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Yujing Liu

Deb Price

Good day, traders --
Mainland markets closed down are open, while Hong Kong is closed due to the Good Friday holiday. No trading on the Stock Connect.
We'll keep you up on the latest in mainland markets, and bring you other insights as well.
So visit us often through the day.
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. If you need to reach the stocks team, email  deb.price@scmp.com.
-- Yujing Liu 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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China stocks slide as investors weigh economy battered by coronavirus

A pedestrian walks past an Adidas AG store in Beijing on April 4, 2020. Photo: Bloomberg


Business

China airlines continue to fall
Chow Tai Fook reiterated as 'buy' by Jefferies


China airlines continued to slide in the mainland, amid turbulence caused by the coronavirus. China Southern has fallen nearly 27 per cent since January 14, when the danger of the virus became clear, while China Eastern Airlines has dropped 25 per cent since then.


Stocks

China stock market

Hang Seng Index

Kweichow Moutai

Live

Yantai Jereh Oilfield Services Group (002353 SZ), a manufacturer of oil field equipment, said it ended its employment contract with vice chief executive surnamed Bao on Thursday, after media reports that he was suspected of sexually assaulting his adopted daughter.
  Police are investigating the case, and operations remain normal at the company, it said in a stock exchange filing early Friday morning.
-- Yujing Liu


China oilfield company first executive accused of sexually assaulting adopted daughted

Here's what we are watching this morning:
  Overnight markets/ What futures foretell
-- The US market rose on Thursday after the Federal Reserve announced a US$2.3 trillion programme in lending to help small businesses and cities. The S&P 500 added 1.4 per cent on Thursday, gaining a stunning 12 per cent for the week in its best weekly performance since 1974. The Dow Jones Industrial Average rose 1.2 per cent, and the Nasdaq Composite inched up 0.8 per cent. The US market will be closed on Friday for the Good Friday holiday.
-- The China A50 futures were little changed. Hong Kong is closed for the Good Friday holiday.
IPO debuts:  -- Shares of solar energy equipment manufacturer Sineng Electric (300827 SZ) will be traded in Shenzhen for the first time.
-- Economic statistics/Central Bank action: China's March inflation figures, social financing and money supply numbers will be released today. China's State Council will hold a press briefing on measures to stablise export orders at 2pm.


Morning guidance

1)     Shui On Land (272 HK) said its contracted property sales for the first quarter amounted to 2.04 billion yuan, made up of residential sales of 2 billion yuan, and commercial property sales of 4 million yuan.
  The total gross floor area was 26,800 square metres and 166 units of carpark, with an average selling price of the signed contracts of 76,700 yuan per square metre.
2)  Greenland Hong Kong Holdings (337 HK) said its contracted sales for the first quarter amounted to 3.7 billion yuan, while a gross floor area of 325,339 square metres. The average selling price was 11,474 yuan per square metre.
3)    Dexin China Holdings (2019 HK) said it achieved contracted sales of 3.38 billion yuan for the month of March, covering an area of 169,000 square metres. For the first quarter, it saw sales of 5.4 billion yuan, covering an area of 276,00 square metres.
4)   Redsun Properties Group (1996 HK) said it achieved sales of 2.78 billion yuan for the month of March, with a total sales area of 201,156 square metres and an average selling price of 13,823 yuan per square metre.  For the first quarter, it saw sales of 5.9 billion yuan, covering an area of 438,053 square metres with an average price of 13,560 yuan per square metre.
5)     Yuexiu Property Company (123 HK) announced contracted sales of 4.8 billion yuan for March, in a 34 per cent increase compared to the year before, covering an area of 183,300 square metres, in a 41 per cent increase when compared to the year before.
  The value of sales for the first quarter was 9.1 billion yuan, in a 36 per cent decrease compared to the same period in 2019.
-- Louise Moon    


Hong Kong-listed property developers announce sales

1)     Metal trading company Lee Kee Holdings (637 HK) said it expects to record a larger net loss for the year ended March 31, when compared to the previous year. This is due to a drop in metal prices, particularly zinc, which lowered the overall profits from sales, as well as an “unfavourable” global macro-economic environment.
2)     Alibaba Pictures Group (1060 HK) said it expects a net loss of between 1.1 billion yuan to 1.2 billion yuan for the year ended March 31, compared to a loss of 254 million in the same period last year. It said the entertainment industry has faced “complicated difficulties in pursuing profitable operation” since 2019, while the Covid-19 outbreak has caused a significant decrease in its fourth quarter revenues.
3)     Maker of freight wagons and passenger carriages CRRC Corporation (1766 HK) said it expects its net profit for the first quarter of 2020 to fall by 55 per cent to 65 per cent, or between 980 million yuan to 1.15 billion yuan, when compared with a net profit of 1.78 billion yuan in 2019.
-- Louise Moon   


Profit warnings by Hong Kong-listed companies

The Shanghai Composite Index opened 0.1 per cent higher at 2,827.19, while the Shenzhen Component Index fell 0.03 per cent. The ChiNext Index dropped 0.3 per cent.
Yantai Jereh Oilfield Services Group (002353 SZ), whose vice chief executive has been accused of sexually assaulting his adopted daughter, declined 3.4 per cent to 24.21 yuan in early trading.
-- Yujing Liu


China markets open mixed

Publishing Holding company Modern Media Holdings (72 HK) said its executive director, chief financial officer and member of the ESG committee, Mok Chun Ho, has resigned with effect from Thursday. The statement said Mok had no disagreement with the board, and did not give further information.
-- Louise Moon
   


Modern Media Holdings CFO resigns

Apparel business Bauhaus International Holding (483 HK) posted a 40 per cent drop in same store sales for the first quarter, when compared to the same period in 2019, and a 28 per cent drop for the full year when compared to the previous year.
  As of the end of March Bauhaus operates 102 stores in Hong Kong, Macau, Taiwan and mainland China, some 94 less than this time last year.
Meanwhile I.T Limited (999 HK) – which owns brands like A Bathing Ape – said it was expecting a net loss of not less than HK$300 million for the year ending February 2020.
  The fashion conglomerate said the loss was due to social instability in Hong Kong and Macau since mid-2019, the outbreak of Covid-19 which “further aggravated the already difficult operational environment”, a lack of inbound tourism or spending enthusiasm in Hong Kong and mainland China, a slowdown of global economic growth and the Sino-US trade dispute.
-- Louise Moon


Protests, coronavirus hits fashion’s profits: Bauhaus, I.T Limited

US and Singapore markets are closed today for Good Friday.
The Australia, Hong Kong and New Zealand stock markets are shut today and Monday for the Easter holiday.
The Live Stocks Blog will cover mainland stock activities as usual today and Monday!
-- Gigi Choy   


Alert, traders: Here’s what you need to know about the holiday schedule

Solar energy equipment manufacturer Sineng Electric (300827 SZ), whose shares were traded for the first time in Shenzhen, soared in early trading by 32 per cent to 28.57 yuan from its initial public offering price of 21.64 yuan.
The stock is temporarily suspended for trading for the magnitude of the surge.
-- Yujing Liu


Shenzhen debutante soars in market open

China’s manufacturing sector continued to suffer from the impact of the coronavirus pandemic in March, as data released on Friday showed factory gate prices contracted at a faster pace last month.
The producer price index, reflecting the prices that factories charge wholesalers for their products, dropped 1.5 per cent year-on-year last month, data from the National Bureau of Statistics (NBS) showed.
That was worse than the 0.4 per cent fall in February and above the 1.1 per cent contraction tipped in a Bloomberg survey of analysts.
Meanwhile, China’s consumer price index rose 4.3 per cent from a year earlier, falling sharply from a 5.2 per cent gain in February, according to the NBS. Analysts polled by Bloomberg had expected an inflation rate of 4.9 per cent.
Read full story here. 


China’s manufacturers hammered by virus, latest data shows

China’s consumer loans are shrinking at an unprecedented pace after a decade of breakneck expansion, a blow to the government’s strategy of relying on spending as a growth engine amid the worst public health crisis in a generation.
The net balance of consumer loans – made up of short-term and credit card loans from banks and online lenders – plunged by a quarter in the first two months of this year to 7.4 trillion yuan (US$1 trillion), according to data published by the People’s Bank of China. Some microlenders are staring at 20 cents on a dollar in bad loans.
The nation’s much-vaunted army of consumers is flinching as the coronavirus outbreak closes shops and causes job losses, hurting demand for new credit and ability to service older ones. A wave of delinquencies will test the resilience of Chinese lenders this year, with the economy expected to be at its weakest since the 1976 Cultural Revolution.
Read full story by stocks reporter Yujing Liu here.


What’s happened to China’s army of consumers?

The five most heavily traded stocks recently by northbound investors on the Stock Connect saw a lot of selling this week after big runups.
Kweichow Moutai (600519 CH), the world’s most valuable liquor company, rose 0.6 per cent to 1,165.13 yuan.  It has climbed 17 per cent over the past three weeks through Thursday’s close.
Ping An Insurance (601318 CH) rose 2. 2 per cent. The insurance giant has been struggling, with its share price falling 15.5 per cent from March 5 through Thursday’s close.
Jiangsu Hengrui Medicine (600276 CH) rose 0.8 per cent to 97.53 yuan. It has been gaining since March 19, rising 22.5 percent since March 19. It manufactures a range of treatments, from fighting tumors to infections.
China International Travel Service (601888 CH) gained 0.4 per cent to 77.83 yuan. It has been on a tear, climbing more than 15 per cent in just over a week.  Some analysts see a rebound beginning in Chinese domestic travel, which will be followed by international travel later once the coronavirus is under control. That helps travel agencies.
Anhui Conch Cement (600585 CH) slipped 0.2 per cent to 57.94 yuan. In the three weeks through Thursday’s close, the cement maker rose nearly 16 per cent, as Beijing gives money to local governments for infrastructure projects to try to boost the virus-stricken economy.
Of these stocks, only Kweichow Moutai saw more buying in terms of total yuan turnover than selling on Wednesday, the last day data is available from the city’s stock operator. Other stocks saw selling as traders bagged profits.   
-- Deb Price


Popular Stock Connect stocks like Kweichow Moutai mostly gaining

Shanghai to start afternoon trading with 0.7 per cent loss

Chinese airlines continue to lose altitude, with China Southern Airlines (600029 CH) falling 0.6 per cent to 5.26 yuan, and China Eastern Airlines (600115 CH) slipping 0.5 per cent to 4.26 yuan.
The airlines’ shares have tumbled amid the coronavirus turmoil, which has been the biggest hit to the airline industry since the global financial crisis in 2008 and the September 11 terror attacks in 2001.
China Southern has fallen nearly 27 per cent since January 14, while  China Eastern Airlines has dropped 25 per cent. 
Here’s what analysts see ahead for these airlines stocks, which also trade in Hong Kong, though not today due to the Good Friday holiday.
-- Deb Price


Chinese airlines continue their descent

China's exports in January and February declined by 16 per cent from the same period last year in yuan terms, Ren Hongbin, assistant minister of commerce, said during a press briefing.
The country's exports are facing the gravest challenge in many years due to the coronavirus outbreak, he said.
Most of the export manufacturers have encountered difficulties including cancelled and delayed orders and problems with logistics, he said.
-- Yujing Liu


China faces gravest challenge in years in export trade, commerce department says

Chow Tai Fook Jewellery (1929 HK)  saw its revenue and core profit slide, which it blamed on “sluggish demand” as consumers cut back on spending amid the coronavirus.
Revenue and core profit fell 11-13 per cent and 7.9 per cent, respectively, for the 11 months through February 29.
For three months ending March 31, same store sales fell 50 per cent in mainland China, and 65 per cent in Hong Kong and Macau, it said in a filing to the Hong Kong stock exchange after market close on Thursday.
It saw big declines in gem-set jewellery and gold products. It closed four stores in Hong Kong.
Jefferies maintained its “buy” on the jeweller, saying the results were in line with expectations. It has a price target of HK$8.97 on the  stock, or nearly 52 per cent from its Thursday close.
“We believe the improvement is continuing in April to date, with [same store sales] declining by 20–30% with HK not as obvious, because SSS in HK are driven by mainland tourist arrivals,” the Jefferies analysts wrote. “Most of the stores in China are open, and in HK around 85% are currently open. Management believes China has passed the worst stage while HK is still seeking the bottom. The break even SSS level is roughly -40% for HK and -60% for China direct retail in 2H FY20.”
On January 14, when the danger of the coronavirus became clear, its share price was HK$8.50, meaning it has seen a 30 per cent delcine in less than three months.
-- Deb Price   


Jefferies reiterates ‘buy’ of virus-battered Chow Tai Fook Jewellery

California-based electric vehicle maker Tesla Inc (TSLA Nasdaq) on Friday unveiled its China-made version of the long-range Model 3.
Priced at up from 339,050 yuan (about $44,000), the model made in its Shanghai Gigafactory is much cheaper than its current US-made version sold at 509,900 yuan (about US$66,000) in China.
-- Yujing Liu   


Tesla launches China-made sedan model at discount price

Car sales in China plunged 48 per cent to 1.43 million units in March from the same period last year, the latest data released by China Association of Automobile Manufacturers shows.
This, however, represents a 361 per cent jump from February, as lockdowns to slow the coronavirus have loosened and consumers are slowly starting to buy cars and other goods.
Car sales in the first quarter decreased by 42 per cent from the same period in 2019.
-- Yujing Liu


China’s March car sales continue to decline

The Shanghai Composite Index declined 1 per cent to close at 2,796.63, failing to stand above the psychologically-important 2,800-point level after closing above it in three straight sessions this week.
The Shenzhen Component Index fell 1.6 per cent, and the ChiNext Index of start-ups listed in Shenzhen tumbled 2.4 per cent.
Trading volume was at just over 600 billion yuan, down from 650 billion yuan on Thursday.
-- Yujing Liu


China markets close lower in muted trading

Investors should look for stocks that will thrive in the post-coronavirus world. Here are some analysts like.
Five questions investors should be asking. 
How long until this mother of all grizzly bears goes into hibernation? Traders and analysts weigh in.
Global markets are unbelievably volatile.  Get used to it, analysts say. 
Tencent (700 HK) has a  big fan club. Here’s why. 
China airline stocks will come back. What should investors know?
And Macau casino stocks have been beaten down. What do analysts say about their odds ahead?


ICYMI: Weekend reading for investors on sectors, market volatility

Yantai Jereh Oilfield Services Group (002353 SZ), a oilfield services provider based in the eastern province of Shandong, ended a choppy trading session 1.9 per cent higher at 25.53 yuan. 
  The company ended its employment contract with vice chief executive Bao Yuming, after his adopted daughter  accused him in Chinese media of sexually assaulting her beginning when she was 14 in 2015. Bao, who also served as an independent non-executive director at telecom giant ZTE Corporation (0763 HK), has handed in resignation to the company, ZTE said in a statement.
In a response to local Chinese media, Bao said he had taken good care of the stepdaughter, but declined to comment on whether he engaged in sexual behaviour with her.  Police in Shandong province are investigating, according to a statement.
-- Yujing Liu   
