Electric Vehicle Makers In China Report Weakening Margins, Meituan Sales and Earnings Advanced

Li Chen
29 Aug, 2024
Hong Kong

Stocks in Hong Kong and Shanghai faced another day of selling pressure, and electric vehicle makers led the decliners in Hong Kong trading. 

The Hang Seng index fell 0.3% and the CSI 300 index decreased 0.2% after Li Auto reported weaker-than-expected earnings and a sharp decline in margins. 

The intense price war among electric vehicle makers finally caught up with leading companies in the sector, and Li Auto's results reflected the worsening market environment. 

Moreover, semiconductor-related stocks were under pressure in Hong Kong and mainland China after Nvidia's current quarter sales outlook fell short of some analysts high expectations. 

Nvidia, the leading artificial intelligence technology player, reported revenue soared 122% from a year ago to $30 billion, net income advanced 168% to $16.6 billion from $6.2 billion, and earnings per share rose to 67 cents from 25 cents a year ago. 

The company guided revenue in the current quarter of $32.5 billion, which fell short of some investors expectations. 

Tech stocks declined despite the shopping platform operator Meituan reporting a sharp jump in profit in the second quarter. 

 

China Stock Movers 

The Hang Seng index declined 0.3% to 17,636.0 and the CSI 300 index dropped 0.2% to 3,278.07. 

Li Auto decreased 8.3% to HK $74.35 and BYD declined 1.3% to HK $223.0 after the electric vehicle makers reported their quarterly results. 

Li Auto profit in the second quarter soared 86% to 1.1 billion yuan, and gross margin shrank 1.1 percentage points to 19.5%. 

Li Auto said unit sales in the second quarter increased 35.1% to 108,581, and the electric vehicle maker estimated sales in the current quarter to range between 145,000 and 155,000 unis. 

BYD said first-half profit increased to 13.6 billion yuan, resulting in an increase of 32.8% from a year ago in the second quarter to 9.1 billion yuan. 

China is the world's largest electric vehicle market, with sales of battery-operated cars now accounting for more than 50% of all passenger car sales in the country. 

Meituan jumped 9.3% to HK $113.70, and the Chinese's largest shopping platform operator reported a jump in revenue and earnings in the second quarter. 

Revenue increased 21% to 82 billion yuan from 68 billion yuan, and net income soared 142% to 11 billion yuan from 4.7 billion yuan a year ago. 

On-demand transactions in the quarter rose 14% to 6.1 billion, driven by an increase in products available for sale and several campaigns for discounted delivery services. 

China Mengniu Dairy Company jumped 9.5% to HK $13.14 after the company announced a stock buyback worth HK $2 billion.