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Deb Price

Snow Xia

Good day, traders --
The Hang Seng Index rallied in late afternoon on news China and US agreed to remove additional tariffs in phases. In China, where markets close earlier, the Shanghai Composite Index closed flat at 2,978.71.
Catch up on the action of the day below.
And if you'd like to receive the Live Stocks Blog each morning via email, shoot Deb a messages at deb.price@scmp.com.
-- Deb Price and Snow Xia in Hong Kong 
 


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Stocks

Stocks Blog: Hang Seng turns up on reports of US, China deal to remove extra tariffs in phases

Investors have turned their attention to innovative drug development. CK Life Sciences is one company whose shares have shot up. Above, a scientist transfers fluids into a tube at the Driver laboratory in Shantou, China. Photo: China  

Business

Markets

CK Life Sciences market valuation passes HK$10 billion
CSPC Pharmaceutical rises 4.4 per cent 


CK Life Sciences shoots up again, while Tencent falls


Hong Kong protests

US-China trade war

China stock market

Hong Kong stock exchange

Tencent Holdings

Hong Kong property

MTR Corporation

HSBC

Live

Shanghai Fosun Pharmaceutical Group (2196 HK), a unit of mainland Chinese conglomerate Fosun International, will increase its investment on innovative drugs, and produce more generic drug types to bolster its profit, according to its chairman.
Currently, 65 per cent of its total research and development expenditure is on innovative drugs, and the company wants to step up its spending over the next few years, Chen Qiyu, Fosun Pharmaceutical’s chairman, said in an interview at the China International Import Expo in Shanghai on Wednesday.
“We will do more to strengthen our innovation capability to better serve the health needs of the Chinese people,” he said. Fosun Pharmaceutical will achieve this mainly through partnerships with teams developing new drugs, as well as by acquiring patents and creating joint ventures, Chen added.
The company has accelerated its investment in advanced medical technology over the past couple of years. Its CAR T cell therapy, a type of adoptive cell transfer, is considered one of the most advanced forms of cancer treatment. The technology behind the da Vinci surgical robot, which helps surgeons perform minimally invasive surgeries, was introduced in China from the United States after Fosun Pharmaceutical formed a joint venture.
The company is also expected to increase production of more generic drugs, including an insulin drug.
Read full story by stocks reporter Zhang Shidong here.    


Shanghai Fosun Pharmaceutical to step up spending on innovative drugs

US President Donald Trump and Chinese President Xi Jinping may not be able to sign a partial trade deal until December, and two US locations have been ruled out for their highly anticipated meeting, according to a person familiar with the matter.
The two sides have been trying to negotiate a limited trade deal that would entail the US dropping some tariffs on Chinese imports in exchange for Beijing resuming purchases of American farm goods and other products.
The US-China trade war that Trump began has been a drag on both nation’s economies, and the leaders had initially expected to take a step toward resolving it ahead of the 2020 US elections at an international summit in Chile this month.
Trump administration officials in recent days have expressed optimism that phase one of a comprehensive trade deal might come together this month, helping boost equity markets to records this week.
Read full story here. 


US-China mini trade trade deal signing may be delayed  

Shares of CK Life Sciences International Holdings (775 HK), the healthcare and agriculture produce unit of tycoon 
Victor Li Tzar-kuoi’s conglomerate CK Hutchison, more than doubled after it announced that its drug for treating early-stage skin cancer has yielded favourable interim clinical trial results.
The drug, being developed by CK Life’s California-based subsidiary Polynoma, could potentially be the first vaccine-based immunotherapy for stage-two sufferers of melanoma - the most severe and deadly form of skin cancer - if it meets US Food and Drug Administration requirements on further trial work.
“Our drug candidate, targeting stage two B and C patients, has been shown to significantly increase the recurrence-free survival likelihood of patients in our trial,” CK Life’s chief scientific officer Melvin Toh Kean-meng said. “We are not aware of another company’s vaccine immunotherapy candidate entering phase three trial.”
Read full story by Eric Ng here. 


ICYMI: CK Life Sciences shot up 153.5 per cent on Wednesday

Here’s what we are watching this morning:
Overnight markets/ What futures foretell
--The S&P 500 inched ahead 0.07 per cent, the Nasdaq slipped 0.29 per cent and the Dow Jones Industrial Average was flat. 
-- Hong Kong futures slipped 0.13 per cent, while the FTSE China A50 futures were down 0.16 per cent
IPO debuts: None to note
Economic statistics/Central Bank action: 
China October foreign reserves and Hong Kong October foreign reserves
Earnings: Lenovo (992 HK)
Conferences: Credit Suisse China Investment Conference (November 6-8) in Shenzhen, China   


Morning guidance 

The Hang Seng Index slipped 0.1 per cent to 27,649.99
Three index heavyweights are mixed.
-- AIA (1299 HK) rose 0.7 per cent to HK$83.40
-- HSBC (5 HK) slipped 0.08 per cent to HK$60.30
-- Tencent (700 HK) fell 1.1 per cent to HK$330.20
Other stocks of note:
-- CK Life Sciences International Holdings (775 HK) shot up 32.2 per cent to HK$1.19. On Wednesday, it skyrocketed 153.5 per cent to 90 HK cents after reporting “improved outcomes” in clinical trials of a melanoma cancer vaccine by its wholly-owned US subsidiary Polynoma. 
-- Budweiser Brewing APAC (1876) fell 0.3 per cent to HK$29.15
-- Meituan Dianping (3690 HK) rose 0.3 per cent to HK$96.85
 

-- Deb Price    


CK Life Sciences shoots up in early trading 

The Shanghai Composite Index fell 0.1 per cent to 2,975. 
Here’s how some of the most heavily traded stocks on the Shanghai-Hong Kong Stock Connect are doing:
-- Jiangsu Hengrui Medicine (600276 CH)  rose 0.2 per cent to 91.34  yuan
-- Kweichow Moutai (600519 CH)  slipped 0.1 per cent to 1,191.55 yuan
-- Ping An Insurance (601318 CH)  slipped 0.2 per cent to 89.79 yuan
-- Industrial Bank (601166 CH)  inched up 0.2 per cent to 20.20  yuan
Also of note: 
-- Luxshare Precision Industry (002475 CH), the main assembler of  AirPods – fell about 1 per cent to 33.90 yuan  
-- Deb Price    


Kweichow Moutai slips in declining Shanghai market

China Everbright Securities said today that as China’s currency has trended toward 6.99 RMB to 1 USD, China’s A-shares will continue attracting foreign investment, and the interest rate cut in China will also boost A-shares. 
These “internal and external factors” are likely to help A-shares “rebound to greater extent.” 
It also recommended that long-term investors not worry about short-term fluctuations.
Today, the onshore yuan was set at 7.01 to the US dollar.  
On Tuesday, the People’s Bank of China lowered the the medium-term lending facility rate by 5 basis points to 3.25 per cent, which would in turn, lower the prime loan rate.
-- Snow Xia    


China Everbright Securities says A shares to rebound on stronger yuan, rate cut

Shanghai Fosun Pharmaceutical Group (2196 HK) rose 1.3 per cent to HK$22.90 in early trading following news it will increase its investment on innovative drugs and produce more generic drug types to bolster its profit.
-- Deb Price    


Shanghai Fosun Pharmaceutical Group rises on news it will increase drug investment

Galaxy Entertainment Group (27 HK) fell 0.8 per cent to HK$54.85 after announcing its net revenue declined 2 per cent in the third quarter year-on-year, which it described as “solid financial results” given headwinds in Macau gambling.
Net revenue was HK$12.7 billion. Adjusted EBITDA -- earnings before interest, tax, depreciation and amortization -- increased 6 per cent year-on-year to HK$4.1 billion. 
“Given the overall market conditions and weaker global consumer sentiment we believe the Group has delivered solid financial results. Macau has faced numerous headwinds in 2019, these includes ongoing trade tensions, a slowing global economy, regional competition, currency fluctuation, disruptions in Hong Kong among others. These events have been impacting consumer sentiment and subsequent spending habits,” it said in its filing to the Hong Kong exchange.  
Its total gross gaming revenue in the third quarter was HK$14.3 billion, down 10 per cent year-on-year and down 6 per cent  quarter-on-quarter, it said. 
Mass gross gaming revenue increased 11 per cent year-on-year and rose 1 per cent quarter-on-quarter. But VIP gross gaming revenue fell 26 per cent year-on-year and declined 13 per cent quarter-on-quarter, it said in its filing.
“We remain confident in the medium to longer term outlook for Macau in general and (Galaxy) specifically. Our confidence is supported by the continued growth in demand for tourism, leisure and travel from Mainland China. We also believe the integration of Macau into the Greater Bay Area will be positive for the development of Macau. We are committed to supporting the Macau Government’s vision to develop Macau into a World Center of Tourism and Leisure.“
It noted increases in visitors to Macau.
In the third quarter, total visitor arrivals to Macau were 9.9 million, up 10 per cent year-on-year, while visitor arrivals from mainland China rose 10 per cent year-on-year to 7.1 million. Visitors from the Greater Bay Area including Hong Kong increased 25 per cent year-on-year to 4.9 million, it said. Visitors from outside Guangdong made up 53 per cent of total mainland visits. 
-- Deb Price    


Galaxy falls after reporting 3Q net revenue declined 2 per cent 

To protect minors from vaping, Chinese authorities banned e-cigarettes online sales last Friday, urging online platforms to take down any sales offers and campaigns. Chinese e-cigarette brands such as Relx, Flow, and SnowPlus, none of which is publicly traded, voiced their support for the policy.
But the announced rule, Chinese authorities said they “urge” e-commerce websites to stop selling e-cigarettes, wording that may not have been as effective as it was intended to be, according to the analyst interviewed by the 21st Century Business Herald.  There are some inconsistencies when it comes to implementing the rules on e-commerce platforms. While e-commerce websites such as JD, Pinduoduo and Suning have blocked keyword search of e-cigarettes, on T-mall and Taobao, the research results of e-cigarettes still show up, the 21st Century Business Herald reported.
A comprehensive ban on online e-cigarettes sales online would have a big impact on the entire industry, the newspaper noted.  The sales will shift to the offline channels, which will even help the top e-cigarettes companies to get more customers. Online sales only account for less than 10 per cent of these companies’ total sales, according to Tianfeng Securities’ report.
--Snow Xia


China ban on online sales of e-cigarettes expected to lead to bigger off-line push

CSPC Pharmaceutical (1093 HK) hit a 52-week high of HK$21.60 in morning trading.
The Chinese drugmaker -- up about 90 per cent this year -- has given up some of the big rally, and is now trading ahead 3.7 per cent to $HK21.25.
Its previous high was HK$20.80 on Monday.
It will report its third quarter results on November 18.
 

-- Deb Price    


CSPC Pharmaceutical hits 52-week intra-day high

The second day of gains of CK Life Sciences (775 HK) has bolstered the company's market valuation past HK$10 billion for the first time.
Chairman Victor Li Tzar-kuoi, who owns 2.25 million shares in the company, made a paper profit of HK$2.2 million from the stock's tripling in value in two days.
-- Eugene Tang 


CK Life Sciences market valuation passes HK$10 billion 

The share price of China International Tobacco (6055 HK) increased 7.1 per cent from Monday -- the first trading day since China announced a ban on online sales and marketing of e-cigarettes -- to Wednesday's close.
It shot up 8.15 per cent on Monday, so has given back some of the gains.
A subsidiary of China Tobacco, one of the most profitable companies in China, the company focuses on imports and exports of traditional tobacco products.
It went public in June, with an initial offering price of HK$ 4.88. The shares are now about 300 per cent above their initial offering price.
Today, it has fallen 0.5 per cent to HK$19.60.

 
--Snow Xia


China International Tobacco’s share price is up 7 per cent since e-cigarette ban

BYD (1211 HK) is flat at HK$38 after announcing Wednesday that its vehicle sales in October dropped 18 per cent year-on-year.
It sold 41,130 vehicles. versus 48,497 in October of last year.
New-energy vehicle sales slid about 55 per cent, from 27,667 last year to 12,567 in October this year, as the government has scaled back subsidies for green cars.
BYD has estimated that its net profit this year will decrease between 36 per cent to 43 per cent.
--Snow Xia   


BYD says vehicle sales fell 18 per cent in October, year-on-year 

The Shanghai Composite Index fell 0.3 per cent to 2,970 in the morning session.
Gauges show gains by blockchain-linked, 5G-related, pig and chicken producers in China’s markets.
Also in mainland markets, Jiangsu Hengrui Medicine (600276 CH)  fell 0.5 per cent to 90.72 yuan, while Kweichow Moutai (600519 CH)  slipped 0.03 per cent to 1,192.59 yuan.
Luxshare Precision Industry (002475 CH), the main assembler of  AirPods – fell 0.6 per cent to 34.05 yuan.
-- Deb Price      


Shanghai will start afternoon trading below water

The Hang Seng Index fell 0.3 per cent in morning trading to 27,595.69.
Tencent (700 HK) fell 1.9 per cent to HK$327.60.
Among hot stocks listed in Hong Kong, CK Life Sciences (775 HK) shot up 38.9 per cent to HK$1.25.
-- Deb Price 


CK Life Sciences gains 38.9 per cent in morning session

Instant noodles operator Nissin Foods (1475 HK) fell 4.6 per cent to HK$6.77, after it announced a 27.1 per cent jump in its year-on-year net profit to HK$211.1 million for the year to September 30.
Its gross profit margin rose to 32.8 per cent, compared to 30.6 per cent in 2018.
It said the improvements were mainly due to stable raw material costs and better control of fixed costs.
Earnings per share rose 27.1 per cent to 19.67 HK cents. 
-- Peggy Sito 


Nissin Foods falls after reporting 27.1 per cent jump in net profits for first three quarters

The frenzy in blockchain stocks continues today, with two Pantronics (1611 HK) and Grandshores Technology Group (1647 HK) shooting up.
Pantronics, which announced last Friday it had officially changed its name to Huobi Technology Holdings, is up 11.3 per cent to HK$5.34. 
Huobi, written in Chinese characters  -- 「火 幣 -- reads as “currency on fire,” and cryptocurrency traders in Asia are very familiar with the Huobi cryptocurrency exchange.
In August 2018, Huobi acquired a 71.67 per cent in Paltronics for HK$586.4 million.
It also changed its logo and its website address, it said in a stock filing. 
Grandshores Technology, which operates construction and blockchain business, jumped 14.8 per cent to 62 HK cents.
Chinese President Xi Jinping set off a frenzy in the sector when he recently said China should become a leader in the technology.
Analysts have questioned the investor stampede into blockchain stocks, saying profitable application is years away and no publicly listed leaders have emerged in a hot sector filled with promising but unproven start-ups.
Here’s a feature for investors on what analysts think about blockchain stocks.
-- Deb Price


Two blockchain-linked stocks -- Pantronics, Grandshores -- jump 

Changan Auto (000625 CH) rose 1.3 per cent to 7.57 yuan, after reporting a small drop  of year-on-year vehicle sales in October.
It said its vehicle sales fell to 164,018 units in October, 0.95 per cent lower that that month in 2018.
On October 31, it reported its net profit  loss totalled 421.5 million yuan (US$ 60.06 million) for the third quarter, which was a 5.6 per cent improvement over the same period last year. 
Changan Auto plans to sell a 50 per cent stake in its joint-venture subsidiary Changan PSA, also half owned by French auto-manufacturer Group PSA, Yicai Global reported on Oct.31.
According to the China Passenger Car Association (CPCA), car sales in China dropped for the 15th straight month in September, when they fell 5.2 per cent compared with the same month last year.
--Snow Xia   


Changan Auto rises on small decline in vehicle sales in October from year before

DaChan Food Asia (3999 HK), a chicken processor, shot up 49.5 per cent to 68 HK cents, after announcing its profit attributable to shareholders jumped 241.6 per cent in the first nine months compared to the same period in 2018.
Its profit attributable to shareholders rose to 60.7 million yuan, an increase of about 42.9 million yuan from the same period last year, it said in a Hong Kong exchange filing.
“Throughout this year, the external environment and competitive landscape of the domestic white feather broilers industry experienced significant changes as compared to last year,” it said in its filing. “Under the impacts of African swine fever, the sharp increase in prices of domestic live pigs and pork contributed to the switch of meat products consumption from pork products to poultry products, thus led to the continuous rise in the prices of feather chickens and chicken meat.“
It said in the first three quarters, turnover of the meat product segment of the company increased by approximately 38.3 per cent. 
-- Deb Price 


DaChan Food Asia shoots up nearly 50 per cent on big profit jump

Geely Auto (175 HK) is trading up 0.1 per cent to HK$15.22, after announcing its vehicle sales volume grew to 130,180 units in October, after falling for six months.
It traded as high as HK$15.76 in the early morning session, before sliding through the day.
Its vehicle sales volume in October was 0.9 per cent higher than in the same period last year and is 14 per cent higher than last month, the company reported. It has reached 80 per cent of its year target of 1.36 million. Its exports volume increased to 2,986 in October, 124 per cent higher compared with the same period last year.
-- Snow Xia   


Geely Auto shoots up on October vehicle sales figures, but then slides

The Shanghai Composite Index closed flat at 2,978.71, with a technical gain of 0.12 points, as a delay in the signing of a “phase one” trade deal weighed on sentiment.
The three heavyweights on the index --  Industrial and Commercial Bank of China (601398 CH), Kweichow Moutai (600519 CH) and the Agricultural Bank of China (601288 CH) -- were mixed.
ICBC fell 0.5 per cent to 5.95 yuan, Kweichow Moutai rose 0.7 per  cent to 1,201.37 yuan, and the Agricultural Bank of China declined 0.6 per cent to 3.30 yuan.
The CSI Index of large cap stocks traded in Shenzhen and Shanghai inched up 0.2 per cent to 3,991.88.
Gauges tracking sectors trading in the mainland showed that blockchain-linked and 5G-related stocks gained, 1.9 per cent and 0.9 per cent respectively, while gold-related stocks declined 0.6 per cent. 
Jiangsu Hengrui Medicine (600276 CH), a stock heavily traded on the Stock Connect, fell 0.7 per cent to 90.58 yuan. 
Luxshare Precision Industry (002475 CH), the main assembler of  AirPods – rose 0.44  per cent to 34.39 yuan.
-- Deb Price      


Kweichow Moutai, Luxshare Precision, blockchain-related stocks gain in China 

The Hang Seng Index rallied in late afternoon on news China and US agreed to remove tariffs in phases.
A Bloomberg report said, if confirmed by the US, the agreement could show a way to deescalate the trade war. Bloomberg cited Ministry of Commerce spokesman spokesman Gao Feng. 
The Hang Seng shot up 0.6 per cent to 27,847.23.
-- Snow Xia


Hang Seng turns up on reports of US, China deal to remove tariffs in phases 

The Hang Seng Index rose 0.57 per cent to 27,847.23, after staging a sudden rally late in trading on reports that the US and China have agreed to roll back additional tariffs in stages. 
“News saying that China and US have agreed to proportionally roll back tariffs on each other’s goods in phases is the main reason for the Hang Seng Index to bounce near 200 points in the afternoon suddenly,” said Kenny Wen, wealth management strategist at Everbright Sun Hung Kai.
The top gainer on the index was CSPC Pharmaceutical (1093 HK), which rose 4.4 per cent to HK$21.40. Investors like the company’s drug pipeline and it announced last week that China had approved its Cephalexin capsules for treatment of respiratory infections.
Another Hong Kong-listed pharmaceutical company continued its march.  CK Life Sciences (775 HK) rose 23.33 per cent to HK$1.11. That was on top of Wednesday’s gain of more than 150 per cent on its report of “improved outcomes” in clinical trials of a melanoma cancer vaccine by its wholly-owned US subsidiary Polynoma. 
“This (pharmaceutical) sector will not be affected by the trade war nor the Hong Kong economy.  With strong earnings growth, we see retail investors chasing those stocks,” Wen said.  Wen said he expects the stock price of CK Life will be highly volatile after the rally.
He recommends that investors take “a wait and see approach rather than chasing the rally.“
DaChan Food Asia (3999 HK), a chicken processor, shot up 47.3 per cent to 67 HK cents, after announcing its profit attributable to shareholders jumped 241.6 per cent in the first nine months compared to the same period in 2018.
Three index heavyweights closed  mixed.
-- AIA (1299 HK) rose 0.7 per cent to HK$83.35
-- HSBC (5 HK) slipped 0.2 per cent to HK$60.20
-- Tencent (700 HK) slipped 0.1 per cent to HK$333.60
-- Deb Price 


Stocks Blog: Hang Seng turns up on reports of US, China deal to remove extra tariffs in phases

.css-1mniedq{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;}CK Life Sciences market valuation passes HK$10 billion CSPC Pharmaceutical rises 4.4 per cent

CK Life Sciences market valuation passes HK$10 billion

CSPC Pharmaceutical rises 4.4 per cent