Alibaba AI Chip Spin-Off Rumor Lifts Shares
5 Min. Read Time
Key News
Asian equities rebounded on talk of a Greenland pact, which dials down the probability of a US-EU trade war.
Both Hong Kong and Mainland China bounced around the room, closing with small gains on a light news day. Internet stocks with AI exposure outperformed, as Alibaba gained +0.98%, Baidu gained +4.1%, driven by its Kunlun filing and the release of the latest version of its large language model (LLM) Ernie Bot 5.0 on strong user demand, Kuaishou gained +0.38%, and Bilibili gained +3.3%. However, Tencent fell -0.83% on no news, along with Meituan, which fell -0.31%.
The Hong Kong Monetary Authority's release on green finance gave green tech a tailwind overnight, though CATL fell -2.84%. Hong Kong-listed insurance stocks had a very weak day, though they’ve been strong performers, so it's likely just profit-taking. In both Hong Kong and Mainland China, non-ferrous metals, which include precious metals and mining companies, had a down day after strong performance in recent months. Meanwhile, oil & gas stocks outperformed in both markets.
Mainland technology hardware stocks had a strong day as US tariff threats cooled, though semiconductors were mixed. Moore Threads gained +0.21% after announcing estimated 2025 revenue in the range of RMB 1.45 billion to RMB 1.52 billion, with losses decreasing to within a range of RMB 950 million from RMB 1.06 billion.
It was another high-volume day for Mainland-listed ETFs favored by the National Team. The top 5 ETFs had $11.6 billion in net outflows, bringing the one-week total to $36.6 billion.
The desire for a slow-and-steady bull market persists. PBOC Governor Pan stated that loose monetary conditions will continue, with the potential for further reductions in bank reserve requirements and interest rates. The National Development and Reform Commission (NDRC) released the proceeds, totaling RMB 93 billion, from the first round of 2026 ultra-long Treasury bonds to support industrial equipment replacement.
After the close, rumors circulated that Alibaba would spin off its AI chip unit T-Head. Similar to Baidu’s plan to spin off its AI chip unit, Kunlun, the move would be another example of a company seeking to extract value for its shareholders. Valuation estimates for Baidu’s Kunlun range from $3 billion to $11 billion. Thus far, the company has neither confirmed nor denied the rumor. It is interesting that Alibaba was a strong net buy from Mainland investors via Southbound Stock Connect both yesterday and today.
At the World Economic Forum (WEF) in Davos, Vice Premier He Lifeng stated, “We firmly support free trade” and “uphold multilateralism.” More importantly, while acknowledging the US-China relationship had experienced some “twists and turns”, he stated, “ Guided by the consensus reached at the Busan summit and four phone calls between the two heads of state, the economic and trade teams of China and the US have held five rounds of economic and trade consultations.” Trump and Xi have spoken four times, with five meetings between the trade teams, validating our belief that US-China relations can continue to improve under Trump.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 0.2% |
| Hang Seng Tech | HSTECH Index | 0.3% |
| Hong Kong Turnover | HKTurn Index | -6.2% |
| Hong Kong Short Sale Turnover | HKSST Index | -14.8% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 15% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 669.14 |
| China (Shanghai) | SHCOMP Index | 0.1% |
| China (Shenzhen) | SZCOMP Index | 0.7% |
| China (STAR Board) | Star50 Index | 0.4% |
| Mainland Turnover | .chturn Index | 3.6% |
| Northbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Not Available |
| Jing Daily China Global Luxury Index | CHINALUX Index | Error 2015 |
| Japan | NKY Index | 1.7% |
| India | SENSEX Index | 0.5% |
| Indonesia | JCI Index | -0.2% |
| Malaysia | FBMKLCI Index | 0.7% |
| Pakistan | KSE100 Index | 0.4% |
| Philippines | PCOMP Index | 1.1% |
| South Korea | KOSPI Index | 0.9% |
| Taiwan | TWSE Index | 1.6% |
| Thailand | SET Index | -0.4% |
| Singapore | STI Index | 0.4% |
| Australia | AS51 Index | 0.7% |
| Vietnam | VNINDEX Index | -0.1% |
| Indicator | Hong Kong | Mainland |
|---|---|---|
| Today's Volume % of 1-Year Average | 91 | 149 |
| Advancing Stocks | 274 | 3364 |
| Declining Stocks | 210 | 1679 |
| Outperforming Factors | Dividend Yield, Low Volatility, Growth | Gas, Aerospace, Building Materials |
| Underperforming Factors | Momentum, EPS Revision, Quality | Motorcycle, Insurance, Precious Metals |
| Top Sectors | Energy, Utilities, Discretionary | Energy, Tech, Real Estate |
| Bottom Sectors | Materials, Financials, Healthcare | Healthcare, Financials, Industrials |
| Top Subsectors | Consumer Durables/Apparel, Construction Materials, Petroleum/Petrochemical | Gas, Aerospace, Building Materials |
| Bottom Subsectors | Consumer Staples Distribution, Electrical Equipment, Non Ferrous Metals | Motorcycle, Insurance, Precious Metals |
| Southbound Connect Buys | Alibaba (Large), CNOOC, Kuiashou, Xiaomi (Moderate), Pop Mart, SMIC (Small), Hua Hong Semi (Tiny) | |
| Southbound Connect Sells | Tencent (Moderate) |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 165 | -0.11 |
| Communication Services | 11 | -0.28 |
| Consumer Discretionary | 28 | 0.75 |
| Consumer Staples | 13 | -0.48 |
| Energy | 6 | 2.34 |
| Financials | 25 | -1.15 |
| Health Care | 15 | -0.98 |
| Industrials | 21 | -0.5 |
| Information Technology | 12 | 0.08 |
| Materials | 10 | -1.42 |
| Real Estate | 7 | 0.1 |
| Utilities | 12 | 1.45 |
| Mainland China Listed | 386 | -0.14 |
| Communication Services | 8 | -0.32 |
| Consumer Discretionary | 28 | -0.68 |
| Consumer Staples | 21 | -0.66 |
| Energy | 12 | 1.36 |
| Financials | 66 | -0.71 |
| Health Care | 33 | -1.07 |
| Industrials | 57 | -0.7 |
| Information Technology | 91 | 1.08 |
| Materials | 49 | -0.07 |
| Real Estate | 6 | 0.12 |
| Utilities | 14 | -0.34 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -0.8 |
| Alibaba HK | 9988 HK Equity | 1 |
| JD.com HK | 9618 HK Equity | 1 |
| NetEase HK | 9999 HK Equity | 0.5 |
| Yum China HK | 9987 HK Equity | 1.5 |
| Baozun HK | 9991 HK Equity | 0 |
| Baidu HK | 9888 HK Equity | 4.1 |
| Autohome HK | 2518 HK Equity | 0.2 |
| Bilibili HK | 9626 HK Equity | 3.3 |
| Trip.com HK | 9961 HK Equity | -0.2 |
| EDU HK | 9901 HK Equity | 0.4 |
| Xpeng HK | 9868 HK Equity | -3 |
| Weibo HK | 9898 HK Equity | 1.1 |
| Li Auto HK | 2015 HK Equity | 4.1 |
| Nio Auto HK | 9866 HK Equity | 2.3 |
| Zhihu HK | 2390 HK Equity | 0.8 |
| KE HK | 2423 HK Equity | 0.3 |
| Tencent Music Entertainment HK | 1698 HK Equity | -0.6 |
| Meituan HK | 3690 HK Equity | -0.3 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TENCENT HOLDINGS LTD | -0.8 |
| ALIBABA GROUP HOLDING LTD | 1 |
| XIAOMI CORP-CLASS B | -0.2 |
| POP MART INTERNATIONAL GROUP | 6 |
| SEMICONDUCTOR MANUFACTURI-H | 3.7 |
| BAIDU INC-CLASS A | 4.1 |
| MEITUAN-CLASS B | -0.3 |
| PING AN INSURANCE GROUP CO-H | -2.3 |
| CHINA LIFE INSURANCE CO-H | -3.8 |
| HUA HONG SEMICONDUCTOR LTD-H | 5.2 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| VISUAL CHINA GROUP CO LTD-A | 0.9 |
| SHANTUI CONSTRUCTION MACHI-A | -1.4 |
| ZHONGJI INNOLIGHT CO LTD-A | -0.5 |
| MONTAGE TECHNOLOGY CO LTD-A | 11.9 |
| CHINA AEROSPACE TIMES ELEC-A | 2.4 |
| EOPTOLINK TECHNOLOGY INC L-A | 3.2 |
| TONGFU MICROELECTRONIC CO-A | -0.2 |
| CONTEMPORARY AMPEREX TECHN-A | 0.1 |
| HYGON INFORMATION TECHNOLO-A | 13.3 |
| SHENZHEN SUNWAY COMMUNICAT-A | -10.2 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.97 versus 6.96 yesterday
- CNY per EUR 8.15 versus 8.15 yesterday
- Yield on 10-Year Government Bond 1.84% versus 1.83% yesterday
- Yield on 10-Year China Development Bank Bond 1.96% versus 1.95% yesterday
- Copper Price +0.28%
- Steel Price +0.35%
