Report
Steven Liu

CSCI Morning News Circular - 20180529

  1. Macro News
  • China's industrial profits up 15 pct in January-April. Profits of China's major industrial firms saw a steady growth of 15 percent for January-April period, data showed. The growth was larger compared with a 11.6-percent increase registered for the first quarter, according to the National Bureau of Statistics.  [China Daily]        
  • China Apr Total Profit of Enterprises of Industries Above Designate Scale Up 21.9% YoY. NBS data showed that for the first four months of 2018, the enterprises of the industries above designate scale achieved total profit of RMB2.13tn, up 15% yearly, with a growth rate accelerating 3.4 ppts compared to the period from January to March.  [AAStocks]   
  • New Bank Indonesia Governor Is Wasting No Time on Rate Hikes. Indonesia’s new central bank governor set the stage for a second interest rate increase in two weeks at an early policy meeting called for Wednesday, as he wastes little time in acting against a currency rout.  [Bloomberg]     
  1. Industry News
  • PBOC May Cut RRR Mid-Year to Boost Liquidity. China may face liquidity shortage in June and July because of implementation of financial regulations, expected fall in fiscal deposit and forex outflows caused by overseas-listed companies’ dividend payment, according to China Securities Journal.  [Bloomberg]     
  • HKEX Gets Approval to Launch MSCI Asia Ex-Japan Index Futures. Hong Kong Exchanges & Clearing received regulatory approval to launch MSCI Asia ex-Japan futures, according to a statement on HKEX’s website on Monday night.  [Bloomberg]      
  • China's power generation up 6.9% in April. China's major power plants generated 510.7 billion kilowatt-hours of power in April, up 6.9 percent year-on-year, data showed. Power generation rose 7.7 percent year-on-year in the first four months of 2018 to reach 2.08 trillion kilowatt-hours.  [Bloomberg]    
  • Corporate News
  • Chalco inks massive metals deal as China pushes ahead with supply-side reforms. The Aluminum Corporation of China (Chalco) plans to merge its copper mining unit with Yunnan Metallurgical Group, which has total assets of nearly 90bn yuan, in what would be the country’s biggest industry consolidation deal in the non-ferrous metals sector. [SCMP]   
  • Taiwan cancer drugs developer seeks Hong Kong bond issue ahead of IPO after delisting from Taipei. JHL Biotech, a Taiwan developer of cheaper alternatives to patent-protected biological drugs, has raised US$106 million from a convertible bond issue, ahead of its planned Hong Kong IPO aiming to raise some US$250mn.  [SCMP]   
  • Ant Financial finalizes last round of financing before IPO. Alibaba's financial arm Ant Financial Services Group has finalized the last round of private funding before its IPO on both Hong Kong and Chinese mainland A-share markets in one or two years, with a valuation of $150 billion, tech news portal All Weather TMT reported.  [China Daily]        
  • Rusal May Cut 2018 Output 30-70% If Sanctions Stay. The company estimates that production this year may be cut by as much as 70% in negative scenario, if sanctions stay after October, Kommersant reports, citing forecast contained in Rusal proposals on state help filed to government.  [Bloomberg]    
  • JD Finance Is Said to Plan Listing in China as Soon as Next Year. The unit of e-commerce company JD.com aims to list shares in Shanghai or Shenzhen as early as 2019 and is targeting a valuation of 400b yuan to 500b yuan. JD Finance is in the process of raising a targeted 90m yuan in a funding round.  [Bloomberg]    
  • Central China Real Estate Proposes Additional Issue of USD Notes. Additional notes to be consolidated and form a single series with $300m 6.875% senior notes due 2020 issued on April 23, according to statement to Hong Kong stock exchange. Proceeds to be used for repaying existing debts and for general corporate purposes.  [Bloomberg]    
  • PetroChina Seen as Biggest Beneficiary in China’s Gas Revamp. PetroChina is the biggest winner from China’s latest move to harmonize city-gate gas prices for all users by hiking residential costs; however, it may hurt city gas distributors, according to research reports.  [Bloomberg]    
  • Meitu Plans to Buy Back Up to $100M of Shares. Meitu Inc. considers its shares to have been “consistently undervalued”; buyback reflects confidence in co.’s prospects, according to statement to Hong Kong stock exchange.  [Bloomberg]    
  • China Telecom Wants to Spin off & List Bestpay; No Plan to Return to A-share Mkt. Asked at the AGM whether China Telecom will mull a return to A-share market, Liu Aili, the president and CEO, said the issue is complicated as actual situation depends on factors like capital market trend and share price, adding the company takes the issue in mind but has not decided yet.  [AAStocks]  
  • China Telecom: China Tower Listing Impact Still Highly Uncertain; No Impact from ZTE Incident. Asked at the AGM whether the company will consider declaring special bonus for the listing of China Tower Corporation, Liu Aili, the president and CEO, did not give direct respond, instead only said what kinds of profits and influences from the listing remain highly uncertain.  [AAStocks]   
  • AAC Tech: No Direct Impact from China-US Trade War on Operation. Managing Director Mok Joe Kuen Richard commented that there is no direct impact from China-US trade war on the operation because the company provides technological solutions while smartphones are also normally changed for new models every year.  [AAStocks]  
  • iDreamSky Applies for Listing; Tencent Holds Around 20% Stake. iDreamSky, a Mainland China-based digital entertainment platform, has filed an official listing application to HKEX. Preliminary IPO documents show that Tencent is currently holding 20.65% stake in iDreamSky via a subsidiary Tencent Mobility Limited.  [AAStocks]  
  • HSBC China Expedites Greater Bay Area Development; Grants RMB2B Loans for EM Enterprises. David Liao, President and Chief Executive Officer at HSBC Bank (China), said the bank is vigorously expediting the deployment in Guangdong-Hong Kong-Macao Greater Bay Area, Xinhuanet.com reported.  [AAStocks]  
  • Cathay sails past 'most dangerous' period. Cathay Pacific Airways says the "most dangerous" period in its business cycle has passed after it suffered a loss from oil hedging amid competition with six other major airlines in the Middle East and China. Paul Loo Kar-pui, Cathay's chief customer and commercial officer and executive director, said passenger numbers in the second half of last year recovered. [The Standard]     
  • Tencent pledges to chip in. Tencent Holdings chairman pledged to advance China's semiconductor industry, saying the blow to ZTE Corp (0763) from Washington's ban on US firms supplying the telecommunications company was a "wake-up" call, Chinese media reported.   [The Standard]     
  • Cosco Shipping International takes 33pc stake in biochem company. Cosco Shipping International (Hong Kong) said on Monday it acquired a 33 equity interest in Nasurfar Biomaterial Technology (Changshu) company, which makes products based on cashew nut shell oil. It is incorporated in the mainland.   [The Standard]     
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