized restaurant delivery has eroded the bottom line of both companies while harming restaurants, as people opt to avoid eating out to save money. A rebound in both companies' bottom line could get their stocks out of the cellar. Alibaba, which gained +0.39%, has some exposure to the industry through to its Ele.me unit, though not nearly to the extent of JD and Meituan.
Hong Kong and Mainland-listed insurance companies had very strong sessions after the Financial Supervision Administration (FSA) of Hong Kong released a pro-business “Notice on Adjusting the Risk Factors of Insurance Company-Related Business”.
Non-ferrous metals companies, which include mining and precious metals names, had another strong day in both markets. CATL gained +1.50% in Mainland China and +1.53% in Hong Kong.
A China-based financial firm noted that nuclear fusion is marked as an area of “strategic technological breakthrough”, a statement that garnered some attention. Coincidentally, Premier Li and the State Council discussed “energy conservation and carbon reduction”. At the same time, President Macron and President Xi signed joint statements concerning nuclear energy development and climate change mitigation.
Today is the nine-year anniversary of Shenzhen-Hong Kong Stock Connect program, which has generated RMB 131 trillion in cumulative trading. Stock Connect has made our lives easier versus using RQFII quota platforms for access to Shanghai and Shenzhen-listed stocks, which we had been doing in the past. Premier Li will meet with the IMF and World Bank next week in Beijing.
Overnight, the Ministry of Commerce’s Wang Wentao was interviewed by Mainland media about the draft 15th Five-Year Plan. I’m going to skip over the “opening up” aspect of the interview as it relates to Belt & Road, lowering tariffs and giving access to foreign companies in China. Below I have clipped his answer to a question about supporting domestic consumption. The question referred to the Five-Year Plan's statement that "a strong domestic market is the strategic support for Chinese-style modernization" and pledge to "strongly boost consumption". Wang was asked to comment on the next steps in achieving this impact. Below are some snippets from his response.
- “During the 14th Five-Year Plan period, China's commodity consumption scale ranked second in the world, and service consumption maintained rapid growth. The annual contribution rate of consumption to economic growth reached about 60%...”
- “We will implement the action to improve the quality of service consumption and benefit the people, improve the '1+N' policy measures system for service consumption, implement 38 policies and measures that have been issued, and promote the formulation and promulgation of policy documents such as promoting the integrated development of railway and tourism, and high-quality development of domestic service industry.”
- “We will also promote the consumption of large-scale durable goods, pilot the reform of automobile circulation and consumption, expand automobile consumption in a full chain, and promote the upgrading and consumption of household appliances. Another key tenet of this plan is to cultivate and expand the consumption of upgraded goods, and release consumption potential in new-era goods, such as green technologies and smart devices.”
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 0.6% |
| Hang Seng Tech | HSTECH Index | 0.8% |
| Hong Kong Turnover | HKTurn Index | 17.4% |
| Hong Kong Short Sale Turnover | HKSST Index | -4.4% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 14.2% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 171.21 |
| China (Shanghai) | SHCOMP Index | 0.7% |
| China (Shenzhen) | SZCOMP Index | 1.2% |
| China (STAR Board) | Star50 Index | 0% |
| Mainland Turnover | .chturn Index | 10.5% |
| 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 | -1.1% |
| India | SENSEX Index | 0.5% |
| Indonesia | JCI Index | -0.1% |
| Malaysia | FBMKLCI Index | -0.3% |
| Pakistan | KSE100 Index | 0.4% |
| Philippines | PCOMP Index | 1% |
| South Korea | KOSPI Index | 1.8% |
| Taiwan | TWSE Index | 0.7% |
| Thailand | SET Index | -0.1% |
| Singapore | STI Index | -0.1% |
| Australia | AS51 Index | 0.2% |
| Vietnam | VNINDEX Index | 0.2% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume as % of 1-Year Average | 85 | 100 |
| Advancing Stocks | 257 | 4122 |
| Declining Stocks | 215 | 926 |
| Outperforming Factors | Liquidity, Large Caps, EPS Revision | EPS Revision, Momentum, Value |
| Underperforming Factors | Low Volatility | Low Volatility, Dividend Yield |
| Top Sectors | Materials, Financials, Tech | Materials, Industrials, Financials |
| Bottom Sectors | Utilities, Healthcare, Staples | Real Estate, Utilities, Energy |
| Top Subsectors | Non Ferrous Metals, Financial Services, National Defense | Insurance, Forest, Energy Equipment |
| Bottom Subsectors | Textiles, Utilities, Consumer Services | Gas, Marine, Banking |
| Southbound Connect Buys | Xiaomi (Very Large), Meituan (Moderate) | N/A |
| Southbound Connect Sells | Alibaba, Tencent (Large), SMIC (Small) | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 151 | 0.75 |
| Communication Services | 9 | 0.09 |
| Consumer Discretionary | 28 | 0.34 |
| Consumer Staples | 13 | -0.21 |
| Energy | 7 | 0.32 |
| Financials | 23 | 2.27 |
| Health Care | 13 | -0.29 |
| Industrials | 20 | 0.86 |
| Information Technology | 10 | 1.42 |
| Materials | 10 | 3.16 |
| Real Estate | 6 | 0.91 |
| Utilities | 12 | 0.2 |
| Mainland China Listed | 404 | 0.81 |
| Communication Services | 6 | 0.34 |
| Consumer Discretionary | 31 | 0.59 |
| Consumer Staples | 24 | 0.27 |
| Energy | 13 | -0.15 |
| Financials | 64 | 1.16 |
| Health Care | 31 | 0.38 |
| Industrials | 64 | 1.19 |
| Information Technology | 91 | 0.28 |
| Materials | 58 | 2.14 |
| Real Estate | 6 | -0.33 |
| Utilities | 16 | -0.15 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -0.3 |
| Alibaba HK | 9988 HK Equity | 0.4 |
| JD.com HK | 9618 HK Equity | 0.8 |
| NetEase HK | 9999 HK Equity | 0.4 |
| Yum China HK | 9987 HK Equity | -1.6 |
| Baozun HK | 9991 HK Equity | 0.3 |
| Baidu HK | 9888 HK Equity | 5 |
| Autohome HK | 2518 HK Equity | 0.3 |
| Bilibili HK | 9626 HK Equity | 0.6 |
| Trip.com HK | 9961 HK Equity | -0.3 |
| EDU HK | 9901 HK Equity | 2.8 |
| Xpeng HK | 9868 HK Equity | 2.3 |
| Weibo HK | 9898 HK Equity | 0.4 |
| Li Auto HK | 2015 HK Equity | 0.7 |
| Nio Auto HK | 9866 HK Equity | 2.1 |
| Zhihu HK | 2390 HK Equity | -1.3 |
| KE HK | 2423 HK Equity | 2.8 |
| Tencent Music Entertainment HK | 1698 HK Equity | 1.5 |
| Meituan HK | 3690 HK Equity | 1 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ALIBABA GROUP HOLDING LTD | 0.4 |
| XIAOMI CORP-CLASS B | 1.9 |
| TENCENT HOLDINGS LTD | -0.3 |
| PING AN INSURANCE GROUP CO-H | 6.7 |
| MEITUAN-CLASS B | 1 |
| BAIDU INC-CLASS A | 5 |
| CHINA CONSTRUCTION BANK-H | 0.8 |
| SEMICONDUCTOR MANUFACTURI-H | -0.1 |
| INNOVENT BIOLOGICS INC | -1.7 |
| CHINA LIFE INSURANCE CO-H | 5.5 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| MOORE THREADS TECHNOLOGY C-A | 425.5 |
| ZHONGJI INNOLIGHT CO LTD-A | 0.3 |
| EOPTOLINK TECHNOLOGY INC L-A | 0.9 |
| EAST MONEY INFORMATION CO-A | 4.1 |
| SUZHOU TFC OPTICAL COMMUNI-A | 6.2 |
| CAMBRICON TECHNOLOGIES-A | -1 |
| ADDSINO CO LTD -A | 10 |
| SUNGROW POWER SUPPLY CO LT-A | 2.5 |
| ZHEJIANG SANHUA INTELLIGEN-A | 0.7 |
| CONTEMPORARY AMPEREX TECHN-A | 1.5 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 7.07 versus 7.07 yesterday
- CNY per EUR 8.24 versus 8.24 yesterday
- Yield on 10-Year Government Bond 1.85% versus 1.87% yesterday
- Yield on 10-Year China Development Bank Bond 1.94% versus 1.94% yesterday
- Copper Price 0.85%
- Steel Price 0.09%
