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Yujing Liu

Srinivasan Iyer

Good day traders,
Hong Kong stocks fell amid lacklustre trading, while the Shanghai Composite rose for the first time in five sessions. 
Catch up on the day's action below.
BTW, if you would like the Live Stocks Blog emailed to you each morning, click here. 
-- Yujing Liu and Srinivasan Iyer in Hong Kong 
Note: Information in this blog is on an "as is" basis and not a solicitation or offer to buy or sell any securities or otherwise; and is not investment/professional advice or services in this regard.  It is subject to our T&C.  SCMP (as defined in T&C) shall not be liable for any loss, damage and costs relating to any investments in securities or otherwise in this connection.


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Stocks

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The Hong Kong stock exchange flag flies outside Exchange Square. Photo: Bloomberg

Business

Markets

China Construction Bank loses 0.9 per cent in Hong Kong
Lithium battery maker Contemporary Amperex Technology closes at an all-time high in Shenzhen


Trading in Hong Kong, which was open only for half a day today, will now resume on Friday after the two-day Christmas break.


Hong Kong Stock Exchange

HKEX

China stock market

A-shares

Live

Here’s what we are watching this morning:
Overnight US markets/ What futures foretell
--The S&P 500 rose 0.08 per cent, the Nasdaq rose 0.2 per cent and the Dow Jones Industrial Average advanced 0.3 per cent. 
-- Hong Kong futures gained 0.1 per cent, and the FTSE China A50 were little changed.
IPO debuts:
-- Trading of Zhejiang Yongjin Metal Technology (603995 SH), a producer of stainless steel plates, will start in Shanghai today
Economic statistics/Central Bank action:
-- Nothing major scheduled. 
Corporate events:
-- None to note. 


Morning guidance

Fashion retailer Joyce Boutique Group (647 HK) said a privatisation document of the company will now be dispatched no later than February 28 instead of January 2 in a bid to allow more time for a High Court meeting to be held to finalise information to be contained in the document. 
On December 12, JoyBo International, which owns 72.9 per cent of Joyce Boutique, requested the board of Joyce to put forward a proposal to privatise the company for a maximum of HK$123.2 million. The offer of 28 HK cents per share, represents 91.8 per cent of the company’s value on the last trading day before the offer was made.
Joyce shares closed 2 per cent higher at 26 HK cents on Monday.
-- Enoch Yiu


Joyce Boutique seeks extension to privatisation move

Cruise operator Genting Hong Kong (678 HK) said it has entered into a sale and leaseback agreement with French lender Credit Agricole to finance the construction of a 200-passenger luxury cruise ship called Crystal Endeavor for 280 million euros (US$310.36 million). 
The company said the deal would allow it to obtain additional working capital while at the same time keep its rights over the vessel being built.  
The company has three vessels that are under construction and this transaction together with the others can raise funds to finance the building of the three ships. 
Genting Hong Kong closed 1.3 per cent lower on Monday at 78 HK cents.
-- Enoch Yiu


Genting and Credit Agricole in financing deal

The Shanghai Composite Index rose 0.3 per cent to 2,970.44 at the open. The Shenzhen Component Index gained 0.5 per cent, and the ChiNext Index added 0.6 per cent.
-- Yujing Liu


China markets open with gains

The Hang Seng Index dropped 0.2 per cent to 27,851.56 in early trading, as sentiment turned cautious at the beginning of a half-day session because of the Christmas holiday.
-- Yujing Liu


Hong Kong market dips at the open

Jiugui Liquor (000799 SZ), a producer of fiery Chinese liquor baijiu, rebounded 0.4 per cent to 35.41 yuan in the latest trading after heavy losses in the previous session.
The distiller is mired in controversy over whether it added artificial sweetener to its product, after a dealer accused it of doing so last week.
The company denied the claims vehemently on Sunday but the stock still plunged by the daily maximum of 10 per cent on Monday.
-- Yujing Liu


Scandal-hit liquor maker rebounds

Chinese suppliers to Tesla advanced in early trading, driven by an overnight rally in the US electric carmaker’s shares on Nasdaq.
VT Industrial Technology (300707 SZ) soared by the daily maximum of 10 per cent to 15.99 yuan. Lingyun Industrial Corporation (600480 SH), which is widely speculated to be supplying to Tesla’s Shanghai factory, also jumped 10 per cent to 8.17 yuan.
Tesla shares reached a fresh intraday high of US$422.01 on Monday, eventually closing 3 per cent higher at US$419.22.
The stock has skyrocketed 74 per cent since the beginning of October. This has been driven by the company’s faster-than-expected production progress in its October earnings report, as well as a successful attempt to pull itself out of a chaotic period of litigation, government inquiries and layoffs earlier this year.
-- Yujing Liu


Tesla-related stocks surge in China

Chinese semiconductor-related companies outperformed in the morning session, led by chip maker SG Micro (300661 SZ), which soared by the daily 10 per cent limit to 283.2 yuan.
Trading of SG Micro resumed on Monday, after it was suspended on December 9 because of a plan to acquire ETA Solutions. The stock rose 2 per cent on Monday.
The acquisition of the fast-growing peer will help SG Micro expand its market share and strengthen its core products, analysts at Tianfeng Securities wrote in a report published on Monday, raising their earnings forecast for the company.
As China continues its push for replacing imported chips with products by homegrown companies, SG Micro could benefit hugely from the rising domestic demand, the analysts wrote.
Other chip makers also advanced. A gauge tracking 117 related stocks listed on Shanghai and Shenzhen bourses climbed by 2.1 per cent.
-- Yujing Liu


Semiconductor firm shoots up on acquisition plan

The Shanghai Composite Index rose 0.3 per cent to 2,970.19 by lunch break, on track to close higher for the first time in five sessions.
The Shenzhen Component Index rose 0.7 per cent, and the ChiNext Index of start-ups listed in Shenzhen jumped 1.1 per cent.
Semiconductor and car part manufacturers led the advance. Contemporary Amperex Technology (300750 SZ), a top lithium battery maker in China, surged by as much as 6 per cent to a fresh intraday high of 98.4 yuan, amid rising hopes of growing demand for electric cars and gains in Tesla shares.
-- Yujing Liu


China stocks hold onto gains in morning session

The Hang Seng Index dropped 0.2 per cent to 27,864.21 by noon, ending its half-day trading below the psychologically important 28,000-point support level.
Most of Macau’s casino operators bucked the downward trend, driven by optimism over their holiday incomes.
SJM Holdings (880 HK) led the advance with a 1.3 per cent rise to HK$8.81.
Mainland Chinese banks weakened broadly. China Construction Bank (939 HK) was the biggest drag on the benchmark as it fell 0.9 per cent to HK$6.62.
-- Yujing Liu


Hong Kong stocks edge lower in half-day trading session

After a year of enthusiastically promoting homegrown chip makers, these firms will face mounting pressure to post robust earnings growth that matches investors’ expectations in 2020, CICC analysts wrote in a report published today.
The semiconductor sector – consisting of related stocks listed on the A-share and Hong Kong markets – has crossed 1 trillion yuan (US$143 billion) in market value, surging 241 per cent from the beginning of this year, according to the report by the Chinese investment bank.
The price-to-earnings ratio of mainland China-listed chip stocks stood at 57 times, far above the average 22 times for consumer electronics.
“This reflects investors expect semiconductor companies to post high growth in future earnings. For these companies, 2020 will be a critical year to fulfill the expectations,” the CICC analysts wrote.
-- Yujing Liu


2020 a critical year for chip makers, CICC says

China’s state-led semiconductor investment fund, also known as the “Big Fund”, is likely to go on a shopping spree with a focus on equipment makers and industry leaders, according to a Guotai Junan Securities report.
The fund, which aims to foster domestic semiconductor firms, raised a second round of 204 billion yuan (US$29 billion) in capital earlier this year. This could attract 1 trillion yuan worth of private and local government funds to flow into the chip-making sector, analysts at Guotai Junan wrote in the report published today.
The fund’s decision to reduce its stakes in three companies – which rattled the market and led to a big plunge among chip makers on Monday – was an adjustment of its portfolio, the analysts wrote. The freed up capital was likely to be shifted into other fields that require long-term investments, such as testing, equipment and material.
The analysts recommended stocks including Naura Technology Group (002371 SZ), Wuhan Jingce Electronic Technology (300567 SZ), Hangzhou Chang Chuan Technology (300604 SZ), and Advanced Micro-Fabrication Equipment China (688012 SH).


Chip-focused “Big Fund” to step up investment

China’s leading lithium battery maker Contemporary Amperex Technology (300750 SZ) soared 7.1 per cent to close at an all-time high of 99.5 yuan, driven by excitement over electric car-related stocks after Tesla hit a fresh record in the US.
CATL is now the most valuable stock on the ChiNext board of start-ups in Shenzhen, with a market cap of 220 billion yuan (US$31 billion).
This year is likely to be another great year for the company, as the stock has climbed 35 per cent. The stock returned a stunning 194 per cent in 2018.
-- Yujing Liu


China’s top battery maker surges to new high

Chinese stainless steel plate maker Zhejiang Yongjin Metal Technology (603995 SH) surged by the maximum 44 per cent to 32.43 yuan on its first day of trading in Shanghai.
The company raised 1.3 billion yuan (US$185.4 million) through its initial public offering.
-- Yujing Liu


Shanghai market debutant soars

China stocks widened their gains in afternoon trading, boosted by positive sentiment in technology stocks.
The Shanghai Composite Index rose 0.7 per cent to 2,982.68, capping its first gains in five sessions. The more tech-heavy Shenzhen Component Index climbed 1.3 per cent, and the ChiNext Index of start-ups listed in Shenzhen surged 1.9 per cent.
Electric car-related stocks – including lithium battery makers – were among the top gainers, rising on the back of spectacular gains in the US-listed shares of Tesla and expectations of high demand for its China-produced models likely to be sold from early next year. A gauge of 227 EV-related stocks jumped 3.3 per cent.
Semiconductor stocks, which suffered heavily on Monday, rebounded strongly on improved sentiment amid several bullish brokerage reports. A gauge tracking 117 related companies surged 3.6 per cent, with seven stocks soaring by the daily 10 per cent limit, including SG Micro (300661 SZ).
-- Yujing Liu


Technology shares lift China markets

Hang Seng Index ends shortened trading session on losing note, but Macau casino operators buck trend

China Construction Bank loses 0.9 per cent in Hong Kong Lithium battery maker Contemporary Amperex Technology closes at an all-time high in Shenzhen

China Construction Bank loses 0.9 per cent in Hong Kong

Lithium battery maker Contemporary Amperex Technology closes at an all-time high in Shenzhen