Snap Snags Growth Stocks While NetEase and Kuaishou Beat Expectations


Visit: KraneShares


Chief Investment Officer

Key News

Asian equities curbed the enthusiasm we saw in US equities yesterday as only Indonesia managed a positive day. Asian growth stocks were hit hard following Snap’s missed financial results which weighed on sentiment. Growth sectors/stocks in China and Hong Kong underperformed as energy was the only positive sector in both markets. 

The Quad leader meeting (India, Australia, Japan, and the US) likely weighed on sentiment. This meeting will be followed by the thirteen countries’ Indo-Pacific trade effort that excludes China. Efforts to ostracize China from Asia’s economy are unlikely to succeed as it ignores economic reality. Japan imports and exports more goods to China than the US! 

Both JP Morgan and UBS downgraded their 2022 China GDP estimates to 3.7% and 3%, which also was a factor in sentiment. Shanghai’s lockdown curtailed economic activity as Shanghai industrial production declined by -60% in April year-over-year. Yesterday, we mentioned the State Council release outlining thirty-three fiscal and monetary measures to be implemented to support the economy. The market was not interested in the support. The market’s yawn/ignoring their talk should cause them to step on the implementation gas pedal. The only sector that responded to the policy support release was traditional, non-EV automakers, as car sale taxes will be reduced.

EVs already enjoy this sales tax reduction fee. EV maker Xpev’s (XPEV US, 9868 HK) financial results beat Q1 estimates, but its Q2 revenue outlook weighed on sentiment. According to a report from The Standard, the market also ignored a release from the National Energy Administration that solar investment increased 204% to RMB 29B year-to-date through April. Breadth in both China and Hong Kong was awful as only 310 China stocks advanced and 52 in Hong Kong. On the plus side, we had both Kuaishou (1024 HK), and NetEase’s (NTES US, 9999 HK) financial results beating analyst expectations this morning pre-US market open/post-Hong Kong close. Healthcare was off as Junshi Bio (688180 CH) was hit -20% in a classic buy the rumor/sell the news after positive Covid trial results. Bit of a head-scratcher, though, par for the course today.

The Hang Seng and Hang Seng Index closed -1.75% and -3.48% on volume +8.09%, 79% of the 1-year average. There were only 52 advancing stocks, while 430 stocks declined. Hong Kong short sale volume increased +4.34%, which is 87% of the 1-year average. Value factors outperformed growth factors while large caps “outperformed”/i.e., fell less than small caps. Energy was the only sector in the green, while healthcare -4.66%, tech -3.44%, discretionary -3%, and staples -2.84%. Southbound Stock Connect volumes were moderate as Mainland investors were small net sellers of Tencent and Meituan. They were small net buyers of Kuiashou.

Shanghai, Shenzhen, and STAR Board declined -2.41%, -3.62%, and -4.73% on volume +15.28%, 92% of the 1-year average. There were only 310 advancing stocks, while 4,153 stocks declined. Energy was the only positive sector +0.01% while healthcare -4.24%, tech -3.79%, industrials -3.25% and materials -3.24%. Foreign investors sold a healthy -$1.433B via Northbound Stock Connect. Treasury bonds were flat while CNY declined -0.28% versus the US $ and copper gained +0.03%.

MSCI china all shares index
asia indices 1 day change %
us hong kong dually llisted
most heavily traded h-shares
most heavily traded a-shares

Last Night’s Exchange Rates, Prices, & Yields

  • CNY/USD 6.67 versus 6.65 yesterday
  • CNY/EUR 7.14 versus 7.09 yesterday
  • Yield on 10-Year Government Bond 2.77% versus 2.77% yesterday
  • Yield on 10-Year China Development Bank Bond 2.98% versus 2.97% yesterday
  • Copper Price +0.03% overnight

Originally Posted on May 24, 2022 – Snap Snags Growth Stocks While NetEase and Kuaishou Beat Expectations

Author Positions as of 5/24/22 are KBA, KALL, KCNY, KFYP, KCNY, KEMQ, BZUN, HSBC, KWEB, KHYB, LI US

Charts Source: KraneShares

Disclosure: KraneShares

Content on China Last Night is for informational purposes only and should not be construed as investment advice. This material represents an assessment of the market environment at a specific time and is not intended to be a forecast of future events or a guarantee of future results; material is as of the dates noted and is subject to change without notice. This information should not be relied upon by the reader as research or investment advice regarding the funds or any security in particular.

This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities. Investing involves risk, including possible loss of principal.

This material contains general information only and does not take into account an individual’s financial circumstances. This information should not be relied upon as a primary basis for an investment decision. Rather, an assessment should be made as to whether the information is appropriate in individual circumstances and consideration should be given to talking to a financial advisor before making an investment decision.

Forward-looking statements (including Krane’s opinions, expectations, beliefs, plans, objectives, assumptions, or projections regarding future events or future results) contained in this presentation are based on a variety of estimates and assumptions by Krane. These statements generally are identified by words such as “believes,” “expects,” “predicts,” “intends,” “projects,” “plans,” “estimates,” “aims,” “foresees,” “anticipates,” “targets,” “should,” “likely,” and similar expressions. These also include statements about the future, including what “will” happen, which reflect Krane’s current beliefs. These estimates and assumptions are inherently uncertain and are subject to numerous business, industry, market, regulatory, geo-political, competitive, and financial risks that are outside of Krane’s control. The inclusion of forward-looking statements herein should not be regarded as an indication that Krane considers forward-looking statements to be a reliable prediction of future events and forward-looking statements should not be relied upon as such. Neither Krane nor any of its representatives has made or makes any representation to any person regarding forward-looking statements and neither of them intends to update or otherwise revise such forward-looking statements to reflect circumstances existing after the date when made or to reflect the occurrence of future events, even in the event that any or all of the assumptions underlying such forward-looking statements are later shown to be in error. Any investment strategies discussed herein are as of the date of the writing of this presentation and may be changed, modified, or exited at any time without notice.

Disclosure: Interactive Brokers

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from KraneShares and is being posted with permission from KraneShares. The views expressed in this material are solely those of the author and/or KraneShares and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

In accordance with EU regulation: The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research.

Any trading symbols displayed are for illustrative purposes only and are not intended to portray recommendations.

Disclosure: Forex

There is a substantial risk of loss in foreign exchange trading. The settlement date of foreign exchange trades can vary due to time zone differences and bank holidays. When trading across foreign exchange markets, this may necessitate borrowing funds to settle foreign exchange trades. The interest rate on borrowed funds must be considered when computing the cost of trades across multiple markets.

Disclosure: Futures Trading

Futures are not suitable for all investors. The amount you may lose may be greater than your initial investment. Before trading futures, please read the CFTC Risk Disclosure. A copy and additional information are available at