The Hang Seng Index fell 0.6 per cent to 16,512.92 at the noon break. The Hang Seng Tech Index dropped 1.7 per cent and the Shanghai Composite Index retreated 0.5 per cent.
Trading was light ahead of the Easter holiday break on Friday and Monday. Trading volumes on the Hong Kong market were about 30 per cent below the 30-day average, according to Bloomberg data.
Alibaba, which has an 8.3 per cent representation on the benchmark as the second-largest constituent, dropped 2.2 per cent to HK$68.75 after withdrawing the listings application for Cainiao. It instead unveiled plans to buy the remaining shares from the unit’s minority shareholders “to double down on its investment in Cainiao”, given the unit’s “strategic importance” in a move that would entail cash burn without unlocking value for its shareholders.
“The company originally wanted to separately list Cainiao in the Hong Kong market to unlock value for Baba shareholders,” said Nomura analysts in a note. “However, management conceded that the challenging capital market made this plan very difficult to implement.”
BYD’s net income rose 18.7 per cent year-on-year in the October-to-December period, the slowest pace since the last quarter of 2021, according to Bloomberg data. Its peer Li Auto lost 3.1 per cent to HK$118.
“Earnings may still languish through 2024 and an acceleration in growth may not materialise until 2025,” said Fu Jingtao, a strategist at Shenwan Hongyuan Group in Shanghai. “Aggregate demand will remain muted amid China’s transition to a new growth model.”
Industrial profits for Chinese companies increased 10.2 per cent from a year earlier in the first two month, recovering from a 4.3 per cent decrease for 2023, the statistics bureau said on Wednesday.
“After an upside surprise to industrial production to start the year, a further recovery of industrial profits sends another signal that we are indeed seeing a gradual recovery after a bottoming out last year,” said ING analysts in a note.
Other major Asian markets were broadly higher. Japan’s Nikkei 225 climbed 1.1 per cent and Australia’s S&P/ASX 200 added 0.4 per cent, while South Korea’s Kospi retreated 0.1 per cent.