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CSCI Morning News Circular - 20180306

1. Macro News

• British PM Theresa May phones Trump to tell him of ‘deep concern’ over US trade tariff plans. Theresa May has called Donald Trump to raise Britain’s “deep concern” over plans to impose tariffs of 25 per cent on imports of steel and 10 per cent on aluminium amid US threats of a trade war with China and escalating tensions with the EU.  [SCMP]   
• China Targets Lower 2018 Budget Deficit at 2.6% of GDP. China plans to run a budget deficit of 2.38tn yuan in 2018, or 2.6% of GDP, lower than the 3% goal for 2017. Fiscal spending is targeted to rise 7.6% to 21tn yuan. Fiscal revenue to grow 6.1% to 18.3tn yuan.  [Bloomberg] 
• China Sets GDP Target at About 6.5%. China has set a growth target of “about 6.5%” for 2018, down from the better-than-expected 6.9% achieved in 2017, indicating Beijing’s tolerance for a more moderate rate of expansion. Li said the country had negated downward pressures and put fears of an economic hard landing behind it.   [SCMP]    

1. Industry News

• Tech Firms Question Hong Kong’s Plan to Lure Next Alibaba. Technology companies and service providers are questioning key parts of Hong Kong’s plan to allow dual-class shares, just as firms including Xiaomi Corp. and Tencent Music Entertainment Group are considering going public.  [Bloomberg] 
• Fed Outlook, U.S. Tariffs Spook Emerging-Market Bulls. Emerging-market stocks snapped a two-week rally, joining losses in currencies as comments from the new Federal Reserve chairman fueled speculation that the central bank will quicken the pace of its interest-rate increases. [Bloomberg]      
• China Plans to Cut Steel Capacity by c.30mn Tons. China will further cut coal production capacity by c.150m tons this year, according to the government work report released at the National People’s Congress. China will close coal-fired power generating units with a capacity of less than 300,000 kilowatts that fail to meet standards.  [Bloomberg] 
• Corporate News
• Hong Kong-listed schools group Wisdom Education eyes further expansion. Hong Kong-listed Wisdom Education International Holdings, the largest private education group in southern China, said it had been approached by several local governments across the country to build schools amid mounting demand for better education.  [SCMP]    
• Foreign banks’ extra leeway in China will benefit consumers, says HSBC’s regional boss. New measures making it easier for foreign banks to operate in China will increase competition and ultimately benefit consumers, according to the regional chief executive of HSBC Holdings.  [SCMP]    
• Chinese nuclear giant continues to expand overseas cooperation. China National Nuclear Corporation is stepping up its overseas cooperation, the chairperson said. Progress is being made in cooperation with CNNC's local partners in countries like Pakistan, Argentina, Saudi Arabia, Ghana and the U.S., its chairperson Wang Shoujun said. [China Daily]
• China Unicom expects 178% surge in 2017 net profit. China Unicom expects its net profit in 2017 to surge 177.6% due to primary business growth, according to a company statement. Net profit attributable to shareholders was estimated at RMB430mn (c.$68mn) last year, said the statement filed to the Shanghai Stock Exchange.  [China Daily] 
• China's energy giants to form joint venture. China Shenhua Energy Company and GD Power Development Co., have agreed to transfer their coal-fired entities and assets to form a joint venture, which will focus on power and heat generation and sales.  [China Daily]   
• Skyworth Digital Says 2018 Income Target Only Internal Guidance. Skyworth Digital clarifies that media report of its target to increase new income by 20% and profit by two fold in fiscal year 2018 vs 2017 are only for internal discussion and guidance only and “don’t represent or indicate in any way that the company can or will achieve these results”.  [Bloomberg]
• CNPC Says Talks With Gazprom on West Siberian Gas ‘Premature’. Talks with Gazprom on gas supplies from West Siberia still haven’t entered commercial negotiation stage, CNPC Chairman Wang Yilin says on the sidelines of the National People’s Congress in Beijing.  [Bloomberg]
• Metal Producers Extend Declines on U.S. Tariffs. Investors sold metal producers’ shares amid continued concern about Donald Trump’s plan to impose steep tariffs on steel and aluminum imports. Shares in Press Metal Aluminum Holdings Bhd., Mitsui Mining & Smelting Co.were top losers on Bloomberg Asia Pacific Mining Index on Monday.  [Bloomberg]
• Wuxi Biologics Expects 2017 Profit to Rise 75%-80% on Year. Wuxi Biologics expects a profit of ~247m-254m yuan for the year ended Dec. 31, compared with 141mn yuan profit year earlier, according to statement to Hong Kong stock exchange.  [Bloomberg]
• Country Garden Studying Hong Kong Listing of Spinoff. Country Garden is studying to spin off its property management business in Hong Kong after withdrawing A-share listing application last year, Ming Pao newspaper reports,citing reply from co. CFO Wu Bijun.  [Bloomberg]
• Tencent CEO Urges ID Link for Hong Kong and Chinese Citizens. Tencent Holdings Ltd. Chairman Ma Huateng called on the Chinese government to introduce an ID system that would link multiple sets of travel documents with a mobile phone as part of a plan to boost regional trade between Hong Kong and the mainland.  [Bloomberg]
• Tongwei Chairman Calls for Carbon Tax to Fund Solar Subsidies. The Chinese government should use carbon taxes to fund solar power subsidies, said Liu Hanyuan, the chairman of Tongwei Group Co., which is planning big investments to expand its solar-cell manufacturing business.  [Bloomberg] 
• Noble Group Paid Co-CEO $20 Million as Company Lost $5 Billion. Noble Group Ltd. handed its outgoing co- Chief Executive Officer Jeff Frase a remuneration package worth about $20 million last year, even as the commodity trader slumped to a record loss of almost $5 billion.  [Bloomberg] 
• China CSRC Considers CDRs by Baidu, 7 Other Tech Cos. China Securities Regulatory Commission and Shanghai and Shenzhen exchanges have “extended olive branches” to Baidu, Alibaba, Tencent and JD.com for A-share listings,Caixin reports.  [Bloomberg] 
• China National Gold to Buy Gold, Copper Mines. China National Gold is looking to buy gold, copper, gold-copper mines, Chairman Song Xin says. Gold price is expected to rise in long term given to their function in hedging against inflation though fluctuations may be seen in short term on Fed’s rate hike, supply demand balances.  [Bloomberg] 
• CNPC Says China Natural Gas Imports From Central Asia to Rise. China’s natural gas imports from Central Asia will rise this year from last year’s level, Chairman Wang Yilin says in Beijing. Gas field in Central Asia had some problem which led to drop in imports from the region.  [Bloomberg] 
• Sunac Estimates 2017 Profit Gained Over 240% as Revenue Climbed. Sunac China Holdings says revenue increased more than 80%, in a profit alert to Hong Kong’s stock exchange. Gross profit margin rose by about 7%. Results take into account an impairment provision related to investment in Leshi. [Bloomberg]