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CSCI Morning News Circular - 20180328

1. Macro News

• S. Said to Push China on Cars and Finance in Tariff Talks. The Trump administration is urging China to lower tariffs on cars and open its market to U.S. financial services as part of talks to resolve a rise in trade tensions that has shaken global markets.  [Bloomberg]   
• China, India pledge to boost trade, economic cooperation. China and India pledged on Monday to further enhance their trade and economic cooperation so as to build a new international economic order and safeguard the interests of developing countries.  [China Daily]   
• Sri Lanka Premier Wants India and Japan Cash to Balance China. Prime Minister Ranil Wickremesinghe said Sri Lanka is seeking foreign investment from India, Japan and others amid criticism over his country’s reliance on Chinese loans for infrastructure projects.  [Bloomberg]       

1. Industry News

• Trade promotion group visiting India to strengthen bilateral ties. A trade promotion group organized by China's Ministry of Commerce is currently visiting India to strengthen economic and trade ties and pragmatic cooperation between the two countries.  [China Daily]   
• China Industrial Profits Decelerated on Slower Factory Inflation. Profit growth at Chinese industrial firms decelerated at the start of this year amid weaker factory-gate inflation. Industrial profits rose 16.1% YoY in the first two months of 2018, less than the 31.5% increase in the first two months of 2017. Total profits for the period were 969bn yuan, the National Bureau of Statistics said Tuesday.  [Bloomberg]      
• ECB Said to Have Raised Concern Banks Could Mask Losses for 2017. The European Central Bank alerted auditors that lenders could try to take advantage of the transition to new accounting standards to spread the hit on loan losses over years instead of reflecting them in their 2017 financial results.  [Bloomberg] 
• Corporate News
• Dongfeng Group Annual Net Profit Nearly RMB14.1B, Up 5.4%; Final Div 25 Fen. Dongfeng Group announced annual results ended December 2017. Net profit gained 5.38% yearly to RMB14.063 billion. EPS was 163.22 fen, while final DPS was 25 fen.  [AAStocks]
• Shimao Property Confident to Surpass RMB140bn Sales Target This Yr. Shimao Property’s Vice Chairman Hui Sai Tan announced for the sales target of RMB140 billion this year. Hui had the confidence to surpass this target on the upbeat that the sales growth of January to February (over 60%) to sustain into March.  [AAStocks]
• AAC Technologies Sees at Least 25% Revenue Growth in 2018. AAC Technologies expects at least 25% y/y growth in revenue this year. GPM expected to be in line with expectation. Expects higher than 40% GPM for optical business; segment to have bigger share in revenue. Plans to conduct one or two 5G antenna pilot projects in the U.S. this year; sees 5G antenna products to drive margin.  [Bloomberg]
• SMIC to Sell Its Equity Interest in JV to China IC Fund. Semiconductor Manufacturing International will sell its equity interest in Ningbo Semiconductor to China IC Fund, reducing its stake to 38.59% from 66.76%, the company said in a Hong Kong stock exchange filing.  [Bloomberg]
• AgBank 2017 Net Rises as Bad Loans Curbed, Margins Improve. Agricultural Bank of China Ltd., the nation’s third-largest lender, reported a 5 percent gain in profit amid a strengthening economy. Net income rose to 193bn yuan in 2017 from 184bn yuan a year earlier, the lender said in a filing to the Hong Kong Stock Exchange.  [Bloomberg]
• FIT Hon Teng to Buy U.S. Consumer Electronics Co. for $866mn. FIT Hon Teng entered into agreement to buy Belkin International by way of merger, according to statement. The merger will provide FIT Hon Teng with channel relationships, retail presence and direct-to-consumer opportunities that had been previously underdeveloped.  [Bloomberg]
• Hong Kong & China Gas Could Seek to Spin Off More Subsidiaries. More of Hong Kong and China Gas's projects are likely to be listed in the coming years. Spinning them off provides more financial flexibility to the local managers while improving relations with local governments.  [Bloomberg]
• China Modern Dairy Full Year Net Loss Widens to 975.1mn Yuan. China Modern Dairy reported net loss of 975.1 million yuan for the year ended Dec. 31, compared with 742.1 million yuan loss a year earlier. FY revenue 4.78 billion yuan, estimate 4.71 billion yuan.  [Bloomberg]
• Evergrande Signals Shift Away From Debt-Fueled Expansion Spree. China Evergrande Group, the developer controlled by billionaire Hui Ka Yan, signaled a pivot away from a debt-fueled expansion spree that helped fuel record sales last year.  [Bloomberg]
• Huawei Facing Barriers in Latest Washington Jab on Feared Spying. Chinese network-gear makers Huawei Technologies Co. and ZTE Corp. could face higher barriers to the U.S. market under a proposal advanced Monday by federal regulators in Washington’s latest move against feared espionage from foreign telecommunications suppliers.  [Bloomberg]
• HNA Abandons Gategroup IPO in Setback to Disposal Efforts. Chinese conglomerate HNA Group Co. abandoned its plan for an initial public offering of its Gategroup Holding AG Swiss airline caterer unit less than 24 hours before the shares were set to start trading in Zurich, citing weak investor demand.  [Bloomberg]
• Top Chinese developers lower growth expectations for 2018. China Evergrande Group and China Overseas Land and Investment have set relatively modest contracted sales targets for 2018 compared with their robust performance last year. China Evergrande has set a target of RMB550bn, compared with the RMB501bn it made last year. China Overseas is targeting HK$290bn, on the back of HK$232.07bn last year.  [SCMP]
• Baidu to issue CDRs, media claims. Chinese internet search giant Baidu Inc will issue Chinese depositary receipts in June, making it one of the first batch to come back to the A-share market via the CDRs, according to a report by tech.163.com, NetEase's online news portal, on Monday.  [China Daily]  
• CITIC sees increase in retail banking business. The contribution of retail banking to net non-interest income of China CITIC Bank Corp Ltd increased significantly, 40% YoY in 2017. According to its annual results announcement, credit cards contributed RMB28.6bn to total net non-interest income from retail banking, accounting for 85.2% of total. [China Daily]
• Sinotruk delivers 34 street washer vehicles to HKSAR. Commercial vehicle manufacturer China National Heavy Duty Truck Group Corp, or Sinotruk, delivered the first batch of 34 new street washer vehicles to the Hong Kong Special Administrative Region government on Monday.  [China Daily] 
• Legend Holdings net climbs to 5bn yuan. Legend Holdings, which holds 29.10 percent equity interest in PC maker Lenovo, said net profit for the year ended December 31, 2017, increased by 4 percent on-year to 5.04 billion yuan, or basic earnings per share of 2.16 yuan. Revenue grew by 3 percent to 316.3 billion yuan.  [The Standard]