TSMC’s Results Power China Chip Stocks, Week In Review
6 Min. Read Time
Week In Review
- Asian equities were mostly higher for the week as Korea and Japan outperformed, while Mainland China's Shanghai Composite and India underperformed.
- Memory chip maker Giga Device Semiconductor raised $600 million in a Mainland IPO on Tuesday.
- According to a data release this week, China's exports increased 7% year-over-year in December, driven mostly by shipments to countries outside the United States.
- An anti-monopoly investigation into travel booking giant Trip.com led to significant share price declines this week, and the company may have to relinquish its shares in competitor Tongcheng Travel Holdings.
Key News
Asian equities ended a positive week mixed, as India underperformed and Taiwan outperformed on strong results from Taiwan Semiconductor Manufacturing (TSMC), while Indonesia was closed for Isra Mi’raj, which celebrates the ascension of the Prophet Muhammad, according to Perplexity. The US dollar was slightly firmer overnight versus China's currency, the renminbi (CNY), which closed off yesterday’s 52-week high at below 6.97 CNY per USD.
TSMC’s halo effect lifted Mainland and Hong Kong-listed semiconductor stocks, while both markets eased off of morning highs to close lower. The Mainland's semiconductor-heavy STAR Market gained +1.35%. As I have mentioned, STAR’s outperformance relative to Mainland small-cap indexes, such as the CSI 1000, appears to be continuing into the new year. I'd say to take a look, though, remember to volatility adjust before diving into the pool!
Mainland China's equity rally saw the regulator, the China Securities Regulatory Commission (CSRC), tap the brakes again after raising margin requirements on new positions earlier this week. Today, at an event, CSRC officials spoke about ensuring that markets remain “stable”.
It turns out that yesterday’s high volumes in the ETFs favored by the National Team, such as 510300 CH, were driven by $2.9 billion in outflows, which explains why Mainland mega-caps, including banks, were off yesterday. National Team ETFs saw very high volumes today, with 510300 recording a high volume on the bid, indicative of ETF sales.
In Hong Kong, semiconductors and AI-related stocks rose, including Alibaba, which gained +0.97%, MiniMax, which gained +22.35%, and Bilibili, which gained +1.80%.
Auto stocks were mixed, as BYD gained +0.10% and battery maker CATL fell -0.57%. This was despite positive China-EU trade talks and chatter of potential Canada-China trade talks on oil & gas and electric vehicles (EVs).
Biotechnology contract research organization Wuxi Biologics fell -0.60% on reports that Biologics Holdings will sell 150 million shares, representing 3.63% of its aggregate shares, at HKD 38.52 versus today’s close of HKD 39.78.
Mainland investors bought a net $12 million worth of Hong Kong-listed stocks and ETFs. This is a very low flow number versus recent history.
Solar panel stocks were stronger, as Sungrow gained 3.34% and LONGi gained 1.24%. Are investors seeing China's green tech as an AI play?
Q4 and December GDP, retail sales, and industrial production will all be released on Sunday night. The National Bureau of Statistics (NBS) will hold a press conference on the 2025 economic recap and Q&A on Monday. Vice Premier He Lifeng is off to Davos for the World Economic Forum, though his agenda was not released. It will be interesting to see whether he meets with President Trump or members of his team.
One of our beliefs is that the US and Chinese governments can improve relations under President Trump. Regardless of what you think of him, he is without question pro-business, as evidenced by his numerous meetings with corporate titans. With President Trump visiting China in April, he and President Xi will want to announce deals between US and Chinese companies. Evidence of this would be US CEOs visiting China. We highlighted that Disney CEO Bob Iger was in China last week.
The Wall Street Journal reported that Ford is in talks with BYD to use its batteries in hybrid vehicles. We’ve historically highlighted that BYD is much more than an EV company, as its hybrid technology is very strong. Like the US, China is a large country, and northern China is very cold, which is less conducive to pure EVs. More importantly, this is a potential sign of the type of deal that Trump and Xi would love to announce in April.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | -0.3% |
| Hang Seng Tech | HSTECH Index | -0.1% |
| Hong Kong Turnover | HKTurn Index | -12.2% |
| Hong Kong Short Sale Turnover | HKSST Index | -7.5% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 12.7% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 11.951724137931 |
| China (Shanghai) | SHCOMP Index | -0.3% |
| China (Shenzhen) | SZCOMP Index | -0.1% |
| China (STAR Board) | Star50 Index | 1.3% |
| Mainland Turnover | .chturn Index | 4.1% |
| Northbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Not Available |
| Jing Daily China Global Luxury Index | CHINALUX Index | -1.3% |
| Japan | NKY Index | -0.3% |
| India | SENSEX Index | 0.2% |
| Indonesia | JCI Index | 0.5% |
| Malaysia | FBMKLCI Index | -0.1% |
| Pakistan | KSE100 Index | 2.1% |
| Philippines | PCOMP Index | -0.4% |
| South Korea | KOSPI Index | 0.9% |
| Taiwan | TWSE Index | 1.9% |
| Thailand | SET Index | 1.1% |
| Singapore | STI Index | 0.3% |
| Australia | AS51 Index | 0.5% |
| Vietnam | VNINDEX Index | 0.8% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume as % of 1-Year Average | 100 | 169 |
| Advancing Stocks | 200 | 2232 |
| Declining Stocks | 282 | 2798 |
| Outperforming Factors | Liquidity | Momentum, Growth, Liquidity |
| Underperforming Factors | Growth, EPS Revision, Dividend Yield | Low Volatility, Dividend Yield, Value |
| Top Sectors | Discretionary, Utilities, Industrial | Tech, Discretionary |
| Bottom Sectors | Real Estate, Staples, Materials | Communication, Real Estate, Healthcare |
| Top Subsectors | Semiconductors, National Defense, Machinery | Semiconductors, Computer Hardware, Auto Parts |
| Bottom Subsectors | Consumer Durables/Apparel, Consumer Staples Distribution, Media/Entertainment | Cultural Media, Forest, Internet |
| Southbound Connect Buys | SMIC, Xiaomi (Large), Hua Hong (Moderate), Alibaba, Pop Mart, Tencent (Tiny) | N/A |
| Southbound Connect Sells | CNOOC, Synagistics (Tiny) | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 151 | -0.34 |
| Communication Services | 9 | -0.6 |
| Consumer Discretionary | 28 | 0.29 |
| Consumer Staples | 13 | -1.18 |
| Energy | 7 | -0.84 |
| Financials | 23 | -0.44 |
| Health Care | 13 | -0.42 |
| Industrials | 20 | 0.06 |
| Information Technology | 10 | -0.95 |
| Materials | 10 | -0.97 |
| Real Estate | 6 | -1.36 |
| Utilities | 12 | 0.14 |
| Mainland China Listed | 404 | -0.27 |
| Communication Services | 6 | -3.6 |
| Consumer Discretionary | 31 | 0.25 |
| Consumer Staples | 24 | -1.01 |
| Energy | 13 | -1.15 |
| Financials | 64 | -1.13 |
| Health Care | 31 | -1.17 |
| Industrials | 64 | -0.01 |
| Information Technology | 91 | 1.41 |
| Materials | 58 | -1.01 |
| Real Estate | 6 | -1.23 |
| Utilities | 16 | -0.38 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -0.7 |
| Alibaba HK | 9988 HK Equity | 1 |
| JD.com HK | 9618 HK Equity | -1.3 |
| NetEase HK | 9999 HK Equity | 1 |
| Yum China HK | 9987 HK Equity | 0.6 |
| Baozun HK | 9991 HK Equity | -2.9 |
| Baidu HK | 9888 HK Equity | -0.4 |
| Autohome HK | 2518 HK Equity | -2.1 |
| Bilibili HK | 9626 HK Equity | 1.8 |
| Trip.com HK | 9961 HK Equity | 1.3 |
| EDU HK | 9901 HK Equity | -0.1 |
| Xpeng HK | 9868 HK Equity | -0.6 |
| Weibo HK | 9898 HK Equity | -0.5 |
| Li Auto HK | 2015 HK Equity | -2.3 |
| Nio Auto HK | 9866 HK Equity | 1.6 |
| Zhihu HK | 2390 HK Equity | -4.6 |
| KE HK | 2423 HK Equity | -1.6 |
| Tencent Music Entertainment HK | 1698 HK Equity | -4.7 |
| Meituan HK | 3690 HK Equity | -0.8 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| SEMICONDUCTOR MANUFACTURI-H | 2.4 |
| TENCENT HOLDINGS LTD | -0.7 |
| ALIBABA GROUP HOLDING LTD | 1 |
| CHINA MOBILE LTD-H | -0.6 |
| HUA HONG SEMICONDUCTOR LTD-H | 7.4 |
| XIAOMI CORP-CLASS B | -2 |
| HSBC HOLDINGS PLC | 0.2 |
| MEITUAN-CLASS B | -0.8 |
| PING AN INSURANCE GROUP CO-H | -1.3 |
| YANGTZE OPTICAL FIBRE AND-H | 5.9 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ZHONGJI INNOLIGHT CO LTD-A | -1.3 |
| TBEA CO LTD-A | -2.7 |
| EOPTOLINK TECHNOLOGY INC L-A | -0.7 |
| FOXCONN INDUSTRIAL INTERNE-A | 4.2 |
| ZHEJIANG SANHUA INTELLIGEN-A | 5.3 |
| LUXSHARE PRECISION INDUSTR-A | 1.2 |
| CHINA SPACESAT CO LTD -A | -4.6 |
| CHINA AEROSPACE TIMES ELEC-A | -4.2 |
| GIGADEVICE SEMICONDUCTO-CL A | 10 |
| ZIJIN MINING GROUP CO LTD-A | -2 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.97 versus 6.97 yesterday
- CNY per EUR 8.10 versus 8.09 yesterday
- Yield on 10-Year Government Bond 1.84% versus 1.85% yesterday
- Yield on 10-Year China Development Bank Bond 1.97% versus 1.97% yesterday
- Copper Price -1.19%
- Steel Price 0.38%
