China Indexes Lacked Direction, Li Ning Quarterly Sales Rise, Baicha Baidao IPO Plunges 35%

Li Chen
23 Apr, 2024
Mumbai

The market index in Shanghai declined 0.4%, but the reference index in Hong Kong advanced 0.6% following an increase of 1.8% in the previous session. 

Market sentiment was positive for the second day in a row after China's financial regulatory agency announced supportive measures to facilitate the listing of mainland Chinese companies on the Hong Kong Stock Exchange. 

Moreover, the market sentiment was bolstered by gains in overnight trading in New York on the hopes of better-than-expected quarterly results from leading tech companies including Apple, Microsoft, Meta Platforms, and Alphabet. 

The market in Asia advanced for the second consecutive day this week, tracking gains in overnight trading on Wall Street. 

Benchmark indexes in Tokyo edged up 0.2%, in Seoul they rose 0.1%, and in Sydney they advanced 0.4%. 

The CSI index fell 0.6% to 3,511.05, and the Hang Seng index rose 1.6% to 16,782.71. 

Tech companies led the gainers in Hong Kong: Tencent Holdings rose 3.1% to HK$330.20, Baidu jumped 1.7% to HK$95.55, and JD.com advanced 6% to HK$106.60. 

WH Group advanced 5.5% to HK$5.78 after China's largest meat processor and pork producer said operating profit soared 37% in the first quarter. 

Li Ning Co. gained 5.1% to HK$18.38 after the sports equipment and sportswear company said overall sales rose by a low single-digit in the first quarter. 

Retail and wholesale sales declined in the "low single-digit," with retail sales increasing in the mid-single-digit  and wholesale sales declining by the "mid single-digit."

Online sales soared in the "low twenties" in the quarter. 

Same-store sales across the network of stores, excluding Li Ning Young stores, declined by "mid-single-digit" from a year ago. 

The company's sales in 2023 increased to 27.6 billion yuan from 35.8 billion yuan, and profit attributable to shareholders declined to 3.2 billion yuan from 4.1 billion yuan a year ago, respectively. 

The two newly listed companies still faced headwinds on the first day of trading in Hong Kong. 

Tianjing Construction Development Group plunged 25% to HK$1.85, and Sichuan Baicha Baidao Industrial dropped 35% to HK$11.20. 

Sichuan Baicha Baidao, the bubble tea store retail chain, priced its offering at HK$17.50 per share and raised HK$2.5 billion, or $330 million, in the largest Hong Kong's initial public offering in 2024 so far. 

The Chengdu-based tea store chain's ChaPanda stores saw rapid expansion of its network to 8.000 locations in 2023 from 500 in 2019.