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Zhang Shidong

Deb Price

Good day, traders --
The Hang Seng and Shanghai Composite ended ahead. Catch up on the day's action below.
And if you'd like the Live Stocks Blog delivered to you each morning via email, shoot Deb a message at deb.price@scmp.com.
-- Zhang Shidong in Shanghai and Deb Price in Hong Kong
 


Stocks Blog: China Resources Land tanks on plan for new shares; China mutual funds bulk up on tech stocks

A Chinese investor uses a mobile phone to check stock prices at a securities brokerage house in Beijing. Photo: EPA-EFE


Business

Markets

51 Credit surges as stock resumes trading and company clarifies police probe
Two new listings do well in Shenzhen and Hong Kong


AAC Technologies, Geely Automobile end as big winners on Hang Seng; Shanghai Composite sees second day of gains, thanks to small technology companies


Stocks

China stock market

Tencent

Hong Kong property

Hong Kong protests

Trade war

Live

* Overnight markets/ What futures foretell
-- Overnight in US markets, the S&P 500 gained 0.7 per cent, the Nasdaq rose 0.9 per cent, and the Dow Industrials added 0.2 per cent
 
-- Hong Kong futures were 0.3 per cent higher, while the FTSE China A50 futures climbed 0.5 per cent
* IPO debuts: Zhejiang Meorient Commerce & Exhibition (300795 CH) will start trading in Shenzhen’s ChiNext board today, while IWS Group Holdings (8441 HK), manned guarding service provider, will debut in Hong Kong.
* Economic statistics/Central Bank action: nothing major
* Corporate events: earnings, meetings, news conferences  -- Anhui Conch Cement (914 HK), Huaneng Power International (902 H) and Wens Foodstuffs Group (300498 CH) will release third-quarter earnings late today.
*Later this week: China’s statistics bureau will release the September data on industrial profits over the weekend.


Morning guidance 

US President Donald Trump said on Monday that efforts to end the trade war with China were going well as the world’s two largest economies continued to battle over trade and politics despite heralding a long-awaited truce this month.
Trump said last week that he hoped the first phase of a trade deal announced earlier in October could be signed by the middle of next month.
“The deal with China’s coming along very well. They want to make a deal,” Trump told reporters before a cabinet meeting, stressing the toll that US tariffs have taken on the Chinese economy.
“They sort of have to make a deal … because their supply chain is going down the tubes.”
US Trade Representative Robert Lighthizer told reporters the administration still aimed to finalise a deal on the first phase of the deal in time for the Asia-Pacific Economic Cooperation meetings in Chile on November 16 and 17, but said there were still outstanding issues to resolve.
Read full story by Reuters   


Trump says trade deal with China 'coming along very well' 

The net profit at China Unicom (762 HK) attributable to shareholders for the first nine months this year rose 24.4 per cent from a year ago, at 4.3 billion yuan from 3.5 billion yuan. Its revenue dropped 1.2 per cent to 217.1 billion yuan from 219.7 billion yuan, it said in a Shanghai exchange filing. 
For the period, total mobile customes were 324.7 million, up 4.8 per cent from 309.8 million a year ago. However, the number of newly acquired paying customers plunged 62 per cent, by 9.7 million compared to 25.7 million newly added customers a year ago.
“Mobile revenue for the nine months was down 6.1 per cent from a year ago, to 117.7 billion yuan ... impacted by accelerated mobile fee reduction, a saturated market, higher competition, and (the fact that) the premium that can be obtained from providing 4G mobile services is gradually disappearing,” the company said.
-- Georgina Lee    


China Unicom’s first nine-month net profit rises but new customer addition slows

Tencent (700 HK) says it has raised its stake in a consortium company that indirectly holds a 81.4 per cent stake in Finland-incorporated mobile game developer Supercell Oy, raising the stake slightly to 51.2 per cent from 50 per cent. Supercell develops mobile games on both Apple’s iOS and Google’s Andriod operating systems.
The stake increase, announced in a stock exchange filing, was done by Tencent converting the entire principal and relevant interest under a US$40 million convertible bond that the consortium company issued to Tencent in October 2016. The conversion price was previously fixed at US$1,000 per share.
Now the consortium company is a subsidary of Tencent, and hence its financial results and other balance sheet information will be consolidated into Tencent’s financial statement. For the year ended December 2018, the consortium company had a net loss of US$536 million, widening from its earlier net loss of US$327.1 million.
-- Georgina Lee    


 Tencent raises stake in loss-making Finnish mobile game developer

President Donald Trump’s comment on the progress made in the China-US trade talk is doing little to buoy up stocks.
The Shanghai Composite Index rose 0.1 per cent at open, while Hong Kong’s Hang Seng Index added 0.2 per cent.
As traders conclude the trade conflict will be protracted and isn’t likely to resolved quickly, they turn to focus on corporate earnings and assess third-quarter results for trading clues.
-- Zhang Shidong


China and Hong Kong stocks trade sideways at open

51 Credit Card (2051 HK), whose shares tumbled 35 per cent Monday in Hong Kong, is under investigation for illegal debt collection, the Hangzhou police said in a statement Monday night.
51 Credit contracted out debt collection business to outside companies, which disguised themselves as government departments, and also intimidated and used violence against debtors, the statement said.
Founder of 51 Credit Sun Haitao subsequently apologized on his personal Wechat for lax management and oversight of the co-operating companies.
Trading of shares of 51 Credit were suspended Monday, and remain so today. They last closed at HK$1.77.
 

-- Zhang Shidong


51 Credit Card probed for unlawful debt collection, police say 

The People's Bank of China injected 250 billion yuan into the financial system today, in its biggest open market operation since May, to spur growth in the stalling economy.
China's third-quarter growth missed forecasts and slowed to 6 per cent, the slowest quarterly pace since 1992. 
-- Eugene Tang 


PBOC injects 250 billion yuan into system to spur growth

Zhejiang Meorient Commerce & Exhibition (300795 CH) soared 44 per cent from its initial public offering price to 20.55 yuan on its first day trading in Shenzhen today. The 44 per cent gain is the maximum allowed by the mainland’s exchanges for any new listing on the main board.
Meanwhile, IWS Group Holdings (8441 HK), a manned guarding service provider, jumped by as much as 113 per cent to 68 Hong Kong cents in its debut. The stock recently traded up 56 per cent to 50 Hong Kong cents.
-- Zhang Shidong


Two new listings do well in Shenzhen and Hong Kong

China’s mutual funds added technology companies to their holdings, particularly those linked to 5G network, cloud computing and OLED display sectors, Securities Times reported.
The conclusion was based on the third-quarter reports by money managers, including China Asset Management and Harvest Asset Management.
Technology innovation underpinned by 5G will be a major investment theme, the report said.
Meanwhile, some funds trimmed holdings of consumer and agricultural stocks that had made excessive gains, it said. The report did not name any specific stock.
-- Zhang Shidong


A glimpse of what mutual funds bought in third quarter

China Mobile (941 HK) dropped 1.4 per cent to HK$65.40 in early trading, putting it on track for its largest daily decline since August 29.
The nation’s biggest wireless phone carrier said Monday night that net income for the first nine months decreased 14 per cent to 81.8 billion yuan (US$11.6 billion) from a year earlier.
-- Zhang Shidong 


China Mobile sees biggest fall in seven weeks after profit decline

Luxshare Precision Industry (002475 CH) gained 3.6 per cent to 30.04 yuan in Shenzhen, heading for a record close since its listing in 2010.
Third-quarter profit increased 67 per cent from a year earlier to 1.39 billion yuan (US$195.8 million), the supplier of Apple said in its quarterly results last night.
Full-year net income may rise by as much as 55 per cent, it said. The Shenzhen-based company makes consumer electronics devices for telecom products and automobiles.
Holding the stock since its listing has brought an annualized return of 43 per cent, compared with a 1 per cent annualized return from the Shanghai Composite Index in the span, according to Bloomberg data.
-- Zhang Shidong 


Apple supplier Luxshare rises to record high on rosy earnings

China Resources Land (1109 HK) tumbled 7.2 per cent to HK$33.55 after a share placement plan by the Chinese government-backed property developer added to concern about diluting earnings per share.
The developer will float 200 million new shares at HK$33.65 apiece to purchase lands and replenish working capital, it said in an exchange statement.
The placement price represents an almost 7 per cent discount to the company’s Monday closing prices.
It is the worst performer on the Hang Seng Index today.
-- Zhang Shidong 


China Resources Land on track for steepest drop in a year on share placement

Ping An Bank (000001 CH) slumped 4.1 per cent to 16.19 yuan in Shenzhen, heading for its worst single-day performance since May 6.
Though the lender said yesterday profit growth for the first nine months accelerated to 16 per cent, its net interest margin -- a profitability gauge of the difference between lending and deposit rates -- narrowed 9 basis points from the previous three-month period to 2.62 per cent in the third quarter, because of lower borrowing costs amid weak corporate demand, according to Citic Securities.
-- Zhang Shidong


Ping An Bank retreats most in five months on worsening net interest margin

51 Credit Card (2051 HK) surged by as much as 31 per cent as the stock resumed trading in the afternoon after being abruptly suspended Monday.
In an exchange statement issued 10 minutes before the trading resumption, the company said it fully co-operated with the investigation by the Hangzhou police, and the daily operation and management are under normal conditions with a sound financial position.
The police raided 51 Credit’s office Monday after receiving tips that the company was engaged in debt collection by means of intimidation and violence. That led to a 35 per cent slump in the the stock's price.
The stock recently surged 18 per cent to HK$2.08.
-- Zhang Shidong


51 Credit surges as stock resumes trading and company clarifies police probe

New Fortune magazine, a Shenzhen-based publisher, will restart the contest for China’s best stock analysts this year after a disgraceful video shelved the competition for a year, the 21st Century Business Herald reported.
New Fortune has revised rules to ensure the fairness of the contest, the Chinese version of the Institutional Investor research poll, it said.
Last year’s contest was cancelled after a racy video of two analysts from Founder Securities dining with clients to seek votes went viral online. It raised doubts about the authenticity and fairness of the competition. The New Fortune analyst ranking had been published since 2003 every year.
-- Zhang Shidong


New Fortune said to revive analyst competition after video last year raised doubts about its authenticity

The Shanghai Composite Index closed 0.5 per cent higher at 2,954.38, as small technology companies led the gain.
Among the leading gainers were Surfilter Network Technology (300311 CH), Beijing Wanji Technology (300552 CH) and Taiji Computer (002368 CH), which all surged by the 10 per cent daily limit.
-- Zhang Shidong


China’s stocks rise for second day as tech companies rally

The Hang Seng Index eked out the tiniest of gains, with advances in consumer discretionary and information technology stocks outweighing losses in the health care sector. It closed ahead 0.23 per cent at 26,786.20.
Apple component supplier AAC Technologies (2018 HK) was the day's big winner, gaining 5.8 per cent to HK$48.70, building off of Apple hitting a new record high in New York on continued excitement about the iPhone 11.
Geely Automobile Holdings (175 HK) also was a big winner, after Citigroup upgraded it to a buy. It finished ahead 4.7 per cent, at HK$14.28.
Macau casino stocks had a lucky streak, getting a boost from a JPMorgan report essentially saying they are so battered that it's a good time to bet on their comeback. Sands China (1928 HK) led casino gains, finishing up 2.6 per cent at HK$37.55.
In a new note, Bloomberg Intelligence contributing analyst David Bonnet wrote that despite slowing tourism growth and a weakening economy, "we expect Sands to post year-over-year 3Q Ebitda growth on the back of a 23 per cent increase in market-wide 3Q mass sales." Bonnet also noted that Sands' 20 per cent non-gaming revenue gives it some cushion.
The big loser was China Resources Land (1109 HK), which tanked 7.9 per cent to HK$33.30 over its plan to issue 200 million new shares, raising alarms about dilution of earnings per share. 
-- Deb Price    


AAC Technologies, Geely end as big winners on Hang Seng 

Shares of Cathay Pacific Airways (293 HK), Hong Kong's largest hometown carrier, jumped by as much as 4.4 per cent to HK$10.34, the highest intraday level since September 18, on expectations that the city's financial secretary would hand out additional incentives to stimulate the slumping tourism industry.
The surge came before a news conference by Financial Secretary Paul Chan Mo-po, who was expected to roll out relief measures for tourism and other industries hit hard by the ongoing protests and the US-China trade war.
Chan ended up announcing HK$2 billion (US$254 million) worth of relief measures. Read a full story here by Denise Tsang on the relief plan.
-- Eugene Tang 


Cathay shares get boost on expectations of relief for battered tourism industry 