Growth Rebounds On Jensen’s Jab
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Key News
Asian equities rebounded overnight as yesterday’s AI bubble kerfuffle was short-lived.
Nvidia’s Jensen Huang said that China could win the AI race due to loose regulations and cheap energy at the Financial Times' Future of AI Summit. Huang’s comments gave a strong tailwind for Mainland China and Hong Kong-listed growth stocks. I have been advocating that investors consider China's green technology, as AI’s strong energy demand aligns with China's low electricity costs, which are driven by renewables such as solar, wind, hydro, and nuclear.
Coincidentally, yesterday on X, a Goldman Sachs Investment Research piece showed that China is currently building 29 nuclear reactors, compared to India’s six and zero in the US. China has 58 nuclear reactors in operation, accounting for approximately 5% of its electrical output. The US has 94 nuclear reactors, accounting for ~18% of its electrical output, which is higher than I would have thought.
Hong Kong had a broad rally, although volumes were a touch light, as growth stocks rebounded, led by internet stocks, semiconductors, autos, electric vehicles, EV batteries, technology hardware, and non-ferrous metals. It was a broad rally, with insurance performing well alongside machinery and coal. Mainland investors bought $704mm of Hong Kong stocks, with the Hang Seng Tech ETF, seeing strong inflow.
Alibaba rose +4.1% as the company’s booth at the World Internet Conference Expo featured Quark AI-enabled glasses and Ding Talk AI, which attaches to cell phones, allowing for 45 hours of AI-enabled phone calls, communication transcription, and analysis. Alibaba also announced a partnership with GE Healthcare on utilizing its AI in CT scanners. XtalPi rose 8% after announcing it would work with Eli Lilly on AI-driven drug development, according to Bloomberg. A Goldman Sachs report that Xiaomi’s +0.28% recent 50% increase in short interest attracted attention overnight. The company reports Q3 on November 19th, with analysts expecting 22% revenue growth YoY and adjusted net income +61% YoY.
After the Hong Kong close, BeOne Medicines (formerly Beigene) gained +1.62% after announcing Q3 financial results that beat analyst expectations, as revenue increased +40% YoY, driven by strong sales of its blood cancer drug Brunkinsa. EPS swung to profitability for the first time in three years, and guided full year 2025 revenue from $5.1 billion to $5.3 billion. After the close, Hua Hong Semiconductor gained +9.05% after reporting Q3 financial results that beat analyst expectations on revenue that increased +21% YoY, though the company missed on net income, down -45% YoY, and Q4 revenue guidance. Mainland China’s rally wasn’t as broad, though growth took the lead, as semiconductors, non-ferrous metals, autos, auto components, and pharmaceuticals all outperformed. It was a fairly quiet night otherwise!
It was high times last night for index geeks as MSCI released its pro forma for the November Semi-Annual Index Review. China’s weight will remain the same, up +0.01% to 29.7% of the Emerging Markets Index, as the 560 stocks are a little less than half of the index’s 1,196 holdings. Notable additions include Zijin Gold International, following its Hong Kong IPO, and Hua Hong Semiconductor. China’s weight is more than 2.5 times that of all of EM Europe, the Middle East, and Africa (EMEA), and 4 times that of EM Latin America. It's hard not to notice that Argentina is not part of the MSCI indices due to its historic capital controls. I wonder if that could be on Milei’s agenda.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 2.1% |
| Hang Seng Tech | HSTECH Index | 2.7% |
| Hong Kong Turnover | HKTurn Index | -1.7% |
| Hong Kong Short Sale Turnover | HKSST Index | -9.1% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 14.6% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 699.78 |
| China (Shanghai) | SHCOMP Index | 1% |
| China (Shenzhen) | SZCOMP Index | 1.2% |
| China (STAR Board) | Star50 Index | 3.3% |
| Mainland Turnover | .chturn Index | 9.9% |
| Northbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Not Available |
| Jing Daily China Global Luxury Index | CHINALUX Index | 0.3% |
| Japan | NKY Index | 1.3% |
| India | SENSEX Index | -0.2% |
| Indonesia | JCI Index | 0.2% |
| Malaysia | FBMKLCI Index | -0.2% |
| Pakistan | KSE100 Index | -0.5% |
| Philippines | PCOMP Index | 0.3% |
| South Korea | KOSPI Index | 0.6% |
| Taiwan | TWSE Index | 0.7% |
| Thailand | SET Index | 1.4% |
| Singapore | STI Index | 1.5% |
| Australia | AS51 Index | 0.3% |
| Vietnam | VNINDEX Index | -0.7% |
| Indicator | Hong Kong | Mainland |
|---|---|---|
| Today's Volume % of 1-Year Average | 97 | 121 |
| Advancing Stocks | 380 | 2816 |
| Declining Stocks | 103 | 2144 |
| Outperforming Factors | Momentum, EPS Revision, Large Caps | Momentum, EPS Revision, Liquidity |
| Underperforming Factors | ||
| Top Sectors | Materials, Discretionary, Industrials | Materials, Tech, Industrials |
| Bottom Sectors | Communication, Real Estate | |
| Top Subsectors | Semis, Machinery, Non Ferrous | Semis, Computer Hardware, Fertilizer/Pesticide |
| Bottom Subsectors | Consumer Durables/Apparel | Forest, Catering/Tourism, Cultural Media |
| Southbound Connect Buys | HS Tech ETF, Hua Hong Semi, XPeng (Large), SMIC, Xiaomi (Moderate), Tencent (Small) | |
| Southbound Connect Sells | Pop Mart (Moderate), Alibaba, Meituan (Small) |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 160 | 2.28 |
| Communication Services | 11 | 2.18 |
| Consumer Discretionary | 28 | 3 |
| Consumer Staples | 13 | 1.66 |
| Energy | 6 | 1.64 |
| Financials | 25 | 1.73 |
| Health Care | 15 | 0.8 |
| Industrials | 21 | 2.9 |
| Information Technology | 12 | 1.26 |
| Materials | 10 | 5.18 |
| Real Estate | 7 | 1.45 |
| Utilities | 12 | 1.58 |
| Mainland China Listed | 385 | 1.44 |
| Communication Services | 8 | -0.47 |
| Consumer Discretionary | 28 | 0.67 |
| Consumer Staples | 21 | 0.51 |
| Energy | 12 | 1 |
| Financials | 66 | 0.35 |
| Health Care | 33 | 0.29 |
| Industrials | 57 | 1.85 |
| Information Technology | 91 | 2.85 |
| Materials | 49 | 2.95 |
| Real Estate | 6 | -0.37 |
| Utilities | 14 | 0.8 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | 2.4 |
| Alibaba HK | 9988 HK Equity | 4.1 |
| JD.com HK | 9618 HK Equity | 3.3 |
| NetEase HK | 9999 HK Equity | 1.3 |
| Yum China HK | 9987 HK Equity | -0.6 |
| Baozun HK | 9991 HK Equity | -2.4 |
| Baidu HK | 9888 HK Equity | 1.9 |
| Autohome HK | 2518 HK Equity | 1 |
| Bilibili HK | 9626 HK Equity | 2 |
| Trip.com HK | 9961 HK Equity | 2.7 |
| EDU HK | 9901 HK Equity | -0.9 |
| Xpeng HK | 9868 HK Equity | 1.9 |
| Weibo HK | 9898 HK Equity | 1.1 |
| Li Auto HK | 2015 HK Equity | 2 |
| Nio Auto HK | 9866 HK Equity | 2.1 |
| Zhihu HK | 2390 HK Equity | -0.2 |
| KE HK | 2423 HK Equity | 1.1 |
| Tencent Music Entertainment HK | 1698 HK Equity | 1.3 |
| Meituan HK | 3690 HK Equity | 2.1 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ALIBABA GROUP HOLDING LTD | 4.1 |
| SEMICONDUCTOR MANUFACTURI-H | -0.2 |
| TENCENT HOLDINGS LTD | 2.4 |
| XIAOMI CORP-CLASS B | -0.2 |
| HUA HONG SEMICONDUCTOR LTD-H | -3.1 |
| MEITUAN-CLASS B | 2.1 |
| XPENG INC - CLASS A SHARES | 1.9 |
| POP MART INTERNATIONAL GROUP | 0 |
| PING AN INSURANCE GROUP CO-H | 3.1 |
| BYD CO LTD-H | -1.8 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| VISUAL CHINA GROUP CO LTD-A | 0.1 |
| SHANTUI CONSTRUCTION MACHI-A | 0.1 |
| SUNGROW POWER SUPPLY CO LT-A | 7.1 |
| TBEA CO LTD-A | 10 |
| CAMBRICON TECHNOLOGIES-A | 0.6 |
| ZHONGJI INNOLIGHT CO LTD-A | -0.2 |
| VICTORY GIANT TECHNOLOGY -A | 1.3 |
| ZHEJIANG SANHUA INTELLIGEN-A | -0.7 |
| EOPTOLINK TECHNOLOGY INC L-A | -0.6 |
| FOXCONN INDUSTRIAL INTERNE-A | 2.4 |
Last Night’s Exchange Rates, Prices, & Yields
- CNY per USD 7.12 versus 7.12 yesterday
- CNY per EUR 8.20 versus 8.18 yesterday
- Yield on 10-Year Government Bond 1.81% versus 1.80% yesterday
- Yield on 10-Year China Development Bank Bond 1.87% versus 1.88% yesterday
- Copper Price +0.63%
- Steel Price +0.10%
