Home » Pinduoduo Beats Estimates, Hong Kong Cheers Internet Earnings, Week In Review

Pinduoduo Beats Estimates, Hong Kong Cheers Internet Earnings, Week In Review

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Review week

  • Asian equities are holistic as President Biden visits the region and China’s internet earnings season kicks off with some surprises upwards under names such as Alibaba, Baidu, Kuaishou, Amiyi, and Tadashi Tadashi. It was a relatively bright week.
  • However, Snapchat’s very disappointing US revenue release led to a slump in sentiment in Asia on Tuesday.
  • John Tuttle, Vice Chairman and Chief Executive Officer of the New York Stock Exchange, joined Krane Shares CEO Jonathan Crane at the Davos panel this week. Regulatory agencies in the United States and China are working towards audit transactions.View the entire panel discussion here..
  • The legislature held a conference call with the rumored 100,000 participants, urging the PBOC to “… secure a time frame and strive to bring the economy back to normal” after the PBOC cut significantly more than expected. .. Major lending rates last Friday.

Friday’s important news

Asian stocks rose most overnight as Hong Kong outperformed, driven by internet stocks following the strong US-listed Chinese internet stocks yesterday.

Alibaba HK and Baidu HK earned + 12.21% and + 14.26%, respectively, following higher-than-expected financial results in yesterday’s memo.

Following the market closure in Hong Kong this morning, e-commerce company Pinduoduo (PDD US) announced revenue that exceeded analysts’ expectations for revenue, adjusted EPS, monthly users and active buyers. The release of Pinduoduo is described below.

After closing in Hong Kong, HKEX announced that a Hong Kong-listed ETF will be added to Southbound Stock Connect. Although the date of incorporation has not yet been announced, mainland investors tend to be interested in growth-oriented ETFs such as Internet proxies. There was also an announcement to ease the rules of foreign investors in the Chinese land bond market.

Pinduoduo (PDD US) reported the first quarter results before marketing. The result was better than expected, leading to a rise in stock prices in front of the market. However, management was conservative in its outlook. Unfortunately, neither management nor earnings analysts have talked about the possibility of Pinduoduo relisting in Hong Kong. I was shocked that the company hadn’t submitted it publicly yet, but in theory they could have submitted it privately. Management has done a good job to keep costs down. They also did a good job of maintaining the key profitability of this market environment.

  • Revenue increased by + 7% to RMB 23.793 ($ 3.753 billion), compared to the expected RMB 20.649.
  • Average monthly users increased by + 4% and 7% to 751.3mm and 881.9mm
  • Total operating expenses decreased from RMB 15.568B to RMB 14.479 ($ 2.284 billion)
  • Adjusted net income increased by RMB42 billion ($ 662.6 million) from a loss of RMB-189 billion, compared to the expected RMB265 billion.
  • Adjusted EPS RMB 2.95 ($ 0.47) vs RMB 1.52 forecast
  • Book cash increased from RMB 92.9 billion to RMB 95.2 billion ($ 15 billion).

The Hang Seng Index and the Hang Seng Technology Index were up + 2.89% and + 3.8%, respectively, up + 25.7% above yesterday’s average of 85% for the year. 307 shares rose and 161 shares fell. Hong Kong’s short sale volume increased + 19.28% from yesterday to an annual average of 88%. Growth factors outnumbered value factors as large caps outnumbered small caps. All sectors were in a green state with a + 6.63% increase in discretion, a + 3.89% increase in healthcare, and a + 2.53% increase in communications. Outsourcing subsectors included outsourced research institutes (CROs, or outsourced pharmaceutical research and manufacturing operations), e-commerce, and cloud stock. The volume of Southbound stocks was average in mixed trading, but Tencent had a small net sell and Meituan had a small net buy.

Shanghai, Shenzhen and STAR Board closed at + 0.23%, 0.00% and -1.05%, respectively, down -1.2% from yesterday to an annual average of 75%. 1,574 shares rose and 2,743 shares fell. Growth and value factors were uniform, but large caps and megacaps outperformed small caps. In the top sectors, energy increased by + 2.33%, healthcare increased by + 1.6%, and finance increased by + 0.88%. On the other hand, telecommunications decreased by -0.12% and real estate decreased by -0.7%. CRO and energy exploration were one of the top sub-sectors, but there was no stock of cement, semiconductors or software. Foreign investors have purchased $ 581 million worth of mainland stocks through Northbound Stock Connect. Government bonds rebounded, CNY rose + 0.43% against the US dollar to 6.71 and copper rose + 0.84%.

Exchange rates, prices, and yields last night

  • RMB / US $ 6.70 vs. yesterday 6.74
  • RMB / Euro 7.18 vs. yesterday 7.23
  • Yield of 1-day government bond 1.20% vs. yesterday’s 1.25%
  • Yields on 10-year government bonds were 2.70% compared to 2.71% yesterday
  • Yield of 10-year China Development Bank bond 2.94% vs. 2.93% yesterday
  • Copper price + 0.84% ​​overnight

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