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Daniel Ren

Deb Price

Good day, traders --
The Shanghai Composite and Hang Seng Index extended losses for into a second day.
Catch up on the day's action below.
And if you would like to receive the Live Stocks Blog each morning via email, shoot Deb a message at deb.price@scmp.com and she'll add you to the list. 
-- Daniel Ren in Shanghai and Deb Price in Hong Kong 


Hong Kong stocks slip as Beijing regulator summons tech firms on train-ticket complaints

Shenzhen-listed Unisplendour abandons year-long effort to raise funds in Hong Kong

Index compiler MSCI tilts towards Chinese tech stocks in latest revamp

Sudden closure of Chinese restaurant chain Shanghai Min’s outlets leaves diners in limbo

Stocks

Stocks Blog: BYD plummets on profits plunge, while Standard Chartered jumps after profit beat

BYD has struggled as Beijing scaled back subsidies aimed at stimulating sales of electric vehicles. Above, a BYD assembly plant in Shenzhen. Photo: Reuters

Business

Markets

Shanghai Composite extends losses to second day
BYD's near-term outlook to 'remain challenging,' Daiwa Capital analysts say


BYD's near-term outlook to 'remain challenging,' Daiwa Capital analysts say.


HSBC

Kweichow Moutai

China stock market

Tencent Holdings

Live

BYD, China's top electric car company backed by legendary investor Warren Buffett, reported that its third quarter profit plunged 89 per cent compared to the previous year.
A drop was to be expected. The automaker has struggled since Beijing dramatically scaled back subsidies to stimulate electric car sales. That has intensified competition with traditional fuel cars. Now, due to slumping car sales in an industry that is tied to one out of six jobs in China, Beijing is encouraging local governments to find ways to stimulate car sales. 
"Under the influence of macroeconomic conditions, it is expected that overall market demands in the automobile sector will remain weak in the fourth quarter," it said in an exchange filing in Hong Kong. 
"Coupled with the fluctuation of fuel vehicle price and the considerable reduction in new energy vehicle subsidies, sales in the new energy vehicle business failed to meet the expected level, thus the Group’s profit from new energy vehicle business is expected with a certain decline versus the corresponding period of last year," it continued. 
"In terms of traditional fuel vehicle business, competition in the market is getting fiercer; however, with the steady increase in the sales of new models such as “Song Pro”, the Group’s fuel vehicle business is expected to recover in the fourth quarter."
The third quarter profit was 119.7 million yuan. 
It trades in Hong Kong (1211 HK) and in mainland China (002594 CH).
JP Morgan cut its A shares to underweight with a price target of 30 yuan, according to a Bloomberg report, and its Hong Kong shares to underweight with a price target of HK$30. Daiwa Securities cut the Hong Kong shares to hold, with a price target of HK$41.

 
-- Deb Price     


BYD 3Q profit plunges 89 per cent 

Profit for China Eastern Airlines (600115 CH) fell 2.7 per cent from a year earlier to 4.4 billion yuan (US$622.8 million) in the nine-month period ended in September, according to an exchange filing.
Sales increased 6.3 per cent in the period, it said.
-- Zhang Shidong    


China Eastern’s profit drops in first nine months

Net income for Shanghai Pudong Development Bank (600000 CH), which plans to raise 50 billion yuan (US$7.08 billion) in what would be China’s biggest convertible bond sales, increased 11.9 per cent from a year earlier to 48.4 billion yuan in the first nine months, according to an exchange statement.
The bank said a day earlier that investors had placed orders for more than 300 times its convertible bonds on offer.
-- Zhang Shidong 


Shanghai Pudong Bank posted profit increase in first three quarters

Sdic Power Holdings (600886 CH) received the approvals by the China Securities Regulatory Commission and UK’s Financial Conduct Authority to sell global depository receipts on the London Stock Exchange, according to a company statement.
The state-owned power producer plans to sell as many as 67.8 million GDRs, which will represent 678.6 million underlying yuan-traded shares in the company, the statement said.
It is the third Chinese-listed company that plans to sell GDRs after Huatai Securities (601688 CH) and China Pacific Insurance (601601 CH).
-- Zhang Shidong 


Sdic Power gets regulatory approvals to float GDRs in London

A raft of clarification statements on block-chain businesses from listed companies including Hanwei Electronic Group (300007 CH) may cool trading after the recent buying binge.
Revenues from block chain-linked orders are small in a subsidiary and there is uncertainty of integrating the blockchain technology with the company’s core technology of internet of things, Hanwei said in an exchange statement.
Beijing Advanced Digital Technology (300541 CH) said it had only conducted a few small-scale experimental projects on blockchain with an affiliate and that would not have a significant impact on earnings in the short term.
Zhejiang Jingu (002488 CH) even received an inquiry letter from the Shenzhen exchange, which required the company to specifically explain its presence in the blockchain business and the feasibility of commercialization.
-- Zhang Shidong    


 Several companies make clarifications on block chain businesses

China Life Insurance (2628 HK), the nation’s second-largest insurer, posted an almost threefold increase in profit for the first nine months, as a run-up in stocks bolstered investment gains and premium incomes rose.
Net income for the first three quarters jumped 190 per cent from a year ago to 57.7 billion yuan (US$8.2 billion) based on the Chinese accounting standard, the insurer said in an exchange statement. The value of new business, a gauge of future profitability, grew by 20 per cent in the period, it said. China Life did not provide data for the third quarter alone in the report.
A turnaround on China’s Shanghai Composite Index significantly boosted profits of insurance companies, which are allowed to invest as much as 30 per cent of their assets in equities. The benchmark has risen 18 per cent so far this year, reversing an annual loss of 25 per cent in 2018, as policymakers loosen policies to offset the fallout of the China-US trade war and foreign inflows accelerate.
China Life’s investment yield was 5.72 per cent in the nine-month period, an increase of 2.31 percentage points from a year earlier, it said in the quarterly report. Premium incomes increased 6.1 per cent from a year ago to 497 billion yuan and the number of sales people rose by 10 per cent, to 1.95 million, it said.
Read full story here by stocks reporter Zhang Shidong. 


China Life Insurance posts near threefold increase in profit

Here's what we are watching this morning:
US Monday markets/ What futures foretell
--The S&P 500 slipped 0.08 per cent, the Nasdaq dipped 0.59 per cent and the Dow Jones Industrial Average inched down 0.07 per cent.  -- Hong Kong futures climbed 1.47 per cent lower, while the FTSE China A50 futures edged down 0.03 per cent
IPO debuts: Shanghai Haohai Biological Technology (688366 CH) Sino Medical Sciences Technology (688108 CH)
Economic statistics/Central Bank action: China’s Ministry of Commerce says policies to stabilise FDI inflows are being made.


Morning guidance 

The Hang Seng inched up 0.04 per cent to 26,797.64.
HSBC (5 HK), which fell two days after releasing worse-than-expected resulst Monday, continued to slide, falling 0.2 per cent to HK$59.35.
Tencent (700 HK) slipped 0.2 per cent to HK$316.40. It has been struggling of late to stay above HK$320, which has proven to be a key support level this year.
Other stocks of note:
Meituan Dianping (3690 HK) fell 0.2 per cent to HK$91.80.
Xiaomi (1810 HK) slipped 0.2  per cent to HK$8.84. 
Both became available for trading through the Stock Connect on Monday, when they jumped. But both fell Tuesday on profit taking.  -- Deb Price   


Hang Seng opens ahead slightly, but HSBC and Tencent continue to slide

Pharmaron Beijing (300759 CH), a biological drug maker, has obtained an approval from the China Securities Regulatory Commission to conduct a share offering on the Hong Kong stock exchange, likely to net proceeds of more than US$1 billion.
The company, which completed a Shenzhen IPO in January, said in an exchange filing that it planned to float 134 million shares in Hong Kong.
Its A shares closed at 55.48 yuan on Monday.
-- Daniel Ren 


Pharmaron Beijing gets CSRC nod to raise funds in Hong Kong

The Shanghai Composite slipped 0.3 per cent to 2,946 in early trading.
Among recently heavily traded stocks for northbound traders on the Stock Connect:
-- Kweichow Moutai (600519 CH) fell 0.8 per cent to 1,183.01 yuan.
-- Hundsun Technologies (600570 CH) slipped 0.07 per cent to 81 yuan.
-- Ping An Insurance (601318 CH) slipped 0.2 per cent to 88.05 yuan
  -- Deb Price 


Shanghai trading slightly down, with Kweichow Moutai falling

Meituan Dianping (3690 HK) and Xiaomi (1810 HK) were heavily traded on their first two days available on the Stock Connect.
On Monday, Meituan was the top most actively traded stock on the Shanghai Connect Southbound, with HK$1.2 billion worth of shares bought and HK$10 million sold, according to data from the Hong Kong stock exchange operator.
Xiaomi (1810 HK) was the fifth most heavily traded stock on the Shanghai Connect Southbound on Monday, with HK$331 million worth of shares bought and HK$25.8 million sold.  
Meituan was the third most heavily traded stock on the Shanghai Stock Connect on Tuesday. Buy trades totalled HK$415.5 million while sell trades were HK$14.8 million.
Xiaomi was the ninth-most actively traded stock on Tuesday, with HK$126 million in shares bought and HK$21.9 million worth of shares sold.
The story was similar on the Shenzhen Connect Southbound, where Meituan was the most heavily traded stock on Monday and Xiaomi was the third most actively traded. 
On Tuesday, Meituan was the third most heavily traded, while Xiaomi did not make the top 10 list. 
Read a feature here for investors about this development by stocks reporter Yujing Liu. 
-- Deb Price       


Meituan Dianping, Xiaomi heavily traded on Stock Connect on first two days

BYD (1211 HK) plunged 7.4 per cent to HK36.65 after it reported that its third quarter profit plunged 89 per cent.
Mainland shares  (002594 CH) dropped nearly 7 per cent to 43.86 yuan.
-- Deb Price    


BYD plummets on profit plunge  

The two IPO debutantes on the Nasdaq-style Star Market got off to a frenetic start on the Shanghai Stock Exchange.
Shanghai Haohai Biological Technology (688366 CH) opened at 149.3 yuan, 67.3 per cent higher than its offering price of 89.23 yuan.
Its shares traded at 139.05 yuan at 9:50am.
Sino Medical Sciences Technology (688108 CH) started at 25 yuan, a jump of 257.6 per cent from the offering price of 6.99 yuan.
The company’s shares traded at 23.91 yuan at 9:50am.
-- Daniel Ren 


Star Market debutantes soar on first trading day

Two blockchain-themed stocks dropped in the morning after they issued statements to clarify that the technology would have only small impact on their businesses.
Hanwei Electronic Group (300007 CH) said revenue from blockchain-linked orders was small and there was uncertainty of integrating the blockchain technology with the company’s core technology of internet of things. Its shares slumped 3.1 per cent to 18.77 yuan in early trading.
Beijing Advanced Digital Technology (300541 CH) said it had only conducted a few small-scale experimental projects on blockchain with an affiliate and that would not have a significant impact on earnings in the short term.
Advanced Digital tumbled 7 per cent to 21.80 yuan.
Blockchain-related companies were actively traded over the past two days, buoyed by President Xi Jinping’s call to accelerate investment and development of the technology.
But analysts said the strong rally would not continue because company fundamentals could not support the lofty prices.
-- Daniel Ren 


Blockchain companies drop after clarification statements.

Every sector is in negative territory on the Hang Seng Index, which is trading down 0.3 per cent at 26,706.42.
Bucking the trend is China Life Insurance (2628 HK), which posted a near threefold increase in profit for the first nine months. It is the top morning percentage gainer, rising 2.8 per cent to HK$20.30. 
WH Group (288 HK) rose 1.5 per cent to HK$8.39, as investors continue to reward it for its 8.5 percent profit jump reported Tuesday.
HSBC (5 HK) declined 0.3 per cent to HK$59.25.
Tencent (700 HK) has turned up, rising 0.3 per cent to HK$317.80.
-- Deb Price    


China Life is top winner in morning trading on declining Hang Seng on strong nine-month results 

Analysts and investors continue to weigh the results and forecast of Shenzhen-based cars and battery maker BYD, which is partly owned by Warren Buffett's Berkshire Hathaway.
In Hong Kong (1211 HK) at the lunch break, it had fallen 6.3 per cent at HK$37.10. In the morning session in mainland China (002594 CH), it fell 5.9 per cent to 44.39 yuan.
Shares of plunged as much as 8.6 per cent in Hong Kong and 7.7 per cent in Shenzhen after it posted an 88.6 per cent year-on-year net profit fall to 119.7 million yuan for the three months to September 30.
It also forecast that net profit would fall 36.2 per cent to 43 per cent to between 1.58 billion yuan and 1.77 billion yuan for the whole of this year.
It cited weak demand in the entire car market due to marked price declines of petrol-powered vehicles and lower state subsidies for electric cars for the gloomy fourth-quarter outlook.
However, it said it expects the launch of its "Song Pro" new petrol car model to help sales recover in the three months to year-end.
It also expected improving fourth-quarter demand for its mobile handset parts and assembly business on easing impact from trade disputes involving the big brand manufacturers, and better demand for its solar power panels. 
The third quarter results were in line with the firm's previous guidance to the market. But the full-year profit projection was worse than the forecast of Daiwa Capital Markets, its analysts said in a note.
"We expect the near-term outlook to remain challenging, but 2020 may see a sales recovery after the impact of the front-loading of sales in the first half of this year diminishes," they said.
BYD was previously forecast to see net profit fall 11 per cent to 2.48 billion yuan this year, before recovering to 2.87 billion yuan next year and growing to 3.4 billion yuan in 2021, according to the average estimate of 22 analysts polled by Bloomberg.  
-- Eric Ng 


BYD's near-term outlook to 'remain challenging,'  Daiwa Capital analysts say

Standard Chartered’s third-quarter pretax profit beat analysts’ expectations, as its became the latest big bank in Hong Kong to report results as the city’s economy teetered on the verge of a “technical recession” in the quarter.
On a pretax basis, the bank reported a profit of US$1.11 billion, exceeding a consensus estimate of US$1 billion of analysts compiled by the bank.
Standard Chartered (2888 HK) shares rose slightly to HK$69.35 in the morning trading session in Hong Kong.
-- Chad Bray 


Standard Chartered 3rd results beat expectations 

Standard Chartered (2888 HK) jumped 3 per cent to HK$71.40 after its third-quarter pretax profit beats analysts’ expectations.
It announced the results during the lunch break.
On a pretax basis, the bank reported a profit of US$1.11 billion, exceeding a consensus estimate of US$1 billion of analysts compiled by the bank.
-- Deb Price    


Standard Chartered soars after profit beat 

Shares of Chongqing Rural Commercial Bank (601077 CH) plummeted to the daily 10 per cent limit one day after its IPO debut on the Shanghai Stock Exchange.
The rural lender traded at 8.42 yuan in the afternoon, following a 27 per cent rally on Monday.
It was the first mainland rural lender to list both A and H shares on the mainland and Hong Kong stock exchanges. In Hong Kong (3618 HK), shares had fallen 1.6 per cent in early afternoon to HK$4.20.
The A shares of Chongqing Rural now trade at a more than 130 per cent premium to its H shares.
-- Daniel Ren 


Chongqing rural lender falls after strong IPO debut

Weak demand and lower cash subsidies are set to exacerbate bearish sentiment on mainland car makers in the remaining 2019 after lacklustre performance in the third quarter.
But an expected market recovery in 2020 still bodes well for the companies’ outlook, analysts said.
On Tuesday, GAC Motor (2238 HK), the joint venture partner of Japanese companies Toyota and Honda, reported a 52 per cent drop in its third-quarter earnings, which was valued at 1.42 billion yuan.
China’s top electric vehicle maker BYD (1211 HK, 002594 CH) said its profits in the quarter ended September plunged 89 per cent to 119.7 million yuan.
“BYD is under heavy pressure to eke out profits in the fourth quarter,” Caitong Securities said in a research note. “The reduced subsidies on new-energy vehicles could further knock down its sales.”
The brokerage predicted BYD will post losses of 200 million yuan between October and December.
Beijing has slashed subsidies on new energy vehicles (NEVs) by up to 60 per cent since late June, denting sales of car makers such as BYD.
Overall amid the slowing economy, the country’s troubled auto market saw vehicle sales decline for 14 consecutive months as of September.
BYD forecast its full-year earnings for 2019 could drop as much as 43 per cent to 1.58 billion yuan.
But analysts said a turnaround next year is expected, driven by the car makers’ new model launches and unleashed pent-up demand.
The reduction in subsidies aimed at edging out small NEV builders would ease market competition and benefit large players such as BYD and GAC.
“We would view any dip in the stock price today as a buying opportunity, given GAC's more visible growth in 2020,” investment bank Jefferies said in a research note.
H shares of GAC tumbled 4.4 per cent to HK$7.88 in afternoon trading.
Caitong predicted BYD’s revenue in 2020 could reach 152.9 billion yuan, up 12 per cent from this year.
Here's a feature for investors on China's underperforming new-energy car sector by stocks reporter Zhang Shidong. 
-- Daniel Ren


Mainland car makers face rough fourth quarter, analysts say 

Citic Securities (600030 CH, 6030 HK), mainland China’s largest brokerage, has received approval from the securities regulator to take full control of smaller rival Guangzhou Securities.
State-owned Securities Times reported that Beijing-based Citic Securities had passed through the hearing by the China Securities Regulatory Commission on its acquisition of the brokerage in South China today, which is valued at 13.46 billion yuan.
Citic Securities will pay Guangzhou Yuexiu Financial Holdings Group 809.8 million shares at 16.62 yuan each to obtain the 100 per cent stake of Guangzhou Securities.
Hong Kong shares of Citic shed 2 per cent to HK$14.52 in afternoon trading while trading of its A shares was suspended.
-- Daniel Ren 


Citic Securities approved to acquire smaller Guangzhou rival

The Shanghai Composite extended its losses into a second day, falling 0.5 per cent to 2,939. 
Only financials ended ahead -- and only slightly -- while communication services and consumer discretionary stocks led losses among sectors.
Of stocks on the benchmark, 1,148 closed down, and only 341 gained and 42 were unchanged. Only five stocks hit or nearly hit the 10 per cent upside limit.
Among recently heavily traded stocks for northbound traders on the Stock Connect:
-- Kweichow Moutai (600519 CH) fell 0.8 per cent to 1,183.80 yuan.
-- Hundsun Technologies (600570 CH) fell 2.5 per cent to 79.06 yuan.
-- Ping An Insurance (601318 CH) slipped 0.3 per cent to 87.95 yuan.
Meanwhile, the CSI 300 of large cap stocks traded in Shanghai and Shenzhen fell 0.5 per cent to 3,891.23.
-- Deb Price    


Shanghai Composite closes down; Kweichow Moutai falls 0.8 per cent 

Nine blockchain-related companies bucked a downward trend as they jumped up to the daily ceiling of 10 per cent.
An index compiled by East Money Information that tracks 172 A-share companies developing or using blockchain technology slumped 2.78 per cent on Wednesday after analysts warned of a potential boom-to-bust cycle.
The index jumped 8.1 per cent on Monday, spurred by Chinese President Xi Jinping’s call for more investment and development of the technology.
It lost 1.1 per cent on Tuesday.
Seven of the nine companies that hit the daily upper limit -- including Insigma Technology (600797 CH) and real estate developer Xinhu Zhongbao (600208 CH) -- surged to the 10 per cent daily trading cap for the third consecutive day.
-- Daniel Ren 


Nine blockchain firms hit daily 10 per cent trading cap

The Hang Seng Index lost ground for a second straight day, falling 0.4 per cent to 26,667.71.
Of the 50 constituent stocks, 16 ended with gains, 33 with losses, and one unchanged. 
CSPC Pharmaceutical (1093 HK) was the biggest percentage gainer, rising 5.9 per cent to HK$19.98, a new high for the year. Investors are enthusiastic about its line of drugs.
WH Group (288 HK) rose 2.4 per cent to HK$8.47, marking its fifth straight day of gains. The world's largest pork producer's results released Tuesday wowed investors. Its revenue increased 3.7 per cent and profit rose by 8.5 per cent in the first nine months of the year, despite dealing with tariffs amid the trade war and the African swine fever, which has roiled the Chinese pig market. 
Other stocks:
Standard Chartered (2888 HK) rose 2.8 per cent to HK$71.25 after its third-quarter pretax profit beat analysts’ expectations.
China Life Insurance (2628 HK), the nation’s second-largest insurer, rose 1.6 per cent to HK$20.05 after it posted an almost threefold increase in profit for the first nine months.
Meituan Dianping (3690 HK) rose 2.2 per cent to HK$94, while smartphone maker Xiaomi (1810 HK) slipped 0.8 per cent to HK$8.79, its second straight day of losses.
The two stocks began trading for the first time on the Stock Connect on Monday.
-- Deb Price    


Stocks Blog: BYD plummets on profits plunge, while Standard Chartered jumps after profit beat

.css-1mniedq{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;} BYD's near-term outlook to 'remain challenging,' Daiwa Capital analysts say

BYD's near-term outlook to 'remain challenging,' Daiwa Capital analysts say