Q1 Earnings Season Begins
6 Min. Read Time
% changes are year-over-year unless otherwise indicated
BYD Q1 Earnings Overview
- Revenue -11.82% to RMB 150 billion
- Net Profit -55% to RMB 4.09 billion
- Earnings per Share (EPS) -56% to RMB 0.45
Mindray Q1 Earnings Overview
- Revenue +1.39% to RMB 8.35 billion
- Net Profit -7.78% to RMB 0.40 billion
Foxconn Q1 Earnings Overview
- Revenue +56.52%
- Cloud Computing Revenue +100%
- Net Profit +102.55% to RMB 10.60 billion
China Merchants Bank Earnings Overview
- Revenue +3.81% to RMB 86.94 billion
- Net Profit +1.52% to RMB 37.85 billion
Key News
Asian equities were largely lower, as Vietnam’s +1.22% gain was an outlier as the US dollar gained against most local currencies.
President Xi and the Central Committee of the Politburo, which is officially titled the "Political Bureau of the Communist Party of China (CPC)", met today to discuss the economy. During the meeting, they acknowledged that China's economy “faces difficulties and challenges” and that “greater efforts and more concrete measures" are necessary to "bolster economic work.” In addition to self-reliance in science and technology and the "AI+" Initiative, they said they need to “implement a more proactive fiscal policy and apply an appropriately accommodative monetary policy in a targeted and effective way, continuously expand domestic demand”. Highlights included “more efforts to tap domestic demand potential”, commitments to “stabilize the property market”, and resolve to “boost confidence in capital markets”.
The only issue is, like the old Wendy’s commercials, investors are still asking: "Where’s the beef?”. There has been lots of talk and very little action since the September 2024 real estate and capital markets stimulus. Could we see such a policy bazooka pointed at domestic consumption? Yes, but the question remains on the timing of such a move. It could happen tomorro, in theory. But, it also may not happen until later this year.
One factor in today’s trading was the fact that Hong Kong will be closed on Friday for China's Labor Day holiday. Meanwhile, Mainland China and Southbound Stock Connect will be closed from Friday until Wednesday. The lack of catalysts in advance of a long weekend led to a disappointing day in both markets, as value stocks, including oil & gas and coal, outperformed in both markets. Meanwhile, yesterday’s technology hardware and semiconductor winners were hit with profit taking.
China National Offshore Oil Company (CNOOC) reported that Q1 revenue increased +8.6% year-over-year (YoY) to RMB 116 billion and that net profit increased +7.1% YoY to RMB 39.1 billion. Shares jumped +1.90% in Hong Kong and +2.45% in Mainland China.
Battery giant CATL fell -6.88% in Hong Kong and -1.66% in Mainland China. The down move came after the company raised $5 billion by selling shares at a 7% discount. Bloomberg News noted the unusual premium of CATL’s Hong Kong shares versus its Mainland shares. It is important to note that there is no fungibility between the two share classes. So, the values of the shares are driven by the independent opinions of the Mainland’s domestic investor base and Hong Kong’s global and professional investor base.
WuXi AppTec +13.57% in Hong Kong and +10.00% in Mainland China. WuXi continued its momentum from yesterday's post-Hong Kong close Q1 financial results that beat analyst expectations. Revenue increased +28.8% YoY and net profit increased +26.7% YoY.
Shanghai Xizhi Tech, which is also known as Lightelligence, listed shares publicly for the first time in Hong Kong overnight. The IPO gained +383% after raising HKD 2.5 billion. Retail investors oversubscribed by 5,784 times to the new listing, while professional investors were 53 times oversubscribed.
Mainland investors bought the dip in Hong Kong with a healthy $1.85 billion worth of net buying via Southbound Stock Connect. Meanwhile, the Hong Kong Tracker ETF experienced a very large net inflow of $527 million from the Mainland.
Mainland China held up better than Hong Kong, as banks, brokers, telecommunications, machinery, and electric utilities, along with oil & gas and coal, all led to broader support. The Mainland-listed China equity ETFs favored by the "National Team", i.e. investment firms associated with China's sovereign wealth, exhibited above-average volumes overnight, but continue to see outflows.
Republican Senator Steve Daines will visit to Shanghai and Beijing in advance of President Trump’s China trip starting on May 1st.
JD.com will report Q1 financial results after the close in Hong Kong on May 12th. Then, Bilibili will report on May 19th, following Baidu’s report on May 18th.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | -0.9% |
| Hang Seng Tech | HSTECH Index | -2.3% |
| Hong Kong Turnover | HKTurn Index | 4.3% |
| Hong Kong Short Sale Turnover | HKSST Index | 21.2% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 18.6% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 1,854.76 |
| China (Shanghai) | SHCOMP Index | -0.2% |
| China (Shenzhen) | SZCOMP Index | -1.1% |
| China (STAR Board) | Star50 Index | -1.3% |
| Mainland Turnover | .chturn Index | -2% |
| Japan | NKY Index | -1% |
| India | SENSEX Index | -0.5% |
| Indonesia | JCI Index | -0.5% |
| Malaysia | FBMKLCI Index | 0.7% |
| Pakistan | KSE100 Index | -0.6% |
| Philippines | PCOMP Index | -0.6% |
| South Korea | KOSPI Index | 0.4% |
| Taiwan | TWSE Index | -0.2% |
| Thailand | SET Index | 0.1% |
| Singapore | STI Index | -0.1% |
| Australia | AS51 Index | -0.6% |
| Vietnam | VNINDEX Index | 1.2% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 102 | 124 |
| Advancing Stocks | 168 | 1548 |
| Declining Stocks | 343 | 3494 |
| Outperforming Factors | Low Volatility | Low Volatility, Value, Large Caps |
| Underperforming Factors | Growth, Liquidity, Momentum | Growth, Liquidity, Momentum |
| Top Sectors | Energy, Utilities | Real Estate, Energy, Healthcare |
| Bottom Sectors | Tech, Materials, Consumer Discretionary | Technology, Materials, Discretionary |
| Top Subsectors | Coal, Environmental Protection, Petroleum/Petrochemical | Coal, Heavy Machinery, Gas |
| Bottom Subsectors | Electrical Equipment, National Defense, Non Ferrous Metals | Aerospace, Education, Power Generation Equipment |
| Southbound Connect Buys | Hong Kong Tracker ETF (Massive), Hang Seng China Enterprise ETF, Xiaomi (Very Large), CIG, CNOOC, Hang Seng Tech ETF (Large) | N/A |
| Southbound Connect Sells | Alibaba, Tencent (Large), Hua Hong Semiconductor, SMIC (Moderate) | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 164 | -1.36 |
| Communication Services | 11 | -1.09 |
| Consumer Discretionary | 28 | -2.23 |
| Consumer Staples | 12 | -0.58 |
| Energy | 6 | 1.68 |
| Financials | 25 | -0.45 |
| Health Care | 16 | -0.04 |
| Industrials | 19 | -1.31 |
| Information Technology | 15 | -3.78 |
| Materials | 14 | -2.57 |
| Real Estate | 1 | -1.26 |
| Utilities | 6 | 0 |
| Mainland China Listed | 11 | -0.51 |
| Communication Services | 11 | -0.25 |
| Consumer Discretionary | 26 | -0.9 |
| Consumer Staples | 18 | 0.15 |
| Energy | 11 | 0.99 |
| Financials | 64 | 0.47 |
| Health Care | 29 | 0.94 |
| Industrials | 60 | -0.72 |
| Information Technology | 113 | -1.49 |
| Materials | 58 | -0.98 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -1 |
| Alibaba HK | 9988 HK Equity | -2.8 |
| JD.com HK | 9618 HK Equity | -1.5 |
| NetEase HK | 9999 HK Equity | -0.3 |
| Yum China HK | 9987 HK Equity | -2.7 |
| Baozun HK | 9991 HK Equity | 2.4 |
| Baidu HK | 9888 HK Equity | -1.9 |
| Autohome HK | 2518 HK Equity | 0 |
| Bilibili HK | 9626 HK Equity | -2.8 |
| Trip.com HK | 9961 HK Equity | 0.8 |
| EDU HK | 9901 HK Equity | 1.2 |
| Xpeng HK | 9868 HK Equity | -4 |
| Weibo HK | 9898 HK Equity | -0.9 |
| Li Auto HK | 2015 HK Equity | -3.9 |
| Nio Auto HK | 9866 HK Equity | -3.7 |
| Zhihu HK | 2390 HK Equity | -1.6 |
| KE HK | 2423 HK Equity | -1.1 |
| Tencent Music Entertainment HK | 1698 HK Equity | -1.6 |
| Meituan HK | 3690 HK Equity | -1.9 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TENCENT HOLDINGS LTD | -1 |
| CONTEMPORARY AMPEREX TECHN-H | -6.9 |
| ALIBABA GROUP HOLDING LTD | -2.8 |
| SHANGHAI XIZHI TECHNOLOGY -H | 383.6 |
| XIAOMI CORP-CLASS B | -3.8 |
| SEMICONDUCTOR MANUFACTURI-H | -3.2 |
| HUA HONG SEMICONDUCTOR LTD-H | -1.1 |
| CIG SHANGHAI CO LTD-H | -16.5 |
| CNOOC LTD-H | 1.9 |
| WUXI APPTEC CO LTD-H | 13.6 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ZHONGJI INNOLIGHT CO LTD-A | -3.7 |
| EOPTOLINK TECHNOLOGY INC L-A | -0.5 |
| FOXCONN INDUSTRIAL INTERNE-A | 1.4 |
| SUNGROW POWER SUPPLY CO LT-A | -1.1 |
| LUXSHARE PRECISION INDUSTR-A | -2.9 |
| CONTEMPORARY AMPEREX TECHN-A | -1.7 |
| SUZHOU DONGSHAN PRECISION-A | -1.5 |
| HENGTONG OPTIC-ELECTRIC CO-A | -4.3 |
| MONTAGE TECHNOLOGY CO LTD-A | -2.5 |
| GIGADEVICE SEMICONDUCTO-CL A | 1.3 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.84 versus 6.83 yesterday
- CNY per EUR 7.99 versus 8.01 yesterday
- Yield on 10-Year Government Bond 1.77% versus 1.77% yesterday
- Yield on 10-Year China Development Bank Bond 1.86% versus 1.86% yesterday
- Copper Price -0.75%
- Steel Price -0.63%
