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Zhang Shidong

Deb Price

Mainland and Hong Kong markets turned out a winning day.
Catch up on the action below.
Please send questions you'd like answered to deb.price@scmp.com .
-- Zhang Shidong in Shanghai and Deb Price in Hong Kong


‘Vibrant’ Hong Kong market to attract more listings from abroad, bankers say

Hong Kong stocks gain as tax worries abate, solar sector rallies on Musk plans

Surging stocks could help China become more than an export powerhouse

Mainland memory firms eye Hong Kong for funds to fuel ‘global ambitions’

Stocks

Stocks Blog:  Bulls charge ahead in Shanghai and Hong Kong

Festival participants run next to fighting bulls in Pamplona, northern Spain on July 11, 2018. Photo: Agence France-Press

Photo: Alamy

Meet the man behind one of China’s biggest agricultural drone makers

Peng Bin of XAG poses with one of his drones. Photo: Lea Li

(170425) -- JIXIAN, April 25, 2017 (Xinhua) -- A farmer looks at a drone spraying pesticide in his field in Jixian County, north China's Shanxi Province, April 25, 2017. Over 50,000 mu (3,333 hectares) of apple trees will be sprayed pesticide with drones this year. (Xinhua/Cao Yang) (dhf)

Demand for agricultural drones is rising because of labour shortages in China. Agricultural drones are used for crop monitoring as well as pesticide spraying. Drone maker is capitalising on ChinaÕs drive to boost agricultural productivity as the country seeks to lessen its reliance on food importsÊ Photo: Lea Li

Demand for agricultural drones is rising because of labour shortages in China. Agricultural drones are used for crop monitoring as well as pesticide spraying. Drone maker is capitalising on ChinaÕs drive to boost agricultural productivity as the country seeks to lessen its reliance on food imports. Photo: Handout

Business

Markets

CStone Biopharmaceuticals announces advance in clinical trial
China’s stock investors top 150 million for first time


Want to learn about mainland and Hong Kong stock markets? Then you are in the right place. We cover these incredibly important markets live, giving you analysis on the action as it unfolds and, through our Crystal Ball feature, thoughts from experts on where sectors and companies are headed.


China stock market

China economy

Live

Here's what we are watching this morning:* Overnight markets/ What futures foretell
  -- Overnight in US markets, S&P 500, Nasdaq and Dow Industrials all dropped 0.1 per cent.
  -- Hong Kong futures were 0.1 per cent lower, while the China A50 futures slid 0.3 per cent.
* IPO debuts:
Seasoning maker Sichuan Teway Food Group will start trading on the Shanghai exchange and Zengame Technology in Hong Kong.
* Economic statistics/Central Bank action:
The statistics bureau will release China’s March home prices this morning. In a statement from the first-quarter meeting of the monetary policy committee issued by the central bank late Monday evening, the policymaker said it will keep good control of the monetary supply and not flood the economy with excessive liquidity, marking a shift in tone.
* Corporate events: earnings, meetings, news conferences: nothing major
*Later this week: The statistics bureau is due to release data on China’s first-quarter economic growth tomorrow as well as other key data, including industrial output and retail sales. Expansion at the world’s second-largest economy probably reached 6.3 per cent in the period, according to the estimate of economists surveyed by Bloomberg.
Good reads: Celia Chen introduces us to Peng Bin, founder of of XAG, one of China's biggest makers of agricultural drones. He Huifeng reports on a mass unbanisation project in Guangzhou that means the end for 1,000 year-old villages. 


Morning guidance 

Hong Kong and China Gas (3 HK) slipped 0.2  per cent to HK$18.66, following a downgrade to hold from outperform by Daiwa Securities. Its price target was raised to HK$19.70 from HK$18.90, or more than 5 per cent from its Monday close.
Of analysts tracked by Bloomberg, one deems the gas producer and distributor a buy, three a hold and eight a sell, with a consensus target price of HK$14.88.
--Deb Price 
 


HK & China Gas slips on downgrade 

Sands China (1928 HK) fell 2.5 per cent to HK$42.20, after being downgraded to hold from buy by HSBC. The price target for the developer and operator of casinos, resorts and retail malls was lowered to HK$43.30 from HK$45.
-- Deb Price
 


Sands China loses some chips after downgrade

China’s stocks continued to slide at the open after flipping into losses from gains yesterday. The Shanghai Composite Index dropped 0.4 per cent, the CSI 300 Index of big-caps 0.3 per cent and the ChiNext gauge 0.9 per cent.
Traders’ jitters about liquidity seemed to be growing after the central bank said late Monday evening that it will be back to the practice of controlling monetary supply amid signs of an economic recovery.
-- Zhang Shidong


China’s stocks open lower amid liquidity concerns

Sunny Optical Technology (2382 HK) fell 2.1 per cent to HK$98.75, following a downgrade to sell from neutral by Haitong International. The price target was dropped to HK$77, from HK$78. That would be a 24 per cent fall from its close Monday.

Its 50-day moving average rose on Monday above its 200-day moving average, known in technical circles as a "golden cross," which is a bullish signal. Over the past 10 years, this has happened to the Chinese optical manufacturer five times, and shares rose 13 per cent in the following 20 days, according to Bloomberg data. 

As of its Monday close, it had risen 64 per cent from its low of HK$61.40 on January 3.
-- Deb Price

 



Sunny Optical trading down but moved into 'Golden Cross'

Shares of Sichuan Teway Food Group (603317), which produces condiments and seasonings, jumped by their 44 per cent daily limit when they began trading for the first time on the Shanghai exchange, rising to 22.63 yuan, from an initial public offering price of 15.72 yuan.
-- Eugene Tang


Sichuan Teway Food jumps by 44 per cent limit on Shanghai debut 

Zengame Technology Holding (2660), which develops games for mobile devices, rose by as much as 24.4 per cent in its Hong Kong trading debut, advancing to an intraday high of HK$1.53, from an initial offering price of HK$1.23.
-- Eugene Tang


Zengame Technology jumps 24.4 per cent in Hong Kong trading debut

Hutchison China Meditech (Chi-Med), the biopharmaceutical company specialising in cancer and immunological drugs controlled by Hong Kong conglomerate CK Hutchison Holdings, has applied to the Hong Kong stock exchange for a listing through a global share offering which will see its parent reducing its stake to below 50 per cent.
CK Hutchison currently owns a 60.2 per cent stake in Chi-Med. It said in a press statement late Monday that its move to reduce its stake to below 50 per cent in the company would enable it to not continue including Chi-Med as a consolidated subsidiary in its financial statements. In 2018 and 2017, Chi-Med net losses attributable to the company stood at US$74.81 million and US$26.74 million, respectively, reversing a net profit in 2016 of US$11.7 million.
Details of the share offerings were not yet available, although Chi-Med disclosed that as part of the global offering it would execute a share split, whereby one share will be subdivided into 10 shares. Based on this ratio, Chi-Med ADS, which currently represents half a share in the company, will represent five shares after the split. Chi-Med will seek shareholders’ approval on the share split at an extraordinary general meeting.
Chi-Med ADS closed up 0.51 per cent at US$31.36 Monday on Nasdaq; while CK Hutchison ADS closed down 1.18 per cent, to US$10.61. In Hong Kong, CK Hutchison was quoted at HK$83.55 in early trading today, down 0.24 per cent.
-- Georgina Lee


Drug maker Chi-Med applies to Hong Kong  for global share offering 

Changsha Jingjia Microelectronics, a maker of chips for graphic processing, tumbled by the daily limit to 40.90 yuan in Shenzhen trading after big shareholders unveiled plans to cut stakes in the company.
Six major holders including chairman, deputy general managers and board secretary plans to sell a combined 4.6 per cent stake in the company in the following six months, Changsha Jingjia said in an exchange statement.
-- Zhang Shidong


Graphic processing chipmaker Changsha Jingjia slumps on stake cut plan

Chongqing Brewery (600132 CH) had its rating downgraded at China International Capital, which cited disappointing sales values of its high-end product Carlsberg, which dropped 6.3 per cent in 2018.
CICC estimated Carlsberg sales will rise only 5 per cent each year in 2019 and 2020, and cut Chongqing Brewery’s profit forecasts for this year by 3.7 per cent and that for 2020 by 0.4 per cent, according to a research note.
CICC set a price target of 32 yuan for the stock, which implies a 6.5 per cent decline from its Monday’s close.
-- Zhang Shidong


Chongqing Brewery cut to hold at CICC on weak sales

Petpal Pet Nutrition Technology, the only publicly traded producer of pet food in the mainland, dropped for an eighth consecutive day in Shenzhen, sliding 3.7 per cent to 41.90 yuan.
That marked the longest such run for the Wenzhou-based company since it began trading in July 2017.
The company, which makes products from animal gum to bird food, said in a statement late yesterday that first-quarter profit decreased 80 per cent from a year earlier, as the trade war delayed orders and rising meat costs eroded profitability.
Shenwan Hongyuan Group expected earnings for the company to recover this year with a détente in the trade war.
-- Zhang Shidong

 


China’s sole listed pet food maker has longest falling streak since 2017 listing

Guess what? The number of US dollar-denominated millionaires in Hong Kong grew at their slowest pace since 2014, because last year's stock market slump had crimped fortunes.
The number of affluent people with HK$10 million in liquid assets - bank deposits, mutual funds, stocks and bonds - rose 1.5 per cent to 69,000 people, according to a survey by Citibank. The number of people with the same amount in total assets - including property - rose 3 per cent to a record 511,000 because Hong Kong's property prices rank at the world's highest. 
The Hang Seng Index fell by almost 14 per cent last year. At least so far, its 16 per cent gain in the year to date, places it among the biggest winners in Asia. 
Read full story here. 


Another victim of the trade war: Hong Kong dollar-denominated millionaires

China's property stocks advanced, as the latest data showed home prices picking up among smaller outlying cities, with property buyers returning in droves. 
Prices of new homes rose in 65 of the 70 cities, a big jump from 57 in February, and the pickup in prices was most apparent in the smaller, far-flung cities away from the major urban centres.
The Property Index on the Shanghai Stock Exchange rose 0.2 per cent to 7,482.55, led by the 2.3 per cent gain in Beijing Capital Development (600376) to 10.10 yuan. Guangzhou Yuetai Group (600393) advanced by as much as 5.9 per cent to 3.60 yuan. Poly Development and Holdings Group (600048), one of the country's largest home builders, gained 1.5 per cent to 14.05 yuan.
-- Eugene Tang


China property stocks advance amid pickup in home prices

China’s stocks had a roller-coaster ride in Tuesday morning trading, with sentiment swayed by optimism about a firm economic recovery and concern about tightening liquidity. The Shanghai Composite Index finished the morning session 1.1 per cent higher, recouping a loss of as much as 0.8 per cent, as financial companies and copper producers rebounded.
The Hang Seng Index was up 0.6 per cent at the midday break. 
-- Zhang Shidong


Shanghai, Hang Seng gain at midday break

A bull run-up on China’s stocks has been enticing more investors into the US$7.4 trillion market.
The latest figure from China Securities Depository and Clearing showed the nation added 2.02 million new equity investors in March, bringing the tally to 150.5 million. The balance exceeds the total number of almost 90 million Communist Party members in the country, and is close to the entire population of Bangladesh.
-- Zhang Shidong
 


China’s stock investors top 150 million for first time

Health care in China will be a solid sector for investors, says Ricky Lee, managing director of Duff & Phelps, an independent valuation firm.
Speaking on a personal basis, he particularly likes 3SBio (1530 HK) and Wuxi Biologics (2269 HK).
"These are two very good companies focused on R&D, on drug discovery, as well as doing a lot of biotech stuff," Lee said during an interview in Hong Kong. 
Both pharmaceutical companies have been on a spectacular run this year, posting more than 80 per cent in gains.  
He also likes China property developers, explaining that they are cheaper than their Hong Kong peers, and that China policymakers need them to succeed to keep GDP growth at more than 6 per cent.
His colleague Patrick Wu, managing director and head of Greater China, says to expect 5G and telecommunications, media and technology (TMT) to continue doing well.
"All that Huawei saga is going to drive China to develop its own technologies, and we expect the 5G and TMT to continue to be strong."
Both Wu and Lee expect more Chinese companies will choose to list in the Hong Kong rather than the US, because the valuation gap has narrowed.
The consultancy firm has just released "Industry Multiples in China," a benchmark study to help listed-company directors and regulators better value industries and companies, an increasingly difficult task because a lot in the new economy comes from intangibles. 
Looking ahead, Wu says investors should expect volatility.
 "It will be a bumpy ride for investors," he said.
-- Deb Price 
 


Crystal Ball: Pharmaceuticals in China are a standout, says Ricky Lee

The rally on Chinese stocks resumed in the afternoon, as traders brushed aside a central bank report implying tighter liquidity.
The Shanghai Composite Index added 1.8 per cent, erasing a loss of a 0.8 per cent, as telecom stocks led the gain.
“I am not worried about the liquidity issue as liquidity won’t get overly tight and the economy recovery now looks very solid,” said Wang Zheng, chief investment officer at Jingxi Investment Management in Shanghai. “The biggest risk facing the market should come from the regulatory front. If stocks rise at a runaway pace, that’ll very likely incur the intervention from the government.”
-- Zhang Shidong


China stocks resume run-up to move on from liquidity concerns

China’s stocks closed at a near 13-month high, with the rally on the Shanghai benchmark resuming, as investors brushed aside concerns about tightening liquidity before the release of economic growth data tomorrow.
The Shanghai Composite Index advanced 2.4 per cent to 3,253.60 at the close -- the highest since March 22, 2018. The gauge finished higher for the first time in four days and recouped all the losses over the past three days.
The resumed run-up came after the People’s Bank of China added back the reference to keeping control of the money supply floodgate, which implies an economic recovery was in good footing, in a statement after the quarterly monetary policy meeting. Meanwhile, the statistics bureau is due to release the data on first-quarter economic growth Wednesday, which is estimated at 6.3 per cent in a Bloomberg survey of economists.
-- Zhang Shidong


China’s stocks refresh highs as liquidity concerns fade

CStone Pharmaceuticals (2616), a biopharma company focused on the development and commercialization of precision medicine for cancer patients, said in an exchange announcement today that it has successfully dosed the first patient with Phase III clinical trial assessing CS1001, which is a monoclonal antibody that it is developing.
Monoclonal antibody drugs are cancer treatments that enlist natural immune system functions to fight cancer. CStone Pharma said the CS1001 was dosed in combination with chemotherapy for the treatment of gastric cancer. It will now evaluate its efficacy and safety in a clinical trial.
“We hope CS1001 can prove successful in this registration study and provide an important new treatment option for Chinese gastric cancer patients,” said chairman and chief executive Dr. Frank Ningjun Jiang in the announcement.
Shares of CStone Biopharmaceuticals were up 1 per cent , at HK$15.78. That was less than the gains seen in the morning when it was quoted at an intraday high of HK$16.46, but still  above its 50-day moving average of HK$15.39.
--Georgina Lee


CStone Biopharmaceuticals announces advance in clinical trial

The Hang Seng Index rose 1.1 per cent, or 319.15 points, to 30,129.87. The Hang Seng China Enterprises Index, or the H-share gauge, gained 1.6 per cent.
Financial stocks provided the biggest gain on the benchmark. China Construction Bank added 3.9 per cent to HK$7.18 and Industrial and Commercial Bank of China climbed 3.1 per cent to HK$6.03.
Sunny Optical Technology Group fell 2.4 per cent to HK$98.50 after Haitong International cut the rating on the stock to sell from neutral. The price target was also lowered by 1.3 per cent to HK$77. That would be a 22 per cent fall from its latest close.
-- Zhang Shidong


Hong Kong’s stocks close higher as financials lead gains

Sands China (1928) -- with its mix of focus on the mass market and VIP segments -- is well-positioned in the overall Macau gaming market, says Margaret Huang, APAC gaming and global lodging analyst for Bloomberg Intelligence.
It has staked claim to 30 per cent of the mass market segment and has more than two-thirds of its revenue coming from this segment of its business, while also sprucing up its properties for VIPs, she said.  That makes it well positioned in the overall Macau market. VIPs drive more than 50 per cent of the entire market's revenues, she said at a media roundtable. 
"The bright spot is the fact that when you look at the growth numbers, the mass market segment is actually surpassing the VIP ...  which is slowing down because of the US-China trade war," she said. "... They (VIPs) are cautious about spending now. The demand is pent up." 
Sands China's Macau properties include the Venetian, the Parisian, the Sands Cotai Central and the Plaza Macao. In the first half off this year, it is expanding and revamping VIP gaming floors at the Venetian and the Plaza, a handout showed.
Of analysts tracked by Bloomberg, Sands China has 21 buys, six holds and one sell, with a consensus target price of  HK$43.31, not far from its HK$43.15 share price today. 
Macau's gaming sector has been on a roller-coaster ride from the heydays in share prices in 2013. It is the only place in China where casinos are legal. It was hit hard through 2015 by President Xi Jinping's anti-corruption drive, which frightened high-rollers away from the tables. It staged a strong VIP-led recovery until last summer, when the trade war dampened VIP's appetites. It began strengthening again at the end of last year. The coming Greater Bay Area will support long-term growth of the Macau gaming sector, she said.
Huang said she doesn't expect another crackdown to keep away VIPs. "We're in a completely different time now," she said.
"Sands is basically a profit leader," Huang said. "So even in tough times, it is doing pretty well." 
-- Deb Price 
 


Crystal Ball: Sands China makes smart bet on its mix of VIPs, mass market, says Margaret Huang

Stocks Blog: Bulls charge ahead in Shanghai and Hong Kong

.css-1mniedq{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;}CStone Biopharmaceuticals announces advance in clinical trial China’s stock investors top 150 million for first time

CStone Biopharmaceuticals announces advance in clinical trial

China’s stock investors top 150 million for first time