Alibaba & Tencent Seeking DeepSeek
5 Min. Read Time
Key News
Asian equities were mixed amid Middle East concerns, as Mainland China, Taiwan, Korea, and Vietnam outperformed, while Hong Kong, Australia, and India underperformed.
Alibaba’s US listing is up today following The Information's report that DeepSeek is raising money from Tencent and Alibaba at a $20 billion valuation. The news hit after the Hong Kong close, which helped mute the overnight “foreign freakout” as professional global investors, whose definition of China is 80% Hong Kong stocks, sar on their hands and di not commit capital as they wait for clarity on the Middle East as uncertainty continues, and supply chain concerns rise.
The Hong Kong drawdown was widespread on light volumes, as Mainland investors bought the Hong Kong dip with $624 million of net buying of Hong Kong-listed stocks and ETFs via Southbound Stock Connect. Local investors held up Mainland China, focused on the Ministry of Industry and Information Technology (MIIT) press conference and Q&A with reporters on “Industrial and information technology development achieved a good start in the first quarter”.
Mainland stocks within technology hardware and semiconductors ripped on the MIIT’s emphasis on "5G + Industrial Internet” implementation, which was specifically focused on “information technology (IT), communication technology (CT), operational technology (OT), and data technology (DT)”. This was an important release, though it was interesting how it was largely ignored by non-Mainland investors as Hong Kong suffered a big widespread drawdown. The Mainland's most heavily traded stocks were all technology hardware and semiconductor names expected to be beneficiaries of this policy.
CATL fell by -5.03% in Hong Kong and by -0.97% in Mainland China after it was announced that Sinopec was behind a recent 8.5 million share sale at a 3.5% discount. Yesterday, CATL announced its new sodium battery will enter mass production in Q4 2026, along with five new batteries, including one that can be recharged in just six minutes and twenty-seven seconds.
Jiangsu Hengrui Pharmaceuticals (600276 CH, 1276 HK) fell by -0.07% in Hong Kong and by -0.56% in Mainland China, though, after the close, it reported that Q1 revenue grew by +13% to RMB 8.14B from RMB 7.21B, missing estimates of RMB 8.8B. Net income also grew by 22% to RMB 2.28B from RMB 1.87B, versus an estimate of RMB 2.33B.
New Oriental Education (EDU US) reported Q3 earnings after the Hong Kong close, as revenue grew by +19.8% to $1.417B, versus estimates of $1.36B; adjusted EPS grew by +36.5% to $0.95 from $0.70, versus estimates of $0.90. Baidu fell -2.81% and Kuiashou fell -2.24%, as both had large call option trades. Bilibili fell by -5.75%, despite a broker upgrade.
The Mainland-listed ETFs favored by the "National Team", i.e. investment firms associated with China's sovereign wealth, saw above-average volumes today, though they continue to see outflows. We cannot say for certain the National Team stepped through, but we know they have a lot of cash, having greatly reduced their positions earlier in the year. Shanghai’s Q1 GDP was up +5.9% YoY.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | -1.2% |
| Hang Seng Tech | HSTECH Index | -1.9% |
| Hong Kong Turnover | HKTurn Index | 11.3% |
| Hong Kong Short Sale Turnover | HKSST Index | 22.1% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 16.2% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 624.583397190294 |
| China (Shanghai) | SHCOMP Index | 0.5% |
| China (Shenzhen) | SZCOMP Index | 1% |
| China (STAR Board) | Star50 Index | 1.7% |
| Mainland Turnover | .chturn Index | 6.6% |
| Japan | NKY Index | 0.4% |
| India | SENSEX Index | -1% |
| Indonesia | JCI Index | -0.2% |
| Malaysia | FBMKLCI Index | -0.3% |
| Pakistan | KSE100 Index | -1% |
| Philippines | PCOMP Index | -0.5% |
| South Korea | KOSPI Index | 0.5% |
| Taiwan | TWSE Index | 0.7% |
| Thailand | SET Index | -0.3% |
| Singapore | STI Index | -0.2% |
| Australia | AS51 Index | -1.2% |
| Vietnam | VNINDEX Index | 1.3% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 89% | 127% |
| Advancing Stocks | 129 | 2515 |
| Declining Stocks | 376 | 2488 |
| Outperforming Factors | Liquidity, Momentum, Growth | |
| Underperforming Factors | Growth, Buyback, Liquidity | Low Volatility, Value, Dividend Yield |
| Top Sectors | Tech, Energy | Tech, Healthcare |
| Bottom Sectors | Communication, Discretionary, Financials | Communication, Real Estate, Utilities |
| Top Subsectors | Tech Hardware, Semis, HK Paper/Packaging | Communication Equipment, Computer Hardware, Electronic Components |
| Bottom Subsectors | Electrical Equipment, Consumer Staples Distribution, Consumer Discretionary Distribution | Marine, Telecom, Land Transportation |
| Southbound Connect Buys | CNOOC (Moderate), CIG, Hua Hong Semis, SMIC (Small) | N/A |
| Southbound Connect Sells | Alibaba, Tencent (Large) | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 164 | -1.8 |
| Communication Services | 11 | -2.88 |
| Consumer Discretionary | 28 | -2.58 |
| Consumer Staples | 12 | -1.2 |
| Energy | 6 | 0.22 |
| Financials | 25 | -1.44 |
| Health Care | 16 | -0.85 |
| Industrials | 19 | -1.05 |
| Information Technology | 15 | 0.86 |
| Materials | 14 | -1.22 |
| Real Estate | 1 | -0.2 |
| Utilities | 6 | -0.14 |
| Mainland China Listed | 11 | 0.72 |
| Communication Services | 11 | -1.34 |
| Consumer Discretionary | 26 | -0.06 |
| Consumer Staples | 18 | -0.62 |
| Energy | 11 | -0.62 |
| Financials | 64 | -0.42 |
| Health Care | 29 | 0.07 |
| Industrials | 60 | -0.2 |
| Information Technology | 113 | 3.66 |
| Materials | 58 | -0.13 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -2.9 |
| Alibaba HK | 9988 HK Equity | -3.5 |
| JD.com HK | 9618 HK Equity | -2.3 |
| NetEase HK | 9999 HK Equity | -2.9 |
| Yum China HK | 9987 HK Equity | -1.4 |
| Baozun HK | 9991 HK Equity | -1.1 |
| Baidu HK | 9888 HK Equity | -2.8 |
| Autohome HK | 2518 HK Equity | 0 |
| Bilibili HK | 9626 HK Equity | -5.8 |
| Trip.com HK | 9961 HK Equity | -1 |
| EDU HK | 9901 HK Equity | -3.6 |
| Xpeng HK | 9868 HK Equity | -2.9 |
| Weibo HK | 9898 HK Equity | -0.7 |
| Li Auto HK | 2015 HK Equity | 0.3 |
| Nio Auto HK | 9866 HK Equity | -2.5 |
| Zhihu HK | 2390 HK Equity | -2 |
| KE HK | 2423 HK Equity | -1.3 |
| Tencent Music Entertainment HK | 1698 HK Equity | -3.7 |
| Meituan HK | 3690 HK Equity | -2.5 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TENCENT HOLDINGS LTD | -2.9 |
| CONTEMPORARY AMPEREX TECHN-H | -5 |
| ALIBABA GROUP HOLDING LTD | -3.5 |
| YANGTZE OPTICAL FIBRE AND-H | 17.2 |
| SEMICONDUCTOR MANUFACTURI-H | -1.3 |
| VICTORY GIANT TECHNOLOGY H-H | 6.9 |
| CIG SHANGHAI CO LTD-H | 21.1 |
| MEITUAN-CLASS B | -2.5 |
| XIAOMI CORP-CLASS B | -1.9 |
| ZIJIN MINING GROUP CO LTD-H | -0.9 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| VISUAL CHINA GROUP CO LTD-A | 0.1 |
| SHANTUI CONSTRUCTION MACHI-A | -2.8 |
| EOPTOLINK TECHNOLOGY INC L-A | 7.6 |
| ZHONGJI INNOLIGHT CO LTD-A | 2.5 |
| FOXCONN INDUSTRIAL INTERNE-A | 8.9 |
| CONTEMPORARY AMPEREX TECHN-A | -1 |
| SUZHOU TFC OPTICAL COMMUNI-A | 6.3 |
| SHENZHEN ENVICOOL TECHNOLO-A | -4.4 |
| LUXSHARE PRECISION INDUSTR-A | 3.5 |
| VICTORY GIANT TECHNOLOGY -A | 3.6 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.82 versus 6.82 yesterday
- CNY per EUR 8.01 versus 8.01 yesterday
- Yield on 10-Year Government Bond 1.75% versus 1.75% yesterday
- Yield on 10-Year China Development Bank Bond 1.84% versus 1.84% yesterday
- Copper Price -0.34%
- Steel Price 0.76%
