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CSCI Morning News Circular - 20180423

1. Macro News

• Philippine Budget Chief Shrugs Off Peso and Inflation Concern. Quickening inflation in the Philippines will likely prove temporary and the weak peso isn’t something to fret over, Budget Secretary Benjamin Diokno said. Both revenue and expenditure targets “are doing great”.  [China Daily]   
• Mnuchin Says He's Considering Trip to China Amid Trade Dispute.S. Treasury Secretary Steven Mnuchin said he’s considering a trip to China, adding that he’s “cautiously optimistic” of reaching an agreement that defuses a dispute over trade.  [China Daily]    
• China, U.K. Agree to Back Free Trade, Open World Economy. Chinese President Xi Jinping and U.K. Prime Minister Theresa May exchanged views on global trade and Syria over phone, Xinhua reports. Xi and May agreed to further promote “golden era” of bilateral ties.  [Bloomberg] 

1. Industry News

• HKEX, Beijing’s new third board in dual-class listings accord. Hong Kong Exchanges and Clearing has signed an agreement with Beijing’s over-the-counter exchange, the National Equities Exchange and Quotations (NEEQ), marking the latest effort in its bid to land more mainland technology start-up listings.  [SCMP]    
• Hong Kong exchange to accept listing applications under new rules from April 30, chief says. Companies with dual-class shareholding structures and biotech firms with no revenue will be able to apply for listing on the Hong Kong stock exchange from April 30 under new bourse rules, the head of the exchange said on Friday.  [SCMP]    
• China kicks off H-share full circulation trial as Legend picked in pilot programme. China has officially started a pilot programme allowing the bulk of shares in Chinese cos listed in Hong Kong to trade freely on the stock market. Legend Holdings will be taking part in the trial known as the full circulation of H shares, the China Securities Regulatory Commission said on Friday.  [SCMP]
• Corporate News
• China Life Expects 1Q Net Income to Rise 110%-130% on Year. China Life attributes net income increase to update of discount rate assumption of reserves in its traditional insurance contracts, company says in statement to Hong Kong stock exchange.  [Bloomberg]  
• Ping An Good Doctor Starts Preparing $1.1bn Hong Kong IPO. Chinese online healthcare platform Ping An Good Doctor, a unit of the country’s biggest insurer by market value, will start taking investors’ orders for a Hong Kong initial public offering that could raise as much as HK$8.8bn ($1.1bn).  [Bloomberg]  
• HNA Cuts Deutsche Bank Stake, Vows to Remain Major Investor. Deutsche Bank AG’s biggest shareholder cut its stake in the lender, it disclosed Saturday, after saying in February that another reduction wasn’t planned. Stake in bank cut to 7.9% from 8.8% in February, HNA says.  [Bloomberg]    
• GE Is in Talks to Unload Rail Business in Deal With Wabte. General Electric Co., the beleaguered manufacturer undergoing a strategic review, is in talks to sell its century-old locomotive business to rail-equipment maker Wabtec Corp. The transportation unit could be valued at $6.8 billion.  [Bloomberg]    
• Legend first to convert non-tradeable HK stock to free-floating shares. Legend Holdings Corporation (3396), the parent of Lenovo, will become the first company in the H-share convertibility pilot scheme to convert non-tradeable equity into free-floating shares, China's securities regulator said.  [Bloomberg]       
• R&F Properties Teams Up With HNA on Hainan Project For 5.7B Yuan. R&F Properties and HNA Real Estate Group reached agreement on land use rights for development at a real estate project in Haikou city of Hainan, R&F says in a statement to Hong Kong stock exchange.  [Bloomberg]  
• China Unicom HK First Quarter Net Income Beats Estimates. China Unicom HK reported net income for the first quarter that beat the average analyst estimate. 1Q net income 3.01 billion yuan, estimate 2.71 billion yuan. 1Q Ebitda 23.91 billion yuan.  [Bloomberg]  
• China’s ZTE Fires Back at U.S., Calls 7-Year Ban ‘Unacceptable’. China’s ZTE Corp. blasted the U.S.government decision to impose a seven-year ban on its purchases of crucial American components, calling the move "extremely unfair" and "unacceptable."  [Bloomberg]
• China NEEQ, HKEX to Sign MOU on Cooperation. China’s National Equities Exchange and Quotations and HKEX will sign a MOU on cooperation April 21,21st Century Herald reports, citing NEEQ. Some analysts say the cooperation may allow NEEQ-listed companies to be listed in Hong Kong as well.  [Bloomberg]
• Baotou Steel Seeks Up to 10B Yuan in Private Share Sale. The company plans to issue A shares to controlling holder Baotou Iron & Steel Group to raise funds, according to statement to Shanghai stock exchange. The company to use the proceeds from the share sale to repay debt to Baotou Iron & Steel Group.The move is aimed at lowering the company’s debt-to-asset ratio.  [Bloomberg]
• Alibaba ramps up offline efforts. Internet giant Alibaba Group Holding Ltd opened its first physical store for cross-border e-commerce platform Tmall Global in its headquarters in Hangzhou, Zhejiang province, on Friday, taking advantage of the city's preferential policies on trans-border retail.  [China Daily] 
• Alibaba buys Chip Manufacturer C-SKY Microsystems. Alibaba Group Holding has acquired Hangzhou C-SKY Microsystems Co Ltd, an integrated circuit design house, in a bid to increase its own chip-making capability,. Alibaba said the purchase will help unify the two cos' R&D capability amid China's campaign to gain self-reliance in key technology. [China Daily]
• Guangzhou R&F unit, HNA Real Estate sign on to Haikou project. Developer Guangzhou R&F Properties said its subsidiary Hainan R&F and HNA Real Estate Group have reached an agreement to develop a project in Hainan at a consideration of 5.7bn yuan. he company has signed up 22.24mn new 4G users in the first quarter.  [The Standard]   
• Huawei, ZTE, Lenovo Involved in Commercial Espionage. As stated in a report issued by the US-China Economic and Security Review Commission, the Chinese govt. may support certain firms to conduct corporate espionage, with an aim to boost the competitiveness of the Mainland enterprises and advance other government interests. Accordingly, Huawei, ZTE and Lenovo Groupd are three PRC companies that exhibit some of these characteristics.  [AAStocks]
• CNOOC 1Q18 Oil & Gas Sales Revenue Grows 10.8% to RMB42.5bn. CNOOC announced that oil and gas sales revenue in 1Q18 amounted to approximately RMB42.54 billion, up 10.8% yearly, mainly driven by the significant rebound in international oil prices.  [AAStocks]