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Stocks Blog: Tencent, New World, Swire Properties gain in Hong Kong early trading

Good day, traders --

Markets closed up overnight in the US. The stand-off between police and hard-core protesters at a Hong Kong University continues this morning.

We'll keep you up on the big moves and news in Hong Kong and mainland markets.

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--- Georgina Lee and Deb Price in Hong Kong 


Note: Information in this blog is on an "as is" basis and not a solicitation or offer to buy or sell any securities or otherwise; and is not investment/professional advice or services in this regard.  It is subject to our T&C.  SCMP (as defined in T&C) shall not be liable for any loss, damage and costs relating to any investments in securities or otherwise in this connection.
 

CICC posts jump in net profit for first three quarters

Chinese investment bank China International Capital Corporation (CICC; 3908 HK) posted a 15 per cent jump in net profit for the first three quarters of this year.

Net income rose to 3.1 billion yuan over the first nine months of 2019, from 2.7 billion yuan in the same period last year. Revenue climbed 14 per cent to 11.2 billion yuan.

-- Yujing Liu 

Chinese couriers post jump in October revenue

Chinese courier giant SF Express (002352 SZ) reported a 24 per cent surge in delivery service revenue in October to 9 billion yuan from the same period last year.

Delivery volume soared by 48 per cent to 438 million packages in last month, the company said in a stock exchange filing on Monday night.

Meanwhile, its smaller rival YTO Express Group (600233 SH) posted a 16 per cent rise in delivery revenue to 2.4 billion in October. Delivery volume climbed by 37 per cent to 861 million packages.

Owner of Apple Daily newspaper reports widening loss

Hong Kong media giant Next Digital Group (282 HK), founded by high-profile mogul Jimmy Lai Chee-ying, reported a widening loss in interim earnings.

Net loss increased by 8.9 per cent to HK$312 million for the six months ended on September 30, the company said in a stock exchange filing on Monday evening.

Revenue from Apple Daily, the Chinese-language pro-democracy newspaper, recorded a 15 per cent plunge to HK$56.5 million, it said.

Morning guidance

Here's what we are watching this morning:

Overnight markets/ What futures foretell

--The S&P 500 inched up 0.05 per cent, the Nasdaq rose 0.11 per cent and the Dow Jones Industrial Average rose 0.11 per cent. 

-- Hong Kong futures fell 0.3 per cent, and the FTSE China A50 futures also declined 0.3 per cent

IPO debuts: CMON Limited (1792 HK) will transfer from GEM to debut on the main board of the Hong Kong Stock Exchange 

Economic statistics/Central Bank action: None to note

Shanghai Fosun Pharma's Indian unit gets tentative approval from US on cancer drug

Shanghai Fosun Pharma's Indian subsidiary, Gland Pharma, has won tentative approval from the US Food & Drug Administration (FDA) on irinotecan hydrochloride on Monday, Bloomberg first reported, citing information from the FDA.

Irinotecan hydrochloride is used alone or in combination with other drugs to treat colorectal cancer that has spread to other parts of the body, including metastatic cancer that has recurred, or for patients that do not respond to chemotherapy, according the information on the website of National Cancer Institute in the US.

Shanghai Fosun Pharma acquired Hyderabad-based Gland Pharma in October 2017.

It and its subsidiaries together indirectly own 74 per cent in Gland Pharma, which is primarily engaged in the development of small molecule injectable generic drugs.

Shanghai Fosun Pharma has proposed spinning off and listing the Gland Pharma on the Indian exchanges, the National Stock Exchange and the Bombay Stock Exchange, through an IPO. Shareholders will vote on the proposal in December this year.

The share price of Shanghai Fosun Pharma (600196 CH) gained 0.4 per cent to 27.78 yuan in early trading.

-- Georgina Lee 

China stocks open south, while Hong Kong open higher

The CSI 300, which tracks blue chips listed on the Shenzhen and Shanghai exchanges, dropped 0.1 per cent at 3,904.1.

The Shanghai Composite Index was down 0.2 per cent to 2,904.28. The Shenzhen Component Index ticked up by less than 0.1 per cent, to 9,721.01.

In Shanghai, People's Insurance (601319 CH) lost 4.6 per cent at 6.83 yuan; Ribo Fashion Group (603196 CH) lost 10 per cent, hitting the daily down-limit, at 9.52 yuan. Liquor distiller Kweichow Moutai (600519 CH) was flat, at 1,228 yuan.

The Hang Seng Index was up by less than 0.1 per cent, at 26,697.03.

Selective Hong Kong properties were ahead.

New World Development (17 HK) rose 1.7 per cent to HK$10.76; Swire Properties (1972 HK) rose 1.3 per cent to HK$23.55; and Sino Land (83 HK) rose 1.1 per cent to HK$11.5.

-- Georgina Lee 

Game developer CMON shoots up on move to Hong Kong's main board

CMON Limited (1792 HK) moved from Hong Kong's GEM board to debut on the main board of the Hong Kong's stock exchange today.

The share price shot up 15. 4 per cent to HK$0.17

The board and tabletop game developer CMON has published many popular games, including Zombicide, Arcadia Quest, Blood Rage, Rising Sun, and Cthulhu: Death May Die. Three games it developed -- Xenoshyft, Rum and Bones and Blood Rage -- ranked among the top 10 games of 2015 by the famous gaming podcast the Dice Tower.

Chief Executive Chern Ann Ng said the company will still focus on tabletop games, although it's also experimenting with mobile and electronic platforms.

"We have published some tabletop games on mobile and electronic platforms. That's not our primary focus. I think we're going to make hybrid tabletop games that use tabloid or phone to keep track of all the logistics of playing board games. The computer would exactly what's happening -- the monster is attacking you and your running away is successful or not. So we're excited about it. That's going to be released next year. "

 

CMON Limited (1792 HK) started trading on the main board of Hong Kong Stock Exchange today, after transferring from GEM. @SCMPNews @scmpbusiness @HKEXGroup pic.twitter.com/k5ztM8LTZC

-- Snow Xia (@SnowXia05) November 19, 2019Sofa maker Man Wah Holdings continues to rise, now at near 16-month high

Man Wah Holdings (1999 HK) continued to rise, thanks to Citi raising its target price to HK$6.8, saying the stock continues to remain on its China mid-cap top pick list, Bloomberg reported.

The upgrade by Citi was driven by expected earnings recovery in the fiscal year of 2021, due to a successful ramp-up of its Vietnam factory, analyst Eric Lau wrote in a note.

Man Wah was up 2.3 per cent to HK$5.81, which is its highest price since July 30, 2018.

Mainland investors pile in Kingsoft after its subsidiary debuts on Star board

Mainland Chinese investors piled into Kingsoft (3888 HK) on Monday when its unit Beijing Kingsoft Office Software (688111 CH) debuted on the on Shanghai's science and technology innovation board, dubbed the "Star" market.

Mainland Chinese investors bought HK$40.1 million of Kingsoft stock through through the Shanghai and Shenzhen southbound connect, making it the third most actively traded company on both, according to Hong Kong Exchange and Clearing data.

Kingsoft develops and operates online and mobile games, cloud services and other office software.

Its unit Beijing Kingsoft Office Software (688111 CH) closed on Monday at 126.35 yuan, nearly tripling from its IPO offer price at 45.86 yuan.

Today in early trading, Kingsoft gained 2.8 per cent at HK$18.3, while Beijing Kingsoft Office Software (688111 CH), which develops anti-virus software and also provides cloud computer, rose 3.7 per cent at 131 yuan.

-- Georgina Lee

Alibaba seeing strong interest in orders for its Hong Kong secondary listing

Alibaba's secondary listing in Hong Kong is already 2.7 per cent oversubscribed, according to a report in the Hong Kong Economic Times, based on what local brokers are seeing and as cited by Bloomberg.

Meanwhile, 12 brokers have extended a total of HK$8.8 billion in margin loans, Bloomberg reported. 

Because of the strong interest, Alibaba will stop taking orders from prospective institutional investors a half day early, Reuters reported, citing people familiar with the matter. Now order books will close on New York's 12 pm Tuesday, Reuters reported.

"I knew it is several times oversubscribed. It is a relatively good result given the huge IPO amount and current market sentiment," said Kenny Wen, wealth management strategist at Everbright Sun Hung Kai.

Wen said demand for Alibaba (which owns the South China Morning Post) has reduced short term liquidity. 

"Given the stock rotation -- from Tencent to Alibaba -- it may not be good news for the Hong Kong market given current market situations," Wen said.

Tencent (700 HK) has gained 1.4 per cent to HK$334.60 in early trading.

Alibaba begins trading in Hong Kong next Tuesday.

-- Deb Price 

Will Alibaba be available on the Stock Connect?

Will Alibaba become available on the Stock Connect?

The answer is that it would require a change in Stock Connect practice.

Last December, Hong Kong and mainland exchanges in Shanghai and Shenzhen agreed that Hong Kong-listed companies with dual-class shares -- called weighted voting rights (WVR) -- would be allowed to be traded on the Stock Connect. 

The first such companies -- online ticketing and food delivery giant Meituan Dianping (3690 HK) and Chinese smartphone maker Xiaomi (1810 HK) -- became available to mainland traders on the Stock Connects on October 28.

But WVR with secondary listings are not included as of now in southbound Stock Connect trading, according to a reply from the Hong Kong  exchange operator to an inquiry. That would exclude Alibaba, which originally listed in the US and is not delisting.

"On your question about Alibaba and Stock Connect, we don't comment on individual companies. What we can say is that, currently, WVR companies with a secondary listing are not included in southbound trading of Stock Connect," Jeffery Ng, senior vice president of corporate communications at the Hong Kong Exchanges and Clearing, said in an email to me. 

"... (T)here are currently no secondary listed companies on Stock Connect," he added.

Inclusion on the Stock Connect can boost a stock's price. As of Monday's close, Meituan Dianping had risen 7.8 per cent since it began trading on the Stock Connect, and has been a hit since then with southbound traders. 

Mainland investors have been eager to be able to invest in Chinese tech superstars, which have tended to list overseas due to what has been a slow and tedious process of listing in China. The securities regulator there says IPO reform is under way. 

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.