China Indexes Extend Losses; PDD Holdings, Trip.com, and Petro China in Focus After Earnings

Li Chen
27 Aug, 2024
Hong Kong

Stocks in China faced selling pressure amid ongoing worries about weak economic growth and earnings outlooks. 

Benchmark indexes in Hong Kong edged lower by 0.2%, and in mainland China, they declined by 0.3%. 

Stocks faced selling pressure after the parent company of Temu, PDD Holdings, said the current rate of sales growth is unsustainable and lowered its earnings outlook. 

Last week, Walmart sold its stake in JD.com at a discount of $3.6 billion and ended its 8-year-long partnership. 

Investors have been selling stocks in Hong Kong after a reversal in sentiment amid a growing worry about an earnings slowdown. 

Moreover, investors in China have been allocating new capital to luxury residences in Shanghai and Beijing as property values continue to appreciate in top-tier cities, seeking safety in Chinese government bonds, and investing in ETFs focused on Japanese and U.S. stocks. 

 

China Stock Movers 

The Hang Seng index decreased 0.2% to 17,835.44, and the CSI 300 index fell 0.6% to 3,304.46. 

PDD Holdings dropped 29% to $98.70 after the parent company of China-based Temu lowered its revenue and earnings growth expectations for the current quarter amid intensifying competition and the need for higher capital expenditure on new projects. 

Revenue rose 86% to $13.4 billion, or 97.1 billion yuan, and adjusted earnings per ADS rose to $3.20, or 23.24 yuan, from 10.157 yuan a year ago. 

Trip.com Group soared 9.4% to HK $366.40 after the dominant online travel platform reported better-than-expected second quarter revenue and earnings. 

Revenue increased 13.% to 12.8 billion yuan from 11.2 billion yuan, and earnings rose to 3.83 billion yuan, or 5.57 yuan per share, compared to 0.63 billion yuan, or 0.94 per share, a year earlier. 

Excluding items, the company reported adjusted earnings of 4.99 billion yuan, or 7.25 yuan per share, for the period.

PetroChina jumped 4.5% to HK $7.18, and the oil and natural gas exploration company reported record operating profit in the first half amid rising energy production. 

Net income rose 3.9% to 88.6 billion yuan, or $12.6 billion, benefiting from higher international oil prices, but weak domestic demand kept processed crude oil production increasing to 3%, while refined crude production advanced only 2.1% from a year ago. 

Jet fuel production soared 42% from a year ago, following a rebound in demand for air travel.