Kuaishou & Baidu Rise On AI Momentum, Week in Review
7 Min. Read Time
Week in Review
- Asian equities were mostly higher for the week as Korea and Mainland China's STAR Market outperformed, while Australia and Indonesia underperformed.
- Hardware technology and internet stocks both rose this week, as the AI trade in China appears to be broadening out beyond just the "picks & shovels", i.e. chips.
- Automakers released April new energy vehicle (NEV) sales on Monday, which revealed Xiaomi saw the largest rise in sales, up 50% year-over-year (YoY).
- A group of US senators visited China this week as President Trump confirmed that he still plans a state visit this month.
Friday's Key News
Asian equities pulled back on light volumes on flaring Middle East tensions, a stronger US dollar, and yesterday’s decline in US chip makers, though the region managed a positive week.
President Trump confirmed his China trip is still on, as media reports of US CEOs joining him increase, which we have written would happen for months. In addition to President Trump’s China trip, we will have JD.com and Tencent Music Entertainment reporting on Tuesday, and then Alibaba and Tencent reporting on Wednesday, making next week arguably the most important week for China investors in recent memory.
Hogn Kong and Mainland China listed chop stocks took the brunt of today’s pullback on profit-taking volumes, though they were lighter, indicating more of a buyer’s strike than a mass exodus, as indexes remained above support levels. Mega and large cap stocks underperformed, including CATL, which fell -2.11% in Hong Kong and -3.24% in Mainlan China. Also, Tencent fell -1.26% as Hong Kong's most heavily traded stock by value.
Kuaishou gained +9.4% and was the 2nd most heavily traded stock in Hong Kong. Shares in the video platform were snapped up by Mainland investors via Southbound Stock Connect. They purchased a net $223 million (HKD 1.75 billion), as short sellers scrambled to cover their shorts. The company’s AI video efforts are finally getting recognition.
Alibaba -1.35% broke its 10-day streak of net selling as it saw $49.7 million worth of net buying via Southbound Stock Connect.
Baidu gained +5.75%, as the China Securities Regulatory Commission (CSRC) posted the IPO filing of its Kunlun Core semiconductor unit for listing on the STAR Board, having previously filed to list Kunlun on the Hong Kong Stock Exchange via a spin-off. Kunlun Core’s revenue is expected to be between RMB 6.5 billion and RMB 8.3 billion by the end of 2026, as 2025 revenue is expected to be RMB 3.5 billion.
Trip.com fell -0.81%, though a Mainland media source noted that founder and Chairman Liang Jianzhang has increased his ownership stake to 6.5% from 5.3% over the last year. Non-ferrous metals were firmer in both markets, while technology hardware was mixed. Financials, such as banks, insurance companies, and brokers were weak in both markets, though weaker in Hong Kong.
Hong Kong-listed auto stocks were mixed, as BYD fell -0.94% and Geely gained +0.18%, despite the China Passenger Car Association announcing April retail car sales were 1.41 million units, but down -20% year-over-year (YoY), but +15% month-over-month (MoM). April's new energy vehicle (NEV) sales, i.e hybrid and fully electric vehicle, sales increased +4% MM and -5% YoY to 883,000 units. Year-to-date retail car sales declined -18% to 5.63 million, while year-to-date NEV -17% to 2.792mm. 62.8% of auto sales were NEVs in April!
The Shanghai Stock Exchange reported 2.49 million new brokerage accounts were opened in April, which is up +29% YoY, though -46% MoM from March’s 4.6 million. YTD new brokerage account openings were 14.53 million, up+54.7% YoY. To put that in perspective, according to Perplexity, Charles Schwab has 38. million active brokerage accounts total!
Filling your gas tank in China is going up as the government adjusts prices upward. According to mainland media sources “On average nationwide, the prices of 92-octane gasoline, 95-octane gasoline, and 0-grade diesel will increase by 0.25 yuan, 0.27 yuan, and 0.27 yuan per liter, respectively. Based on this calculation, filling a 50-liter tank with 92-octane gasoline will cost an additional 12.5 yuan.” RMB 12.50 = $1.84 while 50 liters = 13.21 gallons. To fill the Ahern family truckster, a Detroit SUV, has gone up quite a bit more, in comparison.
Little known fact: I love fireworks. I share this joy by hosting a neighborhood July 4th party, which requires long drive to a more libertarian state than the one I reside in. There was a horrific fireworks factory fire and explosion that killed 37 works in the province of Hunan earlier this week. My condolences!
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | -0.9% |
| Hang Seng Tech | HSTECH Index | -0.4% |
| Hong Kong Turnover | HKTurn Index | -10.5% |
| Hong Kong Short Sale Turnover | HKSST Index | 2.1% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 16.4% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 1681.78850574713 |
| China (Shanghai) | SHCOMP Index | 0% |
| China (Shenzhen) | SZCOMP Index | 0.1% |
| China (STAR Board) | Star50 Index | -2.3% |
| Mainland Turnover | .chturn Index | -3.2% |
| Japan | NKY Index | -0.2% |
| India | SENSEX Index | -0.7% |
| Indonesia | JCI Index | -2.9% |
| Malaysia | FBMKLCI Index | -0.6% |
| Pakistan | KSE100 Index | -0.9% |
| Philippines | PCOMP Index | -1.2% |
| South Korea | KOSPI Index | 0.1% |
| Taiwan | TWSE Index | -0.8% |
| Thailand | SET Index | -0.5% |
| Singapore | STI Index | -0.4% |
| Australia | AS51 Index | -1.5% |
| Vietnam | VNINDEX Index | 0.3% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 108 | 100 |
| Advancing Stocks | 216 | 3386 |
| Declining Stocks | 293 | 1655 |
| Outperforming Factors | Liquidity, Momentum, Growth | Buybacks, Growth |
| Underperforming Factors | Large Caps, Quality, Low Volatility | Large Caps, Momentum, EPS Revision |
| Top Sectors | Real Estate, Materials, Tech | Real Estate, Discretionary, Utilities |
| Bottom Sectors | Industrials, Healthcare, Energy | Industrials, Healthcare, Tech |
| Top Subsectors | Media/Entertainment, Consumer Durables/Apparel, Steel | Aerospace/Military, Packaging, Marine |
| Bottom Subsectors | Semis, Machinery, Commercial/Professional Services | Construction Machinery, Semis, Fine Chemical |
| Southbound Connect Buys | Kuaishou (Very Large), HK Tracker ETF (Large), Alibaba, Pop Mart, SMIC, Tencent (Small) | N/A |
| Southbound Connect Sells | Xiaomi (Moderate), Hua Hong Semis, YOFC (Small) | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 164 | -0.47 |
| Communication Services | 11 | -0.18 |
| Consumer Discretionary | 28 | -0.84 |
| Consumer Staples | 12 | -0.55 |
| Energy | 6 | -0.86 |
| Financials | 25 | -0.73 |
| Health Care | 16 | -1.43 |
| Industrials | 19 | -1.81 |
| Information Technology | 15 | 0.47 |
| Materials | 14 | 1.01 |
| Real Estate | 1 | 3.21 |
| Utilities | 6 | -0.28 |
| Mainland China Listed | 11 | -0.52 |
| Communication Services | 11 | -0.57 |
| Consumer Discretionary | 26 | 0.46 |
| Consumer Staples | 18 | -0.41 |
| Energy | 11 | -0.29 |
| Financials | 64 | -0.28 |
| Health Care | 29 | -0.86 |
| Industrials | 60 | -1.12 |
| Information Technology | 113 | -0.65 |
| Materials | 58 | -0.51 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -1.3 |
| Alibaba HK | 9988 HK Equity | -1.3 |
| JD.com HK | 9618 HK Equity | -0.4 |
| NetEase HK | 9999 HK Equity | -1.1 |
| Yum China HK | 9987 HK Equity | -2.4 |
| Baozun HK | 9991 HK Equity | -1.8 |
| Baidu HK | 9888 HK Equity | 5.8 |
| Autohome HK | 2518 HK Equity | -0.7 |
| Bilibili HK | 9626 HK Equity | 0.8 |
| Trip.com HK | 9961 HK Equity | -0.8 |
| EDU HK | 9901 HK Equity | -0.3 |
| Xpeng HK | 9868 HK Equity | -1.5 |
| Weibo HK | 9898 HK Equity | 0.7 |
| Li Auto HK | 2015 HK Equity | 0.1 |
| Nio Auto HK | 9866 HK Equity | -1.1 |
| Zhihu HK | 2390 HK Equity | 3.5 |
| KE HK | 2423 HK Equity | 3 |
| Tencent Music Entertainment HK | 1698 HK Equity | -1.4 |
| Meituan HK | 3690 HK Equity | -0.2 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TENCENT HOLDINGS LTD | -1.3 |
| KUAISHOU TECHNOLOGY | 9.4 |
| ALIBABA GROUP HOLDING LTD | -1.3 |
| SEMICONDUCTOR MANUFACTURI-H | -4.4 |
| HUA HONG SEMICONDUCTOR LTD-H | -7.5 |
| POP MART INTERNATIONAL GROUP | 3.6 |
| YANGTZE OPTICAL FIBRE AND-H | 5.7 |
| XIAOMI CORP-CLASS B | 1.8 |
| BAIDU INC-CLASS A | 5.8 |
| ZIJIN MINING GROUP CO LTD-H | 0.9 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| CAMBRICON TECHNOLOGIES-A | -5.6 |
| VICTORY GIANT TECHNOLOGY -A | 6.1 |
| SUZHOU DONGSHAN PRECISION-A | 0.2 |
| ZHONGJI INNOLIGHT CO LTD-A | 1 |
| EOPTOLINK TECHNOLOGY INC L-A | -2.1 |
| HYGON INFORMATION TECHNOLO-A | -5.4 |
| CONTEMPORARY AMPEREX TECHN-A | -3.2 |
| CHINA GREATWALL TECHNOLOGY-A | -3.7 |
| LUXSHARE PRECISION INDUSTR-A | 2.5 |
| GIGADEVICE SEMICONDUCTO-CL A | -4.6 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.80 versus 6.80 yesterday
- CNY per EUR 8.00 versus 8.01 yesterday
- Yield on 10-Year Government Bond 1.76% versus 1.76% yesterday
- Yield on 10-Year China Development Bank Bond 1.84% versus 1.85% yesterday
- Copper Price 0.62%
- Steel Price 0.31%
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