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Gigi Choy

Deb Price

Good day, traders --
Ali Health gained while profit taking took hold for Ping An Good Doctor. The Chinese online health platforms have shot up more than 75 per cent in the past five weeks.
Catch up on the latest action below.
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.
-- Gigi Choy 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.



Hang Seng Index gains in cautious trading as US sets coronavirus re-opening goal 

Two people take a break from the virus to take a selfie on a cargo dock in Hong Kong on April 21, 2020. Photo: AFP


Business


US treasury secretary says world's largest economy could re-open by late August
Hong Kong Broadband Network posts positive earnings 



US treasury secretary says world's largest economy could re-open by late August. Ali Health continues to rally, but Ping An Good Doctor has slipped in afternoon trading. 


Hang Seng Index

China stock market

Coronavirus pandemic: All stories

Kweichow Moutai

Live

Telecommunications company Hong Kong Broadband Network (1310 HK) reported a 101 per cent rise in revenue, to HK$4.5 billion, for the six months ended February 29, 2020, and a 77 per cent gain in EBITDA to HK$1.3 billion.
HKBN’s increases were mainly due to reducing operating lease expenses, consolidating six months of results of HKBN Enterprise Solutions Development and its subsidiaries (collectively WTT Group), as well as the addition of two and a half months of results of JOS Group.
This comes after the merger of WTT Group, JOS Group and HKBN.
In reaction to the outbreak of Covid-19, the group waived some February 2020 service fees, as well as 10,000 free broadband services for families in financial difficulties, and three months of fixed contract work experience for 100 fresh graduates.
-- Louise Moon    


HKBN posts positive earnings

Electrical fittings production company Tongda Group Holdings (698 HK) recorded a revenue of HK$1.7 billion for the first quarter of the year, marking a 1.5 per cent decrease when compared to the same period last year.
The percentage of total turnover taken up by the handset casings and high-precision components business rose by 6.8 per cent, to account for 78.2 per cent.
The firm said normal operations in its major production bases restored “as soon as possible” after the long Lunar New Year holiday, despite the outbreak of coronavirus, with precautionary measures implemented. It said market share has increased “continuously”, leveraged on major products from the handset business.   
-- Louise Moon 


Tongda handset casing gain market share

Italian fashion house Prada (1913 HK) said it withdraws the recommendation to distribute a final dividend, recommended in a meeting with the board of directors on March 18, to “support the group’s financial strength, to be able to manage any future economic and financial impacts, and to have the resources to invest when recovery occurs”.
The dividend amounted to 51 million euros, at 0.02 euro per share, for the year ended December 21, 2019.   
-- Louise Moon 


Prada withdraws recommendation to distribute final dividend

China Unicom (0762 HK) said revenue rose 2.3 per cent to 68 billion yuan for the first quarter of 2020, while net profit was down 13.9 per cent to 3.2 billion yuan, when compared to the same period last year.
“So far this year, the novel coronavirus outbreak has posed challenges to the group, especially in terms of business development, customer acquisition, 5G network deployment and risk of bad debt”, it said. At the same time it has also created new opportunities by also accelerating demand for transformation on digitisation, cyberisation and intelligence.
-- Louise Moon    


Coronavirus poses challenges, opportunities for China Unicom

Supermarket company Beijing Jingkelong (814 HK) posted a 10.6 per cent rise in net profit to 27.7 million yuan for the first three months of the year, when compared to last year.
All areas of its retail business except department stores – hypermarkets, supermarkets, convenience stories – posted gains in operating income through the period.
-- Louise Moon 


Gains for supermarket company Beijing Jingkelong

Overnight markets/what futures foretell
- The S&P 500 rose 2.3 per cent, the Dow Jones gained 2 per cent and the Nasdaq advanced 2.8 per cent. Europe’s Stoxx 50 Index increased 1.6 per cent.  - Hong Kong futures were up 0.7 per cent, while the FTSE China A50 futures advanced 0.5 per cent.
IPO debuts: None scheduled.
Economic data: China's March Swift global payments CNY at 9am Hong Kong Time and Hong Kong's March CPI composite year on year at 4:30pm Hong Kong Time
Central bank action: Nothing major scheduled.
Corporate events, earnings, meetings, news conferences: Earnings in Hong Kong include China Life (2628 HK), China Overseas Land (688 HK) and China Telecom (728 HK).
Earnings on the mainland include 360 Security Technology (601360 CH), Oriental Yuhong (002271 CH), China National Nuclear (601985 CH), Hengli Petrochemical (600346 CH), Perfect World (002624 CH), Power Construction (601669 CH), Sanan Optoelectronics (600703 CH), Sany Heavy Industry (600031 CH) and Wens Foodstuffs (300498 CH). Hongta Securities (601236 CH) will hold an annual general meeting.


Morning guidance

Asia-Pacific shares rose after US stocks finished higher and oil prices recovered some ground.
South Korea’s Kospi rose 1 per cent, building on Wednesday's 0.9 per cent gain. The tech-heavy Kosdaq increased 1.2 per cent, after going up 1 per cent the day before. The South Korean economy shrank 1.4 per cent in the three months through March from the previous quarter, marking the worst contraction since the global financial crisis. Economists had forecast a 1.5 per cent contraction.
Japan’s Nikkei 225 gained 1.1 per cent, after declining 0.7 per cent on Wednesday.
In Australia, which is battling its worst recession in decades, the S&P/ASX200 rose 0.8 per cent. It finished flat the day before. The latest flash Purchasing Manager's Index (PMI) data from the Commonwealth Bank pointed to a much stronger contraction of the Australian private sector during April. The country's PMI now sits at just 22.4, down 17 from the March figure.
New Zealand’s S&P/NZX50 gained 1 per cent, after retreating 1.1 per cent on Wednesday.
Singapore’s Straits Times Index rose 0.4 per cent, building on yesterday's 0.1 per cent gain. The country has reported the most coroanvirus cases in Southeast Asia and extended its partial lockdown to June 1, closing more workplaces.
-- Gigi Choy


Asia-Pacific markets up

The Hang Seng Index rose 0.5 per cent to 24,019.81.
Two stocks in the Hong Kong market that have seen spectucular gains will be watched closely: Ping An Good Doctor (1833 HK) gained 1.2 per cent to HK$116.10 while Ali Health (241 HK) jumped 3.7 per cent to HK$19.64.
They are leaders in China’s growing encouragement of online health care platforms. 
Property stocks lead sectors, while financials are down.
-- Deb Price 


Ping An Good Doctor, Ali Health gain at open

The Shanghai Composite Index rose 0.2 per cent to 2,848.76.
The CSI 300 gauge of large caps listed on Shanghai and Shenzhen advanced 0.3 per cent to 3,851.27.
The Shenzhen Component Index increased 0.3 per cent to 10,644.83, while the ChiNext tech board went up 0.4 per cent to 2,051.89.
Liquor distiller Kweichow Moutai (600519 CH) gained 1.6 per cent to 1,2264 yuan in Shanghai, while Apple AirPod maker Luxshare Precision (002475 CH) slipped 0.7 per cent to 41.56 yuan in Shenzhen.
-- Gigi Choy


China starts the day up

US Treasury Secretary Steven Mnuchin said he expects most of the US economy will reopen by the end of August.
"We're operating under the environment that we are going to open up parts of the economy and we're looking forward to -- by the time we get later in the summer -- having most of the economy, if not all of the economy, open," he told Fox Business Network on Wednesday.
Congress is set to pass a US$483 billion coronavirus aid package to help small businesses weather the crisis.
-- Gigi Choy


US Treasury secretary sees most of US economy restarting by end of August

New economy stocks are mixed.
Ali Health (241 HK) continued to gallop and rose 1.9 per cent to HK$19.30.
Ping An Good Doctor (1833 HK) lost some steam, declining 1.7 per cent to HK$112.80.
NetDragon Websoft (777 HK), a Chinese online gaming company offering online learning products, went up 1.5 per cent to HK$20.65.
Chinese smartphone and home appliance maker Xiaomi (1810 HK) gained 0.4 per cent to HK$10.16.
  Kingsoft (3888 HK), a software company with cloud and business management services, stayed flat at HK$27.80.  Meanwhile, Maoyan Entertainment (1896 HK) fell 1.2 per cent to HK$10.06 and food delivery giant Meituan Dianping (3690 HK) shed 0.9 per cent to HK$100.40.
-- Gigi Choy


Hong Kong’s new economy stocks mixed

Ping An Good Doctor (1833 HK) gave some of its holders a scare earlier when it slipped into negative territory. Now China’s leading health-care provider is up 2 per cent to HK$117.
Meanwhile, Ali Health (241 HK) which focuses on e-pharmaceuticals, has shot up 3 per cent to HK$19.52.
-- Deb Price  


Ping An Good Doctor returns to winner’s circle; Ali Health also advancing

Chinese airlines listed in Hong Kong continue to do well after getting a boost from Jefferies, which upgraded China Southern Airlines (1055 HK), China Eastern Airlines (670 HK) and Air China (753 HK) to "buy".
China Eastern jumped 2 per cent to HK$3.11, China Southern rose 1.9 per cent to HK$3.73, while Air China gained 1.3 per cent to HK$5.47.
Hong Kong's de facto flagship carrier Cathay Pacific Airways (293 HK) slipped 0.1 per cent to HK$9.01. Jefferies kept its "hold" rating for Cathay.
Airlines are going through one of their worst -- and arguably their worst ever -- times as the coronavirus all but shuts down international travel. Domestic travel within China has picked back up, however.
-- Gigi Choy


Chinese airlines gain altitude in Hong Kong

Jefferies kept its "buy" rating on Sands China (1928 HK) and said first quarter results, which were significantly lower but in line with consensus, are likely to be a non-event.
Macau, the world's largest gambling hub, has reported no new coronavirus cases for just over two weeks.
Management said it is optimistic about a recovery driven by pent-up demand but is uncertain about the exact timing. They expect a strong rebound in "late fall" as visa and travel restrictions could be partly relaxed from mid-May or June, according to Jefferies.
Sands China is up 2.3 per cent to HK$31.40.
Other casino operators include Galaxy Entertainment (27 HK), which jumped 3.2 per cent to HK$50.25; Wynn Macau (1128 HK), which increased 1.4 per cent to HK$13.50; MGM China (2282 HK), which rose 0.2 per cent to HK$9.10; Melco International (200 HK), which slipped 0.1 per cent to HK$14.22; and SJM Holdings (880 HK), which fell 0.4 per cent to HK$7.77.
-- Gigi Choy


Jefferies maintains ‘buy’ rating on Sands China; Macau casino operator shares mostly rise

Vinda International Holdings (3331 HK), China’s largest producer of tissue and toilet paper, reported its margin almost doubled to 11 per cent in the first quarter, helped by a lower price of pulp -- the raw material for making paper.
Meanwhile, net profit jumped 65 per cent to HK$377 million (US$49 million) from the same period last year, the company said in a filing to the Hong Kong stock exchange on Thursday.
Sales fell 16 per cent to HK$3.4 billion due to slower growth in mainland China, where Vinda’s 12 production lines were shut for weeks starting from late January to comply with government orders to contain the spread of the coronavirus outbreak.
Shares of Vinda fell 2.2 per cent to HK$22.65 in the latest trading.
-- Yujing Liu


Tissue and toilet paper giant Vinda posts profit jump in first quarter, but shares fall

China markets slipped at the lunch break.
The Shanghai Composite Index slipped 0.1 per cent, the CSI 300 fell 0.2 per cent and the Shenzhen Composite Index declined 0.3 per cent.
Four of the most heavily traded stocks by northbound traders on the Stock Connect were mixed.
Kweichow Moutai (600519 CH) gained 0.9 per cent to 1,255.16 yuan.
China International Travel (601888 CH) rose 0.7 per cent to 86.55 yuan.
  Ping An Insurance (601318 CH) slipped 0.2 per cent to 71.93 yuan.
And Jiangsu Hengrui Medicine (600276 CH) fell 2.3 per cent to 95.30 yuan.
-- Deb Price 


Kweichow Moutai gains, while Jiangsu Hengrui declines

The Hang Seng Index will start the after with a 0.2 per cent gain, after searching for direction in morning trading.
As usual, Tencent (700 HK) was the most heavily traded stock. It gained 0.2 per cent to HK$410.40.
Among blue chips, Macau casino operator Galaxy Entertainment (27 HK) shot up 3.3 per cent to HK$50.30.
Two stocks in the Hong Kong market that have seen spectacular gains will be watched closely today: Ping An Good Doctor (1833 HK) gained 1.7 per cent to HK$116.60 while Ali Health (241 HK) jumped 3.5 per cent to HK$19.60.
-- Deb Price   


Ping An Good Doctor, Ali Health to start afternoon with gains

Galaxy Entertainment (27 HK) leads blue chips gainers, advancing 3.7 per cent to HK$50.50.  
The Macau casino operator has seen contruction of new projects slowed by the coronavirus. But investors are betting that Beijing is looking at when to start allowing people to travel back into the world’s gaming capital. Without that travel resumption from the mainland, Galaxy and other casinos have very few gamblers.
Sands China (1928 HK) is also advancing, rising 2.9 per cent to HK$31.60.
The chief executive of Macau spoke to reporters Monday but offered no time table on when the city may re-open. 
“The Chinese consumer is the first one that will turn around,” said Jefferies casino analyst Andrew Lee. “And when they start traveling, they will probably go somewhere close at first. But if you want to go close internationally [from the mainland], you can only go to Kong Kong or Macau and Macau is preferred” because of its gambling option. 
“All the bad news is out there,” said Lee. The question is “when will the positive drivers come through.”
-- Deb Price    


Galaxy leads blue chip gainers

Mark Matthews, head of Asia research at Julius Baer, expects China’s economy will be the strongest in the world because it managed to contain the virus primarily in Hubei province, where the virus was first detected.
China has gone back to work as the virus continues to spread far and wide in Europe and the US.
"We could expect close to flat GDP growth in China this year compared to starkly negative in many other places. I think the government there is stimulating old and new infrastructure. Hong Kong, however, is more tied to the global economy through finance, trade and logistics so we can expect a much deeper economic contraction in Hong Kong, I'd say about the order of 5 per cent is probably not overestimating that," he said.
-- Gigi Choy


China will have the world’s strongest economy this year, says Julius Baer analyst

Ping An Good Doctor slides 1.2 per cent

Stocks in the technology component sector and old infrastructure -- construction and machinery -- are the best to buy and watch, said Mark Matthews, head of Asia research at Julius Baer.
He said the internet and e-commerce sectors have run about 80 per cent of their course, as have consumption recovery plays like Anta (2020 HK) and Li Ning (2331 HK).
But companies like Sunny Optical (2382 HK) and BOE Technology (000725 CH) could see big gains once business activity normalises.
"One pocket that hasn't run up a lot is the technology component sector because it's been heavily beaten up because of the pandemic ... and we all know the global supply chain has been affected. If we are optimistic that the world will continue to unlock, that should be where  the next up move comes," Matthews said.
Infrastructure is also expected to get a boost from the government, which made it clear that it will help smooth the recovery both through old and new infrastructure.
Sunny Optical is down 2.2 per cent to HK$104.50. BOE Technology fell 1.1 per cent to HK$3.77.
China Resources Cement (1313 HK) gained 2 per cent to HK$10.30, while Anhui Conch Cement (914 HK) slipped 0.7 per cent to HK$59.
-- Gigi Choy


Watch Chinese technology component sector and old infrastructure stocks, Julius Baer analyst says

Fitch Ratings said an unparalleled recession is under way, requiring large cuts to global GDP forecasts in response to coronavirus-related lockdown extensions and incoming data flows.
"World GDP is now expected to fall by 3.9% in 2020, a recession of unprecedented depth in the post-war period," said Brian Coulton, chief economist at Fitch Ratings.
"This is twice as large as the decline anticipated in our early April [Global Economic Outlook] update and would be twice as severe as the 2009 recession."
The decline in GDP equates to a US$2.8 trillion fall in global income levels relative to 2019 and a loss of US$4.5 trillion relative to our pre-virus expectations of 2020 global GDP.
Fitch forecasts eurozone GDP to decline by 7 per cent, US GDP by 5.6 per cent, and UK GDP by 6.3 per cent in 2020.
China and India are both expected to see growth below 1 per cent.
Fitch said the downward revision in GDP factored in national lockdowns of around eight or nine weeks as a central case assumption for most major advanced economies. This contrasts to the credit rating agency's previous assumption of around five weeks.
It also expects supply responses and a relaxation of lockdowns to help oil prices to recover in the second half of 2020 from current lows, which are being exacerbated by storage capacity issues.
-- Gigi Choy


World GDP to contract nearly 4 per cent in 2020, Fitch says

The au Jibun Bank Flash Japan Manufacturing Purchasing Managers’ Index (PMI), released on Thursday, fell to 43.7 from a final 44.8 in March, its lowest since April 2009.
Meanwhile, the au Jibun Bank Flash Japan Services PMI index plunged to 22.8 from a final 41.1 in March, marking the lowest since the start of the services sector survey in September 2007.
The decline in combined output across both manufacturing and services was the strongest ever recorded by the survey in almost 13 years of data collection, surpassing declines seen during the global financial crisis and in the aftermath of the 2011 tsunami.
“Overall, GDP looks set to decline at an annual rate in excess of 10 per cent in the second quarter," Joe Hayes, economist at IHS Markit, wrote in a note.
Hayes expects Japan's current state of emergency -- which will stay in place until May 6 -- to be extended, which will continue to pummel service and factory sectors in the world's third largest economy.
-- Gigi Choy


Flash PMI data for Japan shows economic downturn worsening in April

China Overseas Land & Investment (688 HK) posted a 14.7 per cent fall in revenue to 20.68 billion yuan in the first quarter, a decrease of 24.9 per cent compared to the same period last year due to delivery delay amid the coronavirus pandemic.
It secured contracted property sales amounting to 59.72 billion for the first quarter, representing a decrease of 11.7 per cent year on year.
Jefferies maintains COLI as one of its top picks at a target price of HK$34.22 and expects the property giant's sales and earnings to accelerate in coming quarters.
COLI shares rose 0.4 per cent to HK$26.15.   
-- Gigi Choy


Jefferies reiterates ‘buy’ rating on China Overseas Land & Investment

Stocks on the mainland closed lower.
The Shanghai Composite Index slipped 0.2 per cent to 2,838.50.
The CSI 300 gauge of large caps listed on Shanghai and Shenzhen fell 0.3 per cent to 3,829.75.
The Shenzhen Component Index declined 0.5 per cent to 10,564.05, while the ChiNext tech board went down 0.7 per cent to 2,029.52.
Liquor distiller Kweichow Moutai (600519 CH) gained 0.6 per cent to 1,252.26 yuan in Shanghai, while Apple AirPod maker Luxshare Precision (002475 CH) fell 1 per cent to 41.45 yuan in Shenzhen.
The shipbuilding and oil sectors rose 2.8 per cent and 2.2 per cent, respectively. Meanwhile, telecoms tumbled 3.2 per cent, according to a gauge by EastMoney.
Chinese Internet Service Provider 263.net (002467 CH) fell 2.6 per cent to 7.09 yuan in Shenzhen. The world's third-biggest mobile provider China Unicom (600050 CH) slid 0.9 per cent to 5.24 yuan.
  -- Gigi Choy


China ends the day down

Hong Kong's benchmark closed up 0.4 per cent to 23,977.32.
Ali Health (241 HK) continued its jaw-dropping run and jumped 3.5 per cent to HK$19.60.
Ping An Good Doctor (1833 HK), however, tumbled 2.5 per cent to HK$111.80.
Index heavyweight Tencent (700 HK) rose 0.5 per cent to HK$411.60. E-commerce giant Alibaba (9988 HK), which owns the South China Morning Post, fell 0.6 per cent to HK$204.40.
  Among blue chip gainers, Macau casino operators Galaxy Entertainment (27 HK) gained 3.6 per cent to HK$50.45, while Sands China (1928 HK) rose 2.8 per cent to HK$31.55.
-- Gigi Choy


Hang Seng Index ends the day up; Ali Health continues its roll

Ali Health (241 HK) has gained 76 per cent in almost five weeks. Today was its second consecutive day of gains, and it closed up 3.5 per cent to HK$19.60.
Meanwhile, Ping An Good Doctor (1833 HK) has soared 88 per cent in five weeks. It rose three straight days until it broke the run today, dropping 2.5 per cent drop to HK$111.80.
-- Gigi Choy   
