China and Hong Kong Indexes Extended Weekly Losses, PDD and Baidu In Focus After Earnings

Li Chen
22 Nov, 2024
Hong Kong

 Stock market indexes in China and Hong Kong declined following corporate results and a lack of visible improvement in economic activities and the property market. 

The Hang Seng and CSI 300 indexes declined more than 1% and extended weekly losses of 1.2% and 0.4%, respectively. 

PDD Holding and Baidu declined after reporting weaker-than-expected quarterly results, but BYD Electronics and Sunny Optical advanced. 

Market indexes in China and Hong Kong lacked direction, and investor mood soured after the government's measures to support the property market and revive consumer confidence fell short of expectations. 

In late September, Chinese policymakers and lawmakers approved a raft of measures to support the 2024 target GDP growth rate of 5%. However, those measures have yet to revive consumer confidence and support a rebound in corporate earnings. 

Moreover, China is battling structural impediments amid falling birth rates, foreign fund outflows, and rising trade barriers in the European Union and the United States. 

Industrial, retail, and technology companies are struggling under lack of demand growth, brutal competition, and intense price pressure, keeping stocks under pressure for the fourth year in a row. 

Chinese banks have yet to book mounting losses linked to property loans issued to the top 20 large developers, all controlled by the central government. 

 

China Stock Movers 

The Hang Seng index declined 1.3% to 19,343.91 and the mainland-focused CSI 300 index dropped 1.% to 3,948.52. 

Baidu declined 7.6% to HK$76.25, and the search engine operator said revenue declined as advertising demand remained subdued for the third consecutive year. 

Revenue in the third quarter declined 3% to 33.55 billion yuan from 34.4 billion yuan, but net income increased 14% to 7.6 billion yuan from 6.7 billion yuan, and diluted earnings per share rose to 21.60 yuan from 18.22 yuan a year ago. 

PDD Holdings declined 10.4% to $104.09 in New York trading after the budget shopping app operator said third-quarter earnings fell 22% from the previous quarter. 

Total revenue in the quarter soared 44% to 99.3 billion yuan from 68.8 billion yuan, net income attributable to shareholders increased 61% to 24.98 billion yuan from 15.5 billion yuan, and diluted earnings per share rose to 4.23 yuan from 2.65 yuan a year earlier. 

BYD Electronic International jumped 5.4% to HK $34.55 and Sunny Optical Technology Group advanced 5% to HK $59.75. 

At the end of October, BYD reported sharply higher revenue and flat earnings in the nine-month period ending in September. 

Revenue in the nine-month period ending in September soared 32% to 122.1 billion yuan from 92.2 billion yuan, net income attributable to shareholders inched up 0.6% to 3.06 billion yuan from 3.04 billion yuan, and diluted earnings per share increased to 1.36 yuan from 1.35 yuan a year earlier.