China’s Largest Memory Chip Makers File IPOs

Key News

Asian equities were lower on light volumes, with a few markets making smaller gains, such as India, as the US dollar strengthened in advance of today’s Fed minutes release.

Hong Kong and Mainland China posted small losses on weak breadth as semiconductor and oil stocks outperformed in today’s downdraft.

Yesterday, we noted multiple "AI plus manufacturing" statements from government officials. Today, Yangtze Memory Technologies Corp. submitted its IPO application to the China Securities Regulatory Commission (CSRC), China’s SEC. Changxin Technology Group Co., Ltd. also submitted an application for a STAR Board IPO last week. Taken together, these are two of the most significant listings in recent memory.

Yangtze is China’s leading non-volatile flash memory (NAND) chipmaker, ranking it alongside SK Hynix, Samsung, Kioxia, Western Digital, and Micron. It could be worth up to RMB 2 trillion ($277 billion), according to Caixin. Meanwhile, Changxin, which could raise RMB 29.5 billion ($4.2 billion) in its STAR Board IPO, is China’s leading dynamic random access memory (DRAM) chipmaker, also dominated by SK Hynix, Samsung, and Micron, with Q1 revenues of RMB 7.427B.  

We’ll start our deep dives on both companies to get you up to speed shortly. The news lifted Hong Kong and Mainland-listed chip stocks in both markets, though Hong Kong was off more than Mainland China.

Semiconductor Manufacturing International (SMIC) gained +9.71% and was Hong Kong’s most heavily traded stock by value. Tencent fell by -1.04%, and Alibaba fell by -1.05%, despite chip unit T-Head releasing a new chip.

Bilibili’s Hong Kong-listed shares fell by -4.74% following yesterday’s Q1 results. BYD fell by -3.94% after Hungary’s government accused it of pollution, which dragged Geely down -1.24, along with other auto stocks. 

Mainland investors bought the Hong Kong dip with net purchases of $728 million worth of Hong Kong-listed stocks and ETFs. The semiconductor-heavy STAR Board gained +3.2%, while Shanghai and Shenzhen posted small losses. The 1 & 5 Year Loan Prime Rates were held as expected at 3% and 3.5%.

Last Night's Performance

Country / Index	Ticker	1-Day Change
China (Hong Kong)	HSI Index	-0.6%
Hang Seng Tech	HSTECH Index	0.3%
Hong Kong Turnover	HKTurn Index	-3.7%
Hong Kong Short Sale Turnover	HKSST Index	13.8%
Short Turnover as a % of Hong Kong Turnover	N/A	19.8%
Southbound Stock Connect Net Buy/Sell (US $ Millions)	N/A	729
China (Shanghai)	SHCOMP Index	-0.2%
China (Shenzhen)	SZCOMP Index	-0.3%
China (STAR Board)	Star50 Index	3.2%
Mainland Turnover	.chturn Index	2.1%
Japan	NKY Index	-1.2%
India	SENSEX Index	0.2%
Indonesia	JCI Index	-0.8%
Malaysia	FBMKLCI Index	-0.6%
Pakistan	KSE100 Index	1.2%
Philippines	PCOMP Index	-0.1%
South Korea	KOSPI Index	-0.9%
Taiwan	TWSE Index	-0.4%
Thailand	SET Index	0.8%
Singapore	STI Index	-0.5%
Australia	AS51 Index	-1.3%
Vietnam	VNINDEX Index	0%

Indicator	Hong Kong	Mainland China
Today's Volume % of 1-Year Average	100%	137%
Advancing Stocks	142	1516
Declining Stocks	361	3569
Outperforming Factors		Momentum, EPS Revision, Liquidity
Underperforming Factors	Growth, Value, Liquidity	Low Volatility, Value, Dividend Yield
Top Sectors	Healthcare, Tech	Tech, Real Estate, Materials
Bottom Sectors	Utilities, Communication, Discretionary	Utilities, Communication, Discretionary
Top Subsectors	Semis, Paper/Packaging, Chemical Industry	Semis, Marine, Fine Chemical
Bottom Subsectors	Auto, Consumer Staples Distribution, Media/Entertainment	Power, Telecom, Leisure Products
Southbound Connect Buys	China Mobile, SMIC (Very Large), CNOOC, Hua Hong Semi, Tencent (Moderate), Montage Tech, YOFC (Small)	N/A
Southbound Connect Sells	Gigadevice (Moderate), 51World, Alibaba (Small)	N/A

MSCI China All Shares Index	# of Stocks	Average 1-Day Change (%)
Hong Kong Listed	164	-0.75
Communication Services	11	-1.07
Consumer Discretionary	28	-1.01
Consumer Staples	12	-0.16
Energy	6	-0.09
Financials	25	-0.97
Health Care	16	0.81
Industrials	19	-0.41
Information Technology	15	0.12
Materials	14	-0.35
Real Estate	1	-0.69
Utilities	6	-1.44
Mainland China Listed	11	-0.06
Communication Services	11	-2.77
Consumer Discretionary	26	-1.5
Consumer Staples	18	-0.43
Energy	11	-0.08
Financials	64	-0.85
Health Care	29	-0.89
Industrials	60	-0.07
Information Technology	113	1.2
Materials	58	0.04

US & Hong Kong Dually Listed	Ticker	1-Day Change (%)
Tencent HK	700 HK Equity	-1
Alibaba HK	9988 HK Equity	-1.1
JD.com HK	9618 HK Equity	1.5
NetEase HK	9999 HK Equity	1.2
Yum China HK	9987 HK Equity	-0.7
Baozun HK	9991 HK Equity	3.5
Baidu HK	9888 HK Equity	-1.8
Autohome HK	2518 HK Equity	-2
Bilibili HK	9626 HK Equity	-4.7
Trip.com HK	9961 HK Equity	-2.1
EDU HK	9901 HK Equity	0
Xpeng HK	9868 HK Equity	-0.9
Weibo HK	9898 HK Equity	-1
Li Auto HK	2015 HK Equity	-0.8
Nio Auto HK	9866 HK Equity	-2.7
Zhihu HK	2390 HK Equity	-1.1
KE HK	2423 HK Equity	0.7
Tencent Music Entertainment HK	1698 HK Equity	0.2
Meituan HK	3690 HK Equity	-0.2

Hong Kong's Most Heavily Traded by Value	1-Day Change (%)
SEMICONDUCTOR MANUFACTURI-H	9.7
ALIBABA GROUP HOLDING LTD	-1.1
TENCENT HOLDINGS LTD	-1
HUA HONG SEMICONDUCTOR LTD-H	13.9
XIAOMI CORP-CLASS B	-1.6
ZIJIN MINING GROUP CO LTD-H	-2
BYD CO LTD-H	-3.9
CNOOC LTD-H	0.9
MONTAGE TECHNOLOGY CO LTD-H	5.5
CHINA LIFE INSURANCE CO-H	-1.7

Shanghai and Shenzhen's Most Heavily Traded by Value	1-Day Change (%)
SEMICONDUCTOR MANUFACTURIN-A	12.6
GIGADEVICE SEMICONDUCTO-CL A	10
CAMBRICON TECHNOLOGIES-A	3.3
ZHONGJI INNOLIGHT CO LTD-A	0.7
HGTECH CO LTD-A	3.2
SUNGROW POWER SUPPLY CO LT-A	6.2
MONTAGE TECHNOLOGY CO LTD-A	4.1
EOPTOLINK TECHNOLOGY INC L-A	2.7
JCET GROUP CO LTD-A	8.9
ACCELINK TECHNOLOGIES CO -A	2.4

Last Night's Exchange Rates, Prices, & Yields

• CNY per USD 6.80 versus 6.80 yesterday
• CNY per EUR 7.88 versus 7.91 yesterday
• Yield on 10-Year Government Bond 1.74% versus 1.73% yesterday
• Yield on 10-Year China Development Bank Bond 1.82% versus 1.82% yesterday
• Copper Price -0.82%
• Steel Price -0.25%