Hong Kong Stocks Rebound After Positive Earnings from AIA and Xiaomi

Li Chen
22 Aug, 2024
Hong Kong

Stocks in Shanghai and Hong Kong advanced in subdued trading as investors reacted to positive earnings from leading companies. 

The Hang Seng index added 0.5%, and the CSI 300 index edged up a fraction. 

Market sentiment was positive after AIA and Xiaomi reported earnings ahead of market expectations. but residential property developers turned lower after Kaisa Group Holding reported weak results. 

Investors also took note of the Federal Reserve policymakers supporting a rate cut at the next meeting in September if economic data support such a move, as the latest minutes of the meeting showed on Wednesday. 

Despite the rebound in the Hang Seng index after a two-day sell-off, investor enthusiasm was muted amid a weakening macroeconomic backdrop. 

 

China Stock Movers 

The Hang Seng index increased 0.5% to 17,488.74, and the CSI 300 index inched up 0.05% to 3,323.36. 

Xiaomi jumped 8.1% to HK $18.94, and the smartphone and electric vehicle maker reported that second-quarter revenue soared 32% to 88.9 billion yuan, or $12.4 billion, and net income jumped 38.3% to 5.1 billion yuan. 

Smart handset unit sales soared 28% to 42.2 million units, and the business division's revenue increased 27.1% to 46.5 billion yuan. 

The company' delivered 27,307 SU7 electric vehicles, with the EV unit generating revenue of 6.4 billion yuan and a net loss of 1.8 billion yuan. 

The company lost an average of 65,900 yuan per car sold in the June quarter, and the company said it plans to sell 100,000 vehicles by November and expand its retail store network to 100 from the current 87 in 30 cities. 

AIA Group gained 4.9% to HK$53.95, and the insurance company sold more insurance policies in mainland China. 

The value of new business, a measure of revenue, increased 25% to $2.46 billion, and net income soared 52% to $3.31 billion, or 29.53 U.S. cents. 

The value of new business in mainland China rose 36% to $782 million, and in Hong Kong, it advanced 26% to $858 million. 

Mainland residents continued to buy insurance policies issued in Hong Kong to take advantage of stable currency and diversify investment returns amid a weak outlook for the yuan. 

The Chinese yuan has lost about 12% of its value against the U.S. dollar over the last two years. 

The company also increased its interim dividend by 5.2% to 44.50 HK cents.