Chip Demand Rises According To SMIC
7 Min. Read Time
Key News
Asian equities were mixed on very light volumes as Australia, Hong Kong and Singapore had half days today. China's currency, the renminbi (CNY) hit another 52-week high versus the US dollar, closing at 7.01 per USD.
Semiconductor Manufacturing International (SMIC) gained +3.12% in Hong Kong and +2.93% in Mainland China after raising prices on its 8-inch semiconductor by 10% due to increased demand and tight supplies. The news lifted Hua Hong Semiconductors by +1.64%, though Mainland-listed semiconductor stocks were mixed. The US government delaying import tariffs on China-made semiconductors to 2027 was a non-event.
Xiaomi gained +0.05% before announcing, after the close, that it had bought 3.8 million shares. Back in March, it raised $5.55 billion in a secondary share sale; since that sale, the stock is off by -26%.
Referencing the Central Economic Work Conference (CEWC) on stabilizing real estate prices, several Beijing local government agencies shortened the time period before non-Beijing residents can buy an apartment. Meanwhile, families with more than one child can now buy up to three apartments, and banks “no longer distinguish between the first and the second house in terms of interest rate”. The release alludes to further adjustments that could be made in the future. One must suspect that other cities will follow in short order. The key rationale for stabilizing housing prices is to raise consumer confidence and domestic consumption.
Mainland China grinded higher across the trading day, as the Shanghai Composite notched its sixth straight up day. Technology hardware had a very good day, as Foxconn gained +3.63%, Luxshare gained +2.14%, and Sytech gained +10%. Non-Ferrous Metals were higher, again, as metals, mining, and precious metals all advanced. It was a fairly broad advance today, except for mega-cap banks, insurance stocks, and liquor stocks.
The National Development and Reform Commission (NDRC) released the concisely titled "Encouraging Foreign Investment Industry Catalogue (2025 Edition)", expanding the industries foreign companies can invest in. Maybe this gives US companies an opportunity to partner with Chinese companies in advance of the Trump-Xi summit in April?
The PBOC’s Monetary Policy Committee held its Q4 meeting, stating it will “…continue to implement moderate loose monetary policy, increase counter-cyclical and cross-cycle regulation, better play the dual functions of the total amount and structure of monetary policy tools, strengthen coordination between monetary and fiscal policies, and promote stable economic growth and reasonable price recovery.”
Yesterday’s Wall Street Journal article titled “China’s Sprint for Tech Dominance Can’t Hide an Economy Full of Holes” made the rounds, though I would argue the article was full of holes. The main criticism was that China doesn’t have domestic consumption growth, which begs the question: Did the author not read the draft of the 15th Five-Year Plan? Or the CEWC release? Or President Xi’s article? All have emphasized expanding domestic consumption, though not one mention of these events and commitments is made in the article. The WSJ’s infatuation with China makes you wonder: why? Big government and big media need more conflict. Yes, consumption growth has slowed, but in time it can get going again to spark inflation, which is necessary.
Foreign investors have dipped their toes in China AI players, based on the performance of Hong Kong-listed large language model (LLM) and cloud computing players, including Alibaba, Tencent, and Baidu. An element of China’s AI efforts has been outside the global investors’ radar, due to the companies being listed in Mainland China rather than Hong Kong. Within China, these stocks have predominantly been listed on the STAR Market (Science and Technology). Cambricon is the largest of the STAR Board semiconductor stocks with a market cap of $80B, as semiconductors comprise 38% of the STAR 50 Index when you remove names from which US persons are prohibited by executive order. SMIC, for example, has a market capitalization of $87 billion but remains largely off-limits for global investors due to the US executive order.
We often think about the Shenzhen Exchange as the Mainland’s growth stock exchange, though the largest Shenzhen-listed semiconductor stock is Unigroup, which has a market cap of only $9.2 billion. Recent STAR Market IPOs have garnered attention due to their massive day-one rises, including semiconductor stocks Meta X with the ticker 688802, which gained +692% on its first day, and Moore Threads with the ticker 688795, which gained +425%. That is going to change in January, as AI chip stock Biren Technologies, AI company MiniMax, and Zhipu are all going to list in Hong Kong. As we mentioned, Biren’s IPO is already oversubscribed 47 times. I suspect these IPOs could help set the tone for 2026, though time will tell.
It wouldn’t be Christmas eve without last-minute shopping! My punishment is a healthy dose of road rage, impatience, and high blood pressure. On behalf of the ChinaLastNight.com team of Joe, Cole, Henry, and myself, have a Merry Christmas and a Happy Hanukkah! We’ll be taking Friday off to spend time with family and friends.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 0.2% |
| Hang Seng Tech | HSTECH Index | 0.2% |
| Hong Kong Turnover | HKTurn Index | -41.1% |
| Hong Kong Short Sale Turnover | HKSST Index | -47.2% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 13.9% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | -150.07 |
| China (Shanghai) | SHCOMP Index | 0.5% |
| China (Shenzhen) | SZCOMP Index | 1% |
| China (STAR Board) | Star50 Index | 0.9% |
| Mainland Turnover | .chturn Index | -1.1% |
| Northbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Not Available |
| Jing Daily China Global Luxury Index | CHINALUX Index | 0.5% |
| Japan | NKY Index | -0.1% |
| India | SENSEX Index | -0.1% |
| Indonesia | JCI Index | -0.5% |
| Malaysia | FBMKLCI Index | 0.1% |
| Pakistan | KSE100 Index | -0.2% |
| Philippines | PCOMP Index | 0% |
| South Korea | KOSPI Index | -0.2% |
| Taiwan | TWSE Index | 0.2% |
| Thailand | SET Index | 0.3% |
| Singapore | STI Index | -0.1% |
| Australia | AS51 Index | -0.4% |
| Vietnam | VNINDEX Index | 0.6% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume as % of 1-Year Average | 37 | 111 |
| Advancing Stocks | 203 | 3955 |
| Declining Stocks | 266 | 1006 |
| Outperforming Factors | Momentum, Liquidity, Low Volatility | Liquidity, Momentum, EPS Revision |
| Underperforming Factors | Buyback, Dividend Yield, Growth | Dividend Yield, Value, Small Cap |
| Top Sectors | Materials, Utilities, Staples | Tech, Materials, Real Estate |
| Bottom Sectors | Real Estate, Healthcare, Discretionary | Energy, Communication, Staple |
| Top Subsectors | Semis, Chemical Industry, REITs | Chemical Fiber, Aerospace/Military, Paper |
| Bottom Subsectors | Coal, Electrical Equipment, Consumer Discretion Distribution | Motorcycle, Insurance, Coal |
| Southbound Connect Buys | SMIC (Moderate), Hua Hong Semi (Small), Ganfeng Lithium, Xiaomi, YOFC (Tiny) | N/A |
| Southbound Connect Sells | China Mobile (Large), Tencent (Moderate), Alibaba (Small) | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 151 | -0.14 |
| Communication Services | 9 | 0.16 |
| Consumer Discretionary | 28 | -0.47 |
| Consumer Staples | 13 | 0.23 |
| Energy | 7 | -0.31 |
| Financials | 23 | -0.16 |
| Health Care | 13 | -0.64 |
| Industrials | 20 | -0.28 |
| Information Technology | 10 | 0.08 |
| Materials | 10 | 0.58 |
| Real Estate | 6 | -0.68 |
| Utilities | 12 | 0.5 |
| Mainland China Listed | 404 | 0.57 |
| Communication Services | 6 | -0.48 |
| Consumer Discretionary | 31 | 0.1 |
| Consumer Staples | 24 | -0.43 |
| Energy | 13 | -0.62 |
| Financials | 64 | 0.16 |
| Health Care | 31 | 0.09 |
| Industrials | 64 | 0.25 |
| Information Technology | 91 | 1.85 |
| Materials | 58 | 1.04 |
| Real Estate | 6 | 0.75 |
| Utilities | 16 | 0.35 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | 0.2 |
| Alibaba HK | 9988 HK Equity | -0.8 |
| JD.com HK | 9618 HK Equity | 0 |
| NetEase HK | 9999 HK Equity | 0.2 |
| Yum China HK | 9987 HK Equity | 0.8 |
| Baozun HK | 9991 HK Equity | 0.7 |
| Baidu HK | 9888 HK Equity | -0.3 |
| Autohome HK | 2518 HK Equity | 0.2 |
| Bilibili HK | 9626 HK Equity | -1.2 |
| Trip.com HK | 9961 HK Equity | -0.8 |
| EDU HK | 9901 HK Equity | 0.1 |
| Xpeng HK | 9868 HK Equity | -0.5 |
| Weibo HK | 9898 HK Equity | -0.5 |
| Li Auto HK | 2015 HK Equity | -0.2 |
| Nio Auto HK | 9866 HK Equity | -0.5 |
| Zhihu HK | 2390 HK Equity | -4.9 |
| KE HK | 2423 HK Equity | -2 |
| Tencent Music Entertainment HK | 1698 HK Equity | -0.7 |
| Meituan HK | 3690 HK Equity | 0 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| SEMICONDUCTOR MANUFACTURI-H | 3.1 |
| TENCENT HOLDINGS LTD | 0.2 |
| ALIBABA GROUP HOLDING LTD | -0.8 |
| CHINA MOBILE LTD-H | -0.1 |
| HUA HONG SEMICONDUCTOR LTD-H | 1.6 |
| XIAOMI CORP-CLASS B | 0.1 |
| HSBC HOLDINGS PLC | 1.2 |
| MEITUAN-CLASS B | 0 |
| PING AN INSURANCE GROUP CO-H | 0.4 |
| YANGTZE OPTICAL FIBRE AND-H | 3.1 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ZHONGJI INNOLIGHT CO LTD-A | 2.2 |
| FOXCONN INDUSTRIAL INTERNE-A | 3.6 |
| EOPTOLINK TECHNOLOGY INC L-A | -1 |
| ADDSINO CO LTD -A | 9.3 |
| VICTORY GIANT TECHNOLOGY -A | 0.4 |
| CHINA SPACESAT CO LTD -A | 10 |
| SHENZHEN ENVICOOL TECHNOLO-A | 7.1 |
| SUZHOU TFC OPTICAL COMMUNI-A | 0.4 |
| SHANNON SEMICONDUCTOR TECH-A | 8.9 |
| CHINA AEROSPACE TIMES ELEC-A | 5.4 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 7.01 versus 7.03 yesterday
- CNY per EUR 8.26 versus 8.28 yesterday
- Yield on 10-Year Government Bond 1.84% versus 1.84% yesterday
- Yield on 10-Year China Development Bank Bond 1.91% versus 1.90% yesterday
- Copper Price 0.69%
- Steel Price 0.54%
