KE Holdings’ Q3 Hints At Real Estate Rebound, Week in Review
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Week in Review
- Asian equities were mixed for the week as Korea and Pakistan outperformed while Hong Kong and Mainland China underperformed.
- It was a busy week for internet earnings, as we had Q3 earnings releases from Trip.com, which beat expectations, Kuaishou, which beat expectations, fintech Qifu Technology, which beat, and PDD, which missed, among others.
- China's Ministry of Industry and Information Technology (MIIT) encouraged solar panel manufacturers to cut excess after the Ministry of Finance (MOF) reduced the tax rebate for exports of solar panels, moves to lower other countries' trade deficits with China in preparation for potential trade negotiations with the US, especially with an incoming Trump Administration, European Union members, and Brazil.
- Alibaba had some interesting corporate news this week as the company announced it will be merging its international and domestic E-Commerce businesses into one unit and issuing more bonds, denominated in both USD and CNY, to fund both share repurchases and investment.
- Join Xiabing Su as she explores the China 2024 Import Expo in our latest video.
Key News
Asian equity markets were mixed overnight on the perception of heightened geopolitical risks in Eastern Europe and the Middle East, as well as US dollar strength. China markets were not spared as Mainland China bared the brunt of the downdraft while Hong Kong held up slightly better.
Online real estate platform KE Holdings reported Q3 earnings overnight. The company's revenue missed slightly while its net profit beat estimates. The company reported Q3 revenue of RMB 22.59 billion earnings per share (EPS) of RMB 1.53. New home transactions jumped +18% year-over-year (YoY) in the third quarter, which is positive for China's real estate sector. The platform had been focusing on its home decoration services recently amid the slump in the market. So, to see profit increase alongside new home transactions is a truly positive sign for the market overall.
Alibaba announced yesterday that it would be combining its domestic and international E-Commerce units into one. This is an interesting move that reverses one component of the restructuring the company carried out last year. International commerce is growing faster than domestic due to the company's aggressive expansion into new markets and its deployment of one of the most advanced AI sourcing bots. This could also be a motivation, i.e. making sure analysts do not miss the stellar growth in international digital commerce (AIDC).
Regarding the move, Alibaba's CEO Eddie Wu said: "The business model of e-commerce both in China and globally has evolved into the next phase where integrated capabilities in global supply chains, fulfillment and the ability to provide services to consumers will dictate competitive success. The Alibaba E-commerce Business Group will integrate all our e-commerce resources and harness core capabilities accumulated over the years to satisfy the needs of consumers in China and worldwide.”
Mainland investors bought a net $328 million worth of Hong Kong-listed stocks and ETFs overnight via Southbound Stock Connect. This is the seventh straight session of net buying. Mainland investors continued to buy dips in Hong Kong. What do they know? Perhaps they are optimistic about Trump making another trade deal with China.
The Hang Seng and Hang Seng Tech indexes both closed lower by -1.89% and -2.57%, respectively, on volume that increased +32% from yesterday. The top-performing sectors were Information Technology, which gained +0.33%, Energy, which fell -1.67%, and Utilities, which fell -1.71%. Meanwhile, the worst-performing sectors were Real Estate, which fell -3.81%, Materials, which fell -3.03%, and Consumer Discretionary, which fell -2.84%.
Shanghai, Shenzhen, and the STAR Board all closed lower by -3.06%, -3.54%, and -4.16%, respectively, on volume that increased by +11% from yesterday. The top-performing sectors were Utilities, which fell -2.37%, Consumer Discretionary, which fell -2.67%, and Energy, which fell -2.75%. Meanwhile, the worst-performing sectors were Health Care, which fell -3.78%, Information Technology, which fell -3.75%, and Financials, which fell -3.47%.
Last Night's Performance
| Country/Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | -1.9% |
| Hang Seng Tech | HSTECH Index | -2.6% |
| Hong Kong Turnover | HKTurn Index | 32.5% |
| HK Short Sale Turnover | HKSST Index | 16.9% |
| Short Turnover as a % of HK Turnovr | N/A | 17.5% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 179.4 |
| China (Shanghai) | SHCOMP Index | -3.1% |
| China (Shenzhen) | SZCOMP Index | -3.5% |
| China (STAR Board) | Star50 Index | -4.2% |
| Mainland Turnover | .chturn Index | 11.1% |
| Nouthbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Not Available |
| Jing Daily China Global Luxury Index | CHINALUX Index | -0.3% |
| Japan | NKY Index | 0.7% |
| India | SENSEX Index | 2.5% |
| Indonesia | JCI Index | 0.8% |
| Malaysia | FBMKLCI Index | 0.1% |
| Pakistan | KSE100 Index | 0.6% |
| Philippines | PCOMP Index | -1.2% |
| South Korea | KOSPI Index | 0.8% |
| Taiwan | TWSE Index | 1.5% |
| Thailand | SET Index | 0.4% |
| Singapore | STI Index | 0.2% |
| Australia | AS51 Index | 0.9% |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 154 | -2.31 |
| Communication Services | 9 | -2.1 |
| Consumer Discretionary | 29 | -2.84 |
| Consumer Staples | 13 | -1.86 |
| Energy | 7 | -1.67 |
| Financials | 24 | -2.41 |
| Health Care | 14 | -2.67 |
| Industrials | 18 | -2.73 |
| Information Technology | 11 | 0.34 |
| Materials | 11 | -3.03 |
| Real Estate | 6 | -3.81 |
| Utilities | 12 | -1.71 |
| Mainland China Listed | 487 | -3.21 |
| Communication Services | 13 | -2.79 |
| Consumer Discretionary | 41 | -2.66 |
| Consumer Staples | 32 | -3.08 |
| Energy | 17 | -2.74 |
| Financials | 68 | -3.46 |
| Health Care | 45 | -3.77 |
| Industrials | 74 | -2.88 |
| Information Technology | 93 | -3.74 |
| Materials | 80 | -3.13 |
| Real Estate | 7 | -3.31 |
| Utilities | 17 | -2.36 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -1.7 |
| Alibaba HK | 9988 HK Equity | -4.4 |
| JD.com HK | 9618 HK Equity | -0.3 |
| NetEase HK | 9999 HK Equity | -0.3 |
| Yum China HK | 9987 HK Equity | -4.6 |
| Baozun HK | 9991 HK Equity | -14 |
| Baidu HK | 9888 HK Equity | -8.6 |
| Autohome HK | 2518 HK Equity | -1.3 |
| Bilibili HK | 9626 HK Equity | -3.5 |
| Trip.com HK | 9961 HK Equity | -0.3 |
| EDU HK | 9901 HK Equity | -0.7 |
| Xpeng HK | 9868 HK Equity | -4.5 |
| Weibo HK | 9898 HK Equity | -2.8 |
| Li Auto HK | 2015 HK Equity | -3.6 |
| Nio Auto HK | 9866 HK Equity | -0.7 |
| Zhihu HK | 2390 HK Equity | -1.8 |
| KE HK | 2423 HK Equity | -2.1 |
| Tencent Music Entertainment HK | 1698 HK Equity | -3 |
| Meituan HK | 3690 HK Equity | -3.2 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ALIBABA GROUP HOLDING LTD | -4.4 |
| XIAOMI CORP-CLASS B | 1.4 |
| TENCENT HOLDINGS LTD | -1.7 |
| MEITUAN-CLASS B | -3.2 |
| SEMICONDUCTOR MANUFACTURING | -6.7 |
| HONG KONG EXCHANGES & CLEAR | -4.2 |
| PING AN INSURANCE GROUP CO-H | -3.1 |
| JD.COM INC-CLASS A | -0.3 |
| AIA GROUP LTD | -0.7 |
| BAIDU INC-CLASS A | -8.6 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| EAST MONEY INFORMATION CO-A | -5.4 |
| 360 SECURITY TECHNOLOGY IN-A | 5.8 |
| CITIC SECURITIES CO-A | -4.9 |
| CHINA GREATWALL TECHNOLOGY-A | -6.5 |
| IFLYTEK CO LTD - A | -2.3 |
| HITHINK ROYALFLUSH INFORMA-A | -4.6 |
| SHANGHAI ELECTRIC GRP CO L-A | -2.3 |
| CONTEMPORARY AMPEREX TECHN-A | -3.4 |
| OFILM GROUP CO LTD-A | -6.8 |
| PING AN INSURANCE GROUP CO-A | -4.4 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 7.25 versus 7.24 yesterday
- CNY per EUR 7.55 versus 7.59 yesterday
- Yield on 10-Year Government Bond 2.08% versus 2.08% yesterday
- Yield on 10-Year China Development Bank Bond 2.15% versus 2.15% yesterday
- Copper Price -0.20%
- Steel Price +0.48%
