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CSCI Morning News Circular - 20180312

1. Macro News

• China's CPI up 2.9%, PPI 3.7% in February. China's consumer price index rose 2.9% year-on-year in February, the National Bureau of Statistics said Friday. The producer price index, which measures costs for goods at the factory gate, rose 3.7% year-on-year in February. [Bloomberg]   
• Trump Asks China for Plan to Cut $100 Billion Off U.S. Trade Gap. The Trump administration asked China for a plan to cut the annual U.S. trade deficit with the nation by $100 billion, a reduction of more than 25 percent from lastyear’s gap, a White House official said.  [Bloomberg] 
• China NDRC Officials See 2018 PPI Growth at 4%. China’s factory inflation will slow this year as the country shifts focus to quality of economic growth and its reliance on investment steadily falls, four people from National Development and Reform Commission’s prices monitoring department write in Shanghai Securities News.  [Bloomberg] 

1. Industry News

• Foreign reserves reduced for first time in 13 months. China's foreign reserves decreased to US$3.13trn in February, down from US$3.16trn in January, according to data released by the People's Bank of China (PBC, the central bank) on March 7th. This was the first decrease in China's foreign-reserve number in 13 months.  [Bloomberg]      
• Trump Signs Tariff Order on Metals With Wiggle Room for Allies. President Donald Trump followed through on his pledge to impose stiff tariffs on imported steel and aluminum, while excluding Canada and Mexico and leaving the door open to sparing other countries on the basis of national security.  [Bloomberg]    
• China’s exports increase 44.5% in Feb. China's exports jumped 44.5% YoY to $171.62bn in February, fastest pace in 3 years, official data showed. The EU, U.S. and the Association of Southeast Asian Nations were China's top 3 trading partners in first two months of the year, with China's shipments to the EU rising 17.2% YoY and those to the US by 15.8%.  [China Daily]    
• Corporate News
• Hong Kong’s Cathay Pacific banks on cargo to bring the cash as 2017 losses forecast at US$357mn. A strong cargo business will be one of the few bright spots for Cathay Pacific Airways when it unveils losses estimated at HK$2.8 billion (US$357mnn) on Wednesday on the back of its weak passenger operations.  [SCMP] 
• HNA sells Wheelock third plot of Kai Tak land to repay borrowings, making a profit. HNA has sold the third of its four plots of development land at Hong Kong’s former Kai Tak airport site, as it steps up its asset disposals to repay borrowings, under pressure from regulators and creditors.  [SCMP] 
• Xiaomi CEO shares insights on China's manufacturing industry. Chinese tech entrepreneur Lei Jun said Friday that China's manufacturing industry needs both hard power and soft power to support its overall development. Lei listed innovation, quality, design, and Internet Plus as the four pillars supporting the growth of the sector.  [China Daily]    
• UAE energy firm eyeing Chinese market. Abu Dhabi National Oil Co. has vowed to continue increasing its share of oil supplies to China. "We are wholly committed to ensuring oil supplies to China and the wider Asian region ... China's growing demand for crude remained integral to our long-term growth strategy," said its CEO.  [China Daily]  
• Lenovo Wants to List Shares in Mainland China If Possible. The Hong Kong-listed PC maker will “of course” seek a listing on mainland Chinese stock exchanges if the opportunity arises, Chairman Yang Yuanqing tells reporters. The company may consider Hong Kong IPO for some of its subsidiaries if restructuring goes well.  [Bloomberg]  
• China Communication Construction Targets 2018 Revenue at 490B Yuan. The company aims to have new contract value growth at about 8% y/y in 2018, according to a statement to Shanghai Stock Exchange. It plans to sign 150b yuan of new investment contract in 2018.  [Bloomberg]  
• CRRC Unit Tests Longer Bullet Train in China. New model of Fuxing bullet train is twice as long as older model, Xinhua News Agency reports, citing the company. Tests being conducted by 3rd party in Beijing. Design, manufacturing permits will only be granted on successful completion of tests.  [Bloomberg]  
• China Eastern Seeks More Int’l Flights at New Beijing Airport. Beijing’s new airport should be given more air rights and time slots for international flights, Liu Shaoyong, chairman of China Eastern Airlines Corp., said in a written proposal submitted to the Chinese People’s Political Consultative Conference.  [Bloomberg]  
• Wharf Holdings Invests HK$25.5bn in Equities After Spinoff. Wharf Holdings has spent HK$25.5b buying equities, including those of blue-chip Hong Kong developers, for short-term investment after completing a spinoff last year, Hon Kong Economic Journal reports.  [Bloomberg]  
• HNA Technology Investments FY Net HK$5.69M vs Loss Year Earlier. The company reported net income of HK$5.69m for the year ended Dec. 31, compared with HK$18.5m loss a year earlier, according to statement to Hong Kong stock exchange.  [Bloomberg]  
• Liugong Group to Look for Acquisitions in Europ The company seeks to acquire peers outside China to boost overseas sales as a share of total revenue to 40% by 2020 from 30% now, said Zeng Guang’an, Chairman of Guangxi Liugong Group in interview in Beijing.  [Bloomberg]  
• Tongcheng-Elong Is Said to Plan Hong Kong IPO in 2H. Tongcheng-Elong could raise between $1b and $1.5b in its share sale, WSJ reports. Tencent and Ctrip each own about 45% of the travel co.; other shareholders include Dalian Wanda Group and private-equity firm.  [Bloomberg]
• Wynn Resorts Details Macau Operating Data for January-February. Wynn Macau casino January-February adjusted property Ebitda was $137m-$143m vs $109m for the same period last year, according to Wynn Macau Ltd.’s extract of Wynn Resorts statement to Hong Kong stock exchange.  [Bloomberg]
• Tencent eyeing livestreaming edge with more investments. Internet giant Tencent Holdings Limited is looking to establish a clear lead over rivals in China's livestreaming market with latest investments of over $1 billion in the industry's top firms. [Bloomberg]    
• Noble Group Management Payouts Under Fire From Major Shareholder. Noble Group Ltd. drew more fire from disaffected shareholder Goldilocks Investment Co., as the Abu Dhabi fund called for an investigation into management compensation at the embattled commodity trader.  [Bloomberg] 
• HNA Unit HKICIM Sees ‘Substantial’ Decline in 2017 Net Income. Hong Kong International Construction Investment Management is expected to record “substantial” decrease in net income for the year ended Dec. 31, compared with HK$134.05m profit for April 2016 to Dec. 2016, according to statement to Hong Kong stock exchange.  [Bloomberg]