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Zhang Shidong

Deb Price

Welcome to the launch of the South China Morning Post's Live Stocks Blog! 
Each trading day, we will provide investors with timely news and analysis about markets in mainland China and Hong Kong, including significant moves in benchmarks and individual shares as well snapshots of companies, sectors, trends and markets-impacting government policy. (Stock trading involves judgment calls and risks that the SCMP cannot be held responsible for.)
Today, your main markets guides will be Zhang Shidong in Shanghai and Deb Price in Hong Kong. We'll be helped out by the rest of the markets team as well as other reporters on our Business desk.


Chinese toymaker Pop Mart’s 370% surge fuelled by blind box collectibles

Laopu Gold outshines Chow Tai Fook as China’s top jeweller with 437% stock surge

Hong Kong stocks end week lower as traders look for catalysts

Chinese fintech giant Ant denies imminent restart of IPO process

Stocks

Stocks Blog: Hot stocks in China tumble 

Tencent clawing its way back from cliffhanger year, winning rave analyst reviews ahead of earnings

Tecent had a rough 2018, but its share price has been moving up. It reports its earnings Thursday evening Hong Kong time. Photo: Reuters

JPG for ONLINE

Business

Markets

Meituan Dianping falls after lock-up period ends
Xiaomi drops 4.6 per cent as results disappoint investors 


Investors cautious ahead of US Fed meeting


Live

Here's what we are watching this morning:
Overnight markets/ What futures foretell
Overnight in US markets, the S&P 500 was little changed, the Nasdaq gained 0.1 per cent and the Dow Industrials slipped 0.1 per cent.
Most markets in Asia fell today as investors awaited the results of the Fed policy meeting on Wednesday US time, which will shed light on the tone of interest rate policies.
Hong Kong and FTSE China A50 futures are both down 0.4 per cent
IPO debuts: nothing major
Economic statistics/Central Bank action: nothing major
Corporate events: earnings, meetings, news conferences
Xiaomi, China’s top smartphone maker, posted a profit of 13.5 billion yuan (US$2 billion) in 2018, compared with a loss of 43.9 billion yuan a year earlier, amid increased growth in global sales.
Later this week: Tencent and PetroChina will report earnings on Thursday.
Also, don't miss these stories on what analysts are saying about Tencent before its earnings and why China's nuclear shares soared and what's ahead.


Morning markets guidance 

China’s benchmark Shanghai Composite Index opened 0.4 per cent lower on Wednesday trading, with selling mostly from liquor distillers that were ramped up early this week on prospects of robust earnings. Even so, the gauge was only a step away from rising past a nine-month high. Hong Kong’s Hang Seng Index dropped 0.5 per cent at the open, falling in line with the rest of the markets in Asia.
-- Zhang Shidong


Mainland, Hong Kong start day with small losses

Sunny Optical Technology is the biggest decliner on the Hang Seng Index in early trading, falling 5.9 per cent to HK$91.35, after the maker of optical products used for smart phones reported profits that fell short of analysts’ expectations.
Trading volumes of the stocks almost tripled its 30-day average. The company reported a profit of 2.49 billion yuan (US$370.8 million) in 2018, trailing the median estimate of 2.52 billion yuan in a Bloomberg survey.
-- Zhang Shidong 



Sunny Optical takes a pounding over reported profits  

Xiaomi, the Chinese smartphone maker controlled by tycoon Lei Jun, slid 4.1 per cent to HK$11.70 in early Wednesday trading, heading for the biggest decline since January.
While the company swung to 2018 profit in the earnings results released Tuesday night, investors seemed to focus more on its lower-than-expected revenues and shipments. Xiaomi’s fourth-quarter sales were 4 per cent below the projection by Daiwa Capital Markets, and shipments of smart phones for the three-month period missed the estimate by 23 per cent, analysts led by John Choi at the brokerage wrote in a note.
-- Zhang Shidong



Xiaomi out of investors' favour

The technology and innovation board, newly set up at the Shanghai Stock Exchange, could help companies raise between 50 billion to 100  billion yuan (US$14.9 billion) this year, according to a research report issued by China International Capital on Wednesday.
The new board, eyeing New York's Nasdaq and Hong Kong's market to woo leading tech firms, will adopt a different review process for IPO applications and tolerate high price settings for IPOs. So far, 20 Chinese companies have announced they have filed IPO applications to list on the board.
-- Xie Yu


Shanghai's new stock board could raise US$15 BL through IPOs in 2019

Meituan Dianping (3690:HK) fell nearly 4 per cent in early Hong Kong trading as a six-month lock-up period for key investors ended.  
The China food delivery service platform was trading at HK$49.90 -- or down 31 per cent from its high of HK$72.65 on September 20, 2018, when it debuted. It is facing tough competition from Alibaba-backed Ele.me. (Alibaba owns the SCMP.)
-- Deb Price 


Meituan Dianping tumbles after lock-up period ends

Huaneng Power International and China Longyuan Power retreated at least 4 per cent in Hong Kong trading after posting profits that either fell or trailed analysts’ estimates.
Huaneng’s profit for 2018 plunged 54 per cent from a year earlier and Longyuan’s earnings missed analysts’ consensus estimates of 4.78 billion yuan (US$712.1 million) by 18 per cent. Daiwa Capital Markets attributed Longyuan’s weaker-than-expected profit to higher-than-anticipated staff, maintenance and finance costs.
--Eric Ng


Huaneng Power and Longyuan Power retreat on disappointing earnings

Losses on China’s benchmark Shanghai Composite Index deepened in morning trading, as investors pulled out of some of the best-performing stocks.
The index slid 1 per cent to 3,059.17 at the break, while the ChiNext gauge of start-ups in Shenzhen tumbled 2.7 per cent. Pig and chicken-farming companies including Hunan New Wellful and Shandong Minhe Animal Husbandry led the pack of decliners, with investors worried about outsized gains. Hunan New Wellful, a pig-farming firm, tumbled 8.1 per cent to trim its gain to 196 per cent this year, while Shandong Minhe, a chicken farmer, slid 5 per cent, paring the annual advance to 150 per cent.
-- Zhang Shidong



China stock declines accelerate as hottest shares tumble

China Renaissance Holdings (1911: HK) was down nearly 5 per cent in Hong Kong trading after posting a lower-than-expected full-year net profit of US$67.3 million in a filing on Tuesday evening.
The 2018 net profit was up 15.8 per cent from last year. Its investment banking grew by 49 per cent, investment management by 67 per cent and subsidiary Huajing Securities by 30 per cent through the year.
Listed in September, the investment bank focuses on providing financial services to new economy companies and entrepreneurs.
“Our aim is to become China’s next generation bank,” chief operating officer Wei Xiang, said at a news conference on Wednesday. “For long-term growth, we have a strong position as an entrepreneur base.”-- Louise Moon


China Renaissance takes a hit over net-profit miss

Megvii, the developer of facial recognition software Face++ used widely across China, is mulling an initial public offering that could raise up to US$800 million, people familiar with the matter said.
The Beijing-based artificial intelligence start-up is still weighing options to list in either New York or Hong Kong, with the latter more likely at this stage, said the people who did not want to be identified as the information is private.
Read full story by Sarah Dai and Chad Bray here.


Chinese AI start-up Megvii said to plan IPO to raise up to US$800 million

Shares of Guangzhou R&F Properties (2777: HK) tumbled in Hong Kong after it reported its profits plunged 59 per cent last year to 8.73 billion yuan (US$1.3 billion).
The Chinese developer blamed the profit drop on a much smaller gain -- 397 million yuan -- than last year on "bargain purchases." Meanwhile, core profit, excluding revaluation gains on investment properties, was up 49 per cent to 9.53 billion yuan, driven by strong property sales of 131.1 billion yuan, 60 per cent higher than that of 2017. That met the developer's target amid a softened Chinese housing market in 2018.
Its shares tumbled when trading resumed after the midday break, when it reported, and were last down by 2.5 per cent.-- Pearl Liu 
 


Guangzhou R&F Properties shares fall after profits plunge

Jiayuan International Group (2768: HK) -- the Chinese property developer that plummeted by more than 80 per cent on a single trading day in January -- jumped by as much as 8.7 per cent today before paring some of the gains to 3.8 per cent, at HK$4.05.
The advance followed its announcement of an initial agreement to acquire a group of development projects located in the eastern province of Anhui from its chairman, Shum Tin Ching.
The purchase, which contains projects from residential complexes to offices and shopping malls, will allow Jiayuan to establish its presence in Anhui and expand its land reserve, the company said in a filing to the stock exchange.
-- Yujing Liu


Jiayuan International -- known for big plunge -- jumps on deal to buy Anhui projects  

Two more Hong Kong-listed Chinese developers saw their shares drop after their 2018 results fell short of expectations, due to lower-than-anticipated booked revenues.
China Overseas Land & Investment (688:HK) announced an 8.3 per cent increase in its core profits while revenue grew merely 3.25 per cent. The HK$37.1 billion core profit missed the average HK$39.8 billion expected in a poll by Bloomberg, and the HK$171.5 billion revenue fell short of the HK$198.8 billion expected. The second-largest Hong Kong-traded Chinese developer by market capitalization was trading down nearly 3 per cent.
Agile Group Holdings (3383: HK) reported an 18.3 per cent increase in net profits to 7.13 billion yuan, missing the 7.44 billion yuan average estimated. Its revenue rose 8.8 per cent to 56. 1 billion yuan, a miss from the 61.1 billion yuan estimated. Its shares were last trading down 4.1 per cent. -- Zheng Yangpeng 
 


2 more Chinese developers see shares tumble over 2018 results

Shares of Xinjiang Goldwind Science & Technology (2208:HK), China's largest wind turbine maker, jumped as much as 14.2 per cent and were last trading up 12.2 per cent, at HK$11.16.
This came after a Shanghai Securities News report cited reports by Pacific Securities, Chuancai Securities and Essence International Financial that noted a resurgence in demand growth for wind power generation equipment this year. Essence's analysts forecast as much as 30 giga-watt of new wind farms installations this year, as developers race to complete projects before subsidies will be eliminated for all new projects later this year. Some 20.6 GW were installed last year, according to the National Energy Administration.
--Eric Ng 


Report of favorable winds for wind turbine makers boosts Xinjiang Goldwind 

The head-spinning pace of property development in China is unlikely to be maintained, said Yan Jianguo, chairman and CEO of China Overseas Land and Investment, a top Chinese developer.
“It is unlikely that China will see rapid growth in property in the future," Yan said at a news conference after reporting its 2018 core profit grew by 8.3 per cent, falling short of expectations.
The company set a sales target of 350 billion yuan in 2019, representing a 16 per cent increase. But that target was much slower than the 30 percent growth seen in 2018.
Shares of the Hong-Kong listed developer fell nearly 2 per cent.-- Pearl Liu


'Rapid growth' in China property is likely over, says developer

The world-beating rally by Chinese stocks has slowed down.
Today, traders offloaded holdings of agricultural companies, one of the year’s best-performing sectors, to lock in profits.
The Shanghai Composite Index dropped less than 0.1 per cent, or 0.34 points, to 3,090.64 at the close, but it had declined as much as 1.2 per cent in volatile trading.
The selling was mainly in pig- and chicken-farming companies, whose share prices have at least doubled this year on expectation about short supply amid African swine flu. Meanwhile, a rally in brokerages helped to put a floor on the broader market, with the Shanghai Composite still trading close to a nine-month high.
Shanghai is up 24 per cent this year. But investors are parsing corporate results in the earnings season for clues on whether there will be more catalysts to fuel the rally.
A gauge tracking Chinese agricultural companies slumped 2.6 per cent on Wednesday, paring its gain to 48 per cent this year, according to data service provider Shanghai DZH. Among them, Hunan New Wellful, a pig breeder, slid 4.4 per cent to 10.40 yuan after having surged 221 per cent this year through Tuesday. Rival Chuying Agro-pastora Group sank 5.6 per cent to 2.52 yuan. Shandong Minhe Animal Husbandry, a chicken-farming firm, lost 2.6 per cent to 29.31 yuan, trimming its year-to-date gain to 156 per cent in 2019.
On the flip side, brokerages bucked the market decline on prospects that a coming technology innovative board in Shanghai will boost revenues. China International Capital estimated as much as 100 billion yuan (US$14.9 billion) will be raised from selling initial public offering shares on the board this year.-- Zhang Shidong


China's bull run takes a breather 

Hong Kong's Hang Seng Index shed 0.5 per cent, or 145.31 points, to close at 29,320.97. The Hang Seng China Enterprises Index, or the H-share gauge, also dropped 0.5 per cent.
Xiaomi, the Chinese smartphone maker controlled by tycoon Lei Jun, slid 4.6 per cent to HK$11.64 for the biggest decline since January. While the company swung to 2018 profit in the earnings results released Tuesday night, investors seemed to focus more on its lower-than-expected revenues and shipments. Its fourth-quarter sales were 4 per cent below the projection by Daiwa Capital Markets, and shipments of smart phones for the three-month period missed the estimate by 23 per cent, analysts led by John Choi at the brokerage wrote in a note.
Meituan, the Chinese food delivery service platform, lost 3.8 per cent to HK$50 as a six-month lock-up period for key investors ended.
Tencent Holdings, the Chinese social-media giant, remained unchanged at HK$370 before the release of earnings results on Thursday.
 


Hang Seng closes down, with Xiaomi sliding 4.6 per cent 

Stocks Blog: Hot stocks in China tumble

Meituan Dianping falls after lock-up period ends Xiaomi drops 4.6 per cent as results disappoint investors

Meituan Dianping falls after lock-up period ends

Xiaomi drops 4.6 per cent as results disappoint investors