Hong Kong stocks open earnings-packed week on a cautious note

Hong Kong stocks open earnings-packed week on a cautious note

Hong Kong stocks open earnings-packed week on a cautious note

Caution prevailed among Hong Kong investors as stocks traded in narrow ranges ahead of earnings announcements this week from nearly a third of the companies that comprise the 82-member benchmark.

The Hang Seng Index rose less than 0.1 per cent to 16,503.12 as of 10.02am local time. The Hang Seng Tech Index eased 0.2 per cent and the Shanghai Composite Index retreated 0.2 per cent.

Meituan, China’s biggest on-demand delivery company, surged almost 8 per cent to HK$95.20 after reported a turnaround in its fourth quarter earnings. Aluminium producer China Hongqiao jumped 8.5 per cent to HK$8.02 after reporting full-year profit increased 32 per cent in 2023 from a year ago. Both companies reported their results after the market closed on Friday.

“We believe Meituan is on a path of solid execution with its ‘food plus platform’ strategy that targets a mass audience with high-frequency services,” said Jefferies in a report over the weekend. “It is able to create a strong self-reinforcing ecosystem covering about 600 million annual transacting users and over seven million merchants.”

Citigroup expects China Hongqiao’s earnings to beat estimates this year, when its aluminium smelting margins will be sustained because of lower coal and electricity costs.

Among losers, personal computer maker Lenovo Group sank 6.1 per cent to HK$9.14, Alibaba Health slumped 5.9 per cent to HK$3.10 and China Life Insurance lost 3.2 per cent to HK$9.15.

Caution prevailed as 26 companies on the Hang Seng Index are due to release this week their full-year results for 2023, including index heavyweights BYD and China Merchants Bank.

The Hang Seng Index dropped 1.3 per cent last week dragged down by a batch of weak earnings from major companies including Tencent Holdings, Ping An Insurance and Li Ka-shing’s two flagship listed units.

Investors are also weighing comments from Chinese Premier Li Qiang who said at a forum over the weekend that China will remove more barriers for foreign companies including market access, policy tendering and cross-border data flow, as the nation is struggling with an exodus of foreign investments that has exacerbated a slowdown in growth.

Elsewhere, Hubei Gabriell Optech, which makes optical glass products, jumped 113 per cent from its IPO price to 21.30 yuan on the first day of trading in Beijing.

Other major Asian markets showed mixed trends. Japan’s Nikkei 225 slipped 0.5 per cent and South Korea’s Kospi retreated 0.1 per cent, while Australia’s S&P/ASX 200 added 0.5 per cent.

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