Robots & Real Estate Rebound Pre-Alibaba Earnings Results

Key News

Asian equities and currencies were mixed overnight as South Korea and Mainland China outperformed while Indonesia underperformed with President Trump’s tariff threat weighing on sentiment.

It is hard to say if Trump’s tariff threat, the recent strong outperformance, or xAI’s Grok3 model launch sparked today’s Hong Kong growth/internet stock profit-taking. The timing is interesting, with Alibaba, NetEase, and Bilibili reporting earnings tomorrow, as all three have an AI angle. Mainland China and Hong Kong hard technology stocks in the semiconductor and high-end manufacturing sectors, specifically in auto/electric vehicle, hardware, and electric equipment, had a strong day. People on Chinese social media noted that at President Xi’s meeting with the private sector/entrepreneurs, the speaker list was only from manufacturing firms. Good point, though, worth noting: Mainland investors via Southbound Stock Connect bought a healthy $1.327 billion of Hong Kong stocks today with an emphasis on the internet stocks on today’s dip, less so Meituan, while semiconductor stocks were mixed with SMIC a net sell and Hua Hong Semis a net buy.

Not receiving significant attention, the State Administration for Market Regulation announced a three-year plan to promote the consumption of “automobiles, home appliances, home furnishings, electronic products, textile and apparel, food and other fields.” Policies are likely lining up for the Dual Sessions in March with an emphasis on domestic consumption support.

Humanoid robots were all the rage in Mainland China, with many companies rumored/actually in space, rising significantly as brokerage houses speculate that mass production will occur in 2025. In hindsight, the dancing robot routine at the Chinese New Year TV gala was a good clue.

There are only 7 listed Mainland real estate stocks and 6 Hong Kong-listed real estate stocks left in the MSCI indices, though they had a strong as January new home prices fell -0.07% in January versus -0.08% in December while used home prices fell -0.34% in January versus -0.31% in December. If one looked beyond the number, the catalyst was 1st Tier cities (Beijing, Shanghai, Shenzhen, and Guangzhou) rose for the second consecutive month while 2nd Tier cities (including Wuhan, Xi’an, Chengdu, Tianjin, Hangzhou, etc) increased in January after being flat in December. It is not surprising that richer cities are coming back faster. As we all know, when it comes to real estate, it is “location, location, location”. The State Council announced an “Action Plan for Stabilizing Foreign Investment in 2025” that removes barriers to foreign investment in telecommunications, medical care, and education. Based on the humanoid robot surge today, “I’ll be back” tomorrow with Alibaba, NetEase, and Bilibili’s financial results!

Here’s an update on financial results based on corporate websites: VIPS reports on 2/21/2025, TCOM reports on 2/24/2025, and Tencent reports on 3/19/2025.

The Hang Seng and Hang Seng Tech had a rare diverge down -0.14% and up +0.59%, respectively, on volume down -22.46% from yesterday, which is 154% of the 1-year average. 254 stocks advanced, while 222 declined. Main Board short turnover decreased -43.72% from yesterday, which is 143% of the 1-year average, as 14% of turnover was short turnover (Hong Kong short turnover includes ETF short volume, which is driven by market makers’ ETF hedging). Value and small capitalization stocks gained more than growth and large capitalization stocks. The top sectors were technology, up +2.73%, consumer staples and real estate, both up +0.77%, while consumer discretionary fell -1.31%, energy fell -1.24%, and communication services fell -1.22%. The top sub-sectors were semiconductors, technology hardware, and national defense distribution, while coal, consumer discretionary distribution, and household appliances were the worst. Southbound Stock Connect volumes were 3X pre-stimulus levels as Mainland investors bought $1.327 billion of Hong Kong stocks and ETFs, led by Tencent, Hua Hong Semis, and Kuiashou, which were moderate net buys, while Xiaomi was a small/moderate net buy, Ubtech Robotics a small net buy, Xtalpi and SMIC a small net sell, and Meituan a large net sell.

Shanghai, Shenzhen, and the STAR Board gained +0.81%, +1.90%, and +2.31%, respectively, on volume down -4.31% from yesterday, which is 104% of the 1-year average. 4,390 stocks advanced, while 589 declined. Growth and small capitalization stocks outperformed value and large capitalization stocks. The top sectors were technology, up +2.24%, industrials, up +0.90%, and real estate, up +0.77%, while energy fell -1.19%, utilities fell -0.60%, and materials fell -0.01%. The top sub-sectors were industrial machinery, semiconductors, and auto parts, while oil/gas, coal, and soft drinks were the worst. Northbound Stock Connect volumes were well above average. CNY and the Asia dollar index fell versus the US dollar. Treasury bonds rallied. Copper and steel rose.

Live Webinar

Join us on Thursday, February 20th at 11 am EST:

A DeepSeek Driven China Internet Rerating?

Please click here to register

New Content

Read our latest article:

2025 China Outlook: A Recipe For Re-Rating

Please click here to read