Mainland China Lower As Countries Implement Work From Home, Week in Review
5 Min. Read Time
Week in Review
- Asian equities were mostly lower for the week, though Singapore and Hong Kong managed gains, while Mainland China and Taiwan underperformed.
- On Monday, video platform and Baidu spin-off iQiyi announced it will relist in Hong Kong, filing for an IPO with the exchange.
- On Tuesday, China's National Bureau of Statistics (NBS) released the "official" purchasing managers' indexes (PMIs) overnight, which beat expectations.
- Humanoid robotics maker UB Tech reported better-than-expected revenue growth, driven by the sale of 1,079 humanoids, while net income loss narrowed.
Friday's Key News
Virtually all of Asia, including Hong Kong, was closed for Good Friday, though Japan and South Korea posted positive days, while Mainland China was lower. Volumes were light, while the US dollar was weaker, as several south east Asian countries looked to curtail oil demand by implementing mandatory work-from-home policies.
It was a quiet night, though China’s private survey March Services purchasing managers' index (PMI), which is focused on smaller and non-state-owned companies and is conducted by S&P, came in at 52.1 versus expectations of 53.6 and February’s 56.7. The month-over-month gauge indicates growth, albeit at a slower pace. Remember, both “official” PMIs increased month-over-month, though high oil prices on China’s largest Asian trade partners is a concern and explains the lack of a positive reaction. Yes, China is well-prepared for the oil shock due to significant inventories and insulated due to the fact that electricity production is nearly entirely from domestic renewables and coal, though it is part of the global economy that is facing a headwind.
Mainland China was lower on light volumes for a risk-off day. Technology hardware and semiconductors were among the few positive subsectors, led by Mainland China’s most heavily traded stock by value Zhongji Innolight, which gained +4.21% following their Hong Kong IPO announcement yesterday, fiber optics company YOFC gained +6.02%, and semiconductor names, including Moore Threads, which gained +4.88%, and Cambricon, which gained +2.67% following Nvidia’s Marvell investment, were broadly higher. This is China's version of the AI "picks and shovels" trade.
Otherwise, the Mainland heatmap looks like Omaha beach, i.e. a blood bath. Banks were especially weak, along with several green technology names, including CATL, which fell -3.67%, and BYD, which fell -2.6%. I believe these names are the intermediate and long-term beneficiaries of countries, companies, and individuals looking to diminish their dependency on oil from the Middle East that is shipped through the Strait of Hormuz.
Sungrow fell -3.09% after Wednesday’s 2025 annual financials missed estimates to the downside. Kweichow Moutai gained +0.01% after announcing it spent RMB 1.11 billion to repurchase 794,200 shares. Zijin Mining fell -0.63% despite announcing it spent RMB 1.68 billion to repurchase 53.03 million shares in March.
The Ministry of Commerce (MoC) led nine government agencies in releasing a statement saying it will “promote the improvement of service consumption” with 64 “specific tasks and measures in six aspects”. The effort will focus on “traditional service consumption areas, such as catering and accommodation, elderly care, and childcare, culture, entertainment and tourism, and sports and health, as well as new growth areas, such as domestic services, online audio-visual, inbound consumption, and performance services.”
ByteDance, Alibaba and Xiaohongshu (Little Red Book) met with three government agencies concerning healthcare goods being sold online.
Mainland media noted Xiaomi stating consumer electronics are apt to see an increase in prices due to rising memory chip price driven by AI demand. That reminds me of the saying “the solution for high prices is high prices”. Consumers, otherwise known as voters, are taking the brunt of data centers driving electricity prices higher and now their electronics (phones, laptops, etc.) are getting more expensive. Seeing a headline that Amazon will add a surcharge due to higher oil prices. Uncle!
The Wall Street Journal had a good article titled “Under the Skin of America’s Humanoid Robots: Chinese Technology”. The article basically reminds us that Tesla’s humanoid robot efforts are dependent on China-based suppliers. The article reiterates our thesis that Chinese companies will dominate humanoid robot manufacturing, while US technology companies will dominate the AI inside, i.e. the "brain".
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Shanghai) | SHCOMP Index | -1% |
| China (Shenzhen) | SZCOMP Index | -1.5% |
| China (STAR Board) | Star50 Index | -0.5% |
| Mainland Turnover | .chturn Index | -10.2% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | Closed | 84 |
| Advancing Stocks | Closed | 774 |
| Declining Stocks | Closed | 4349 |
| Outperforming Factors | Closed | Low Volatility, Dividend Yield, Value |
| Underperforming Factors | Closed | Liquidity, Growth, Momentum |
| Top Sectors | Closed | Energy, Staples |
| Bottom Sectors | Closed | Real Estate, Tech, Communication |
| Top Subsectors | Closed | Energy Equipment, Marine, Oil/Gas |
| Bottom Subsectors | Closed | Internet, Computer Hardware, Precious Metals |
| Southbound Connect Buys | Closed | N/A |
| Southbound Connect Sells | Closed | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 164 | Closed |
| Communication Services | 11 | Closed |
| Consumer Discretionary | 28 | Closed |
| Consumer Staples | 12 | Closed |
| Energy | 6 | Closed |
| Financials | 25 | Closed |
| Health Care | 16 | Closed |
| Industrials | 19 | Closed |
| Information Technology | 15 | Closed |
| Materials | 14 | Closed |
| Real Estate | 1 | Closed |
| Utilities | 6 | Closed |
| Mainland China Listed | 11 | -0.73 |
| Communication Services | 11 | -1.47 |
| Consumer Discretionary | 26 | -1.46 |
| Consumer Staples | 18 | 0.73 |
| Energy | 11 | -0.05 |
| Financials | 64 | -0.76 |
| Health Care | 29 | -1.83 |
| Industrials | 60 | -1.71 |
| Information Technology | 113 | 0.48 |
| Materials | 58 | -0.8 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ZHONGJI INNOLIGHT CO LTD-A | 4.2 |
| EOPTOLINK TECHNOLOGY INC L-A | 1.7 |
| SUZHOU TFC OPTICAL COMMUNI-A | 3.4 |
| HENGTONG OPTIC-ELECTRIC CO-A | 8.7 |
| CONTEMPORARY AMPEREX TECHN-A | -3.7 |
| VICTORY GIANT TECHNOLOGY -A | 2.6 |
| SUNGROW POWER SUPPLY CO LT-A | -3.1 |
| CNPC CAPITAL CO LTD-A | 7.9 |
| ACCELINK TECHNOLOGIES CO -A | 7.7 |
| HGTECH CO LTD-A | 3.2 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.88 versus 6.90 yesterday
- CNY per EUR 7.94 versus 7.94 yesterday
- Yield on 10-Year Government Bond 1.82% versus 1.82% yesterday
- Yield on 10-Year China Development Bank Bond 1.95% versus 1.96% yesterday
- Copper Price 0.00%
- Steel Price -0.13%
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