bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

urlAlias

moreOnThisArticles

sponsorType

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

Georgina Lee

Deb Price

Good day traders --
Shanghai eked out a small gain. but Hong Kong slipped.
Catch up on the latest action below. We'd love to hear from you, so drop us a line to deb.price@scmp.com .
-- Georgina Lee and Deb Price in Hong Kong 
 


China, Hong Kong stocks set to gain nearly 20% in 2026, JPMorgan says

DeepSeek’s Liang Wenfeng makes the cut in top 10 ‘people who shaped science in 2025’

Hong Kong stocks extend losses amid rate-cut caution and muted China policy outlook

Hong Kong’s MPF marks 25 years with strong returns, ‘growing public confidence’

Stocks

Stocks Blog: Shanghai ends slightly ahead, while Hong Kong slips amid US-China trade, tech tensions

A man walks past an electric stocks board at a brokerage house in Beijing on May 14, 2019. Photo: Associated Press.


An investor walks past a screen showing stock market figures at a securities company in Hangzhou in China's Zhejiang province on June 19, 2018. Photo: Agence France-Presse


The bull sculpture at Exchange Square in Hong Kong. Photo: David Wong


Economy

Business

Markets

Crystal Ball: HSBC expects Tencent Holdings (700 HK) to rocket, maintains 'buy'
Kweichow Moutai jumps as investors gather for annual general meeting


Crystal Ball: HSBC expects Tencent Holdings (700 HK) to rocket, maintains 'buy'


Hong Kong stock exchange

China stock market

Live

Here's what we are watching this morning:
Overnight markets/ What futures foretell
-- Overnight in US markets, S&P 500 was down 0.84 per cent, Nasdaq slipped 0.39 per cent, and the Dow Jones Industrial Average was down by 0.93 per cent.
 -- Hong Kong futures are down 0.29 per cent , while the China A50 futures are down 1.67 per cent.
IPO debuts:
None
Economic statistics/Central Bank action:
None to note
Corporate events:
Annual general meetings: CGN Power (1816 HK),  Dali Foods Group (3799 HK), China Telecom (0728 HK); Kweichow Moutai (600519 CH), Zhejiang Zheneng Electric Power (600023 CH)
Good reads: Rising Chinese AI star Megvii has gotten caught in the US-China tech war, reports Sarah Dai. Hong Kong’s stock exchange is counting on a confidential application process for companies that are already listed in New York or London to raise funds on its bourse, reports Enoch Yiu. 


Morning guidance 

Nationalist Global Times had tough words today for the US on rare earths, used in everything from iPhones to guided missile systems.
China accounts for more than 90 per cent of global production, and US President Donald Trump has left them off his tariff lists.
"If China decides to ban rare earths export to the US, it would produce complex effects, including incurring certain losses on China itself. However, China also clearly knows that the US would suffer greater losses in that situation," the Global Times writes in an editorial. "... China has great advantages in output and variety. Once China's rare earth supply stops, it will certainly pose a great challenge for the US to face."
It also quoted an unidentified official of the National Development and Reform Commission as saying Tuesday in response to a reporter's question about whether China would use rare earths as a countermeasure against US tariffs, "If anyone wants to use the products made from rare earths exported by China to contain and suppress the development of China, I think the people of the old revolutionary base area in the south of Jiangxi Province and the people of China will not be happy."
Rare earth-linked stocks have soared amid sudden attention, which was set off by a recent visit by President Xi Jinping to one of China's major rare earth facilities.
-- Deb Price 
 


Global Times sends a warning: 'US will rue forcing China's hand on rare earths'

Sunny Optical Technology Group (2382 HK) was upgraded to neutral from sell by Goldman Sachs, with a price target of HK$70. 
That share price is considerably lower than the consensus target price of analysts tracked by Bloomberg, who see it rising to HK$102.85, or nearly 49 per cent from its Tuesday close. Thirty-two call it a buy, 11 a hold and two a sell. Sunny Optical makes glass and other products for mobile phone cameras and microscopes.
It is trading up 0.3 per cent to HK$69.40.
-- Deb Price 
 


Sunny Optical Technology upgraded to neutral by Goldman Sachs

Mainland and Hong Kong markets fell.
The Hang Seng Index is down 0.5 per cent, at 27,260.51, with some banks and property stocks leading the blue chip index lower.
Industrial and Commercial Bank of China (ICBC) (1398 HK) was down 1.44 per cent, to HK$5.46; China Construction Bank (939 HK) was down 0.49 per cent at HK$6.16; Chinese developer Country Garden (2007 HK) down 2.22 per cent at HK$10.58; while Sino Land (0083 HK) fell 1.08 per cent at HK$12.84.
China benchmarks also opened lower, with the CSI 300, which tracks blue chips listed on the Shanghai and Shenzhen exchanges, sliding 0.72 per cent, or 26.54 points, to 3,645.72.
The Shanghai Composite Index was down 0.48 per cent, or 13.81 points, tot 2896.1. Driving it down were financial stocks, such as ICBC (601398 CH), down 0.71 per cent at 5.63 yuan, and China Merchant Securities (60999 CH), down 1.77 per cent at 15.54 yuan.
But bucking the losses were rare earth-related stocks, with a gauge tracking 33 companies up 4.89 per cent.
-- Georgina Lee 


Hong Kong, China stocks fall, weighed down by financials

Shares of Hong Kong Exchanges & Clearing (0388 HK) continued their upward trend since last Thursday, shooting up 0.39 per cent at HK$255.6, after the SCMP reported it is counting on a confidential application process for companies that are already listed in New York or London to raise funds on its bourse. The shares then slid, and are up about 0.08 per cent.
The move is part of last year’s listing reforms by the HKEX and the local securities regulator aimed at enticing globally listed companies to consider Hong Kong as an additional source of funds.
On Tuesday, Bloomberg reported that US-listed Alibaba Group Holding is considering a second listing in Hong Kong through a US$20 billion float. It listed in New York in 2014.
-- Georgina Lee 


HKEX keeps up its recent roll after SCMP report on secondary listing reform

China rare earth stocks are flying, after the Global Times warned the US it will "rue forcing China's hand on rare earths."
In Hong Kong, China Rare Earth (0769 HK) is up 35 per cent to HK$0.69. It is the one that recently closed up 108 per cent, after a visit to a mainland rare-earth facility by President Xi Jinping spotlighted US dependence on the  key element in high-tech products.
On the mainland, L Mag Rare-Earth (300748 SZ), the company visited by Xi, hit the 10 per cent daily upward limit, rising to 49.34 yuan. Taiyuan Twin Tower Aluminum Oxide Co (000795 SZ) was up 9.95 per cent to 9.39 yuan.
 


 China rare earth stocks shoot up after Global Times warning to US

Foreign capital has been returning to China’s A-share market
On Monday, net inflows totalled 5.57 billion yuan from the northbound Shanghai Connect and Shenzhen Connect, based on total transaction value. That broke an eight-day streak of net outflows by foreign buyers.
At the close of Tuesday, China Merchant Bank (600036 CH), Industrial Bank (601166 CH), Shanghai Pudong Development Bank (600000 CH), China Minsheng Bank (600016 CH), Industrial and Commercial Bank of China (601398 CH), together accounted for seven of the top-10 most actively traded stocks on the Shanghai connect, according to the latest information available on the Hong Kong stock exchange.
Today, A-share financials are all trading down in line with the broader market.
Ping An Insurance (601318) was down 0.31 per cent, at 77.95 yuan, while the Agricultural Bank of China (601288 CH) was down 0.54 per cent at 3.7 yuan. Industrial Bank (601166  CH) fell 1.66 per cent at 17.75 yuan, while Shanghai Pudong Development Bank was down 1.68 per cent at 11.1 yuan. China Minsheng Bank slipped 0.49 per cent to 6.15 yuan, while the Industrial and Commercial Bank of China fell 0.71 per cent, to 5.63 yuan.
-- Georgina Lee 


Buying interest on Stock Connect returns to A-shares of Chinese insurance and financials

Shares of Bank of East Asia (23 HK) fell by as much as 2 per cent to an intraday low of HK$23.90, after Hong Kong's first Chinese-owned bank announced that David Li Kwok-po will step down as chief executive to hand over the daily management of the century-old bank to his two sons.
Li will remain as the bank's executive chairman when the handover takes effect on July 1.
-- Eugene Tang 
 


Bank of East Asia falls after chief executive says he is handing over management to sons

Shares of liquor king Kweichow Moutai (600519 CH) have been having a great year, soaring 56 per cent despite a slide this month amid Donald Trump's tariff and tech storms.
On Tuesday, the Stock Connect saw a net inflow from foreign investors into the A-share market. But Kweichow Moutai saw a net outflow of 492 million yuan.
Today, thousands of shareholders are gathering for the company’s annual general meeting. Many are determined to get clarity from management about some of the negative news swirling around the distiller. Earlier this month, a plan by its new chairman to streamline sales of the highly sought-after rice liquor created a backlash and public outcry. The company even received a letter from the Shanghai Stock Exchange, asking the distiller to explain why its state-run parent Kweichow Moutai Winery Group had established its own sales network, which could potentially conflict with the interests of the listed company. Shareholders are expected to pound management for further clarifications today.
Meanwhile, on Tuesday, Kweichow Moutai got a strong endorsement: Investment bank CICC said it expects the liquor maker’s net profit and revenue could grow more than 10 times over the next decade. That in part drove the Shanghai-listed heavyweight to be the top gainer on the CSI 300 index. 
Kweichow Moutai’s net outflow Tuesday also contrasted Shenzhen-listed Wuliangye Yibin (000858 CH), which recorded net inflow from investors. It was also forecast by CICC to enjoy a more than 10-times increase in profit and revenue in the next decade.
Kweichow Moutai is trading up 2.8 per cent at 912.70 yuan, while Wuliangye Yibin is up 0.8 per cent at 103.97 yuan.
 
-- Georgina Lee 


Kweichow Moutai jumps as investors gather for annual general meeting

A gauge tracking tracking more than 100 semiconductor-related stocks rose by over 4 per cent in the morning, with a dozen listed in Shanghai and Shenzhen jumping 10 per cent, the daily up-limit allowed by their exchanges.
Earlier this week, Chinese scientists said they created a transistor that will increase the performance of microchips, and dramatically reduce their energy use. The most advanced computer chips on the market today use seven-nanometre transistors. But a team at the Institute of Microelectronics at the Chinese Academy of Sciences in Beijing said they had developed 3nm transistors – about the width of a human DNA strand – and that tens of billions of them could fit on a fingernail-size chip.
Transistors are the building blocks of processors. The smaller transistors become, the more that can be fitted onto chips, increasing the performance of a processor exponentially.
Datang telecom (600198 CH) was up 9.,26 per cent at 15.81 yuan, its highest in over three weeks. Those that rose to the daily up-limit included Shenzhen Fastprint Circuit Tech  (002436 CH), to 6.47 yuan;  Ningbo Kangqiang Electronics (002119 CH), to 20.74 yuan, Zhejiang Yueling (002725 CH), to 11.65 yuan, and Shenzhen Fine Made Electronics (300671 CH) at 30.58 yuan.
 
-- Georgina Lee 


China chip stocks shoot up after Chinese scientists claim breakthrough on micro transistors

OFILM Group (002456 CH), whose technologies and products are used in Apple iPhones’ selfie camera,  rose to its highest level in two weeks after it announced in an exchange filing that it has signed an agreement with Jiangxi province-based  Nangchang Industrial to sell to the latter a 16 per cent stake in the company for 3.47 billion yuan, valuing the stake at about 8 yuan per share.
Nangchang Industrial is a state-owned conglomerate whose businesses span trading, property development, financial services and foodstuffs.
Shares of OFILM Group, which produces touch screens, video head modules, fingerprint identification modules and other products, were up 6.9 per cent at 8.68 yuan at the lunch break.
-- Georgina Lee 


Apple supplier OFILM Group shares up after disclosing 16 per cent stake sale to Jiangxi SOE

A gauge tracking seven insurance stocks surged after lunch, as investors cheered China's Ministry of Finance announcement of a tax cut for insurers.

The Ministry of Finance said in a notice on its website today that insurance companies will be able to get a tax deduction on the commission expenses and fees incurred in the course of their operations.
The deduction would be capped at 18 per cent of  an insurer’s total  premium income for the year after adjusting for refunded premiums. The new rule will be effective for insurance companies’ payable taxes due for the 2018 fiscal year, it said.
The People’s Insurance Company (Group) of China  (601319 CH) shot up 9.93 per cent to 9.19 yuan; China Life Insurance (601628 CH) climbed 6.57 per cent to  27.4 yuan; China Pacific Insurance (601601 CH) rose 6.41 per cent to 35.55 yuan;  and Hubei Biocause Pharmaceutical (000627 CH), which controls Shanghai-based Guohua Life, was up 4.9 per cent to 6.64 yuan.
-- Georgina Lee 


China insurance stocks shoot up on targeted tax cut news 

Macao casino operators are having an unlucky day.
Sands China (1928 HK) is the top loser in afternoon trading on the Hang Seng Index, down nearly 3 per cent at HK$35.85. Fellow Macau player Galaxy Entertainment Group (27 HK) is down 1.4 per cent at HK$47.40. 
Sands China was cut to neutral from buy by Goldman Sachs on Tuesday. Goldman said it expects Macau gross gaming to fall 3 per cent this year, compared to what it had thought would be 3 per cent rise, Bloomberg reported. It cited deteriorating US-China relations.

Bloomberg Intelligence analyst Margaret Huang says premium mass gamblers are fueling revenue and profit growth at Macau casinos, "outpacing both VIPs and the base mass market by delivering steady, predictable business." The group, "well-heeled, gaming savvy and entertainment-minded," was behind Sand China's 1Q profit growth, and may do the same for other operators, she said in a note out Tuesday. 
BI said that Sands China is boosting its premium-mass table count, which has shot up 23 per cent over the past two years. Such clients generate US$1.7 million quarterly per gaming table, double that of base-mass gamblers, and they spend more on dining, luxury goods and other non-gambling activities, Huang said. Galaxy and US-traded Melco Resorts are the only rivals that could compete with Sands for these choice gamblers, she concludes.

The Hang Seng has 34 of its 50 stocks trading down, 12 up, and the rest unchanged as sentiment continues to be weighed down by growing tensions between the US and China. It was last trading down 0.36 per cent, at 27,292.74. 
-- Deb Price 
 


Casino stocks having unlucky day, weighing on Hang Seng

The Hang Seng China Enterprise Index, which tracks China stocks listed in Hong Kong, gained 0.14 per cent or 14.26 points at 10,430.81, bucking the downward trend of the blue chip index.
After lunch break, China insurer stocks drove the index higher, after the Ministry of Finance said in a notice on its website that insurance companies will be able to get a tax deduction on the commission expenses and fees incurred in the course of their operations. The new rule will be effective for insurance companies’ payable taxes due for the 2018 fiscal year, it said.
Leading the gains in the H-share index were PICC Property and Casualty (2328 HK), up 5.59 per cent at HK$8.5; New China Life Insurance (1336 HK), up 5.18 per cent at HK$37.55; China Pacific Insurance (2601 HK) up 5.16 per cent, at HK$29.55; the People’s Insurance Company (Group) of China (1339 HK), up 4.08 per cent at HK$3.06.
-- Georgina Lee 


Hang Seng China Enterprises Indexes turns up on insurer tax break

Kweichow Moutai (600519 CH) investors are ready to hit chairman Li Baofang with questions about the outlook for share prices and plans to streamline sales, reports Zhang Shidong, at the distiller's biggest meeting ever. 
The liquor stock has surged more than 50 per cent this year to an all-time high. Kweichow Moutai has chalked up an annual return of 32 per cent since its listing in 2001, compared with 2.5 per cent for the Shanghai Composite Index in the same period time, according to Bloomberg data.
Shareholders will be looking for clues as to whether Kweichow Moutai can maintain the kind of stellar returns and earnings growth that warrants bullish calls by investment banks, Zhang reports.
As the share price approaches the 1,000-yuan mark, which translates to more than 30 times earnings, analysts say the high-flying price can be digested by steady earnings growth. China International Capital Corp, which has the most bullish share-price estimate for Kweichow Moutai, said in a report this week that its revenues and profits will probably rise more than tenfold in the next decade as Chinese consumers opt for more expensive goods amid increasing affluence. The investment bank has a target price of 1,250 yuan for the stock.
It is trading up 2.7 per cent at 911.91 yuan.


Kweichow Moutai investors ready to ask about share price outlook 

The Shanghai Composite Index eked out a tiny gain, finishing up up 0.17 per cent, or 4.79 points, at 2914.7.
That marked four-straight days of gains, thanks to leading insurance heavyweights that rose on news about new tax cuts.
In the afternoon session, insurers shot up after the Ministry of Finance said that insurance companies will be able to get a tax deduction on the commission expenses and fees incurred in the course of their operations. The new rule will be effective for insurance companies’ payable taxes due for the 2018 fiscal year.
People’s Insurance Company (Group) of China  (601319 CH) ended as second biggest index point gainer, up 8.85 per cent at 9.1 yuan. The next big gainers were China Pacific Insurance (601601 CH), which jumped 7.2 per cent to 35.81 yuan, and China Life Insurance (601628 CH), which climbed 4.82 per cent to 26.95 yuan, and Ping An Insurance (601318 CH), which rose 2 per cent to 79.78 yuan.
The CSI 300, which tracks blue chips listed on both Shanghai and Shenzhen, slid 0.23 per cent, or 8.35 points, ending at 3,663.91. In Shenzhen, old economy stocks led losses, with Gree Electric Appliances (000651 CH) falling 1.46 per cent to 54.1 yuan, and property developer China Vanke (00002 CH) losing 1.67 per cent to 27.16 yuan.
-- Georgina Lee


Shanghai gets boost from insurers helped by tax cut 

The outbreak of African swine fever that is roiling China's pork sector has helped WH Group (288 HK) climb out of last year's rut to shoot up 29 per cent in 2019. That includes a steep falloff this month after it reported weak first quarter results and markets overall were rattled when advances toward a US-China trade deal unraveled.
“This year’s situation is definitely good for us,” WH Group’s investors relations director Luis Chein told Peggy Sito of the South China Morning Post. “We were very busy last year struggling to fight against the tough environment. This year, we are also busy, but we are happy.”
WH Group, the world’s largest producer of the meat and owner of Smithfield Foods of Virginia, saw its first-quarter operating profit take a 10 per cent drop due to oversupply in the US hog market.
“It will be challenging to get the disease contained in a short time. China killed millions of pigs to contain the virus’ spread, so importers need to buy supplies from abroad to make up for it,” said Chein. “We will increase imports of fresh port from US production base to China.”
Read full story here. 


African swine fever is bad for pork lovers, but boosting WH Group this year

The Hang Seng Index lost 0.57 per cent, or 155.1 points at 27,235.71, driven down by selective banks and Tencent.
Traders said investors’ worry over slower global economy growth resurfaced, after yield on the benchmark three-month US Treasury once again rose above that of the 10-year, amid the protracted US China trade war. The so-called  yield curve inversion is seen traditionally as warning sign signalling a looming recession.
Insurer AIA (1299 HK) lost 1.03 per cent, to HK$76.7; and Tencent (700 HK), fell 1.1 per cent to HK$322. They were the top losers in index point terms on the Hang Seng.
Capping Hang Seng losses were China insurance stocks, which gained on news that insurance companies will be able to get a tax deduction on the commission expenses and fees incurred in the course of their operations. It will be applied in the 2018 taxation year. Ping An Insurance (2318 HK), climbed 0.53 per cent at HK$86.15, while China Life (2628 HK) rose 0.55 per cent to HK$18.28.
-- Georgina Lee


Hong Kong stocks end lower as concerns over economic outlook resurface

HSBC expects Tencent Holdings (700 HK) to rocket this year, boosted by "strong synergies" in its  cloud, smart retail (through its WeChat and mini programs), advertising and FinTech segments. 
It sees an upside of 42  percent, maintaining a target price of HK$460 from its HK$323.80 close on Monday.
"Tencent differentiates itself by supporting enterprise customers through digital transformation involving an open approach to technology (i.e. being an enabler for its ecosystem partners), and to build cloud “technology resource pool” with service partners," HSBC analysts wrote in a note sent out late today. "Tencent has increased its market share in IaaS [logging as a service] to 12% (from 9% in 1H17), according to IDC, and its revenue is c45% of BABA’s; and diversification of its customer base continues in finance, retail, and government services (beyond its core social, games, video verticals) and leverages its unique core competencies in social network to attract cloud customers who focus on customer management."
HSBC sees plenty of room for Tencent to grow, as China becomes the second largest cloud service market behind the US. It sees the cloud business part of Tencent contributing more to its revenue. 
"Tencent’s Smart Retail differentiates with: 1) an unparalleled social network to connect retailers with customers anytime, anywhere; 2) unique combination of technologies including Cloud, Mini Programs, payment solutions; 3) private zones for retailers (e.g. digital membership)," the HSBC analysts wrote. "We see robust user growth in Tongcheng eLong (MAU 199m vs Ctrip’s 210m in 1Q19) and PDD with mini program initiatives."
It is trading at a premium to peers, but HSBC says it is "well justified given Tencent’s earnings quality and visibility." 
The stock closed today at HK$322, falling 1.1 per cent in a declining market.
-- Deb Price 
 


Crystal Ball: HSBC maintains buy on Tencent, sees it rocketing

Stocks Blog: Shanghai ends slightly ahead, while Hong Kong slips amid US-China trade, tech tensions

Crystal Ball: HSBC expects Tencent Holdings (700 HK) to rocket, maintains 'buy' Kweichow Moutai jumps as investors gather for annual general meeting

Crystal Ball: HSBC expects Tencent Holdings (700 HK) to rocket, maintains 'buy'

Kweichow Moutai jumps as investors gather for annual general meeting