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Business

Heng Seng Indexes pressured by the mainland cities’ lockdown as European markets remains stable after French election on sunday

The Hong Kong stock plummeted 663.71 points, or 3.03% today from its previous close, falling to the lowest level in the past three weeks as concerns over the lockdown of Shanghai and other main cities in China under a new round of pandemic gloomed over the country’s economic growth. Heng Seng Indexes opened at 21,688 in the morning and hit the lowest point of 21,132 in the mid day. Among the worst performers of the index, Country Garden Services Holdings Company(06098) tumbled 9.10% to HK$ 36.45. Alibaba (09988) slipped 5.11% to HK$98.5 and Xiaomi Cooperation (01810) lost 6.36% to HK$ 12.36. Concerning the worsening pandemic outbreak in mainland cities, the forecast for economic performance in April is pessimistic. “Comparing the country’s March’s Purchasing Managers' Index with other months, the figure still falls in the relatively bad range,” said Steven Wong, the portfolio manager from the Harris Fraser group. The latest Caixin China Services Purchasing Managers' Index, announced a few days ago, fell to 42 in March from 50.2 in February. The 50-point mark separates growth from contraction on a monthly basis. Wong indicated that the main concern is how long will it take for those cities to handle the outbreak under the zero-covid policy that was insisted on by the government. The effect on the consumer and the manufacturing related sectors will be the first to suffer enormously during the city-wide lockdowns. Shanghai, China’s economic center with 23million people, entered a 2-week lockdown as the city’s daily COVID cases surged to 26,090 on April 10. Consumption and manufacturing suffered a lot from the country’s zero-covid policy. “ We will see much more impact on the mainland real estate sector gradually, since it is the main contributing factor of China’s GDP, the government might need to loosen its monetary policies in …

Business

SF Intra-City’s shares plunge as the company lose more last year

Share price of Hangzhou SF Intra-city company (9699.HK) slumped 5% to HK$ 7.03 today, after the company announced its net loss for 2021 expanded to 899 million yuan, as shown in the annual report released yesterday. The largest third-party on-demand delivery service provider in China saw a high open of HK$ 7.70 this morning , up 4.05% from the previous close, but the price went down afterwards to as low as HK$ 6.96. The company reported a net loss of 899 million yuan for the year 2021, versus 758 million yuan in 2020, it said in the result. The company achieved revenue of 8.174 billion yuan, a year-on-year increase of 68.77% and its gross profit and gross profit margin have recorded positive numbers for the first time, at 94.809 million yuan and 1.2% respectively, as of December 31, 2021. SF Intra-City was officially listed on the Hong Kong Stock Exchange on December 14 last year. However, it sank on the first day and closed at HK$14.9 per share on the same day, down 9.26% from the offering price, with a total market value of HK$13.91 billion. In the past five years, the instant delivery industry has ushered in a period of rapid growth, and the overall size of orders in the industry was 27.9 billion last year, said the report from iresearch.  SF Intra-City has become the largest third-party on-demand delivery service platform in China, with a steady market share of over 11%, capturing the emerging business opportunity of the instant delivery service according to its press release yesterday. Zeng Hailin, CFO of the company, said in today’s phone conference that he is confident that the company's gross profit margin will continue to improve and the expense ratio will further decline, and will strive to achieve breakeven as soon as …

Society

Virus or Starvation: Hong Kong Suffers Under Worst Pandemic Wave

Empty stores try to tempt customers with 20% discounts. Many more are closed, their shutters covered in thick dust. The previously bustling streets only see a handful of pedestrians, many of whom have sealed themselves off with surgical masks and even goggles. This was an early day in March in Hong Kong, in the third Covid-19. Hong Kong is suffering from the worst wave of pandemic with more than a million reported cases. Despite being one of the world's wealthiest cities, the Covid-19 fatality rate exceeds 0.5%, marking the highest death rate in the world right now. The city has shuttered bars, closed down late-night dining and schools, leaving hundreds of thousands without a job and little in terms of a safety net. According to Sze Lai-shan, deputy director of the Society for Community Organization, the situation is dire. "As most people can get vaccinated, the chances of dying from Covid are low, but starving to death is higher now," said Sze, whose group helps 40,000 people a day. Hong Kong's unemployment is surging amid the semi-lockdown, reaching 4.5% in February, the highest since September 2021. The government is trying to stem the disaster in the city, with Financial Secretary Paul Chan Mo-po recently announcing a sixth round of the Anti-pandemic Fund of HK$27 billion to subsidize affected employers and individuals. Some HK$3billion is reserved for unemployment support. Eligible applicants must be unemployed for 30 consecutive days to get one-off HK$10,000 subsidies. Lam said to expand unemployment subsidy on Friday to benefit up to 1.3 million workers, covering three-quarters of workers earning HK$30,000 per month. Ronald Kong, 50, was recently temporarily laid off from his job at a barber shop, and had to make ends meet by giving haircuts in his apartment. While he's back at work now, he's deeply …

Business

Jinmao Property Services shares slump in Hong Kong trading debut

Shares of Jinmao Property Services Co.(00816), a Chinese property management company, plunged as much as 36% to HK$5.21 on its first trading day, as China's real estate markets remained under pressure. The company’s shares closed at HK$5.8 today, dropping 29% from its initial public price of HK$ 8.14. Jinmao Service was offering 101 million shares at a price ranging from HK$7.52 to HK$ 8.14, with a goal to raise up to HK$ 759.6 million. The share price was down as much as 6.1% to HK$7.6 in Gray Market trading on Wednesday, data compiled by Bloomberg Terminal shows. "The property services industry follows the trend of the housing market," said Steven Wong, the Portfolio Manager of Harris Fraser, "property services could be overvalued if property sales are weak." China's property market faces a great setback under Beijing's regulation as real estate companies have difficulties in paying debt, such as the default of property tycoon China Evergrande. Jinmao’s business scale is relatively small compared to other leading companies. Its managed area exceeds 23 million square metres in mainland China, including 20 provinces and 35 cities by September 2021, while Country Garden Services (06098) provides ten times more services, covering 644 million square metres by June 2021. Jinmao Property Services’ net profit increased from RMB 23 million yuan in 2019 to RMB 77 million yuan in 2020, while the net profit ratio was 8.2%, below that of Country Garden Services (06098), which is 17.2%. Meanwhile, the company's average management fee was RMB5.4 per square metres per month, higher than the average listing peer RMB3.8 yuan, according to a research report finished in 2022. Country Garden Services slipped 4.3% to HK$38.6 per share today. China Jinmao Holdings Group(00817), the parent company of Jinmao Property Services, which relies on real estate and hotel operations, recorded …

Business

Café de Coral shares slightly rebound from post-2008 financial crisis record low as the group stopping dine-in services due to pandemic

The share price of Café de Coral(00341), a Hong Kong fast-food chain, rebounded 2.17% compared to HK$ 11.98 yesterday as the company announced to stop dine-in services in most outlets. However, its shares still decreased nearly six percent in the past five trading days. Café de Coral and its congee restaurant Super Super Congee and Noodles suspended dine-in services and focused on takeaway from March 1, announced the Café de Coral Group on Feb 27. The Group would also adjust the business hours and modes of some casual dining branches. Leung Ke-ting, CEO of Café de Coral Group (Hong Kong), has publicly stated that the suspension on dine-in can reduce crowds in the store, protect the health of customers and employees, and reduce the pressure on employees to go to work. The group’s share fell as much as to HK$ 11.86 today, the lowest since the financial crisis in 2008. Restaurants in Hong Kong struggled to survive as the fifth wave of epidemic hit the city. It is estimated that there may be 5,000 restaurants that suspend business if the regulations are further tightened, said the Hong Kong Federation of Restaurant and Related Trades, reported by local media. LH Group Limited (01978) has suspended the operation of all its restaurants including Gyu-Kaku, Gyu-Kaku Jinan-Bou, On-Yasai, Mou Mou Club, etc. since yesterday. Its shares continued to drop today to HK$0.85, 1.16% lower than the previous close, after it plunged more than 11% to HK$0.82 yesterday morning. Tao Heung Holdings Limited (00573), a chain of Chinese restaurants, announced yesterday that it will be temporarily closed from today until the epidemic eases on Facebook. Its share price decreased 1.19% to a one-year low of HK$ 0.83 today. The government has expanded tightening social distancing rules to at least April 20. It ordered hair …

Society

Budget 2022: Hong Kong budget aims to tighten financial and economic ties with mainland China

Hong Kong’s Financial Secretary Paul Chan Mo-po addressed the HK$170 billion budget for the city in today's speech, with considerable mentions on integrating Hong Kong’s economy into the mainland China market and national-level development. Strengthening Hong Kong as a financial centre to integrate with mainland development Hong Kong will enhance its status as an international financial centre in line with the 14th Five‑Year Plan by strengthening its status as an offshore renminbi hub and asset management centre, the Financial Secretary said in his budget speech today. “In the future, we will explore ways to further expand the channels for the two-way flow of cross- boundary RMB funds, as well as continue to promote the development of offshore RMB products, including introducing more diversified RMB wealth management products and bonds,” Financial Secretary, Paul Chan said . The city launched the Southbound Trading of Bond Connect and the Cross‑boundary Wealth Management Connect Scheme in the Greater Bay Area (GBA) in September last year, which allows individual investors in the mainland to invest in offshore bonds through the Hong Kong bond market according to the Hong Kong Monetary Authority. Chan said the government is exploring more enhancement measures for these investment initiatives, including expanding quotas and scope of eligible investment products, inviting more companies to participate, and improving distribution. The Hong Kong Mortgage Corporation Limited will study and implement a pilot plan for infrastructure financing securitization within the year. According to the plan, the corporation is expected to issue infrastructure financing securitization products worth about HK$ 35.1 trillion (US$450 million) in the institutional market next year. “On the one hand, the local infrastructure financing market will be more vigorous and diversified, and at the same time, market capital will be introduced into high-quality infrastructure projects,” Chan said. Chan also proposed to set up …

Society

Five highlights from Hong Kong Budget Address 2022-23

In response to the fifth wave of outbreak in Hong Kong, Financial Secretary Paul Chan Mo-po unveiled today’s 2022-23 Budget online, a first for the city. Here are a few highlights of his speech: 1. Important figures The government’s total revenue is estimated to be HK$715.9 billion, a 3.3% increase compared with the previous year, while expenditures will increase 15.5% to HK$807.3 billion, Chan said.  Hong Kong will have an HK$18.9 billion surplus for 2021-22, Chan said, rather than the expected HK$101.6 billion deficit.  Fiscal reserves are expected to be HK$946.7 billion by the end of March. 2. Tax The rates of profits tax and salaries tax will remain unchanged in view of the current economic situation, Chan said. The government will also continue to waive up to HK$10,000 of salaries tax and tax under personal assessment. “With the outbreak of the fifth wave of the epidemic, businesses and individuals are generally under considerable financial pressure,” he said.  3. Progressive rating system A progressive rating system for domestic properties will be introduced to reflect the "affordable users pay" principle.  For properties with a rateable value of HK$550,000 or less, rates will remain uncharged at the present level of 5%  Property owners will pay 8% for a rateable value up to HK$800,00 and 12% over that. Chan said this will affect about 42,000 local properties, accounting for around 2% of private real estate, but will bring an increase of about $760 million in annual government revenue. 4. Anti-virus measure Chan added about HK$22 billion to the Food and Health Bureau to strengthen Covid-19 testing work, produce rapid antigen test kits and provide additional support for the Hospital Authority. 5. Green city The government will inject HK$200 million into the Green Tech Fund to build a liveable and green city and HK$1.5 …

People

Cross-border drivers stuck in quarantine, driving up fresh food prices

Fresh food prices in Hong Kong soared due to the increasing number of cross-border truckers undergoing compulsory 3-week quarantine, disrupting the fresh food supply chain. As of yesterday, 35 cross-border drivers have either tested positive or preliminary positive for Covid-19 at Shenzhen Bay Port, according to Shenzhen’s checkpoint office, scaling down the human power for transporting fresh food from mainland to Hong Kong. Around 300 to 400 drivers who were considered as close contacts are isolated, said Cheung Yuk-fai, representative from the Hong Kong-Guangdong Transportation Drivers and Employees Association in a RTHK programme yesterday.  The cross-border truck drivers are responsible for transporting fresh produce from the mainland to Hong Kong. “Less than 50 workers remain working,” Cheung added.  Ada Chan, the owner of a stall at On Tai Market in Kwun Tong, said the vegetable price doubled or tripled from the previous days in order to make a balance. “The transportation fee was raised from HK$10 to HK$80. Of course I have to raise the vegetable price,” said Chan. Hong Kong receives 92 per cent of vegetables, 94 per cent of fresh pork and 97 per cent of live freshwater fish from the mainland, according to the Food and Health Bureau.  “I would prefer buying more cured products and frozen food since I am afraid the fresh food will be insufficient one day. The vegetable price is already expensive for me now,” said Leung Yuk-yee, a customer in the supermarket of On Tai Estate at Kwun Tong.  Chinese green cabbage was sold for HK$6.60 per kilogram at the beginning of the month. It escalated to HK$21.70 as of Feb. 12, according to the Vegetable Marketing Organisation. “The government could give immediate subsidies to help poorer families, it may be hard for some of them to afford the food price,” said …

Business

Hong Kong stocks slip on Wuxi Biologics’ record 32 percent slump

Hong Kong stocks slid as the US Department of Commerce added two subsidiaries of Wuxi Biologics’ to the red-flag list, with other 32 Chinese companies. Today’s main turnover was HK$129.5 billion. The Hang Seng Index closed at 24,329.49, down 1.02% following weakness from technology stocks. The city’s Tech index dropped 1.67%, closing at 5,436.92. Alibaba and Meituan fell 3.30% and 2.13% respectively. The stock price of Alibaba Health Information Technology tumbled 7.52%. Before its suspension started from 10:51 am, Wuxi Biologics plunged 22.77% to HK$ 62.3 after its inclusion to the “Unverifyed list” of US government, a list of business wordwide subjected to stricter export control as US officials cannot do routine check. The company’s stock sank as much as 32% in Hong Kong before the halt, dragging down the city’s benchmark and health-care stocks. WuXi Biologics’ associates, WuXi AppTec slumped 11.36% while JW (Cayman) Therapeutics fell 4.01%. Auto stocks also shrank. Great Wall was down 3.55% while BYD and Geely shrank 2.49% and 2.2% respectively. The state’s decision affected mainland stocks. Crypto stocks fell while semiconductor stocks followed. Insurance stocks demonstrated movements in opposite directions. The Shanghai Composite Index was up 0.67%, closing at 3,452.63, while the SZSE Composite Index inched down 0.24% to 2,280.51. The CSI Health Care Index, which tracks the performance of pharmaceutical companies listed in Shanghai and Shenzhen, decreased 1.32% to a 22-month low.

Business

Hong Kong stocks fall three trading days in a row

Hong Kong stocks continued to drop as technology stocks shrank and the market was concerned about upcoming tighter monetary policy in the U.S., in light of inflation. The Heng Seng Index closed at 24112.78, showing a 0.43% decrease. Though the market grew 0.69% to today’s peak, 24385.05, from its previous close in the morning trading session, the growth was erased by the drop at noon. The lowest of the day was 24009.71. The market was dragged down by losses in the technology sector. Tencent recorded a decreased 2.75% reduction to HK$HKD 452.8 from yesterday’s HK$HKD 465.6. This was followed by Meituan and Alibaba, declining 0.375% to HK$HKD 215.8 and 1.63%to HK$126.4 respectively. Several financial media reported that Morgan Stanley cut the target price of Tencent from HK$650 to HK$600 as the broker predicted that Tencent’s revenue will report a slower growth of 6% for the last quarter in 2021. This is due to delays in revenue recognition of new games. Regulatory policies regarding games and advertisements also came into play. Country garden from the property industry is the best performing blue chip of the day. It displayed a 4.94% growth, reaching HK$ 6.16. The company announced on Monday that it has repurchased US$ 10 million senior note (HK$ 389 million) from the market. HSCE fell 0.18%. The SSE Composite Index and CSI 300 Index inched up 0.80% and 0.97% respectively.