China Approves US Soybean Producers, AI Bubble Fears Weigh On Growth Stocks, Week In Review
6 Min. Read Time
Week in Review
- Asian equities were mostly lower for the week as Indonesia and Singapore outperformed with gains, while Korea and the Philippines underperformed.
- On Wednesday, the Trump White House announced that, effective November 10th, the tariff rate on China will be reduced from 34% to 10%, and the fentanyl-responsive tariff will be lowered from 20% to 10%, with similar reductions on China's side related to US goods.
- Yum China reported Q3 financial results on Tuesday that met analyst expectations as revenue rose +4% year-over-year (YoY) to $3.2B as the company now operates 17,514 stores.
- Appliance giant Midea announced it is making a home housekeeping humanoid robot that will be available for purchase in two to three years.
- KraneShares executives meet the latest models of humanoid robots in China in our latest video above.
Key News
Asian equities ended the week with a thud as the US AI bubble talk and potentially fewer US Fed cuts on weakening US economic data led to indiscriminate profit taking in growth and technology stocks.
It is interesting that the high valuations are really a US equity phenomenon, though several sectors with very high valuations such as Mainland China-listed semiconductor stocks were off, including Semiconductor Manufacturing (SMIC), which fell -2.19%, Cambricon, which fell -3.21%, and Hygon, which fell -2.92% following Hua Hong Semiconductor’s lackluster results yesterday, as the stock fell -0.83% in Hong Kong and -1.18% in Mainland China. Profitless tech was weak, as Pony AI fell -11% after falling -9% yesterday following their Hong Kong IPO. So, today was a drawdown, though there were positives and, remember, Tencent reports Wednesday and JD.com reports on Thursday.
The General Administration of Customs announced the resumption of US soybean imports from firms CHS, Louis Dreyfus and EGT, following a March decision to cancel their import licenses due after detecting “ergot and seed-coated soybeans in imported U.S. soybeans.” The reversal is clearly a result of the Trump-Xi meeting last week, a positive development in US China relations, and a win for US farmers!
Solar stocks bucked today’s downdraft, as LONGi gained +3.03% and Tongwei gained +6.77%, after reports production will be further curtailed. The China’s government's anti-involution effort, which is meant to reduce excess capacity, on solar appears to be working as Tongwei and LONGi’s Q3 earnings per share (EPS) losses narrowed considerably from the second quarter and year-over-year (YoY). Maybe my thesis on Chinese renewable energy companies being an AI play is coming to fruition?
Alibaba fell -2.97%, despite CEO Eddie Yu’s speech at World Internet Conference on the company’s AI and cloud efforts. XPeng gained +1.68% on the strong pre-sales of the extended range X9. NIO fell -5.14%, despite announcing that 300,000 ES6 cars had been made.
Labubu doll maker Pop Mart fell -5.88% after an employee questioned the price of goods during a live streaming event. JD.com -2.29% despite announcing a fully autonomous delivery station will become operational next April.
Electric truck maker Deepway Technology, which is 37.5% owned by Baidu, gained +0.4% after an affiliate filed for a Hong Kong IPO, following yesterday’s close. Autohome gained +1.15% after beating low expectations on the big three: revenue, adjusted net income and adjusted EPS.
The Ministry of Finance released a "Report on the Implementation of China's Fiscal Policy in the First Half of 2025" that speaks to the department’s efforts to promote “active fiscal policies”, “boost consumption” and issue government bonds for consumer subsidies. The report garnered attention in China but clearly had zero effect on markets.
China’s trade data was not great, per the below. Several Mainland sources reported the data’s weakness was due to a high base effect, though in checking the data this isn’t true. The trade data is not a great sign for the global economy.
- October Exports -1.1% versus September’s 8.3% and expectations of 2.9%
- Imports 1.0% versus September’s 7.4% and expectations of 2.7%
- Trade Balance $90.0 billion versus September’s 90.4 billion and expectations of $95.8 billion
Over the weekend, October’s producer price index (PPI) and consumer price index (CPI) will be released.
Last Night’s Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | -0.9% |
| Hang Seng Tech | HSTECH Index | -1.8% |
| Hong Kong Turnover | HKTurn Index | -10.7% |
| Hong Kong Short Sale Turnover | HKSST Index | -8.3% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 15% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 960.78 |
| China (Shanghai) | SHCOMP Index | -0.3% |
| China (Shenzhen) | SZCOMP Index | -0.3% |
| China (STAR Board) | Star50 Index | -1.5% |
| Mainland Turnover | .chturn Index | -2.7% |
| 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 | -1.2% |
| India | SENSEX Index | -0.1% |
| Indonesia | JCI Index | 0.7% |
| Malaysia | FBMKLCI Index | 0% |
| Pakistan | KSE100 Index | 0.3% |
| Philippines | PCOMP Index | -1.3% |
| South Korea | KOSPI Index | -1.8% |
| Taiwan | TWSE Index | -0.9% |
| Thailand | SET Index | -0.8% |
| Singapore | STI Index | 0.2% |
| Australia | AS51 Index | -0.7% |
| Vietnam | VNINDEX Index | -2.7% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume as % of 1-Year Average | 86 | 118 |
| Advancing Stocks | 174 | 2035 |
| Declining Stocks | 307 | 2928 |
| Outperforming Factors | Dividend Yield, Low Volatility, Value | Multi-Factor Score, Dividend Yield, Value |
| Underperforming Factors | Growth, Liquidity, Momentum | Momentum, EPS Revision, Large Caps |
| Top Sectors | Materials, Energy | Materials, Energy, Industrials |
| Bottom Sectors | Tech, Discretionary, Healthcare | Tech, Communication, Discretionary |
| Top Subsectors | Chemical Industry, Construction Materials, Non Ferrous Metals | Fine Chemical, Chemical Raw Material, Petrochemical |
| Bottom Subsectors | Consumer Durables/Apparel, Media/Entertainment, Tech Hardware | Motorcycle, Software, Internet |
| Southbound Connect Buys | Xiaomi (Large), Hua Hong Semi (Moderate), SMIC, XPeng (Small) | N/A |
| Southbound Connect Sells | Tencent (Moderate), Alibaba, GCL Tech, Kuaishou, Pop Mart (Small) | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 151 | -0.72 |
| Communication Services | 9 | -0.23 |
| Consumer Discretionary | 28 | -0.35 |
| Consumer Staples | 13 | 0 |
| Energy | 7 | 0.01 |
| Financials | 23 | -0.01 |
| Health Care | 13 | -0.05 |
| Industrials | 20 | -0.01 |
| Information Technology | 10 | -0.07 |
| Materials | 10 | 0.01 |
| Real Estate | 6 | -0.01 |
| Utilities | 12 | 0 |
| Mainland China Listed | 404 | -0.14 |
| Communication Services | 6 | 0 |
| Consumer Discretionary | 31 | -0.02 |
| Consumer Staples | 24 | 0 |
| Energy | 13 | 0 |
| Financials | 64 | -0.04 |
| Health Care | 31 | -0.01 |
| Industrials | 64 | 0.01 |
| Information Technology | 91 | -0.15 |
| Materials | 58 | 0.06 |
| Real Estate | 6 | 0 |
| Utilities | 16 | 0 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -1.6 |
| Alibaba HK | 9988 HK Equity | -3 |
| JD.com HK | 9618 HK Equity | -2.3 |
| NetEase HK | 9999 HK Equity | -0.5 |
| Yum China HK | 9987 HK Equity | -0.9 |
| Baozun HK | 9991 HK Equity | 0 |
| Baidu HK | 9888 HK Equity | 0.4 |
| Autohome HK | 2518 HK Equity | 1.2 |
| Bilibili HK | 9626 HK Equity | -3.5 |
| Trip.com HK | 9961 HK Equity | -1.6 |
| EDU HK | 9901 HK Equity | -5 |
| Xpeng HK | 9868 HK Equity | 1.7 |
| Weibo HK | 9898 HK Equity | -3 |
| Li Auto HK | 2015 HK Equity | -1.8 |
| Nio Auto HK | 9866 HK Equity | -5.1 |
| Zhihu HK | 2390 HK Equity | -0.4 |
| KE HK | 2423 HK Equity | -3.3 |
| Tencent Music Entertainment HK | 1698 HK Equity | -2.6 |
| Meituan HK | 3690 HK Equity | -1.3 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ALIBABA GROUP HOLDING LTD | -3 |
| TENCENT HOLDINGS LTD | -1.6 |
| XIAOMI CORP-CLASS B | -2.8 |
| POP MART INTERNATIONAL GROUP | -5.9 |
| HUA HONG SEMICONDUCTOR LTD-H | -0.8 |
| SEMICONDUCTOR MANUFACTURI-H | -1.9 |
| XPENG INC - CLASS A SHARES | 1.7 |
| KUAISHOU TECHNOLOGY | -5.9 |
| MEITUAN-CLASS B | -1.3 |
| GCL TECHNOLOGY HOLDINGS LTD | 6.5 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TBEA CO LTD-A | 4.2 |
| SUNGROW POWER SUPPLY CO LT-A | -2.1 |
| SUZHOU TFC OPTICAL COMMUNI-A | 12.7 |
| ZHONGJI INNOLIGHT CO LTD-A | -1.4 |
| FOXCONN INDUSTRIAL INTERNE-A | -4.6 |
| EOPTOLINK TECHNOLOGY INC L-A | -1.9 |
| WEICHAI POWER CO LTD-A | 1.3 |
| ZHEJIANG SANHUA INTELLIGEN-A | -3.9 |
| GUANGZHOU TINCI MATERIALS -A | 9.3 |
| CAMBRICON TECHNOLOGIES-A | -3.2 |
Last Night’s Exchange Rates, Prices, & Yields
- CNY per USD 7.12 versus 7.12 yesterday
- CNY per EUR 8.24 versus 8.22 yesterday
- Yield on 10-Year Government Bond 1.81% versus 1.81% yesterday
- Yield on 10-Year China Development Bank Bond 1.88% versus 1.87% yesterday
- Copper Price -0.02%
- Steel Price 0.06%
