Asian Macro Initial Thoughts: BoJ in focus, along with RBA and Fed. Nvidia new more powerful chips +VE TSMC and others. China's Longi Green lays off staff. Evergrande fraud not China policy.
Markets open: NZX choppy start but working better and ASX choppy start around flat ahead of RBA
ASIA
The main focus is the BoJ rate decision at 10am Hong Kong time with an increasing number of investors thinking there will be a change of policy.
Also today the RBA rate decision 30 minutes later with no change expected.
Nvidia conference started on Monday and after market revelled new, more powerful chips; called Blackwell; expected to ship later this year +VE for TSMC and others. The company also introduced new revenue-generating software; NIM making it easier to use AI, giving customers another reason to stick with Nvidia chips over a rising field of competitors. For China it could announce production of its H20 AI chips, a sanction compliant chip; that is the alternative to its more powerful H100 and H200 chips.
News that LONGI GREEN ENERGY (601012.SH)the world's largest solar panel maker, plans to dismiss up to 30% of its workforce in an attempt to cope with overcapacity and cut costs, Bloomberg quoted people with the knowledge of the matter. Whilst it shows the forces of business may be operating it does make you wonder about China’s unemployment data. Xi’an-based Longi isn’t alone: China’s solar industry dominates global manufacturing but has suffered from layoffs and suspended investment plans in recent months. Manufacturers have been forced to sell at or below production costs after prices for solar panels fell to record lows last year. The result is that an industry seen as crucial to the global energy transition is struggling with excessive capacity, consolidation and the possibility of bankruptcies.
US homebuilder sentiment improving; Housing Market Index Mar 51 vs 48 Feb (F/cast 48). Strongest for 8 months. With the Fed expected to cut rates later this year this is positive and should help Techtronics (669 HK).
Housekeeping
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MARKET OPENING INDICATIONS
New Zealand
Opened higher and trended higher to test 11,750 mid morning but then sold down to flat bounced but then testing Monday’s closing level before working higher to 11,750 at 12:30pm local.
No Data due but could get Global Dairy Trade Price Index
Australia
ASX 200 staggered open, first print was up 7pts vs up 2pts Futures and continued to 7,690 in early trades before reversing lower into the red testing 7,670 then tick up to flat. Expect caution ahead of the RBA rate decision; although no change expected. Energy stocks +VE as oil higher overnight. Gold and Iron Ore higher but expect market to open and trade around flat. Tech could see upside as Nvidia announces new chips and platform.
Earnings New Hope Corporation Ltd (ASX: NHC) releases its half-year results.
Data
RBA Interest Rate Decision
Japan
Nikkei futures -130pts -0.3% at 39,610, Chicago Nikkei Futures -90pts -0.23% at 39,390
Expect caution ahead of the BoJ rate decision; expected by many to end eight years of negative interest rates. BUT something it might wit until April so there could be disappointment.
Yen closed at 149.12 in US but opened 149.05
Data after the open
BoJ Interest Rate Decision. Press conference after market.
Lunchtime
Capacity Utilisation Jan MoM vs -0.1% Dec (F/cast is -0.2%)
Industrial Production Jan MoM vs 1.4%Dec (F/cast is -7.5%)
S Korea
Expect market to open higher on news of new chips from Nvidia after market in the US.
No data due
Taiwan
Market to opened higher with TSMC seen to benefit from Nvidia’s new chips.
No data due
China
CSI 300 opened lower after Golden Dragon Index closed -40pts -0.63% at 6,271 just off the afternoon low. FTSE A50 China Futures -33pts -0.27% at 12,161
No data due could get
FDI (YTD) Feb YoY vs -11.7% Jan (F/cast is -19%)
Hong Kong
HSI to open lower as ADR’s closed -50pts -0.3% at 16,687 with only HSBC, CLP and Xiaomi in the green. Turnover dropped on Monday to sub HK$100b after last weeks increase and may indicate ’Team China’ taking a breather. The selection of short sold stocks also increased.
Earnings today include; HK & Shanghai Hotels, PAX Global, China Unicom, Emperor Watch & Jewellery, Huaneng Power, Anhui Conch Cement, COFCO Joycome Foods, Tencent Music, Xiaomi, Ping An Healthcare & Tech, China Aircraft Leasing, ZTO, Li Ning, XPeng and others.
No data due
Out after market Monday
Unemployment Rate Feb 2.9% vs 2.9% Jan (F/cast was 2.9%)
But the survey is of little real use; it’s a phone survey to landline numbers and if you don’t answer they assume you are working. There are no unemployment benefits in Hong Kong that you can register for. It would be better to look at the number of people who are on assistance.
Singapore
No data due but could get 4 and 12 week Bill Auction
India
India is unlikely to achieve China's 8-10% economic growth rate in the long term, though Morgan Stanley remains optimistic about India's prospect, Chetan Ahya, Morgan Stanley's Chief Asia Economist, said. India's economic growth is expected to stabilize at 6.5-7% in the long run, while it is far from being able to replace China as a global manufacturing center, due to a lack of infrastructure and a shortage of technological labor force, Ahya added.
No data due
Europe
Eurozone ECB’s Guindos speaks, ZEW Economic Sentiment Index, Labour Cost Index, Wage Growth
Germany ZEW Economic Sentiment & Current Condition Indexes
France No data due
United Kingdom 20 year Treasury Gilt Auction
United States
Futures indicate Dow up 8pts 0.02%, S&P -0.15% and NDX -0.28% but S&P and NDX improving.
Data due Building Permits, Housing Starts, Redbook, 52 week Bill Auction, 20 year Bond Auction, Net Long-term TIC Flows, Foreign Bond Investment, Overall Net Capital Flows, API Crude Oil Stock Change.
Earnings Close Brothers HY, Commerzbank FY, Continental FY, DFS Furniture HY, Essentra FY, Harworth FY, Sabre Insurance FY, SThree Q1 trading update, Trustpilot FY, Videndum FY, Wickes FY
AUSTRALIA
Australians are shopping more frequently but making smaller purchases, as cost-of-living pressures force consumers to balance their budgets.
Uber’s $272 million settlement with Australian taxi operators has been welcomed by one of the people who started it all.
Australia’s largest online weight-loss business at loggerheads with regulators. One of the nation’s fastest-growing technology start-ups has accused Australian medical regulators of damaging patient outcomes.
Union savaged at Qantas’ illegal outsourcing compensation case. The Transport Workers Union has been told to prioritise its members instead of tweeting as Justice Michael Lee takes it to task for “wasting the court’s time”.
JAPAN
The United States and Japan on Monday proposed a U.N. Security Council resolution stressing that nations should comply with a treaty that bars putting nuclear weapons in space, a message that appeared aimed at Russia. Washington believes Moscow is developing a space-based anti-satellite nuclear weapon whose detonation could cause havoc by disrupting everything from military communications to phone-based ride services, a source familiar with the matter has said.
Hedge funds have cut back their huge bet against the yen ahead of the Bank of Japan's policy decision on Tuesday, but not by much, suggesting they don't believe a landmark interest rate hike would do much to improve the currency's immediate fortunes. The BOJ is expected to deliver its first rate hike in 17 years on Tuesday, bringing the curtain down on eight years of negative interest rate policy (NIRP), and the latest move to end decades of deflation-fighting, accommodative policy.
TSMC (2330.TW) is looking at building advanced packaging capacity in Japan, according to two sources familiar with the matter, a move that would add momentum to Japan's efforts to reboot its semiconductor industry. The deliberations are at an early stage, they added, declining to be identified as the information was not public. One option the chipmaking giant is considering is bringing its chip on wafer on substrate (CoWoS) packaging technology to Japan, according to one of the sources who was briefed on the matter.
Foreign Minister Yoko Kamikawa pledged Monday to launch a new dialogue framework to start negotiations for a multinational treaty banning the production of nuclear materials that have the potential to be used for weapons. With Japan holding the U.N. Security Council's monthly chair for March, Kamikawa said at an open debate session in New York that the "Friends" meeting with like-minded countries is aiming to "enhance political attention" to the Fissile Material Cut-off Treaty. The move comes amid China's military buildup with its nuclear stockpile increasing, while fears linger that Russia might use such arms in its war with Ukraine and North Korea may conduct its seventh nuclear test, the first since September 2017.
Former Liberal Democratic Party policy chief Hakubun Shimomura drew criticism Monday for dodging questions on the political funds scandal during a Lower House political ethics committee meeting, despite having hinted that his testimony would finally provide some answers. Key issues in the scandal concern why a system of kickbacks was maintained by the Seiwakai faction, previously led by former Prime Minister Shinzo Abe, after Abe’s death, as well as whether faction leaders recognized the system was illegal. As a former leader of the Abe faction, Shimomura had been expected to shed light on those questions via his testimony. Instead, his vague replies are likely to increase opposition pressure on Prime Minister Fumio Kishida to allow sworn parliamentary testimonies by other key LDP members, which would — unlike those given to the political ethics committee — carry legal penalties for perjury.
SOUTH KOREA
President Yoon Suk Yeol on Monday urged the medical community to engage in dialogue and to trust the government, rather than refusing to bend on plans to increase the annual medical school enrollment quota.
North Korean leader Kim Jong Un has overseen firing drills by artillery units in the western region involving "newly-equipped super-large" multiple rocket launchers, state media KCNA said on Tuesday. The drills came a day after South Korea and Japan reported North Korea's launch of several short-range ballistic missiles into the sea, its first such missile test in about two months. Kim guided the drills on Monday that were aimed at testing the "real war capabilities" of 600 millimetre multiple rocket launchers and improving the operators' combat morale and readiness posture, KCNA said.
Korean businesses are unlikely to face a massive challenge by possible shift in US trade policies resulting from the 2024 US presidential election but they should get ready for small hiccups, experts on international trade said on Monday. “From the US perspective, Korean companies are very important partners in trade and investment. … Since the Korea-US Free Trade Agreement has been revised in a way that satisfies US constituencies, there may be hiccups (in the trade relationship) after the presidential election, not a massive problem,” Kate Kalutkiewicz, a senior managing director at Washington-based trade consulting firm McLarty Associates said during a Korea-US Trade Forum hosted by the Korea Chamber of Commerce and Industry in Seoul.
Celltrion announced Monday that its new autoimmune disease treatment Zymfentra has been launched in the US market. Zymfentra is a subcutaneous injection formulation of Celltrion's infliximab Remsima. In October last year, the US Food and Drug Administration approved Zymfentra (infliximab-dyyb) for the maintenance treatment of adults with moderately to severely active ulcerative colitis and Crohn’s disease. Celltrion said the wholesale acquisition cost of two injections of Zymfentra, which a patient needs in four weeks, has been set at $6,181. “The company has been able to set an optimal price for the drug considering the prices of its competing products,” Celltrion said. Celltrion expressed hopes that Zymfentra would drive the company’s long-term revenue growth. The company said it would aim to raise over 1 trillion won in annual sales with Zymfentra by 2025 and afterward. The company added that Zymfentra will be under patent protection until 2037 for its dosage form and until 2040 for route of administration. Celltrion expects Zymfentra will increase its share in the US market due to the treatment’s efficacy and accessibility.
Kumho Tire recently introduced EnnoV, the company's newly branded lineup of tires designed specifically for electric vehicles, stepping up its game in the EV tire competition with Hankook Tire & Technology’s iON brand. The launch took place during the EnnoV Experience Day at the Korea Automobile Testing & Research Institute in Hwaseong, Gyeonggi Province, on March 15. EnnoV marks a significant rebranding effort by Kumho Tire, consolidating its EV-specific tires, including models such as the Majesty9 SOLUS TA91 EV, under a new, more evocative brand name. The name EnnoV is derived from the words "electric" and "innovation," and is positioned as a premium brand built on Kumho Tire's most advanced technologies.
Local real estate asset manager Igis Asset Management is set to move forward with its plan to refurbish the office area near the Seoul Station, having recently acquired two office properties on the site. The asset manager announced Monday it had acquired Metro Tower (41,139.6-square-meters) and Seoullo Tower (27,897.5-square-meters) in the area, which connects with another property owned by the company, the Millennium Hilton Seoul. Through the project, the area, situated near the iconic Namsan, will be redeveloped into a 460,000-square-meter mixed-use complex, comprising a landmark hotel, office and retail spaces. It will also feature a separate 7,000-square-meter green area to be open to the public.
James Dyson, the founder and senior engineer of UK home appliance giant Dyson, visited Seoul on Monday to unveil the company’s new hair dryer, the Dyson Supersonic Nural. The new hair dryer, which is designed to better protect hair and the scalp from heat, made its global debut in Korea, one of the brand’s top-selling markets. The 76-year-old Dyson founder showed his appreciation for the local market as he took the stage to introduce the new machine in person.
Korea Water Resources, the state-run water management agency, announced Monday that it has partnered with Vietnam’s National Center for Water Resources Planning and Investigation to address the country's water concerns and mitigate against climate change impacts. The collaboration was formalized through a memorandum of understanding signed at the International Conference on Water held in Hanoi, Vietnam, on March 15.
Korean Air on Monday said it plans to expand the number of its international flights for the upcoming summer season, elevating its operational rate to nearly 96 percent of pre-pandemic levels. From March 31 through Oct. 26, the company will resume operations of weekly flights to four cities, including China’s Zhengzhou and Zhangjiajie, as well as Zurich and Bangkok.
TAIWAN
Minister of Digital Affairs Audrey Tang yesterday delivered an unannounced video message at a US-backed democracy summit in Seoul. Tang told the third Summit for Democracy that Taiwan has suffered disproportionately from concerted cyberattacks and that the nation was willing and able to work with all stakeholders to ensure artificial intelligence (AI) develops safely and sustainably. Taiwan is a key global supplier of the semiconductor chips critical for such technology applications. The conference being hosted by South Korea is an initiative of US President Joe Biden aimed at finding ways to stop democratic backsliding and the erosion of rights and freedoms. China said it was firmly opposed to South Korea having invited Taiwan to participate.
The Legislative Yuan yesterday inaugurated a parliamentary friendship group with the Czech Republic and Austria, and announced that the National Palace Museum might exhibit in the Czech Republic next year. The Republic of China-Czech and Austrian Parliamentary Amity Association was initiated by Chinese Nationalist Party (KMT) Legislator Wan Mei-ling, who is to also serve as chair. The group is to also have 11 vice chairs from across party lines, with an initial membership of about 50 legislators.
A record rally in Taiwanese stocks is luring retail investors to pile into exchange-traded funds (ETFs), as local regulators stepped up warnings on the herding behavior. Two new stock ETFs this month raised a combined NT$223.1 billion (US$7.05 billion), with the latest one which ended subscriptions on Friday last week setting a new record. This brings the total inflows into equity ETFs to about NT$340 billion, more than half of last year’s, underscoring how the global market frenzy around artificial intelligence (AI) is spurring local demand for exposure to a technology-heavy market. Central bank Governor Yang Chin-long last week described the enthusiasm for ETFs as a “herding effect” in the market. He added that such funds helped drive up risk in the stock market, which could lead to greater volatility in the long term. That is set to be a challenging job, as local stocks are powered by a record rally in Tsmc, which supplies the majority of the advanced chips used for AI.
Cathay United Bank (CUB) kick-started the new year with good news from its private banking business. CUB Private Banking has been named “Best Domestic Private Bank (Taiwan)” by Asian Private Banker for the fifth year in a row, the only financial institution in Taiwan to achieve this great feat. Moreover, the bank also received the green light from the Financial Supervisory Commission to continue rolling out the Wealth Management 2.0 service targeting high-net-worth individuals (HNWIs). These achievements indicate that both the government and the public recognize CUB’s effort to provide comprehensive services to uncover the needs of HNWIs.
Google is still evaluating market demand and adjusting its plan to build a new data center in Tainan, Google Taiwan managing director of sales and operations Tina Lin told the Central News Agency on Sunday. Lin was speaking after the company was questioned last year by city councilors as to why it had not begun construction of the facility after it announced plans to construct the center more than four years ago. Lin did not give any more details on the Tainan plan, but emphasized that Google was continuing to invest in its data center in Changhua County, its first in Taiwan.
Housing agency Hiyes International Co and elevator maker Golden Friends Corp are expecting stable business growth this year, as the local property market steadily emerges from a slowdown induced by economic uncertainty and tight monetary policy. Hiyes said business visibility is better this quarter from a year earlier, judging by agency cases and construction revenue. Things might be quieter during the second quarter of the year, as developers would seek to digest unsold houses and launch major presale projects in the third and fourth quarters that would generate billions of revenue, it said.
CHINA
Spot USD/CNY lost 17 bps to close at 7.1982 Monday (18th). As of 4:38 pm, USD/CNY in the night session dropped 25 bps. Meanwhile, USD/CNH added 1 bp to 7.1962, trading 20 bps higher than USD/CNY.
LONGI GREEN ENERGY (601012.SH) the world's largest solar panel maker, plans to dismiss up to 30% of its workforce in an attempt to cope with overcapacity and cut costs, Bloomberg quoted people with the knowledge of the matter. As the company's total number of employees purportedly reached a peak of about 80,000 last year, its plan to lay off up to 30% of its workforce means that the reported number of layoffs may be as high as 24,000 people. The company has been accelerating layoffs since November 2023, when it laid off several thousand employees, most of whom were management trainees and factory workers.
China's embassy in Singapore on Monday urged its citizens in the city-state to stay away from all forms of betting, saying gambling overseas violates Chinese laws. The warning comes as Beijing intensifies its efforts to crack down on Chinese citizens gambling across Southeast Asia, a popular tourist destination. In a statement, the embassy "solemnly reminded" the majority of Chinese in Singapore to enhance their legal awareness and stay away from gambling. Singapore is home to two casinos, one operated by Las Vegas Sands (LVS.N) and the other Genting Singapore (GENS.SI). Another example of the President Xi wanting to have total control
BYD (002594.SZ) launched on Monday a new version of its Destroyer 07 hybrid car at a starting price 11.3% lower than its predecessor, Reuters calculations showed. Shows. How intense the price war in China has become -VE for sales as purchasers take a wait and see approach. It also makes the overseas markets attractive.
China has changed the rules for consumer finance firms for the first time in a decade, setting a higher bar for non-bank financial businesses providing small personal loans in the world's second-largest economy. The stricter measures, which will take effect on April 18, come amid a regulatory tightening across China's financial sector, despite the economy's wobbly post-COVID recovery, and analysts see them as potentially deterring new players. The revised rules, published by the National Financial Regulatory Administration (NFRA) after a one-month consultation ended mid-January, are in line with the proposed amendments. Under the new regulation, firms that provide consumer financing for other than home and car purchases must have a minimum registered capital of 1 billion yuan ($139 million), more than three times the minimum 300 million yuan required under 2014 regulation. A major investor in a consumer finance firm must also hold a stake of at least 50%, up from 30% previously. Financial institutions that are major investors must have total assets of at least 500 billion yuan by the end of the most recent fiscal year, up from 60 billion yuan previously. A non-financial major investor, meanwhile, needs to have at least 60 billion yuan in operating income in the most recent fiscal year, double the previously required number.
Since the adjustment of domestic refined oil product prices on 4 March in Mainland China, oil prices in the international market have been rattling to move sideways, according to the National Development and Reform Commission (NDRC). Compared the average price of the first ten working days prior to 18 March with the average price of the first ten working days prior to 4 March, the price adjustment amount was less than RMB50 per ton, based on the prevailing domestic refined oil product price mechanism. The NDRC required that the three major Chinese oil companies, namely PetroChina, Sinopec and CNOOC, as well as other crude oil processors, should organize the production and transportation of refined oil products to ensure a stable supply in the market, and strictly enforce the national pricing policy. Relevant government departments around the country should reinforce market supervision and inspection, strictly investigate and deal with non-execution of the national pricing policy, and safeguard the normal market order.
New Zealand’s prime minister Christopher Luxon intends to travel to China in the coming months following meetings with China’s Foreign Minister Wang Yi in New Zealand this week. Luxon on Monday, along with Foreign Minister Winston Peters and Trade Minister Todd McClay met with Wang, who was the first high ranking Chinese official to visit New Zealand since 2017. Peters said in a briefing to media on Tuesday that meetings with Wang had been “very convivial, very friendly” and that McClay would visit China next month and Luxon is “going not long after that.”
The number of new marriages in China jumped 12.4% in 2023 from a year earlier, reversing a downtrend that has lasted for almost a decade as more youth tied the knot after delaying their nuptials due to the COVID-19 pandemic. The number of newlyweds rose to 7.68 million last year, according to data released by the Ministry of Civil Affairs last week. This was up 845,000 couples from 2022 but still far below the peak of 13.47 million couples hit in 2013. The data comes after China's Premier Li Qiang pledged in March that the government would work towards "a birth-friendly society and promote long term, balanced population development", as well as reducing the cost of childbirth, parenting and education. Policymakers are grappling with how to reverse a declining population, where the birthrate is falling and society ageing rapidly. Roughly 300 million Chinese are expected to enter retirement in the coming decade - the equivalent of almost the entire U.S. population.
HONG KONG
Earnings today include HK & Shanghai Hotels, PAX Global, China Unicom, Emperor Watch & Jewellery, Huaneng Power, Anhui Conch Cement, COFCO Joycome Foods, Tencent Music, Xiaomi, Ping An Healthcare & Tech, China Aircraft Leasing, ZTO, Li Ning, XPeng and others.
After Market Monday
CHINA TOWER (00788.HK)'s FY23 operating cash flow dropped 49.6% YoY to RMB32.84 billion. Executive Director and Chairman Zhang Zhiyong explained that the company had signed a new round of commercial pricing agreements with the 3 major telecom operators at the end of 2022, and the implementation of these agreements brought technical factors that caused a lag in booking the full-year receivables. Yet he considered this to only be temporary. He also pointed out that the overall rate of receivable payments in 4Q23 was faster than that of the previous three quarters. In the first two months of this year, the receivable performance has improved significantly, reaching about RMB21 billion, compared with the monthly average of RMB6 billion last year. He expected that cash flow will gradually improve to a normal level this year. CHINA TOWER's dividend payout ratio for last year increased by 3 ppts YoY to 75%. Asked whether the company would consider paying interim dividends in the future, Zhang emphasised that the company has always maintained a proactive dividend policy and is concerned about shareholders' needs, which is why the dividend payout ratio has been further increased this year. In the future, the company will adhere to the same philosophy of balancing shareholders' returns while enhancing healthy corporate development, and will reward investors for their support through a variety of means. As for the SASAC's inclusion of market capitalisation management into central SOE appraisal, Zhang commented that management attaches great importance to it and is expected to bring long-term returns to shareholders through the assessment. The company will continue to focus on the high-quality development of its business.
CHINA RES BEER (00291.HK) Chairman of the Board Hou Xiaohai said the company's sales situation and selling prices improved in 4Q23, despite the strong pressure on the consumption situation in the Mainland last year. He said CR BEER's sales volume and revenue in the first two months of 2024 will continue to grow positively following the performance at the end of last year, although the company is still facing the impact of under-expectation, weakening expectations, lack of demand, and contraction of consumption in this year. He noted that the company had recorded nearly six consecutive months of sales and revenue growth, and forecasted the trend to continue. Hou added that the company's current business performance was already relatively good in the face of less optimistic economic and consumer conditions. The company's business performance for 2024 is predicted to be stable to positive, with a generally optimistic outlook while also being cautious. This year, the Company is guided to maintain growth in sales volume, revenue and profit, and will continue to focus on driving business growth as its key development strategy. In terms of competition in the industry, Hou noted that some products continue to be upgraded even in the face of shrinking and divergent consumption. For example, the quality of products has not been reduced and prices have become more favourable. He believed that consumer upgrading and premiumisation are still the main competition tracks for beer brands in the Chinese beer industry, and that they are facing more demand for personalisation and price-performance ratio. As for product pricing, CR BEER currently does not have any plans to increase prices, but will maintain price flexibility in response to market conditions. Hou commented that the company would not rule out the possibility of raising prices as much as possible in the future to further improve its performance. In addition, he said the company has no intention of engaging in a price war.
CHINA LIT(00772.HK) released its annual result ended December 2023. Turnover. declined 8% YoY to RMB7.012 billion. Net profit amounted to RMB805 million, up 32.3% YoY. EPS. was RMB0.8. No dividend was declared.
Xtep International (1368) said it may delay plans to open a K-Swiss flagship store in Hong Kong due to factors, including rents and economic conditions, after the sportswear firm posted an 11.8 percent rise in its net profit to a record 1.03 billion yuan (HK$1.15 billion) last year from a year ago. The firm announced a final dividend of 8 HK cents, which will bring the full-year dividend to HK$21.7. The dividend payout ratio came in at 50 percent. The company's revenue increased by 10.9 percent to 14.35 billion yuan in 2023 from a year ago, an all-time high. Shares of Xtep dropped 4 percent after the results were announced.
China Lilang (1234) said net profit last year jumped 18.4 percent to 530 million yuan and declared a final dividend and a special dividend totaling 18 HK cents. Revenue last year rose nearly 15 percent to 3.54 billion yuan. Lilang aims to open 100 to 200 stores this year, including overseas directly-operated stores.
Buybacks
AIA (01299.HK) announced the repurchase of 3.8 million shares of the company on the Stock Exchange of Hong Kong Monday (18th) at $59.05-60.45 per share, involving a total of $226 million. Since the ordinary resolution was passed, the group has repurchased 332 million shares, representing 2.8555 % of the number of its issued shares.
HSI Short Selling Monday 21% vs 19.1% Friday
Top shorts China Life (2628) 55%, SHKP (16) 43%, MTRC (66) 42%, Nongfu Spring (9633) 41%, Chow Tai Fook (1929) 40%, Bank of China (3988) 39%, BYD (1211) 37%, Anta Sports (2020) 37%, Galaxy Ent (27) 37%, HK & China Gas (3) 36%, WH Group (288) 35%, CK Asset (1113) 34%, Hang Seng Bank (11) 33%, Henderson Land (12) 32%, Ping An (2318) 31%, Hansoh Pharma (3692) 30%, China Resource Beer (291) 30% ahead of earnings, Mengniu Dairy (2319) 30%, CCB (939) 30%, HSBC (5) 30%, China Res Land (1109) 29%, Sino Biopharm (1177) 29%, China Res Power (836) 29%, Hang Lung Ppty (101) 28%, ICBC (1398) 28%, Shenzhou (2313) 27%, Power Assets (6) 27%, WHARF REIC (1997) 27%, JD SW (9618) 26%, New World Dev (17) 26%, OOIL (316) 26%, Haidilao (6862) 25%.
Tourism
The monthly fireworks and drone displays over Victoria Harbour could be started in May at the earliest, the executive director of the Hong Kong Tourism Board Dane Cheng Ting-yat said on Monday. The new annual budget sets nearly HK$1.1 billion aside to hold tourism events, including the drone show and fireworks display, in hopes of attracting tourists to the city. Personally I think the money could be better spent.
WATCH
EVERGRANDE authorities accuse Evergrande’s founder Hui Ka Yan of inflating revenues by $80bn at Hengda Real Estate. Preliminary decision by regulator marks first detailed allegations and as I wrote earlier I expect them to shift the blame for the collapse onto individuals and away from President Xi’s policy change. FT reports 'The China Securities Regulatory Commission plans to impose a Rmb4.2bn ($580mn) fine on Hengda Real Estate, Evergrande’s mainland business, according to a filing by the company to the Shenzhen and Shanghai stock exchanges that included accusations of false documentation in financial reports.’ The securities regulator imposed a fine of 47 million yuan on former chairman Hui Ka-yan and banned him from participating in the country's securities market for life after he was caught out in fraudulent behavior, according to an exchange filing from the property developer on Monday.
BABA-SW (09988.HK) announced at an internal meeting this afternoon (18th) that Hou Yi, the founder of Hema, will retire and step down as CEO, but will continue to provide guidance to the company as the chief honorary advisor of Hema, LatePost reported, citing sources. The CFO of Hema, Yan Xiaolei, will also serve as CEO. Hema is still in active pursuit of introducing new strategic investors, having contacted a number of potential investors, sources told. Currently, Hema is valued at about US$3.7 billion. In 2022, the company had weighed to raise capital at a valuation of US$10 billion. BABA-SW reportedly focuses on streamlining its offline retail business. BABA-SW and TENCENT (00700.HK) are vying to invest in offline retail because they want to take over the market before planning more. They were worried that the other party will take limited offline assets into their hands before they do, and this worry in turn speeds up the investment of the two companies.
NEW WORLD DEV (00017.HK) and Visa joined hands to optimize the K Dollar program by launching the instant earn membership rewards, according to the announcement made by the two parties. The collaboration aims to deepen customer interaction and promote local consumption, marking another milestone in the long term strategic partnership between NEW WORLD DEV and Visa.
CIFI Group announced that 43 projects across China have been shortlisted on the financing whitelist and have begun to acquire financing. Among them, the Park City project in Beijing has received a RMB340 million loan from Hengfeng Bank this month, which will be used to replace the existing project financing, and has already been disbursed. In addition, the Xiamen Powerlong CIFI City project received about RMB1.212 billion of financing support from BANKCOMM (03328.HK) +0.020 (+0.387%) Short selling $23.85M; Ratio 26.417% in late January. The bank also provided financial assistance to the project through adjustments to repayment arrangements.
EUROPE & US RECAP
DAX -0.02%, CAC -0.2%, FTSE -0.06%
Markets opened around flat and traded around flat all day. Telecoms -1.4% but autos up 0.9%. Caution after mixed China data and ahead of the rate decisions this week. Tech mixed ahead of the Nvidia AI Conference that started Monday in the US.
Reckitt Benckiser up 5.7% in early trade, recovering some losses from the previous session, when the stock hit its lowest level in a decade after a damaging U.S. lawsuit over its Enfamil baby formula.
Alstom climbed 6.4% after announcing that it plans to operate a new passenger train service in the U.K.
British insurance firm Phoenix Group fell 4.5% after saying that it would set aside £70 million ($89 million) to cover the cost of reducing customer charges
DOW 0.2%, NDX 0.82%, S&P 0.63%, Russel 2K -0.72%
US markets opened higher. Dow traded sideways in a tight range just above flat but the NDX and S&P drifted lower from early highs. Russell traded around flat but sold down into the close.
All 11 sectors were up for the day. Increases were led byTelco services sector, followed by consumer discretionary, information technology and consumer staples.
Laggards were Real estate and healthcare up around 0.1% gain.
Nvidia up 0.7% on the first day of the company’s GTC Conference; where is announced a new more powerful chip. Analysts hiked up their price targets as the conference began, with Truist’s William Stein predicting 34% upside. Shares had climbed as high as 4% on Monday morning.
Alphabet up 4.6% higher after Bloomberg News reported that Apple was in talks with Google to include the company’s Gemini AI in iPhones.
Inflation has taken a toll on retail spending, Bank of America reported in its latest consumer spending report. With the biggest month-over-month declines hitting the groceries and general merchandise sectors. However, the bank chalked this up to severe weather effects in January, leading consumers to stock up on daily supplies.
Banks JPMorgan Chase 1.24%, Citigroup 1.77% Wells Fargo 0.45%, Amex 1.15%
Ecommerce Meta 2.66%, Apple 0.64%, Amazon 0.03%, Netflix 2.06%, Disney 1.7%, Zoom Video 0.41%, Alphabet 4.44% and Microsoft 0.22%,
Tech NXP Semi -0.39%, Nvidia 0.7%, Micron 0.57%, AMD -0.21%, Skyworks -0.94%
Industrial/Discretionary Boeing -1.47%, Caterpillar 1.42%, Simon Property 0.78%, Kohl’s 0.93%, Nordstrom -1.33%, Gap -4.66%, United Airlines -0.16%, Carnival -0.43%, Wynn Resorts -0.25%
Energy Chevron -0.09%, Exxon Mobil 0.93%,
Consumer Staples Campbell Soup 1.43% General Mills 1.47%, JM Smucker 0.5%
DAILY DATA
USD stronger, Bitcoin -1.05% at 67,609.61, VIX -0.56% at 14.33 ,
US T10 up 3 bpts at 4.33% and T2 up 1 bpts at 4.73%
OIL Brent 1.7%, WTI 1.9% to a four month high as Saudi exports fell.
Gold 0.2%, Silver -0.4%, Copper 0.07%, Platinum -1.8%, Palladium -4.2%. Asian