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Zhang Shidong

Azar Zaidi

The Hong Kong and mainland China markets are – once again – expected to see-saw between optimism over a trade deal between Beijing and Washington and caution about what looks like Iran and the US walking back from an all-out armed conflict in the Middle East.
With US equities moving higher overnight, stocks here are also expected to follow suit, with optimism triumphing over caution for the time being.
Domestically, the inflation number for December, expected on Thursday morning, could still lead to a wobble or two. 
And if you would like the Live Stocks Blog emailed to you each morning, click here. 
– Zhang Shidong in Shanghai and Azar Zaidi 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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The Hong Kong and mainland China markets are – once again – expected to see-saw between optimism over a trade deal between Beijing and Washington and caution about what looks like Iran and the US walking back from an all-out armed conflict.


China stock market

Hong Kong Stock Exchange

Coronavirus pandemic

Flu in Hong Kong

Disease

Coronavirus pandemic: All stories

Live

Overnight markets/ What futures foretell:  – Overnight in US markets, the S&P 500 gained 0.5 per cent, the Nasdaq rose 0.7 per cent and the Dow added 0.6 per cent.  – Hong Kong futures were 1.4 per cent higher, while the FTSE China A50 futures slid 0.2 per centIPO debuts: Shenzhen Etmade Automatic Equipment (300812 CH) will start trading in Shenzhen today.Economic statistics/central bank action: The statistics bureau is schedule to release the December data on inflation at 9.30am, ThursdayCorporate events, earnings, meetings, news conferences: nothing majorLater this week: The December number on new lending and aggregate financing might be out as early as Friday.


Morning Guidance

The state-owned China Citic Bank Corporation (998 HK) reported a 7.9 per cent jump in annual net profit to 48 billion yuan (US$6.9 billion) in 2019 from the year before, it said in an exchange filing on Wednesday night. Its revenue surged by 13.8 per cent to 187.6 billion yuan, according to the filing.
Chinese property developer Yuexiu Property Company (0123 HK) reported a 25 per cent surge in contract sales in 2019 to 72.1 billion yuan from 2018, in a stock exchange filing on Wednesday night.  Its contract sales rose by 5 per cent in December 2019 to 11.8 billion yuan from the same period in 2018, it said.
– Yujing Liu


Overnight filings

Eight patients infected with an as yet unidentified, pneumonia-like virus have been discharged in central China’s Wuhan city, the state news agency Xinhua reported on Wednesday night. The patients have not shown symptoms such as fever for many consecutive days, and a local hospital granted them permission to leave, according to the report. Authorities in Wuhan, Hubei province have reported 59 cases, with seven patients in critical condition. Chinese authorities have denied the outbreak was caused by the severe acute respiratory syndrome (Sars) virus.
– Yujing Liu


Patients struck by pneumonia-like virus discharged in Wuhan: Xinhua

China will continue opening up its domestic markets to foreign players and further reduce a “negative investment list” that restricts or prohibits overseas investors in certain industries, vice commerce minister Wang Shouwen said on Wednesday. Beijing will grant the country’s free-trade zones greater power to explore and reform, he said during a conference, according to Chinese media reports.
– Yujing Liu


China to grant greater access to foreign firms, official says

A flurry of clarifying statements from companies related, or rumoured to be related, to Tesla have proved a recent market fascination with the US electric vehicle maker is far from over.
  Car parts maker Ningbo Xusheng Auto Technology (603305 SH) said Tesla was the company’s biggest customer, and sales to Tesla accounted for 52.1 per cent of its overall revenue, in a stock exchange filing on Wednesday night. Shares of Ningbo Xusheng have shot up by 33 per cent so far this year.
  Car accessories maker Ningbo Joyson Electronic Corp (600699 SH), meanwhile, said in a stock exchange filing it expected business related to Tesla to generate no more than 2 billion yuan in revenue and to make up only a small portion of the company’s overall income. It warned investors of risks in investing in the company. Shares of Ningbo Joyson have surged by 22 per cent so far this year.
  Glass coating material maker Changzhou Almaden Stock (002623 SZ) said it had not worked with Tesla’s Shanghai factory so far, in a filing, while Shijiazhuang Kelin Electric (603050 SH) said its existing contract with Tesla involves an extremely low amount of money, and it has not received new orders from Tesla recently.
– Yujing Liu


Fascination with stocks related to Tesla continues

China’s consumer inflation rose 4.5 per cent from a year earlier in December, the National Bureau of Statics said on Thursday morning. A Bloomberg survey had estimated a 4.7 per cent gain. Producer prices dropped 0.5 per cent as well, the agency said. 
This also leaves China's inflation at its highest level since October 2011, and above 4 per cent for the second month running.
– Zhang Shidong and Eugene Tang


China’s December inflation at 4.5 per cent, lower than expected

A positive mood descended on markets in mainland China and Hong Kong on Thursday, after the US and Iran moved to de-escalate the possibility of military conflict. The Shanghai Composite Index gained 0.7 per cent at the open, while the Hang Seng Index rose 1 per cent, rebounding from its biggest loss in five weeks a day earlier. Sentiment was also lifted by China’s inflation numbers, with its consumer prices rising by a lower-than-expected 4.5 per cent in December.
– Zhang Shidong


Hong Kong, China stocks rebound on easing US-Iran tensions

LCD equipment maker Shenzhen Etmade Automatic Equipment (300812 CH) surged by 44 per cent, the maximum allowed for debuting stocks on mainland exchanges’ main boards, to 30.90 yuan in Shenzhen on Thursday. 
– Zhang Shidong


LCD equipment maker Shenzhen Etmade jumps by daily limit on debut

China has identified a new strain of coronavirus as the cause for the pneumonia-like virus in the central city of Wuhan, China Central Television reported, citing a team of medical experts. It adds to the six existing type of such viruses, including Sars, which typically causes respiratory and intestinal diseases, it said. The research and production of effective treatments and vaccines for the virus might take years to finish, according to the report. The outbreak drew attention from the World Health Organisation and sent shares of medical companies that make antibiotics soaring.
– Zhang Shidong


Wuhan outbreak caused by new strain of coronavirus: CCTV

Poly Developments and Holdings Group (600048 CH) rallied 4.4 per cent to 16.20 yuan in Shanghai, heading for its biggest gain since October 8, after the property developer said in a preliminary earnings statement that its profit increased 41 per cent in 2019 from a year earlier. Shenwan Hongyuan Group raised its earnings estimate for Poly by 19 per cent this year and 17 per cent in 2021, citing adequate land reserves and low capital costs.
– Zhang Shidong


Property firm Poly Developments rises most in three months on positive earnings

The Shenzhen Composite Index, which tracks the performance of shares listed on the exchange of “China’s Silicon Valley”, rose by as much as 1.6 per cent to an intraday high of 1,797.07, its biggest intraday jump in about four weeks, after the local government announced that the city’s economy grew 7 per cent last year. Shenzhen’s gross domestic product topped 2.6 trillion yuan (US$374 billion), surpassing Hong Kong’s economy for the second year, according to data by the southern Chinese municipality.
– Eugene Tang


Shenzhen Composite rises most in four weeks on GDP growth

Aier Eye Hospital Group (300015 CH) rose 6 per cent to 41.13 yuan on Thursday, and was on course for its biggest gain since November 1. The hospital operator plans to spend 1.87 billion yuan (US$269.8 million) buying out 30 clinics with cash and private sales of stocks to sellers, it said in an exchange statement. The stock offering will be valued at no more than 710.2 million yuan, it said.
– Zhang Shidong


Hospital firm Aier Eye posts biggest gain in two months on acquisition spree

China’s 10 largest companies have grown eight-fold in value over the past decade, according to a Hurun Research Institute report. The 10 were valued at a combined US$1.8 trillion, a size that would rank them as the 10th largest by GDP, surpassing Canada were they an economic entity, based on International Monetary Fund data.
Read the full story here.


China’s largest private firms add up to 10th largest economy globally

About 800 billion yuan (US$115.5 billion) might be ploughed into Chinese stocks in 2020, analysts led by Qin Peijing and Qiu Xiang at Citic Securities said in a report released on Thursday. Overseas investors might contribute about 300 billion yuan, while buy-backs by industry insiders might increase by 48 billion yuan and flows from wealth management companies, insurance firms and social security fund, might reach as much as 440 billion, the report said.
– Zhang Shidong


China stocks to attract US$115 billion this year: Citic Securities

A risk-on mood has returned to the markets in mainland China and Hong Kong, with traders ramping up their buying of stocks in the afternoon. The Shanghai Composite Index rose 0.7 per cent, as did the ChiNext gauge of small caps, the latter rising by more than 2 per cent. In Hong Kong, the Hang Seng Index has risen 1.2 per cent. Easing inflation in China is also fuelling the rally. Meanwhile, gold stocks have plunged.     “With US President Donald Trump choosing discretion over valour … markets went into business as usual mode,” said Jeffery Halley, analyst at Oanda in Singapore. “That all means that it will be back to business as usual, i.e. getting long on Asian post-trade agreement recovery trade, buying equities anywhere and generally hunting for yield in any form. China inflation should wane in the coming months.”
– Zhang Shidong


Hong Kong, China stocks hold gains as risk appetite improves

Han’s Laser Technology Industry Group (002008 CH), a popular stock trading through the Stock Connect programme, cut its projections for 2019 earnings, citing provisions it made for some potentially bad debt in the fourth quarter. Its profit probably fell between 58 per cent and 63 per cent from a year earlier, compared with an earlier forecast of a drop between 45 per cent and 55 per cent, the company said in an exchange statement. The stock remained unaffected by the news, rising 0.9 per cent to 43.31 yuan after recovering from an intraday loss of 2.3 per cent.
– Zhang Shidong


Han’s Laser lowers earnings forecast on possible bad debt

The Shanghai Composite Index added 0.9 per cent to 3,094.88 at the close on Thursday, after geopolitical tensions between the US and Iran eased, and inflation in China rose at a slower-than-estimated pace in December. Small caps including technology stocks led the gains on improving risk appetite, while gold producers were ditched.
– Zhang Shidong


Shanghai Composite closes Thursday trading 0.9 per cent higher

China’s retail passenger vehicle sales fell 7.5 per cent to 21 million units in 2019, for a second year of declines in the world’s largest vehicles market, according to Passenger Car Association data. Passenger vehicles include sedans, multipurpose vehicles, sports utility vehicles and minivans, and exclude commercial trucks, minibuses and coaches. Sales fell 3.6 per cent in December to 2.17 million vehicles.
– Eugene Tang


Chinese retail passenger vehicle sales fell for a second year in 2019

Carmakers’ shares rose in an advancing market. Guangzhou Automobile (2238 HK), which makes cars with Toyota Motors and Honda Motors in southern China, rose 0.2 per cent to HK$9.93 in Hong Kong, while its A shares (601238 CH) rose 0.7 per cent in Shanghai to 12.28 yuan. BAIC Motor (1958 HK), which makes cars with Hyundai Motors in Beijing, rose 0.5 per cent to HK$4.36 on the Hong Kong exchange.
– Eugene Tang


Carmakers’ shares rise in Hong Kong, mainland markets

Vice-Premier Liu He, China’s top trader negotiator, will fly to Washington from January 13 to 15 to sign the phase one trade deal with the US, Gao Feng, a spokesman for the commerce ministry, said at a briefing on Thursday.
– Zhang Shidong


China, US to sign trade deal next week: commerce ministry

Chinese e-commerce giant Alibaba Group Holding (9988 HK) is poised to refresh its closing record, with its stock rising 2.2 per cent to HK$215.40 in Hong Kong on Thursday. The current record is HK$212.80, set on December 27. Alibaba, which owns the South China Morning Post, has gained 23 per cent since its secondary listing in the city in November.
– Zhang Shidong


Alibaba set for record close in Hong Kong

The Hang Seng Index advanced 1.7 per cent to 28,561 for its steepest gain since December 13. Alibaba Group Holding (9988 HK) rose to a record high at the close, and Chinese sportswear maker Li Ning (2331 HK) surged 9.3 per cent to HK$26.50 after JPMorgan Chase said new stores were popular among consumers, citing channel checks in Shanghai and Guangzhou.
– Zhang Shidong


Hong Kong, China stocks follow US equities higher, rebound on easing US-Iran tensions

Hong Kong stocks rally most in about four weeks Alibaba hits record high in Hong Kong

Hong Kong stocks rally most in about four weeks

Alibaba hits record high in Hong Kong