Key News
Asian equities were mixed overnight in a quiet session following Friday’s global index rebalance and the expiration of US futures and options. Hong Kong and India, which has picked up recently after its correction, outperformed while the Philippines and Indonesia underperformed.
The Wall Street Journal is reporting Trump’s April 2nd tariff announcements will be more targeted, which makes sense to me as it allows for a great headline without cratering the US economy and stock market.
Auto giant BYD (1211 HK, 002594 CH) reported Q4 and 2024 financial results after the close in Hong Kong and Mainland China that beat analyst expectations.
- Revenue for 2024 and Q4 rose +27% year-over-year and +53%, respectively, to $107.9 billion and $38.2 billion
- Adjusted net income for the year and Q4 grew +32% and 73%, respectively, to $5.6 billion and $2.1 billion
- Adjusted EPS for 2024 and Q4 increased +32% and +74%, respectively, to $1.92 and $0.72.
- BYD sold 4.27 million cars last year, including 1.76 million fully electric vehicles (EVs)
The company forecasted 2025 sales between 5 million and 6 million units, according to Bloomberg. With a market cap of $157 billion, you could buy 5 BYDs using Tesla’s current market cap of $799 billion!
Hong Kong’s market was flat until a late-day surge pushed the Hang Seng Index up to just below the 24,000 level after hitting a 52-week high last Wednesday and the Hang Seng Tech Index, which hit a 52-week high last Tuesday. The Hong Kong correction “feels” dramatic, but, after a strong move, a breather is warranted.
Hong Kong-listed internet stocks had a good day, led by Hong Kong’s most heavily traded stocks by value, Tencent, which gained +0.29%, Alibaba, which gained +1.61% as Ant Group announced its AI does not use US semiconductors, Xiaomi, which gained +4.2% though after the close announced they will raise $5.3 billion to fund their EV push, Meituan, which fell -1.13% after Friday’s results, a head scratcher to me, and BYD, which gained +3.10% in advance of today’s post-close results.
Breadth and volume were both off while mainland investors only bought $325 million worth of Hong Kong-listed stocks and ETFs today. Trump’s tariffs have the potential to sideline investors.
Short-video platform Kuaishou (1024 HK) will report Q4 earnings tomorrow.
Mainland China had a choppy session on lighter volumes and poor breadth. Premier Li gave the keynote speech at the China Development Forum in Beijing, which was focused on addressing foreign investor concerns and continued opening up. Apple’s Tim Cook was in China for the event and was in the front row for the official photograph, which is covered further below. Tourism stocks had a good day in advance of next Friday’s “Tomb Sweeping Day”, a.k.a. “Ching Ming Festival”.
The Ministry of Finance (MoF) released a long report on fiscal policy, which should be more “proactive. ” It said all the right things, though it clearly didn’t have a market impact. I’ll give it a full read tomorrow, as it is a long report! There has been a fair amount of chatter on copper based on a Bloomberg article, but in Mainland China, there is talk of Trump’s tariff on copper imports.
Reuters and the Associated Press may have been the only Western media outlets to report on Pro-Trump Republican Montana Senator Steve Daines’ meetings with Premier Li on Sunday and Vice Premier He Lifeng on Saturday. Daines, a former Proctor & Gamble executive who worked in Hong Kong and Guangzhou in the 1990s, was joined by the CEOs of Qualcomm, Pfizer, Cargill, and Boeing, in advance of the China Development Forum. It is worth noting that only the US executives were given the one-on-one with Premier Li. According to Reuters, the meeting with Vice Premier He, “China’s economy tsar”, focused on fentanyl and the trade deficit.
Reuters reported this morning that the world’s largest steel producer, China Baowu Steel Group’s subsidiary Xinjiang Ba Yi Iron and Steel, will cut production by 10% “after Beijing earlier stated its intent to curb capacity in an industry long plagued by overcapacity.” Maybe the Chinese government should do something to limit overcapacity in steel, solar, and EVs in a concession to Trump?
The Hang Seng and Hang Seng Tech indexes diverged to close +0.91% and +1.72%, respectively, on volume that decreased -31.26% from Friday, which is 141% of the 1-year average. 232 stocks advanced while 241 stocks declined. Main Board short turnover decreased -25.12% from Friday, which is 158% of the 1-year average, as 17% of turnover was short turnover (Hong Kong short turnover includes ETF short volume, which is driven by market makers’ ETF hedging). Large caps and momentum outperformed value, growth, and small caps. All sectors were positive, except for Health Care, which fell -1.11%, led by Information Technology, which gained +3.03%, Materials, which gained +2.95%, and Consumer Discretionary, which gained +1.28%. The top-performing subsectors were non-ferrous metals, household appliances, and consumer services. Meanwhile, construction, telecom services, and healthcare equipment were among the worst-performing subsectors. Southbound Stock Connect volumes were light as Mainland investors bought a net $325 million worth of Hong Kong-listed stocks and ETFs, including Meituan, BYD, Xiaomi, and Kuaishou. Meanwhile, Tencent, Alibaba, Xpeng, China Mobile, and Semiconductor were small net sells through the program.
Shanghai, Shenzhen, and the STAR Board diverged to close +0.15%, -0.66%, and +0.29%, respectively, on volume that decreased -6.44% from Friday, which is 121% of the 1-year average. 974 stocks advanced, while 4,099 stocks declined. Value, momentum, and large caps outperformed growth and small caps. The top-performing sectors were Materials, which gained +1.01%; Consumer Discretionary, which gained +0.84%; and Information Technology, which gained +0.59%. Meanwhile, the worst-performing sectors were Real Estate, which fell -1.06%, and Health Care, which fell -0.66%. The top-performing subsectors were catering, tourism, marine shipping, and base metals. Meanwhile, forest industry, education, and household products were among the worst-performing subsectors. Northbound Stock Connect volumes were above average. CNY fell and the Asia Dollar Index posted a small gain versus the US dollar. Treasury bond prices rose. Copper fell, and steel rose.
New Content
Read our latest article:
2025 China Outlook: A Recipe For Re-Rating
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Last Night’s Performance
Last Night’s Exchange Rates, Prices, & Yields
- CNY per USD 7.25 versus 7.25 yesterday
- CNY per EUR 7.85 versus 7.85 yesterday
- Yield on 10-Year Government Bond 1.84% versus 1.85% yesterday
- Yield on 10-Year China Development Bank Bond 1.85% versus 1.88% yesterday
- Copper Price -0.21%
- Steel Price 0.44%
Read the full article here
