AI “Picks & Shovels” Outperform
5 Min. Read Time
Key News
Asian equities were largely higher on a weaker US dollar, led by the AI "picks & shovels" trade in Korea and Taiwan, which are posting exceedingly strong month-to-date returns. Thailand also had a good day.
The AI "picks & shovels" trade also applied to Hong Kong and Mainland China overnight. Semiconductors and technology hardware stocks had a good day in both markets, but almost nothing else did, except for oil & gas. The chip-heavy STAR Board gained +3.76% overnight versus the value-heavy Shanghai Composite, which only managed a +0.16% gain, and the Hang Seng Index, which fell -0.2%. DeepSeek’s V4 launch likely contributed positively to chip stocks, though competitive pricing weighed on the recently-listed large language model (LLM) providers Minimax, which fell -3.54%, and Knowledge Atlas, which fell -2.19%.
The National Development & Reform Commission (NDRC) is reportedly not approving Meta’s acquisition of “Singapore-based" agentic AI platform Manus. It is a complicated issue, making it easier to say "no". I suppose the proposed acquisition could be a topic at the upcoming Trump-Xi meeting.
Tencent fell -3.00% overnight and was Hong Kong’s most heavily traded stock by value, on volume that was 2X the 1-year average, though the move was driven by no news. Alibaba fell -1.21% on light volumes, as the company announced plans to spin off real estate holdings via a Shenzhen-listed real estate investment trust (REIT). Alibaba also has a small ownership stake in mobile payment company XTransfer, which also filed for a Hong Kong IPO.
BYD gained +4.74%, following the Beijing Auto Show. Biotech contract research organization WuXi AppTec gained +1.86%, after reporting Q1 net income increased +26.68% year-over-year (YoY) to RMB 4.6 billion. Battery maker CATL fell -2.81% in Hong Kong and -2.25% in Mainland China, on the company’s upcoming private placement.
Mainland investors sold a net -$522 million worth of Hong Kong-listed stocks and ETFs via Southbound Stock Connect. The Hong Kong Tracker ETF experienced a very large outflow overnight, likely driven by Mainland selling.
Zhongji Innolight fell -3.38% after last week’s disappointing financial results. The optical communications equipment provider was clearly left out of the strong bid on hardware stocks today.
The National Energy Administration (NEA) of China reported the number of individual electric vehicle (EV) charging stations increased +46.9% YoY to 21.48 million.
China reported that Industrial Profits increased +15.8% YoY in March and +15.5% YoY for the first three months of the year.
PDD Holdings is reportedly creating its own products versus selling only third party products, similar to Amazon Basics.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | -0.2% |
| Hang Seng Tech | HSTECH Index | 0.8% |
| Hong Kong Turnover | HKTurn Index | 6.3% |
| Hong Kong Short Sale Turnover | HKSST Index | -8.7% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 16% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | -522.61 |
| China (Shanghai) | SHCOMP Index | 0.2% |
| China (Shenzhen) | SZCOMP Index | 0.5% |
| China (STAR Board) | Star50 Index | 3.8% |
| Mainland Turnover | .chturn Index | -1.8% |
| Japan | NKY Index | 1.4% |
| India | SENSEX Index | 0.8% |
| Indonesia | JCI Index | -0.3% |
| Malaysia | FBMKLCI Index | -0.2% |
| Pakistan | KSE100 Index | -1.2% |
| Philippines | PCOMP Index | -0.7% |
| South Korea | KOSPI Index | 2.2% |
| Taiwan | TWSE Index | 1.8% |
| Thailand | SET Index | 1.6% |
| Singapore | STI Index | -0.6% |
| Australia | AS51 Index | -0.2% |
| Vietnam | VNINDEX Index | -0.9% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 98 | 126 |
| Advancing Stocks | 183 | 3160 |
| Declining Stocks | 319 | 1897 |
| Outperforming Factors | Liquidity, Momentum, Growth | |
| Underperforming Factors | EPS Revision, Value, Low Volatility | Low Volatility, Dividend Yield, Value |
| Top Sectors | Tech, Energy | Tech, Discretionary, Real Estate |
| Bottom Sectors | Communication, Materials, Real Estate | Consumer Staples, Industrials, Materials |
| Top Subsectors | Semiconductors, Auto, Petroleum | Semis, Daily Chemicals, Autos |
| Bottom Subsectors | Electrical Equipment, Software, Non Ferrous Metals | Liquor, Internet, Motorcycle |
| Southbound Connect Buys | SMIC (Large), CNOOC (Moderate), CIG, Hua Hong Semis (Small) | N/A |
| Southbound Connect Sells | HK Tracker ETF (Very Large), HS Tech ETF, HS China Enterprise ETF (Large), Alibaba, Tencent (Moderate), YOFC (Small) | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 164 | -0.85 |
| Communication Services | 11 | -2.1 |
| Consumer Discretionary | 28 | -0.53 |
| Consumer Staples | 12 | -0.71 |
| Energy | 6 | 0.01 |
| Financials | 25 | -0.56 |
| Health Care | 16 | -0.83 |
| Industrials | 19 | -0.76 |
| Information Technology | 15 | 1.12 |
| Materials | 14 | -1.65 |
| Real Estate | 1 | -1.05 |
| Utilities | 6 | -0.08 |
| Mainland China Listed | 11 | 0.36 |
| Communication Services | 11 | 0.06 |
| Consumer Discretionary | 26 | 1.62 |
| Consumer Staples | 18 | -2.27 |
| Energy | 11 | -0.7 |
| Financials | 64 | -0.06 |
| Health Care | 29 | -0.68 |
| Industrials | 60 | -0.77 |
| Information Technology | 113 | 2.72 |
| Materials | 58 | -0.73 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -3 |
| Alibaba HK | 9988 HK Equity | -1.2 |
| JD.com HK | 9618 HK Equity | -1.3 |
| NetEase HK | 9999 HK Equity | 1.4 |
| Yum China HK | 9987 HK Equity | -0.3 |
| Baozun HK | 9991 HK Equity | -1 |
| Baidu HK | 9888 HK Equity | 3.5 |
| Autohome HK | 2518 HK Equity | 1.9 |
| Bilibili HK | 9626 HK Equity | -1.8 |
| Trip.com HK | 9961 HK Equity | -1.3 |
| EDU HK | 9901 HK Equity | -1.9 |
| Xpeng HK | 9868 HK Equity | 0 |
| Weibo HK | 9898 HK Equity | -0.1 |
| Li Auto HK | 2015 HK Equity | -0.3 |
| Nio Auto HK | 9866 HK Equity | 2 |
| Zhihu HK | 2390 HK Equity | -2.8 |
| KE HK | 2423 HK Equity | -0.3 |
| Tencent Music Entertainment HK | 1698 HK Equity | -0.9 |
| Meituan HK | 3690 HK Equity | -0.7 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TENCENT HOLDINGS LTD | -3 |
| SEMICONDUCTOR MANUFACTURI-H | 6.1 |
| ALIBABA GROUP HOLDING LTD | -1.2 |
| HUA HONG SEMICONDUCTOR LTD-H | 6 |
| YANGTZE OPTICAL FIBRE AND-H | 7.2 |
| BYD CO LTD-H | 4.7 |
| MEITUAN-CLASS B | -0.7 |
| MINIMAX GROUP INC | -3.5 |
| XIAOMI CORP-CLASS B | -0.3 |
| CHINA MOBILE LTD-H | 0.6 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ZHONGJI INNOLIGHT CO LTD-A | -3.4 |
| EOPTOLINK TECHNOLOGY INC L-A | 0.1 |
| LUXSHARE PRECISION INDUSTR-A | 9 |
| HENGTONG OPTIC-ELECTRIC CO-A | 2.6 |
| SUZHOU DONGSHAN PRECISION-A | -0.6 |
| FOXCONN INDUSTRIAL INTERNE-A | 3.4 |
| MONTAGE TECHNOLOGY CO LTD-A | 8.9 |
| CONTEMPORARY AMPEREX TECHN-A | -2.3 |
| HYGON INFORMATION TECHNOLO-A | 4 |
| JIANGSU ZHONGTIAN TECHNOLO-A | 7.7 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.82 versus 6.83 yesterday
- CNY per EUR 8.01 versus 8.01 yesterday
- Yield on 10-Year Government Bond 1.49% versus 1.48% yesterday
- Yield on 10-Year China Development Bank Bond 1.88% versus 1.87% yesterday
- Copper Price 0.13%
- Steel Price 0.22%
