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Yujing Liu

Deb Price

Good day, traders —
Catch up on the day's hottest action below.
We'd love your feedback as we work to make our live blog your must-read source for stock news. Please email your thoughts to deb.price@scmp.com .
— Yujing Liu and Deb Price in Hong Kong
 


‘China’s little Nvidia’ Moore Threads warns of overheating risks after 723% share surge

China’s generative AI tiger MiniMax pursues Hong Kong IPO to expand global reach

Hong Kong stocks advance as traders position for additional growth measures

AI stock opportunities lie in ‘battleground’ sectors, not ‘titans’, BofA Securities says

Hong Kong stock market

Stocks Blog: China, Hong Kong stocks gain on optimism over coming trade talks  

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


Business

Markets


Pro Tips: Kenny Wen on investing like a Thai boxer, getting Trump and dieting
China’s car industry has more room to grow, Guosen Securities says



Pro Tips: Kenny Wen on investing like a Thai boxer, getting Trump and dieting


Live

Think of stock investing like Thai boxing, suggests stocks pro Kenny  Wen.
Your counter attack is very important, based on your opponent's action and movement. For investing, that means identifying the macro trend, then adjusting your strategy and portfolio.
In other words, if you don't watch carefully, you very well may get kicked in the head.
"For the US, it is not about the trade war deficit. It is worrying about China replacing the US and becoming the largest economic power in the world," says Wen, wealth management strategist at Everbright Sun Hung Kai and a Thai boxing jock.
Over briny Irish oysters and a goat cheese salad at Hong Kong's swanky Chinnery bar, Wen offers his take on everything from China's "drink first and then talk" business culture, to its embrace of stock investing as just another form of gambling and how its tycoons slip their money out of the country. Wen also weighed in on his six must-read books for a better grasp of Donald Trump and the US-China trade fight — which he doesn't expect will end nicely — and on dieting.
In a surprise, dieting may just be his favourite topic. At the start of the evening, he handed out dated business cards: "Notice anything different?"
Comparing the chubby-faced man on the card with the buff Wen of today, the difference is startling: He lost 50 pounds in five months, mostly by replacing Cokes and desserts with almost daily bouts of Thai boxing.
It took discipline and commitment, which also happen to be hallmarks of a happy investor.
"If you can control your mindset, making a reasonable profit mid- to long term, I don't think it is very difficult. The most challenging thing is ourselves," he says, underscoring that this self-discipline thing is never fully mastered. 
So, first the six books, then the "Kenny tips" for happy investing.
To get the macro picture, he encourages all of his clients to read Death by China, co-written by Peter Navarro, a China hawk and trade adviser to president Trump; the bombshell Trump expose Fire and Fury: Inside the Trump White House by Michael Wolff,  Destined for War: Can America and China Escape Thucydides's Trap by Harvard scholar Graham Allison, who argues that history shows war usually results when a dominant power is challenged by a rising one, The Hundred-Year Marathon: China's Secret Strategy by Michael Pillsbury, Fear: Trump in the White House by esteemed journalist Bob Woodward and The Art of the Deal in which Trump reveals exactly how he thinks.
And now for the top five "Kenny tips" for  investors:
* Limit your portfolio to 10 to 15 stocks "so you can focus on every one of them."
* Check on your stocks at least weekly. Set a "cut loss" rule before you buy to tame emotions — Wen recommends 10 per cent — and if a stock falls that much, sell it.
* Focus on the fundamentals of any company you own for the next six months to a year because you can't control daily market volatility.
* Know your companies' price-to-earnings ratios. Below 10, you buy. Above 15, sell. "If you follow this for 10 or 15 years, you can have a handsome profit," he says.
*Investing in A-shares is best done through mutual funds, where a professional who knows the Chinese market is picking. China's immature market is driven by retail investors who love gambling and will pick one stock over another just because it costs less per share, he warns. "Chinese investing is just like gambling. They won't take it long term. They hit the target price, and they will get out and try to find another stock."
Wen expects gold to hit US$1,500 an ounce by the end of the year — up from US$1,417.73 now — and advises investors hold some of the yellow metal — but not to make it more than 20 per cent of your portfolio.
Wen likes bonds, especially property bonds, and suggests investors take a look at those of Zhenro Properties Group and China Evergrande Group.
"It's difficult to control emotions because we are humans. We are not machines," Wen says. "But do your homework, know the fundamentals of a company and that will increase your confidence level and you will not be as easily affected by the daily news or the daily movement."

Kenny Wen joined Everbright SunHung Kai in 2013 as the wealth management strategist and leader of a research team on equities and macroeconomic trends. He started at Tai Gook Securities (now known as "Haitong Securities), moved to Citibank, where he was a research manager and investment strategist, and then went to HSBC, where he provided market analysis and managed investment portfolios for high-net worth individuals. He holds a Bachelor of Business Administration degree in accounting and finance from the University of Hong Kong.
 
— Deb Price and Yujing Liu
 


Pro Tips: Kenny Wen on investing like a Thai boxer, getting Trump and dieting

Joyware Electronics (300270 SZ), a video surveillance solutions provider, said in an exchange filing that it is buying back shares worth between 30 million and 50 million yuan (US$4 million to US$7 million), at a price of no more than 10 yuan apiece.
The company carried out the first round of share buybacks yesterday, when it purchased 71,200 shares, or 0.02 per cent of the overall shares, for over 465,000 yuan.
Shares of Joyware closed 1.5 per cent higher at 6.58 yuan Tuesday.
— Yujing Liu


Video surveillance firm to buy back shares worth millions of dollars

Sino Energy (1096 HK) announced its secretary, Tsang Ho Yin, resigned on July 19.
The company has yet to appoint a successor to Tsang, and did not give reason for the change in a filing to the stock exchange.
Separately, Sino announced that a petition against it, over a claim it failed to settle a sum of HK$5.1 million, will be heard at the High Court on August 14.
— Louise Moon


Sino Energy announces secretary's resignation

Here's what we are watching this morning.
Overnight markets/ What futures foretell:
-- The US market gained overnight, lifted by positive quarterly results from Coca-Cola and United Technologies. The S&P 500 rose 0.7 per cent, the Nasdaq Composite added 0.6 per cent, and the Dow Jones Industrial Average was 0.7 per cent higher.
-- The Hang Seng Index Futures climbed 0.4 per cent, while the China A50 futures were up 0.5 per cent.
IPO debuts:
 
-- Jiangsu Shemar Electric (603530 SH), a maker of rubber seals used in power grids, will trade for the first time in Shanghai. The company has raised 238 million yuan with an offering price at 5.94 yuan apiece.
Economic statistics/Central Bank action:
None to note.
Corporate events:
-- Citic Dameng (1091 HK), China's largest maker of steel-smelting ingredient manganese, will announce first-half results today.
Good reads: Chinese economists are keeping a close eye on the upcoming Politburo meeting headed by President Xi Jinping to see what clues it will offer on how Beijing will manage an economy grappling with uncertainties caused by domestic structural obstacles and the effects of the trade war with the United States, reports Frank Tang. China’s Baoshang Bank failure has silver lining in the form of greater focus on rural lending, Orange Wang reports.


Morning guidance 

The International Monetary Fund lowered its forecast for global economic growth again, as the expansion of emerging economies failed expectations in the face of US-China trade tensions, disruptions to the global technology supply chain, and Brexit uncertainties.
The IMF projects a 3.2 per cent growth rate for the global economy, down 0.1 percentage points from its projection in April, which was 0.3 percentage points lower than its estimate at the beginning of this year.
“The negative consequences of policy uncertainty are visible in the diverging trends between the manufacturing and services sector, and the significant weakness in global trade,” the international organisation said in a statement yesterday.
The IMF also cut its estimate for China's GDP growth to 6.2 per cent this year from 6.3 per cent in the April projection.
“In China, the slight revision downwards reflects, in part, the higher tariffs imposed by the United States in May,” it said.
— Yujing Liu 


IMF lowers global growth, China forecasts due to trade war

Most of the stocks listed on the new STAR technology board rebounded in early trading, looking set to continue a wild ride on the board's third day of action.
All but five of the 25 stocks listed on the Nasdaq-style board climbed.
Fujian Forecam Optics (688010 SH), which specializes in cameras and optic components, led the advance with a 16.3 per cent gain to 63.37 yuan.
Micro-Tech Nanjing (688029 SH), a manufacturer of medical equipment for endoscopy tests, dropped 1.8 per cent to 121.23 yuan, marking the largest loss among the stocks.
The STAR stocks declined broadly Tuesday after skyrocketing by as much as 521 per cent at one point on Monday. The board, unlike the other bourses in China, effectively does not cap price movements in its stocks over the first five days of their trading.
— Yujing Liu 


STAR board debutantes rising in early trading

Chinese sportswear maker Anta Sports jumped by as much as 3.4 per cent to HK$60.5 in early trading, looking set to extend a nine-session winning streak and reach a fresh record high.
The company said it expects a gain of as much as 25 per cent in its net profit for the first half of the year, from 1.95 billion yuan (US$283 million) in the same period last year, according to its stock exchange filing on Monday night.
The stock climbed by 15 per cent from a recent low on July 10 to reach an all-time high of HK$58.5 Tuesday.
The rally came despite activist short-seller Muddy Waters’ repeated attacks since early July. Muddy Waters claims the company secretly controlled distributors and suppliers to inflate profit margins. Anta has denied all allegations.
— Yujing Liu


Anta rallies again to an all-time high, shrugging off short seller attacks

Chinese top developer China Evergrande continues its shopping spree in the electric vehicle area, teaming up with hofer AG, a German auto powertrain maker. 
Evergrande Health Industry Group (708 HK), a Hong Kong-listed arm of the developer chaired by billionaire Hui Ka-yan, said in a stock filing today that it has established a joint venture with hofer AG to develop integrated powertrains – key components to generate power for next-generation cars. Evergrande will hold a 67 per cent stake. 
The joint venture will have a research and development plant in China.
The company didn't disclose the amount of its investment.
Evergrande has said it aims to become the world’s largest maker of new energy vehicles in three to five years.
Before the new joint venture, the Chinese developer had already spent north of US$42 billion over the past six months in the EV sector. Its first-ever electric vehicle, the Nevs 93, was put into production last month.
Evergrande Health shares jumped 1.9 per cent to HK$21.70 in early trading. 
— Pearl Liu 
 


 New EV deal gives a boost to Evergrande Health shares

Several Hong Kong protesters obstructed subway train doors and caused delays as long as 15 minutes on the Hong Kong Island line earlier this morning, when workers were on their way to offices in the central business district of Central and Admiralty.
MTR Corporation (0066 HK), Hong Kong’s railway operator, said it handled the incident properly and that trains returned to normal operation at 9:30am.
An unknown number of protesters were taken away by police, according to media reports. The obstruction was intended to express the protesters’ anger at the inaction of MTR staff during an unprecedented violent attack on demonstrators and other passengers on Sunday night in northwestern Hong Kong’s Yuen Long station.
The social unrest in Hong Kong is fast worsening since massive protests broke out in early June. The government’s push for a controversial bill that would allow extraditions to mainland China triggered the ongoing protests.
Central Station stuck right now by a group of protesters, some people have yelled angrily to them. Commuters have responded with applause to support the protesters #HKprotests #hongkong pic.twitter.com/IEa026TAXD
— Adolfo Arranz (@adolfux) July 24, 2019
 
— Yujing Liu 


Subway delays hit office workers on commute as protesters turn against MTR Corp.

Telecom stocks and smartphone component makers surged broadly in Hong Kong and China, after the US government said it will handle requests by tech companies for waivers over the Huawei Technologies blacklisting within weeks.
US Commerce Secretary Wilbur Ross said in an interview with Bloomberg Television overnight that the administration will deal with the more than 50 waiver applications from 35 companies “within the next few weeks”.
The Huawei blacklisting, put in place at the end of May, prevents US companies from supplying hardware, software and services to the Chinese telecom giant.
In Hong Kong, Sunny Optical Technology (2382 HK), which supplies phone camera lenses to Huwei, jumped 4.8 per cent to HK$94.55. Telecom equipment giant ZTE Corporation (000063 SH; 0763 HK) surged 2.8 per cent in Shanghai and 3.7 per cent in Hong Kong.
A gauge of 128 stocks related to 5G listed in Shanghai and Hong Kong climbed 2.8 per cent, with Shenzhen Envicool Tech (002837 SZ) and Zhejiang Yueling (002725 SZ) surging by the daily limit of 10 per cent.
— Yujing Liu 


US official's Huawei waiver application comment lifts telecom, 5G and smartphone component makers

Stocks in Hong Kong and China have been climbing on the back of fresh optimism about US-China trade negotiations, while shares listed on the new STAR technology board rebounded from sharp losses on Tuesday.
The Shanghai Composite Index advanced by as much as 1.3 per cent, before trimming the gains to 1 per cent at 2,929.17 at lunch break. The Shenzhen Component Index added 1.3 per cent, and the ChiNext Index of start-ups rose 1.6 per cent.
In Hong Kong, the Hang Seng Index gained 0.9 per cent to 28,730.41.
All but one of the 25 stocks listed on Shanghai’s technology innovation board, also known as the STAR Market, traded higher. Fujian Forecam Optics, which specializes in cameras and optic components, led the advance with a 25 per cent gain to 68.03 yuan.
— Yujing Liu


Markets feeling perky 

Traders are hopeful after White House economic adviser Larry Kudlow signaled confidence about trade talks, said Louis Tse Ming-kwong, managing director of VC Asset Management.
"I'm not surprised the market shot up. Wall Street was up quite a bit [last night]," said Tse. "Sentiment improved, I would say."
The Hang Seng Index is up 0.75 per cent at 28,678.92 while the Shanghai Composite climbed 0.9 per cent to 2,927.
Top US officials will travel to China next week, for the first face-to-face talks since the G20 summit at the end of June, media outlets including the SCMP reported. 
“I’m going to play that on the optimistic side. Going over there is a very good sign,” said Kudlow, Politico reported.
"In the near term, I think there is a chance of [the Hang Seng] going up to 29,000," said Tse, adding that US President Donald Trump seems to be holding back of late on some of his anti-Chinese rhetoric.
With Boris Johnson elected to succeed Theresa May as prime minister of the United Kingdom, how Brexit will play out has also become clearer, which is good for traders, Tse added.
Optimism in the Hong Kong and Chinese markets comes even as the STAR tech board was introduced in China this week, which has siphoned money out of the main boards. Half-year interim earnings so far have been mixed, and violence amid the extradition bill crisis in Hong Kong has escalated.
"The only thing that will hamper the Hong Kong market is the local sentiment, [with] all these protests happening. These affect the retailers in Hong Kong," said Tse.
On Monday, the Hong Kong General Chamber of Commerce for the first time joined calls for chief executive Carrie Lam to formally withdraw the bill and set up an independent commission of inquiry to look into the facts surrounding the continuing protest crisis.
"This puts a lot of pressure on Carrie Lam. I won't be surprised if within two weeks something will happen that will be beneficial to the local market," said Tse.
— Daryl Choo 
 


Crystal Ball: Hang Seng could hit 29,000 as market trades on optimism, says Louis Tse

Swiss private bank Pictet Wealth Management revised down its forecast for global economic growth, following a similar move by the International Monetary Fund.
Pictet projects a 3.1 per cent growth rate for global economy this year, down from 3.3 per cent in a March forecast. The growth in 2020 is likely to be 3.3 per cent, down from 3.6 per cent, according to its report released today.
“Global recession is still avoidable at this stage but requires swift and decisive stimulus from the authorities,” Jean-Pierre Durante, Pictet’s head of applied research, wrote in the report.
A slowdown in fixed investment growth among advanced economies, coupled with a downturn in world industrial production, led to Pictet’s lowering expectations.
“Even were the authorities to step in with stimulus now, the rebound in activity would likely lag for a few quarters, only really being felt in 2020,” the report says.
“The most immediate benefit of any stimulus would be seen in business sentiment and asset prices. At this stage, the likelihood of a significant rebound in overall growth in Q3 and Q4 is remote.”
— Yujing Liu 


Pictet lowers global growth projection on the back of IMF downgrade

The Chinese military has said that it can be deployed to Hong Kong to maintain social order at the request of the city’s government, and said that Sunday’s siege of the mainland government’s liaison office in the city was intolerable.
“Some behaviour of the radical protesters is challenging the authority of the central government and the bottom line of one country, two systems. This is intolerable,” said Wu Qian, a spokesman for China’s defence ministry.
Asked how the defence ministry would handle events in Hong Kong and independence forces, Wu said only that “Article 14 of the garrison law has clear stipulations”, without elaborating further.
That article states that the Hong Kong government – in accordance with the Basic Law, the city’s mini-constitution – can ask the central government for assistance from the People’s Liberation Army’s (PLA’s) Hong Kong garrison for the maintenance of public order and disaster relief.
Veteran China watcher Johnny Lau Yui-siu said the defence spokesman’s remarks were noteworthy because they were subtly different from the mainland authorities’ long-standing stance that the PLA’s Hong Kong garrison would not interfere in the city’s internal affairs.
“Now the spokesman of the defence ministry did not say explicitly that the PLA’s Hong Kong garrison would not interfere in the city’s affairs, but instead said the ministry is closely following the developments in Hong Kong,” Lau said.
“My interpretation is that the PLA is in the stage of observing the situation in Hong Kong. The PLA’s Hong Kong garrison is like a submarine which is floating up slowly to the water level."
Retailers have seen sales fall due to the ongoing protests, and concerns have been raised about their potential impact on foreign investment in the city.
Full story by reporters Catherine Wong, Teddy Ng and Gary Cheung can be read here. 
 


China military can be deployed at Hong Kong's request, Beijing says 

The trade war isn't over. Nor are demonstrations. But Colliers International gave a glass more full than empty assessment of how Hong Kong's critical property market will do overall this year, saying it doesn't see any "doom and gloom scenario" ahead.
“We expect the lower interest rate outlook, low unemployment rate and opportunities arising from the Greater Bay Area plan to provide long-term stability,” said Rosanna Tang, head of research for Hong Kong and southern China at Colliers International.
It predicts prices for warehouse and luxury residential to improve, ending up for the full year by 4.5 per cent and 2 per cent, respectively. Prices for strata-titled offices and mass residential are expected to be weighed down, down 5 per cent and up 6 per cent, respectively, for the full year. Prime street retail rent is forecast to stay flat.
— Daryl Choo


No ‘doom and gloom scenario’ for Hong Kong property market, says Colliers

Carmakers advanced in Hong Kong as investors looked to positive news amid an industry downturn.
Dongfeng Motor Group (0489 HK) was the top gainer, rising 5 per cent to HK$7.4. Investment bank JPMorgan Chase increased its stake in the company to 5.06 per cent from 4.96 per cent last week, according to data from the stock exchange.
BAIC Motor rallied for a second day, trading 3.5 per cent higher at HK$5.37, after its parent company said yesterday it has bought a 5 per cent stake in German auto giant Daimler AG.
China’s car sales rose in June for the first time in over a year as carmakers stepped up discounts to clear inventories, according to data released earlier this month.
— Yujing Liu 


Shares of carmakers step on the gas in Hong Kong

China’s car sales are far from topping out in spite of the current downturn, analysts at Chinese brokerage Guosen Securities said in a report released today.
Car sales could grow over 40 per cent to more than 40 million units per year over the next two decades, as China’s auto industry transitions to a mature stage from the current high-growth period. At that time, car ownership is likely to reach 400 units per 1,000 people, they said.
“Investment opportunities will be increasingly found in the market of existing demand instead of new demand,” analysts led by Liang Chao wrote in the report.
The analysts recommended segments including car maintenance, testing, financing and second-hand car dealing, as well as carmakers who have the capability to bring components and products to the next level.
Changzhou Xingyu (601799 SH), which specializes in lighting systems, will benefit from product upgrade, according to the report. Great Wall Motor (601633 SH; 2333 HK) will outperform as the market consolidates, and BYD (002594 SZ; 1211 HK) will also receive a boost from the electrification of cars.
The analysts also recommended Shandong Linglong Tire (601966 SH), Shenzhen Anche Technologies (300572 SZ) and China Automotive (601965 SH).
— Yujing Liu 


China’s car industry has more room to grow, Guosen Securities says

Turns out the US has some strong believers in its innovation prowess — in China.
A new survey by Bloomberg's New Economy Forum finds that most of the 2,000 business professionals (54 per cent) it surveyed said they agree or strongly agree that China and India will surpass the US as the world's centres of tech innovation by 2035.
But those asked the question in the US and other developed markets were less likely to think that way (49 per cent). In China, skepticism was even higher, with only 40 per cent agreeing.
—  Deb Price 
 


China and India will surpass the US in tech by 2035? Chinese are skeptical

China’s smartphone production chain has been given a boost from US Commerce secretary Wilbur Ross’ comment that the government has started processing American firms’ applications for waivers from the blacklist put on Huawei Technology, according to CICC.
“The component supply to Huawei from the US could resume, which will lift investors’ confidence in the smartphone manufacturing chain,” analysts led by Huang Leping wrote in a report today.
Eight 5G smartphones recently received approval from Chinese authorities to go to market, with four of the models developed by Huawei. This will help Huawei strengthen its position in the high-end segment, according to CICC.
The analysts recommend acoustic component maker GoerTek (002241 SZ) and Luxshare Precision (002475 SZ).
— Yujing Liu


Softening Huawei blacklisting good news for smartphone production chain, CICC says

China and Hong Kong stocks closed higher, driven by smartphone component makers and technology shares.
The Shanghai Composite Index rose 0.8 per cent to 2.923.28, after surging by as much as 1.3 per cent in the morning. The Shenzhen Component Index added 1 per cent, and the ChiNext Index was 1.2 per cent higher.
The Hang Seng Index pared earlier gains of as much as 1.1 per cent to close 0.2 per cent higher at 28,524.04.
A gauge of 75 stocks related to smartphone production in Shanghai and Shenzhen surged 3 per cent on higher hopes that American supply to Huawei Technologies could resume soon.
In Hong Kong, Tencent Holdings (700 HK) climbed 2 per cent to HK$365.6, after the company said it is working with Japanese video game company Nintendo sell the Switch console in China. The companies will hold a joint press conference about the launch in China on August 2, according to Chinese media.
— Yujing Liu


Tencent among day's winners as it moves on console launch

Stocks listed on the new STAR board recorded big gains after most suffered losses on Tuesday.
All of the 25 companies ended higher.
Fujian Forecam Optics (688010 CH), which specializes in cameras and optic components, was the top winner, with a 49 per cent increase.
Transaction volume in the STAR stocks stood at 23 billion yuan (US$3.3 billion), slightly up from the 20 billion yuan recorded yesterday.
— Yujing Liu


STAR stocks in China shoot back up 

Stocks Blog: China, Hong Kong stocks gain on optimism over coming trade talks

.css-1mniedq{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;} Pro Tips: Kenny Wen on investing like a Thai boxer, getting Trump and dieting China’s car industry has more room to grow, Guosen Securities says

Pro Tips: Kenny Wen on investing like a Thai boxer, getting Trump and dieting

China’s car industry has more room to grow, Guosen Securities says