China ETF News: Alibaba, JD, & Meituan Rocket On “The Takeout War Is Over”
By Brendan Ahern
Key News
Asian equities had a strong day on the hope that Middle East tensions are simmering down.
Let’s not bury the lead: Mainland media source, the Economic Daily, which describes itself as the “official outlet for the government to publicize its economic policies,” published an article titled “The Takeout War is Over.” This article outlines the toll that the restaurant delivery war has taken on drivers, merchants, and the balance sheets and market capitalizations of Meituan, JD.com, and Alibaba. Yesterday, we noted that the Beijing Municipal Administration for Market Regulation met with 12 internet companies, including Alibaba’s Taobao, Trip.com, Meituan, JD.com, ByteDance’s Douyin, and Kuaishou, regarding the ongoing delivery price wars. This declaration appears to be the direct result of those meetings.
Additionally, the State Administration for Market Regulation (SAMR) held a symposium yesterday on “price supervision and anti-unfair competition.” In a press release, SAMR stated “Price supervision and competition work should focus on building a strong domestic market,” and efforts should be made to “thoroughly rectify involutionary competition." Instant commerce subsidies have weighed significantly on companies' bottom lines, as adjusted net income and adjusted EPS have both cratered.
Equity strategists are stuck focusing on the MSCI China Index and earnings per share (EPS). The overall EPS level for the members of the MSCI China Consumer Discretionary Index has been decimated by Alibaba’s 39% weight and its EPS decline in 2025, as well as Meituan, which is 8% of the index, and JD.com, which is 4.7% of the index. One caveat is that Alibaba’s artificial intelligence (AI) capex has also been a factor in the steep fall in EPS. Ultimately, the restaurant delivery and instant commerce price war has affected investors’ perception of China investing, both explicitly through the individual companies' EPS declines and implicitly through the knock-on effect of strategists who focus on MSCI China EPS.
Meituan gained +13.92% on volume that increased +466% from yesterday, which is 5X the 1-year average. Alibaba gained +4.63% on volume up +70% from yesterday, though its Hong Kong stock had several big put trades, and JD.com gained +4.85% on volume up +124% from yesterday. Meituan and Alibaba saw strong inflows from Mainland investors via the Southbound Stock Connect, though JD.com is not part of the program because its Hong Kong listing is not a dual-class share structure. Tencent fell -1.65% and might have been affected by the rotation into other internet names.
Hong Kong had a strong move on good volumes as beneficiaries of Middle East tensions fell, such as oil and gas stocks. CATL fell by -1.16% in both Hong Kong and Mainland China. Xiaomi fell by -0.49% following yesterday’s after-hours financial results. I was a surprised that electrice vehicle (EV) stocks were mixed, as BYD fell by -0.56%.
Labubu doll maker Pop Mart fell by -22.51% after a slight fiscal year revenue miss, though adjusted net income and adjusted EPS beat. Ping An Good Doctor gained +10.87% after reporting better-than-expected 2025 financial results after yesterday’s Hong Kong close. Non-ferrous metal stocks gained in both markets.
Hong Kong’s Q1 IPOs raised more than HKD 100 billion, an increase of +500% year-over-year (YoY). Southbound Stock Connect bought a healthy net $2.9 billion worth of Hong Kong-listed ETFs and stocks. Mainland China had a strong day as well, led by semiconductor and technology hardware stocks. The ETFs favored by the National Team saw mixed volumes and flows, along with broader Mainland-listed China equity ETFs, though a Mainland media article noted strong inflows and volumes over three days as an indication of buying support. I do not know whether one can be so bold as to say that there is a line in the sand for the Mainland.
COSCO Shipping announced it would resume shipping to the UAE, Saudi Arabia, Bahrain, Qatar, Kuwait, and Iraq, after Iran’s UN mission stated that “non-hostile vessels” can pass through the Strait of Hormuz.
Yesterday’s Wall Street Journal had a good article titled “The Chinese Billionaire Who Says America’s EV Market Is Doomed Without Him” on CATL and its founder Robin Zeng. The article focuses on CATL’s battery technology, its technology licensing partnerships with Tesla, Ford, and GM, and its current inability to build a plant in the US.
E-Commerce giant PDD reported earnings before the US market open with a top-line beat but a bottom-line miss.
“To meet the evolving needs of consumers, we must continually explore and make investments,” said Ms. Jun Liu, VP of Finance of PDD Holdings. “These investments are firm and long-term, and will inevitably affect our financial performance.”
- Revenue grew 12% YoY to RMB 123.9B ($17.7B) from RMB 110.6B and versus expectations of RMB 123.7B
- Adjusted Net Income decreased -12% YoY to RMB 26.2B ($3.76B) from RMB 29.8B and versus expectations of 31.2B
- Adjusted Net EPS decreased to RMB 17.69 ($2.53) from RMB 20.15 and versus expectations of RMB 20.88
Online video maker Kuaishou (1024 HK) reported Q4 results after the Hong Kong close that beat analyst expectations.
- Revenue grew +11.8% YoY to RMB 39.5B from RMB 35.3B and versus expectations of RMB 38.8B
- Adjusted Net income grew +16.2% YoY to RMB 5.4B from RMB 4.6B, and versus expectations of RMB 5.3B
- Adjusted EPS grew YoY to RMB from RMB 1.04 and versus expectations of RMB 1.24
- Average Daily Average Users increased to 407mm YoY from 401mm
- Average Monthly Users increased 740mm YoY from 735mm
- Total E-Commerce GMV increased to RMB 521B YoY from RMB 462B
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 1.1% |
| Hang Seng Tech | HSTECH Index | 1.9% |
| Hong Kong Turnover | HKTurn Index | 15.8% |
| Hong Kong Short Sale Turnover | HKSST Index | 24.1% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 18.9% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 2,850.90 |
| China (Shanghai) | SHCOMP Index | 1.3% |
| China (Shenzhen) | SZCOMP Index | 2% |
| China (STAR Board) | Star50 Index | 1.9% |
| Mainland Turnover | .chturn Index | 4.6% |
| Japan | NKY Index | 2.9% |
| India | SENSEX Index | 1.6% |
| Indonesia | JCI Index | 2.7% |
| Malaysia | FBMKLCI Index | 0.5% |
| Pakistan | KSE100 Index | 2.8% |
| Philippines | PCOMP Index | 1.8% |
| South Korea | KOSPI Index | 1.6% |
| Taiwan | TWSE Index | 2.5% |
| Thailand | SET Index | 3.4% |
| Singapore | STI Index | 0.9% |
| Australia | AS51 Index | 1.8% |
| Vietnam | VNINDEX Index | 2.7% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 136 | 112 |
| Advancing Stocks | 377 | 4484 |
| Declining Stocks | 132 | 607 |
| Outperforming Factors | Growth, Value, Low Volatility | Liquidity, Momentum, EPS Revision |
| Underperforming Factors | Buyback, Momentum, EPS Revision | |
| Top Sectors | Discretionary, Materials, Staples | Tech, Materials, Communication |
| Bottom Sectors | Communication, Energy | Energy |
| Top Subsectors | Consumer Discretionary Distribution, Food, Semis | Food, Internet, Communication Equipment |
| Bottom Subsectors | Consumer Durables/Apparel, National Defense, Consumer Services | Oil/Gas, Coal, Marine |
| Southbound Connect Buys | HK Tracker ETF (Massie), HS China Enterprise, Meituan, Pop Mart (Very Large), Alibaba, HS Tech ETF, Xiaomi (Large), YOFC (Tiny) | N/A |
| Southbound Connect Sells | CNOOC (Large), Tencent (Moderate) | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 164 | 1.21 |
| Communication Services | 11 | -1.23 |
| Consumer Discretionary | 28 | 3.04 |
| Consumer Staples | 12 | 2.7 |
| Energy | 6 | -0.12 |
| Financials | 25 | 1.68 |
| Health Care | 16 | 0.4 |
| Industrials | 19 | 0.76 |
| Information Technology | 15 | 1.3 |
| Materials | 14 | 2.76 |
| Real Estate | 1 | 0.96 |
| Utilities | 6 | 1.52 |
| Mainland China Listed | 11 | 1.33 |
| Communication Services | 11 | 1.6 |
| Consumer Discretionary | 26 | 0.72 |
| Consumer Staples | 18 | 0.42 |
| Energy | 11 | -2.36 |
| Financials | 64 | 0.69 |
| Health Care | 29 | 0.6 |
| Industrials | 60 | 1.33 |
| Information Technology | 113 | 2.55 |
| Materials | 58 | 2.19 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -1.7 |
| Alibaba HK | 9988 HK Equity | 4.6 |
| JD.com HK | 9618 HK Equity | 4.9 |
| NetEase HK | 9999 HK Equity | -0.5 |
| Yum China HK | 9987 HK Equity | -1.2 |
| Baozun HK | 9991 HK Equity | 0 |
| Baidu HK | 9888 HK Equity | -0.5 |
| Autohome HK | 2518 HK Equity | -4.4 |
| Bilibili HK | 9626 HK Equity | -0.6 |
| Trip.com HK | 9961 HK Equity | 0.8 |
| EDU HK | 9901 HK Equity | 0 |
| Xpeng HK | 9868 HK Equity | -2.3 |
| Weibo HK | 9898 HK Equity | 0.2 |
| Li Auto HK | 2015 HK Equity | 4.2 |
| Nio Auto HK | 9866 HK Equity | 1.9 |
| Zhihu HK | 2390 HK Equity | 5.1 |
| KE HK | 2423 HK Equity | 2.1 |
| Tencent Music Entertainment HK | 1698 HK Equity | -0.3 |
| Meituan HK | 3690 HK Equity | 13.9 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| POP MART INTERNATIONAL GROUP | -22.5 |
| MEITUAN-CLASS B | 13.9 |
| TENCENT HOLDINGS LTD | -1.7 |
| ALIBABA GROUP HOLDING LTD | 4.6 |
| XIAOMI CORP-CLASS B | -0.5 |
| CNOOC LTD-H | -3.2 |
| YANGTZE OPTICAL FIBRE AND-H | 12.1 |
| BYD CO LTD-H | -0.6 |
| ZIJIN MINING GROUP CO LTD-H | 2.2 |
| SEMICONDUCTOR MANUFACTURI-H | 2.4 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| VISUAL CHINA GROUP CO LTD-A | 1.6 |
| SHANTUI CONSTRUCTION MACHI-A | 2.9 |
| EOPTOLINK TECHNOLOGY INC L-A | 1.8 |
| ZHONGJI INNOLIGHT CO LTD-A | 4.2 |
| ZIJIN MINING GROUP CO LTD-A | 3.2 |
| BIWIN STORAGE TECHNOLOGY C-A | 9.4 |
| LUXSHARE PRECISION INDUSTR-A | 10 |
| SUZHOU TFC OPTICAL COMMUNI-A | 6.5 |
| HGTECH CO LTD-A | 3.3 |
| SUNGROW POWER SUPPLY CO LT-A | 1.5 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.89 versus 6.89 yesterday
- CNY per EUR 8.00 versus 7.99 yesterday
- Yield on 10-Year Government Bond 1.82% versus 1.83% yesterday
- Yield on 10-Year China Development Bank Bond 1.97% versus 1.97% yesterday
- Copper Price +0.72%
- Steel Price -0.19%
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