China Indexes Resume Downward Slide, Kuaishou Technology Plunged 10%

Li Chen
21 Nov, 2024
Hong Kong

China and Hong Kong stock market indexes halted a three-day rally as investors looked for fresh catalysts. 

The Hang Seng index declined 0.1% and the CSI 300 index eased 0.2% as investors turned cautious following a weak earnings growth outlook. 

Baidu and Chow Tai Fook were in focus ahead of quarterly results later today. 

Benchmark indexes in mainland China and Hong Kong are down about 15% from their peaks in late September, after fiscal and monetary stimulus measures failed to revive consumer confidence. 

Moreover, investors are also concerned about rising trade barriers in the European Union and higher tariffs in the U.S. on goods made by China. 

The latest monetary and fiscal measures to revive property markets did not go far enough, and property developers continue to struggle with insufficient capital. 

China's stimulus measures focus on easing the debt burden on local governments but do not provide any support to property developers and home buyers who have paid for unfinished projects. 

Moreover, leading 35 companies in Hong Kong reported flat earnings in the latest quarter and forecast weak earnings growth in the remainder of the year. 

 

China Stock Movers 

The Hang Seng index decreased 0.1% to 19,680.23, and the mainland-focused CSI 300 index edged lower 0.2% to 3,976.90. 

Semiconductor equipment-related stocks were in focus after Nvidia Corp. reported strong quarterly results but fell short of the highest revenue expectations.

Revenue in the fiscal third quarter increased 94% to $35.1 billion from $18.1 billion, net income soared 109% to $19.3 billion from $9.2 billion, and diluted earnings per share jumped 111% to 78 cents from 37 cents a year earlier. 

Nvidia forecast fiscal fourth quarter revenue of $37.5 billion, with a band of 2%, and GAAP gross margin of 73% and non-GAAP gross margin of 73.5%. 

Data center revenue increased to $30.8 billion, a jump of 17% from the previous quarter and a rise of 112% from a year ago. 

Baidu edged down 0.06% to HK$83.95, and Chow Tai Fook Jewellery Group decreased 3% to HK$7.14. 

Residential property developers fell as investors worried that Beijing policymakers may encourage struggling companies to consolidate. 

Longfor Group declined 1% to HK $11.24; China Vanke decreased 2.2% to HK $6.40; and China Resources Land dropped 1% to HK $23.60.

Kuaishou Technology dropped 10.5% to HK $47.05 after the short-video app developer's revenue increase fell short of market expectations. 

Revenue in the third quarter increased 11.4% to 31.1 billion yuan from 27.9 billion yuan, net income jumped 50% to 3.3 billion yuan from 2.2 billion yuan, and diluted earnings per share rose to 0.75 yuan from 0.49 yuan a year earlier. 

Average daily users increased 5.4% to 407.5 million from 386.6 million, and average monthly users rose 4.3% to 714.1 million from 684.7 million a year ago.