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Zhang Shidong

Deb Price

Rough day for Hong Kong and China stocks.
Catch up on the action below.
We'd love to hear your thoughts and feelings, including strategies you're adopting, scary and funny moments, as well as super and awful trades for possible inclusion in the blog.
Where's the bottom? What's it going to take to start climbing out? And how long will it take?
Please send them to deb.price@scmp.com.
And, hey, are you getting your Live Stocks Blog every morning via email? You can! Don't miss out on our coverage of Hong Kong and mainland markets each trading day! If you would like the Live Stocks Blog emailed to you each morning, click here.
-- Zhang Shidong in Shanghai and Deb Price 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

Hang Seng Index drops 4 per cent as US futures fall on coronavirus fears 

People ride an escalator at the High Speed Railway Station in Guangzhou, Guangdong province, China, on March 12.  Photo: EPA-EFE


Business

Asia-Pacific markets tumble
Tencent, Alibaba, Sands China, AAC Tech, Sunny Optical see steep declines


Big drops of more than 4 per cent seen some of Hong Kong's best known stocks, including Tencent, Alibaba, Sunny Optical, Sands China and AAC Tech. 


China stock market

Hang Seng Index

Tencent

Coronavirus pandemic: All stories

Live

After seven months of searching, HSBC (5 HK) had found its leader.
The bank, which is based in London, but generates much of its revenue in Asia, named Noel Quinn as its permanent chief executive effective immediately in the overnight hours on Wednesday. 
The appointment of Quinn, who has been with HSBC for more than 30 years, removes a major source of uncertainty for the bank as it prepares to navigate a global downturn sparked by the coronavirus epidemic.
“[Quinn] is a strong and proven leader with extensive global banking expertise, deep client relationships and the energy and skill to drive the business forward at pace,” Mark Tucker, the HSBC chairman, said in a statement. “In the last few months Noel has worked closely with the board to agree the key actions required to build and enhance performance on a sustainable basis. He has shown a great understanding of HSBC, the challenges we face and the significant opportunities for growth that lie ahead.” 
Quinn has served as interim CEO since August, when John Flint was ousted after just 18 months in the top job. 
Since his appointment, Quinn has shaken up the company’s management team and is the architect behind the lender’s third major reshaping in a decade.
In February, Quinn announced the bank would cut as many as 35,000 jobs and reduce annual costs by an additional US$4.5 billion as part of its latest strategy update.HSBC’s shares rose 2.6 per cent to HK$44.95 in Hong Kong on Tuesday ahead of the announcement. 
Read full story here. 
-- Chad Bray and Enoch Yiu


Noel Quinnn named permanent CEO at HSBC

Kaisa Health Group Holdings (876 HK), a dental product maker, expects to record an annual loss between HK$340 million (US$44 million) and HK$360 million last year, widening from the HK$22 million loss made in 2018, it said in a stock exchange filing on Tuesday night.
  The company had to offer price discounts in order to secure more export orders as US customers became more conservative in procurement amid the US-China trade war, it said.
-- Yujing Liu


Kaisa Health Group warns of wider annual loss

Founder Holdings (0418 HK), a computer product distributor owned by Chinese state-owned conglomerate Peking University Founder Group, said it expects to record an annual loss of over HK$225 million (US$29 million) last year, compared with a profit of HK$87 million in 2018, in a stock exchange filing on Tuesday night.
The loss was mainly a result of a default by Peking University Founder Group, which is its controlling shareholder, on a loan with a principle of 370 million yuan. The default will lead to a net loss of about HK$315 million, the company said.
-- Yujing Liu 


Founder Holders warns of profit loss after controlling shareholder’s default

China Vanke (2202 HK), the country's second-largest developer by sales, reported its net profit rose 15 per cent year-on-year to 38.9 billion yuan (US$5.5 billion) last year, failing to reach the consensus prediction of 41.1 billion yuan according to a Bloomberg poll of analysts.
  Revenue climbed 24 per cent during the period to 367.9 billion yuan, the company said in a stock exchange filing on Tuesday night.
-- Yujing Liu 


China Vanke’s 2019 net profit falls short of market expectations

Jinxin Fertility Group (1951 HK), a Chinese assisted-reproductive services provider, expects its net profit to surge by 90 per cent last year from the previous year, it said in a stock exchange filing on Tuesday night.
  The profit jump was mainly a result of its acquisition of its current US operations and an increase in the in vitro fertilisation (IVF) treatment cycles and profit margin, the company said.
--  Yujing Liu 


Fertility services provider Jinxin forecasts jump in 2019 profit

Jiumaojiu International Holdings (9922 HK), a Chinese restaurant chain operator that sells Shanxi noodles and pickled fish, said it will reopen some of its outlets starting from today, in a stock exchange filing on Tuesday night.
  The company did not specify how many of its 149 shops will resume operations, but said the rest of the stores will gradually be reopened depending on local epidemic control departments' decisions. The outlets were closed on January 26.
Previously, popular hotpot chain Haidilao International Holding (6852) reopened 85 of its 550 stores in mainland China last week.
-- Yujing Liu 


Chinese restaurant chain Jiumaojiu reopens some stores

Tencent Holdings could be one of its online game characters – its shares clawed their way out of a scary stock market dungeon, took a quick run uphill during the coronavirus lockdown in China, and recently were knocked down by the global market upheaval.
The Chinese online gaming and social-media giant will report its 2019 and fourth-quarter results on Wednesday night, after market close in Hong Kong, and analysts were very upbeat.
“It’s not just the game market. You can barely get through a day without touching one of Tencent’s applications,” said Vey-Sern Ling, senior analyst at Bloomberg Intelligence.
Tencent’s ecosystem of games, social networking, mobile payments, music and videos, as well as the cloud put it in a unique position in China, the most wired country in the world, analysts said.
A Bloomberg survey of 59 analysts found they expected its net profit for the year to grow 22.3 per cent to 94.7 billion yuan (US$13.5 billion) and revenue to rise 20.1 per cent to 375.5 billion yuan. For the fourth quarter, they expect Tencent’s net profit to grow 30.8 per cent to 25.8 billion yuan and revenue to rise 22.1 per cent to 103.69 billion yuan.
Read full story by stocks team here. 


Tencent to report 2019 results tonight

US stocks rose on Tuesday, a day after the Dow Jones Industrial Average plunged nearly 3,000 points for its largest point drop in history, as the government announced plans to stabilize the economy against the worsening coronavirus outbreak.
The blue-chip index gained 1,048.86 points, or 5.2 per cent, while the S&P 500 stock index was up 6 per cent and the Nasdaq jumped 6.2 per cent, recovering from the Dow’s worst percentage drop since “Black Monday” in 1987.
The Trump administration said on Tuesday that it was proposing a massive stimulus package to prop up the economy that could include cash payments to Americans.
US Treasury Secretary Steven Mnuchin, who was pitching the package to Congress in the afternoon, said the administration would allow a 90-day, penalty-free deferral of tax payments of up to US$1 million for individuals and US$10 million for companies.
The package would be mostly focused on adding liquidity to the economy through a payroll tax cut or other mechanism. Some US$50 billion would be directed to helping the airline industry.
Read full story here.


US stocks jump on stimulus plan

Asian stocks are mixed after rebound in US stocks.
Markets in Asia opened in a mixed note after the major US benchmarks bounced back in overnight trading.
Japan’s Nikkei 225 added 1.4 per cent and New Zealand’s S&P/NZX 50 Index rallied 2.6 per cent, while Australia’s S&P/ASX 200 slid 3.3 per cent and South Korea’s Kospi index slipped 0.2 per cent.
The three major US major benchmarks rebounded at least 5 per cent overnight.
-- Zhang Shidong


Asia stocks mixed

Overnight markets/what futures foretell
  - In overnight trading, the S&P 500 rose 6 per cent, the Dow Jones Industrial Average jumped 5.2 per cent and the Nasdaq surged 6.2 per cent
- Hong Kong futures were 1 per cent lower, while the FTSE China A50 futures climbed 0.8 per cent
IPO debuts: Changhong Jiahua Holdings (3991 HK), Kidztech Holdings (6918 HK) and Jianzhong Construction Development (589 HK) will start trading in Hong Kong today.
Economic statistics/central bank action: none
Corporate events, earnings, meetings, news conferences: Tencent (700 HK) reports 2019 results tonight.
Later this week: China will release the monthly change of its loan prime rate, a market-based mechanism for pricing loans, on Friday.


Morning guidance

The Hang Sang Index is trading down by 0.7 per cent at 23,110.91.
Tencent (700 HK) gained 0.3 per cent to HK$351 ahead of posting earnings for 2019 tonight.
Meanwhile, Alibaba (9988 HK) lost 2.1 per cent to HK$179.40 in early trading. Its November secondary listing IPO price HK$176. (Alibaba is the owner of the South China Morning Post.)
Beigene (6160 HK) jumped 11 per cent.
-- Deb Price       


Hang Seng opens down; Alibaba drops to HK$179.40

The Shanghai Composite Index climbed 0.6 per cent to 2,797.45 at the open, heading for the first gain in six days.
The ChiNext gauge of small-caps added 1.3 per cent. Technology and consumer stocks led the pack of gainers.
The rally came after the Trump administration rolled out a stimulus package of US$1 trillion to bolster the world’s largest economy that is ravaged by the coronavirus outbreak globally.
-- Zhang Shidong 


China’s stocks rise at open on US stimulus package

Hang Seng gains 0.5 per cent to 23,390.13

The premium China’s yuan-denominated stocks command over the city’s shares has now widened to the biggest since January 31, as the mainland’s equities remain relatively resistant to the global rout.
Mainland shares are now 32 per cent more expensive than Hong Kong stocks, according to a gauge tracking the price discrepancy between the two markets.
-- Zhang Shidong


China and Hong Kong stock price gap widens

The Hang Seng Index is now down 0.1 per cent at 23,233.02.


Hang Seng seesaws back into small loss

Kidztech Holdings (6918 HK) opened down 20.3 per cent from an initial offering price at HK$1.38. It was last trading at HK$1.10.
Kidztech ranked ninth in the domestic toy manufacturing market in China in terms of sales revenue for 2018, according to a report by China Insights Industry Consultancy. The company hopes to expand its overseas market and will consider setting up factories in other countries to lower costs if the US reimposes tariffs on toys.  
Jianzhong Construction Development (589 HK) shares rose 9.7 per cent to HK$1.81 from an initial offering price at HK$1.65 in early trade. 
The company is the largest foundation works subcontractor in Fujian province and the third largest non-state owned foundation works subcontractor in China, according to a report by Frost & Sullivan in 2018.
Meanwhile, Chinese IT hardware company Changhong Jiahua Holdings (3991 HK) transferred from GEM (8016 HK) to the main board and opened up 3.4 per cent at HK$1.20 from HK$1.16.
The company is set to become a general distributor of Huawei products in mainland China beginning in the second half of the year.
 
Three companies started trading on the main board of the Hong Kong Stock Exchange today. They are Kidztech Holdings (6918 HK), Jianzhong Construction Development (589 HK) and Changhong Jiahua Holdings (3991 HK). @SCMPNews @scmpbusiness pic.twitter.com/zatoXGObSI
  — Gigi Choy (@gigi_choy) March 18, 2020
-- Gigi Choy


Three Chinese companies bang the gong in Hong Kong

ICYMI: What should you do during Hong Kong market turmoil? Kenny Wen weighs in

Hang Seng up 0.3 per cent to 23,323.77

Looking for information on what analysts are saying about sectors? Check out these features by the stocks team:
China and the rest of the world’s airlines are going through turbulence they haven’t seen since the global financial crisis in 2008 and the September 11 terror attacks in 2001. It makes for a nail-biting time as well for investors. Here’s what analysts say. 
While China’s US$143 billion hog-farming industry has been hit by African swine fever and now the coronavirus, analysts say a number of pork stocks can still gain more altitude. Read our latest feature on China pork stocks.
Analysts are bullish on casino stocks. Here’s why. 
Apple suppliers like Luxshare Precision and Goertek are expected to catch up on production after the coronavirus disarray. Here’s what analysts think.
New economy stocks like Ping An Good Doctor are expected to gain over the long term as Chinese consumers in lockdowns try out apps and grow more confident about online health and other services. Here’s what analysts say.


ICYMI: Airlines, Apple suppliers, pig farmers, new economy stocks. Here’s what analysts say

China Vanke (000002 CH) had its earnings estimates cut at Shenwan Hongyuan Group after the property developer reported 2019 profits that missed the consensus projection.
The forecast for Vanke’s earnings this year was lowered by 7.3 per cent to 48.3 billion yuan and that for 2021 was slashed by 2.5 per cent to 59.2 billion, the Shanghai-based brokerage said in a note dated today.
Vanke’s shares slid 3.1 per cent to 27.22 yuan in Shenzhen and the stock retreated 4.2 per cent to HK$26 in Hong Kong.
-- Zhang Shidong


Shenwan cuts Vanke’s earnings estimates after profit miss

Tencent will be discussing their earnings results in their 2019 Fourth Quarter and Annual Results call tonight.
The conference call starts at 8pm Hong Kong Time, or 8am Eastern Time in the US.
Listen in by clicking here for the webcast, or dial in with the following numbers: US: 184 4760 0770, UK: +44 20371 35084, China (landline): 80087 00532, China (mobile): 40062 40407, International: +65 6713 5330, and HK: +852 3018 8307. The passcode is 339 4047.
Here’s a preview article about Tencent and the coming results.
-- Gigi Choy


Tencent: Tonight’s earnings call-in information

At the lunch break, the benchmark was at 2,804.


Shanghai Composite Index to start afternoon with 0.9 per cent gain

The Hang Seng Index gained 0.3 per cent to 23,323.77.
Tencent (700 HK), which reports earnings tonight, has rollercoasted and most recently was down 0.5 per cent HK$348.20.
Sunny Optical (2382 HK) fell 4.9 per cet to HK$99.80.
A top turnover stock is Alibaba (9988 HK). It is down 1.1 per cent at HK$181.20.
-- Deb Price


Tencent slips

Jefferies reaffirmed its top pick rating for A-Living Services after the investment holding company announced its FY19 results that showed 54 per cent earnings growth to 1.2 billion yuan.
A-Living Services (3319 HK) is up 7.9 per cent to HK$30.00.
  -- Gigi Choy


A-Living shoots up on big results, Jefferies reaffirms it as a ‘top pick’

Jefferies cut earnings and forecasts for China and Hong Kong airlines.
The airlines will be loss-making in FY20 after global air travel took a hit as more countries impose travel restrictions in a move to contain the novel coronavirus pandemic, Jefferies analysts said in a new note.
The investment bank downgraded China Eastern Airlines, China Southern Airlines and Cathay Pacific to neutral and Air China to underperform.
Jefferies expects domestic Chinese air travel to rebound first and forecasts a U-shaped recovery for the airlines above.
China Eastern Airlines (670 HK) fell 2.3 per cent to HK$3.02. China Southern Airlines (1055 HK) dropped 2.7 per cent to HK$3.56. Cathay Pacific (293 HK) is down 1.6 per cent at HK$8.74, while Air China (753 HK) fell 0.5 per cent to HK$6.05.
-- Gigi Choy


Jefferies downgrades China airlines and Cathay Pacific.

Jefferies maintains its buy rating for China Literature with a price target of HK$38.10, after the company reported 2019 results with revenue and earnings beating consensus and estimates across different business lines.
The investment bank forecasts that total revenue will grow 7 per cent year-on-year to 8.9 billion yuan, with online reading expected to resume growth momentum on China Literature’s successful content enhancement and diversification strategy.
China Literature (772 HK) rose 13.9 per cent to HK$31.60 at lunch break.
-- Gigi Choy


China Literature soars on earnings beat; Jefferies maintains buy rating

The Hang Seng Index has seesawed today, and was recently down 1 per cent at 23,034.82.
“Markets are driven by sentiment, and it’s difficult to explain daily movement. And investors may have totally different strategies --  some bottom fished at around 23,000 level, while others may target to offload during recent rebounds. Capital markets will remain highly volatile and any rebound will only be short lived,” said Kenny Wen, wealth management strategist at Everbright Sun Hung Kai.   
-- Deb Price


Capital markets to remain highly volatile, says analyst Kenny Wen

China Tower (00788 HK) jumped 4.2 per cent to HK$1.75,after saying profits surged 97 per cent from a year earlier in 2019.
-- Zhang Shidong


China Tower surges after reporting higher profit 

US futures point to another wild opening. They are down about 4 per cent for the three main benchmarks.
The Hang Seng has slid about 2 per cent in early afternoon trading to 22,803.32, with 42 of the 50 constituent stocks posting losses.
"It is hard to know when the selloff will end," said Alan Li, portfolio manager at Atta Capital.
"Traders still tend to sell on rebounds to enhance their cash levels. If policies to fight the virus work, new infected cases may peak out in next two weeks. Markets will keep an eye on the effectiveness" of policies, like border and air traffic restrictions, closures, quarantines and discouragement of large gatherings, Li said.
-- Deb Price 


Fall of US futures weighing on Hong Kong sentiment

Major stock benchmarks in Asia fell in afternoon trading, erasing gains that were spurred by the proposed US stimulus package totaling US$1 trillion.
Hong Kong’s Hang Seng Index slid almost 2 per cent and China’s Shanghai Composite Index slipped 0.6 per cent. Japan’s Nikkei 225 lost 0.9 per cent at the close and South Korea’s Kospi index tumbled 3.4 per cent.
Australia’s S&P/ASX 200 sank 6.4 per cent, while New Zealand’s S&P/NZX 50 Index added 0.2 per cent.
-- Zhang Shidong


Asian stocks resume declines in afternoon trading

Xtep International Holdings (1368 HK), one of the three Fujian shoemakers listed on the Hong Kong Exchange, reported a 10.8 per cent increase in net profit to 728 million yuan but remains cautious about the short term prospects of the sportswear industry in mainland China amid the coronavirus outbreak.
The sportswear maker proposed a final dividend of 7.5 HK cents per share for 2019, down from 9.5 HK cents per share in 2018.
It dropped 3.7 per cent to HK$2.33, in a falling market.
-- Martin Choi


Xtep International Holdings drops despite profit increase, remains cautious in short term

Net selling of Chinese stocks by foreign traders is poised to enter a sixth consecutive day.
They have sold a combined 5.7 billion yuan (US$812 million) of the stocks via the exchange link with Hong Kong today.
Over the past five days, overseas traders dumped a total of 46.3 billion yuan of mainland-traded equities.
-- Zhang Shidong


Overseas investors set to sell Chinese stocks for sixth straight day

A sell-off on US index futures weighed on Chinese stocks and other benchmarks in the Asia-Pacific region.
The Shanghai Composite Index slid 1.8 per cent at the close and the ChiNext gauge of smaller companies sank 1.6 per cent.
-- Zhang Shidong


China’s stocks fall for sixth straight day

The Hang Seng Index closed down more than 4 per cent, losing close to 1,000 points as traders ran for the exits as US futures pointed to another bloodbath there.
Huge drops were seen in some of the city’s best known stocks.
Tencent (700 HK), which reports 2019 earnings tonight, fell 4.5 per cent to HK$334.
  Alibaba (9988 HK) dropped 5.6 per cent to HK$173. That is below its secondary listing IPO price in November of HK$176.
Sunny Optical (2382 HK) tumbled 11.9 per cent to HK$92.40.
AAC Tech (2018 HK) plunged 8.7 per cent.
-- Deb Price    


Hang Seng falls more than 4 per cent; Alibaba closes down below secondary listing price

Jefferies upgraded China Tower Corporation to buy, even though the telecommunication company's revenue fell below market consensus and Jefferies' expectations.
China Tower Corporation's revenue fell 0.3 percent quarter-on-quarter and grew by only 4.1 per cent year-on-year, lower than Jefferies' 6.8 per cent year-on-year growth forecast.
Jefferies said its rating is based on higher 5G base transmission system (BTS) build assumptions.
China Tower Corporation (788 HK) stock remained at the opening price of HK$1.68.
-- Gigi Choy 


China Tower remains a buy at Jefferies

Tencent (700 HK) fell 4.5 per cent today, and, as the heavyweight in the index, was responsible for some of the carnage in Hong Kong’s benchmark, said Louis Tse, managing director of VC Asset Management.
Short selling of Tencent stock drove down the Hang Seng Index in the afternoon, he said.
"Tencent's business will be heavily affected by the virus ... So I think there was a re-rating of Tencent's future profitability. Because it's a heavyweight in Hang Seng constituent stock, it will affect the Hang Seng Index heavily," Tse said.
-- Gigi Choy


Hang Seng Index drops 4 per cent as US futures fall on coronavirus fears

Asia-Pacific markets tumble Tencent, Alibaba, Sands China, AAC Tech, Sunny Optical see steep declines

Asia-Pacific markets tumble

Tencent, Alibaba, Sands China, AAC Tech, Sunny Optical see steep declines