Q1 Financial Results Power Markets Higher
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Key News
Asian equities were largely higher as Hong Kong and Mainland China outperformed, while Vietnam underperformed. Japan was closed for Showa Day, marking the Emperor Showa's birthday, though Perplexity notes that the holiday is "officially described as a day to look back on the turbulent Shōwa period (1926–1989) and contemplate the country's future, rather than to glorify the emperor himself".
Both Hong Kong and Mainland China had strong days, marked by good breadth and decent volumes. It was funny to see Twitter/X focused on Mainland real estate price declines, though, arguably, the worst is behind us, as Tier 1 cities are seeing prices firm. Ironically, Real Estate was the best-performing sector in Hong Kong overnight!
First quarter earnings dominated trading today, as insurance stocks led markets higher, following better-than-expected results from Ping An, which gained +6.08% in Hong Kong and +3.12% in Mainland China. Yesterday, Western media headlines screamed about BYD's first quarter net income decline, which was reported after yesterday's close. Local investors focused on international growth, sending BYD's Hong Kong-listed shares higher by +4.44% and +3.86% in Mainland China. Along with BYD, NIO also helped autos, rising +8.74% after unveiling a new SUV at the Beijing auto show.
Battery maker CATL fell -0.24% in Hong Kong, but gained +4.05% in Mainland China, following yesterday's comments on the Hong Kong shares' premium to the Mainland shares due to the lack of fungibility.
The Hong Kong Exchanges & Clearing Corporation reported strong results, driven by IPOs. The exchange's results lifted brokerage stocks. Meanwhile, strong results from rare earths suppliers lifted non-ferrous metals stocks. Printed circuit board maker and AI wave rider Victory Giant gained +7.00% in Hong Kong and +6.65% in Mainland China, on strong revenue and earnings per share (EPS) growth.
Baidu fell -2.76% after Bloomberg News reported that new autonomous driving licenses will be suspended after the company's robotaxis stopped working in Wuhan. Houston, we have a problem….
Hua Hong Semiconductor fell -4.59%, along with Hong Kong and Mainlan-listed semiconductor stocks, after reports that the US Commerce Department would limit exports of certain semiconductor manufacturing equipment. Gree Electrical Appliances gained +5.28% in Mainland China, after announcing a buyback of RMB 5 billion to RMB 10 billion.
There were very few details following another Politburo meeting, with a statement focusing on "high-quality development". Mainland investors sold a net -$504 million worth of Hong Kong-listed stocks and ETFs via Southbound Stock Connect, including the Hang Seng China Enterprise ETF, whihch experienced a very large outflow. Alibaba, which gained +3.24%, and Tencent, which gained +1.14%, were also net sells. Mainland media cheered Liu Haoling becoming Vice Chairman of the China Securities Regulatory Commission (CSRC), given his positive reputation.
The Ministry of Industry and Information Technology (MIIT) announced an effort in "AI + Software" to raise the capabilities of domestic software companies. The State Administration for Market Regulation (SAMR) released "the sixth batch of typical cases in the live-streaming e-commerce sector." However, I didn't recognize any of the companies mentioned. Hopefully, we receive guidance on the potential benefits of regulation during earnings calls.
April's "official" purchasing managers indexes (PMIs) are due today.
Q1 Earnings Frorm Last Night
% changes are year-over-year (YoY) unless otherwise indicated
- ICBC Net Profit +3.31%
- Agricultural Bank of China (AgBank) Net Profit +4.52%
- Bank of Communication Net Profit +3.11%
- China Life Net Profit -32.3%
- Hong Kong Exchanges & Clearing Net Profit +27%
- Geely Auto Net Profit -27%
- TBEA Net Profit +13.4%
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 1.7% |
| Hang Seng Tech | HSTECH Index | 1.7% |
| Hong Kong Turnover | HKTurn Index | -1.5% |
| Hong Kong Short Sale Turnover | HKSST Index | -4.4% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 18% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | -504.69 |
| China (Shanghai) | SHCOMP Index | 0.7% |
| China (Shenzhen) | SZCOMP Index | 1.7% |
| China (STAR Board) | Star50 Index | 0.3% |
| Mainland Turnover | .chturn Index | 2.3% |
| Japan | NKY Index | -1% |
| India | SENSEX Index | 0.8% |
| Indonesia | JCI Index | 0.4% |
| Malaysia | FBMKLCI Index | -0.5% |
| Pakistan | KSE100 Index | -1.7% |
| Philippines | PCOMP Index | 0.7% |
| South Korea | KOSPI Index | 0.8% |
| Taiwan | TWSE Index | -0.6% |
| Thailand | SET Index | 0.8% |
| Singapore | STI Index | -0.5% |
| Australia | AS51 Index | -0.3% |
| Vietnam | VNINDEX Index | -1.2% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 100 | 126 |
| Advancing Stocks | 409 | 3823 |
| Declining Stocks | 111 | 1222 |
| Outperforming Factors | EPS Revision, Momentum, Value | Momentum, EPS Growth, Growth |
| Underperforming Factors | ||
| Top Sectors | Real Estate, Materials, Discretionary | Materials, Communication, Industrials |
| Bottom Sectors | ||
| Top Subsectors | Chemical Industry, Non Ferrous Metals, Paper/Packaging | Soft Drinks, Base Metals, Fine Chemical |
| Bottom Subsectors | Semis, Pharmaceuticals | |
| Southbound Connect Buys | CNOOC, YOFC (Small) | |
| Southbound Connect Sells | HS China Enterprise (Very Large), Tencent, HK Tracker ETF (Large), Alibaba, SMIC, Xiaomi (Small) |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 164 | 1.85 |
| Communication Services | 11 | 0.93 |
| Consumer Discretionary | 28 | 2.99 |
| Consumer Staples | 12 | 2.38 |
| Energy | 6 | 2.64 |
| Financials | 25 | 1.78 |
| Health Care | 16 | 0.11 |
| Industrials | 19 | 0.8 |
| Information Technology | 15 | 0.47 |
| Materials | 14 | 3.13 |
| Real Estate | 1 | 5.27 |
| Utilities | 6 | 0.46 |
| Mainland China Listed | 11 | 1.19 |
| Communication Services | 11 | 2.31 |
| Consumer Discretionary | 26 | 1.52 |
| Consumer Staples | 18 | 0.61 |
| Energy | 11 | 1.83 |
| Financials | 64 | 0.28 |
| Health Care | 29 | 0.43 |
| Industrials | 60 | 2.24 |
| Information Technology | 113 | 0.38 |
| Materials | 58 | 3.47 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | 1.1 |
| Alibaba HK | 9988 HK Equity | 3.2 |
| JD.com HK | 9618 HK Equity | 1.9 |
| NetEase HK | 9999 HK Equity | 1.3 |
| Yum China HK | 9987 HK Equity | 2.3 |
| Baozun HK | 9991 HK Equity | -1.6 |
| Baidu HK | 9888 HK Equity | -2.8 |
| Autohome HK | 2518 HK Equity | -0.1 |
| Bilibili HK | 9626 HK Equity | 3.5 |
| Trip.com HK | 9961 HK Equity | 1.1 |
| EDU HK | 9901 HK Equity | 2.4 |
| Xpeng HK | 9868 HK Equity | 1.5 |
| Weibo HK | 9898 HK Equity | 0.5 |
| Li Auto HK | 2015 HK Equity | 3.4 |
| Nio Auto HK | 9866 HK Equity | 8.7 |
| Zhihu HK | 2390 HK Equity | -0.6 |
| KE HK | 2423 HK Equity | 2.4 |
| Tencent Music Entertainment HK | 1698 HK Equity | 1.8 |
| Meituan HK | 3690 HK Equity | 3.5 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TENCENT HOLDINGS LTD | 1.1 |
| ALIBABA GROUP HOLDING LTD | 3.2 |
| PING AN INSURANCE GROUP CO-H | 6.1 |
| XIAOMI CORP-CLASS B | 0.7 |
| BYD CO LTD-H | 4.4 |
| CONTEMPORARY AMPEREX TECHN-H | -0.2 |
| SEMICONDUCTOR MANUFACTURI-H | -0.4 |
| YANGTZE OPTICAL FIBRE AND-H | 1.9 |
| HUA HONG SEMICONDUCTOR LTD-H | -4.6 |
| CNOOC LTD-H | 1.4 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ZHONGJI INNOLIGHT CO LTD-A | 2.5 |
| VICTORY GIANT TECHNOLOGY -A | 6.6 |
| FOXCONN INDUSTRIAL INTERNE-A | -2.8 |
| SUZHOU DONGSHAN PRECISION-A | 0.2 |
| CONTEMPORARY AMPEREX TECHN-A | 4.1 |
| SUNGROW POWER SUPPLY CO LT-A | 6.3 |
| EOPTOLINK TECHNOLOGY INC L-A | 0.3 |
| LUXSHARE PRECISION INDUSTR-A | -1.8 |
| GIGADEVICE SEMICONDUCTO-CL A | 0.5 |
| CAMBRICON TECHNOLOGIES-A | 3.1 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.83 versus 6.83 yesterday
- CNY per EUR 7.99 versus 7.99 yesterday
- Yield on 10-Year Government Bond 1.74% versus 1.77% yesterday
- Yield on 10-Year China Development Bank Bond 1.84% versus 1.86% yesterday
- Copper Price -0.89%
- Steel Price +0.13%
