China Clean Tech Picks Up
6 Min. Read Time
Key News
Asian equities were lower due to the global risk-off environment on light volume, as Middle East peace talks ended without an agreement, followed by President Trump’s announcement that the Strait of Hormuz would be closed to all ships. The US dollar strengthened overnight, though Mainland China posted a small gain, while Thailand was closed for Songkran Festival, a traditional "New Year" celebration.
Hong Kong was off on light volumes, as buyers did not commit capital, though sellers were not overly aggressive. Hong Kong is the definition of China for professional investors globally, at 80% of the MSCI China Index by weight, while Mainland China is 16% and US listings make up 4% of the index.
Did you see the Bloomberg News article titled “China’s Clean Tech Firms Signal Windfall From Gulf Energy Shock”? Others might be noticing my thesis on China’s answers to countries, companies, and individuals wanting to insulate themselves from the Strait of Hormuz through renewables. It might explain the strong move by BYD overnight, up +4.95% in Hong Kong and +2.54% in Mainland China, though other electric vehicle ecosystem stocks were mixed in HK. Auto companies' formation of a coalition focused on securing their supply chains might have been a factor as well.
Polycrystalline silicon, a key component in solar panels, futures surged by 9% on reports of meetings between solar companies in Chengdu regarding production limits and potential price floors. Mainland solar names were mixed, though Sungrow gained +2.64% and LONGi gained +3.27%, though one would expect that global demand for solar will increase. In early July last year, anti-involution efforts were announced to curtail solar production, leading to a surge in polycrystalline silicon futures. On Friday, the futures price hit the price level from before last year’s July announcements, as they started to roll over in December, giving up all of their previous gains.
On the downside, there were headlines that battery giant CATL, which gained +0.15% in Hong Kong and +2.68% in Mainland China, will raise $5 billion by selling more shares, i.e. dilution.
There was chatter overnight that internet regulators examining train ticket sales. However, I only saw the Cyberspace Administration of China (CAC) announcement about live-streaming tipping. Ultimately, today was simply a risk-off day across the board, so it is difficult to ascertain the effects of unconfirmed regulations on the markets.
Tencent fell -2.87%, as the company’s remarkable buyback streak will end due to the one month quiet period ahead of Q1 financial results. Alibaba fell -1.83%, despite announcing one billion downloads of its Qwen large language model (LLM). Mainland China held up a bit better, as technology hardware outperformed, along with banks, oil & gas, software, defense stocks, and electronic equipment.
The Mainland-listed China equity ETFs favored by the "National Team", i.e. investment firms associated with China's sovereign wealth, had below-average volumes, though they were hit with outflows.
March's New Loans were reported on a year-to-date (YTD) basis overnight. New loans totaled RMB 8.6 trillion, rising from the RMB 5.6 trillion YTD lent through Febuary, though below expectations of RMB 9.08 trillion Aggregate Financing, also reported on a YTD basis, reached 14.83 trillion in March, rising from 9.6 trillion by February, but coming just shy of the expected RMB 15.15 trillion. Household deposits increased by RMB 7.68 trillion in the first quarter.
Premier Li met with the UAE’s Crown Prince Khalid in Beijing. Spain’s Prime Minister visited Xiaomi’s headquarters.
China’s Foreign Ministry daily press conference included a question surrounding the 55th anniversary of US-China “Ping Pong Diplomacy”. The anniversary was celebrated in Beijing with a China US sports event held with President Xi, who sent a congratulatory letter. When asked about the current US-China relationship, the spokesperson answered by saying “We look forward to strengthening exchanges between people from all walks of life in both countries, especially young people, so that the spirit of 'Ping-Pong Diplomacy' can be revitalized in the new era, jointly writing a new chapter in China-US friendship, and injecting new impetus into promoting the stable, healthy, and sustainable development of China-US relations.” With that, I’ll put the my paddle down!
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | -0.9% |
| Hang Seng Tech | HSTECH Index | -0.8% |
| Hong Kong Turnover | HKTurn Index | -15.6% |
| Hong Kong Short Sale Turnover | HKSST Index | -21.6% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 15% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 287.22 |
| China (Shanghai) | SHCOMP Index | 0.1% |
| China (Shenzhen) | SZCOMP Index | 0.5% |
| China (STAR Board) | Star50 Index | 0.8% |
| Mainland Turnover | .chturn Index | -7.5% |
| Japan | NKY Index | -0.7% |
| India | SENSEX Index | -0.9% |
| Indonesia | JCI Index | 0.6% |
| Malaysia | FBMKLCI Index | -0.6% |
| Pakistan | KSE100 Index | -4% |
| Philippines | PCOMP Index | -0.7% |
| South Korea | KOSPI Index | -0.9% |
| Taiwan | TWSE Index | 0.1% |
| Thailand | SET Index | 1.2% |
| Singapore | STI Index | -0.1% |
| Australia | AS51 Index | -0.4% |
| Vietnam | VNINDEX Index | 0.5% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 81 | 109 |
| Advancing Stocks | 125 | 2272 |
| Declining Stocks | 375 | 2731 |
| Outperforming Factors | Value | Momentum, Liquidity, EPS Revision |
| Underperforming Factors | Growth, Buyback, EPS Revision | Dividend Yield, Quality, Low Volatility |
| Top Sectors | Energy, Real Estate, Materials | Tech, Real Estate, Materials |
| Bottom Sectors | Communication, Staples, Healthcare | Communication, Healthcare, Energy |
| Top Subsectors | Auto, Paper/Packaging, Petroleum | Building Materials, Computer Hardware, Base Metals |
| Bottom Subsectors | Consumer Staples Distribution, Textiles, Healthcare Equipment | Marine, Insurance, Offic Supplies |
| Southbound Connect Buys | CNOOC, SMIC, Xiaomi (small) | N/A |
| Southbound Connect Sells | Tencent (Large), Alibaba, Deepexi Tech, YOFC (Small) | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 164 | -1.02 |
| Communication Services | 11 | -2.53 |
| Consumer Discretionary | 28 | -0.65 |
| Consumer Staples | 12 | -2.46 |
| Energy | 6 | 1.18 |
| Financials | 25 | -0.44 |
| Health Care | 16 | -1.23 |
| Industrials | 19 | -0.07 |
| Information Technology | 15 | -1.1 |
| Materials | 14 | 0.04 |
| Real Estate | 1 | 0.33 |
| Utilities | 6 | -0.33 |
| Mainland China Listed | 11 | 0.25 |
| Communication Services | 11 | -2.6 |
| Consumer Discretionary | 26 | -0.05 |
| Consumer Staples | 18 | -0.28 |
| Energy | 11 | -0.61 |
| Financials | 64 | 0.08 |
| Health Care | 29 | -0.76 |
| Industrials | 60 | 0.48 |
| Information Technology | 113 | 0.85 |
| Materials | 58 | 0.48 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -2.9 |
| Alibaba HK | 9988 HK Equity | -1.8 |
| JD.com HK | 9618 HK Equity | 0.8 |
| NetEase HK | 9999 HK Equity | -1.5 |
| Yum China HK | 9987 HK Equity | -1.4 |
| Baozun HK | 9991 HK Equity | -5.9 |
| Baidu HK | 9888 HK Equity | -1.1 |
| Autohome HK | 2518 HK Equity | -0.6 |
| Bilibili HK | 9626 HK Equity | 1.4 |
| Trip.com HK | 9961 HK Equity | -0.9 |
| EDU HK | 9901 HK Equity | -2.6 |
| Xpeng HK | 9868 HK Equity | 0.9 |
| Weibo HK | 9898 HK Equity | -1.3 |
| Li Auto HK | 2015 HK Equity | -0.7 |
| Nio Auto HK | 9866 HK Equity | 7.5 |
| Zhihu HK | 2390 HK Equity | 0.6 |
| KE HK | 2423 HK Equity | 1.1 |
| Tencent Music Entertainment HK | 1698 HK Equity | -0.3 |
| Meituan HK | 3690 HK Equity | -1.3 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TENCENT HOLDINGS LTD | -2.9 |
| ALIBABA GROUP HOLDING LTD | -1.8 |
| YANGTZE OPTICAL FIBRE AND-H | -3.4 |
| BYD CO LTD-H | 4.9 |
| DEEPEXI TECHNOLOGY CO LTD-H | 59.2 |
| XIAOMI CORP-CLASS B | -0.8 |
| POP MART INTERNATIONAL GROUP | 0.4 |
| SHENZHEN XUNCE TECHNOLOGY -H | 15.6 |
| CNOOC LTD-H | 0.5 |
| SEMICONDUCTOR MANUFACTURI-H | -1.9 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| EOPTOLINK TECHNOLOGY INC L-A | -1.9 |
| CONTEMPORARY AMPEREX TECHN-A | 2.7 |
| ZHONGJI INNOLIGHT CO LTD-A | 0.5 |
| SUZHOU DONGSHAN PRECISION-A | 2.3 |
| LUXSHARE PRECISION INDUSTR-A | 0.7 |
| HGTECH CO LTD-A | 8 |
| VICTORY GIANT TECHNOLOGY -A | 2.9 |
| SUZHOU TFC OPTICAL COMMUNI-A | -2.2 |
| SUNGROW POWER SUPPLY CO LT-A | 2.6 |
| HENGTONG OPTIC-ELECTRIC CO-A | -4.4 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.83 versus 6.83 yesterday
- CNY per EUR 7.99 versus 8.01 yesterday
- Yield on 10-Year Government Bond 1.79% versus 1.81% yesterday
- Yield on 10-Year China Development Bank Bond 1.89% versus 1.92% yesterday
- Copper Price 0.89%
- Steel Price 0.06%
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