Electric Vehicle Sales Roar Quietly

Key News

Asian equities had a strong start to the week, led by the AI "picks & shovels" trade winners of South Korea and Taiwan, which ripped higher, though several markets were closed, including Mainland China, which was closeed for Labor Day, Japan, which was closed for Greenery Day, and Thailand, which was closesd for Coronation Day.

Mainland China's Labor Day vacation data appeared strong, as a new record of 24.8 million people traveled by train on May 1^st, according to China State Railway Group via Reuters. Mainland media had several articles on domestic tourist sites seeing big crowds, though more clarity will be coming.

Hong Kong traders returned from the three-day holiday in good spirits, as growth stocks outperformed as the Hang Seng Index closed above the 26,000 level. It was a strong performance day, even with Southbound Stock Connect closed, which usually accounts for about 22% of Hong Kong's volume.

In addition to the rips in TSMC, SK Hynix, and Samsung, the performance of DeepSeek’s updated V4 large language model (LLM) fueled the growth rally. There were also reports of Huawei’s Ascend 950PR AI chip performance and 1/3 cost of Nvidia’s H20. Tencent gained +1.11% and was Hong Kong's most heavily traded stock by value. Meanwhile, Alibaba gained +4.52% and was cited as a significant buyer of Huawei's new chip.

Auto stocks were higher following Friday’s release of April auto sales, led by Xiaomi, which gained +6.75% following the 50% month-over-month (MoM) increase in unit sales, as well as pre-sales of its new SU7 that increased more than +70,000 in just six weeks. The new SU7 standard costs RMB 219,900 ($32,186), the Pro version costs RMB 249,900 ($36,600), and the Max version costs RMB 303,900 ($44,500), according to CNevPost.com. Li Auto gained +3,85% on sales of 34,085 units in April, an increase of +0.43% year-over-year (YoY), though down -16.97% month-over-month (MoM). Geely gained +0.52% on sales of 235,164 units. BYD gained +0.49% on unit sales that increased +6.96% MoM, though were down -15.51% YoY, including 134,000 foreign shipments. XPeng gained +2.54% on sales of 31,011 units, which is down -11.51% YoY, though represents an increase of +13.12% MoM. However, NIO fell -2.36% on sales of 29,356 units, an increase of +22.83% YoY, though a decrease of -17.2% MoM. Battery maker CATL gained +3.87% as an obvious beneficiary of strong April sales, though the company is more than auto, as it announced a partnership with Australia’s Zinfra for battery storage. The company recently sold 62.39 million Hong Kong-listed shares, which raised $5 billion to fund further global expansion.

Hong Kong was a sea of green overnight, except for oil and coal. Semiconductors had a strong day, as Hua Hong gained +6.05%. Internet stocks were granted some AI love, leading Baidu to gain +3.45%, Knowledge Atlas to gain +10.25%, Minimax to gain +12.62%, and communications equipment maker YOFC to gain +12.46%. Brokers were higher, as the Mainland-listed Zhefu Intelligent Systems has applied for an Hong Kong listing. Healthcare was also strong, except for Akeso, which fell -5.89%. All told, it was a good start to the week. Yes, knocking on wood!

April’s “private” Services purchasing managers' index (PMI) will be released tomorrow.

Last Night's Performance

Last Night's Exchange Rates, Prices, & Yields

Mainland China's currency, fixed income, and commodity markets were closed overnight.