AIA, BYD, CNOOC lift Hong Kong stocks on earnings optimism while distiller ZJLD sinks 18 per cent on listing debut

Hong Kong stocks climbed for a second day as earnings reports fuelled optimism even as some funds worried about China's economic outlook. Liquor distiller ZJLD Group sank as much as 18 per cent on its debut after completing a US$680 million stock offering.

The Hang Seng Index closed 0.4 per cent higher at 19,813.38 in Thursday trading, clawing its way up from a four-week low. The Tech Index pared losses to 0.3 per cent while the Shanghai Composite Index gained 0.7 per cent.

AIA Group climbed 1.6 per cent to HK$85.20 while peer Ping An Insurance rallied by the most in four months with a 9 per cent surge to HK$56.20, following their robust report cards. Limiting gains, Alibaba Group dropped 1.8 per cent to HK$81.80 while Baidu slumped 1.7 per cent to HK$115.50 and Tencent lost 0.9 per cent to HK$345.

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Stocks earlier swung between gains and losses as investors absorbed a slew of better corporate earnings from industry heavyweights like AIA Group, Ping An and HSBC. BYD, CNOOC, Sinopec and China Life Insurance are among firms issuing their reports later today.

"From the conversations I have with clients, they are just a bit unsure where to go next because policy wise, it is not clear and no one quite has the handle on that," said Ken shih, head of wealth management at Saxo Markets in Hong Kong. "Many of them are a bit more cautious in terms of how they invest."

BYD jumped 1.4 per cent to HK$236.00 as China's top-selling electric-car maker attracted big pre-orders after cutting prices on some of its vehicles, putting it on course to overtake Volkswagen as the top domestic brand. China Life added 5.1 per cent to HK$14.72. Oil explorer CNOOC slipped 0.1 per cent to HK$12.42.

Onshore investors weak confidence among onshore money managers on China's economic outlook. Investors were concerned about potential policy tightening and a banking crackdown, Goldman Sachs said in a report on April 26, based on recent conversations with its clients in Beijing.

Elsewhere, ZJLD Group tumbled 18 per cent to HK$8.88 after earlier sliding to a low of HK$8.82, on concerns its offering price of HK$10.82 was too aggressive. Investors paid for the shares at about 45 times earnings, versus about 35 times for market leader Kweichow Moutai.

MedSci Healthcare, the other market debutant in Hong Kong, rose 1.1 per cent to HK$9.20.

Major Asian markets were mixed. The Nikkei 225 in Japan gained 0.1 per cent and the Kospi in South Korea added 0.4 per cent, while the S&P/ASX 200 in Australia lost 0.3 per cent.

Additional reporting by Jiaxing Li

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2023 South China Morning Post Publishers Ltd. All rights reserved.

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