China ETF News: US Asks China For Help, Alibaba Reports Q4
Key News
Asian equities were mostly lower overnight, with only Indonesia posting a gain; Malaysia also outperformed, though it was lower, while Japan and India underperformed.
Mainland China did not fall as much as Hong Kong overnight, though both markets were lower. This reflects the extreme risk-off mode that foreign investors are currently in due to the Iran conflict, which appears to be escalating. Mainland investors appear to have taken advantage of this overnight, buying a net $3 billion worth of Hong Kong-listed stocks and ETFs on weakness, including Alibaba, a top net purchase, after it missed estimates slightly on the top line. There was significant value and defensive bias overnight, as energy stocks outperformed and were the only sector to gain. Materials and precious metals stocks were crushed, likely stemming from potential supply issues coming from the Strait of Hormuz closure.
President Trump reached out to East Asian nations reliant on Persian Gulf oil imports to help shepherd oil tankers through the Strait of Hormuz. Of note, he included China in his plea for help with protecting the oil trade. This is an interesting development and bodes well for his upcoming visit. We believe this could be the first time in this century that the US has requested military and security assistance from China. The request makes sense, as over 40% of China's oil imports pass through the Strait. Of course, that share of imports pales in comparison to Japan and Korea, for whom over two-thirds of oil imports cross the Strait.
The People's Bank of China (PBOC), China's central bank, pledged to maintain stability in the operations of stock, bond, and currency markets amid headwinds and volatility. The central bank also reiterated its “moderately loose” monetary policy stance for the rest of 2026, implying that it could be executed through various tools, including cuts to the reserve requirement ratio (RRR) for banks, government bond purchases, cuts to the medium-term lending facility (MLF).
Delton Technology, a manufacturer of high-tech communications equipment, is scheduled to list shares publicly for the first time in Hong Kong tomorrow.
Alibaba launched Wukong, a platform for AI agents. According to the company, the platform will enable different agents to perform complex tasks with the highest security and privacy for businesses. It is designed specifically for business use and can be embedded within Ding Talk, Alibaba’s productivity suite, or used as a standalone application.
Alibaba Q4 Earnings Overview
% changes are year-over-year (YoY) unless otherwise indicated
- Revenue +2% to RMB 284.8 billion versus estimate RMB 289.8 billion
- Net Income RMB 15.7 billion
- Net Margin 6%
- Earnings per Share (EPS) RMB 5.7
Alibaba slightly missed estimates on both its top and bottom lines. However, it is important to note that the relatively low revenue growth was heavily influenced by the divestment from brick-and-mortar retail businesses, Sun Art and In Time, completed in early 2025. Excluding revenue from those businesses in the YoY comparison, the company increased revenue 6%. During the earnings call, management focused on the AI and cloud businesses, which grew revenue by 35%, marking the 10th consecutive quarter of double-digit growth and surpassing the 26% growth in the third quarter. Their goal is to surpass $100 billion in external revenue from cloud and AI. They also noted the launch of Qwen 3.5 plus, the latest version of its large language model (LLM), during the Lunar New Year holiday. The Qwen model has achieved an astonishing one billion cumulative downloads since the first version was launched, via Hugging Face. Meanwhile, investments in instant commerce and AI initiatives weighed on profitability during the quarter. Though the instant commerce investments could be paying off, as the segment saw improved unit economics during the quarter and growth of 56%.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | -2% |
| Hang Seng Tech | HSTECH Index | -2.2% |
| Hong Kong Turnover | HKTurn Index | 27.4% |
| Hong Kong Short Sale Turnover | HKSST Index | 99.3% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 24.2% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 3,344.83 |
| China (Shanghai) | SHCOMP Index | -1.4% |
| China (Shenzhen) | SZCOMP Index | -2.3% |
| China (STAR Board) | Star50 Index | -2.4% |
| Mainland Turnover | .chturn Index | 3.4% |
| Japan | NKY Index | -3.4% |
| India | SENSEX Index | -3.3% |
| Indonesia | JCI Index | 1.2% |
| Malaysia | FBMKLCI Index | -0.5% |
| Pakistan | KSE100 Index | -1% |
| Philippines | PCOMP Index | -0.6% |
| South Korea | KOSPI Index | -2.7% |
| Taiwan | TWSE Index | -1.9% |
| Thailand | SET Index | -1.6% |
| Singapore | STI Index | -0.7% |
| Australia | AS51 Index | -1.7% |
| Vietnam | VNINDEX Index | -0.9% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 119 | 106 |
| Advancing Stocks | 13 (Hang Seng) | 37 (CSI 300) |
| Declining Stocks | 77 (Hang Seng) | 258 (CSI 300) |
| Outperforming Factors | Value | Value |
| Underperforming Factors | Growth | Growth |
| Top Sectors | Energy, Information Technology, Financials | Energy, Utilities, Financials |
| Bottom Sectors | Materials, Communication Services, Real Estate | Materials, Real Estate, Information Technology |
| Top Subsectors | Coal, Petroleum & Petrochemicals, Autos | Oil & Gas, Coal, Diversified Financial Services |
| Bottom Subsectors | Non-Ferrous, Software, Paper & Packaging | Precious Metals, Base Metals, Fertilizers & Pesticides |
| Southbound Connect Buys | CNOOC, Alibaba, Tencent | N/A |
| Southbound Connect Sells | Xiaomi, SMIC, Shandong Molong Petroleum | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 164 | -2.96 |
| Communication Services | 11 | -6.02 |
| Consumer Discretionary | 28 | -2.46 |
| Consumer Staples | 12 | -1.93 |
| Energy | 6 | 1.82 |
| Financials | 25 | -0.99 |
| Health Care | 16 | -2.81 |
| Industrials | 19 | -1.99 |
| Information Technology | 15 | 0.14 |
| Materials | 14 | -6.94 |
| Real Estate | 1 | -3.76 |
| Utilities | 6 | -1.03 |
| Mainland China Listed | 11 | -2.13 |
| Communication Services | 11 | -1.74 |
| Consumer Discretionary | 26 | -1.73 |
| Consumer Staples | 18 | -1.5 |
| Energy | 11 | 1.58 |
| Financials | 64 | -0.92 |
| Health Care | 29 | -1.73 |
| Industrials | 60 | -2.25 |
| Information Technology | 113 | -2.32 |
| Materials | 58 | -5.66 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -6.8 |
| Alibaba HK | 9988 HK Equity | -4.1 |
| JD.com HK | 9618 HK Equity | -1.9 |
| NetEase HK | 9999 HK Equity | -2.4 |
| Yum China HK | 9987 HK Equity | -1.5 |
| Baozun HK | 9991 HK Equity | -6.7 |
| Baidu HK | 9888 HK Equity | -3.3 |
| Autohome HK | 2518 HK Equity | -2 |
| Bilibili HK | 9626 HK Equity | -5.7 |
| Trip.com HK | 9961 HK Equity | -2.9 |
| EDU HK | 9901 HK Equity | 1.3 |
| Xpeng HK | 9868 HK Equity | -0.3 |
| Weibo HK | 9898 HK Equity | -12.4 |
| Li Auto HK | 2015 HK Equity | -1.3 |
| Nio Auto HK | 9866 HK Equity | -1 |
| Zhihu HK | 2390 HK Equity | -1.2 |
| KE HK | 2423 HK Equity | -4.8 |
| Tencent Music Entertainment HK | 1698 HK Equity | -8.1 |
| Meituan HK | 3690 HK Equity | 0.5 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TENCENT HOLDINGS LTD | -6.8 |
| ALIBABA GROUP HOLDING LTD | -4.1 |
| XIAOMI CORP-CLASS B | 3.4 |
| CNOOC LTD-H | 4.5 |
| ZIJIN MINING GROUP CO LTD-H | -7.1 |
| SEMICONDUCTOR MANUFACTURI-H | -3.2 |
| MEITUAN-CLASS B | 0.5 |
| KUAISHOU TECHNOLOGY | -6.2 |
| SHANDONG MOLONG PETROLEUM-H | 12.9 |
| CHINA HONGQIAO GROUP LTD | -6.7 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| VISUAL CHINA GROUP CO LTD-A | -2.1 |
| SHANTUI CONSTRUCTION MACHI-A | -5.3 |
| EOPTOLINK TECHNOLOGY INC L-A | 2.2 |
| ZHONGJI INNOLIGHT CO LTD-A | -0.8 |
| ZIJIN MINING GROUP CO LTD-A | -7.4 |
| HGTECH CO LTD-A | 4.5 |
| CONTEMPORARY AMPEREX TECHN-A | -0.4 |
| BIWIN STORAGE TECHNOLOGY C-A | -5.8 |
| SUZHOU TFC OPTICAL COMMUNI-A | 1.5 |
| SUNGROW POWER SUPPLY CO LT-A | -0.9 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.90 versus 6.89 yesterday
- CNY per EUR 7.95 versus 7.91 yesterday
- Yield on 10-Year Government Bond 1.83% versus 1.82% yesterday
- Yield on 10-Year China Development Bank Bond 1.97% versus 1.97% yesterday
- Copper Price -3.87%
- Steel Price -0.10%
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