{"id":203188,"date":"2024-03-07T10:15:00","date_gmt":"2024-03-07T15:15:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=203188"},"modified":"2024-03-08T13:39:46","modified_gmt":"2024-03-08T18:39:46","slug":"bilibili-full-truck-alliance-beat-expectations-wuxi-hit-by-potential-us-policy","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/bilibili-full-truck-alliance-beat-expectations-wuxi-hit-by-potential-us-policy\/","title":{"rendered":"Bilibili & Full Truck Alliance Beat Expectations, WuXi Hit By Potential US Policy"},"content":{"rendered":"\n

Key News<\/h2>\n\n\n\n

Asian equities were largely higher except for Japan, China, and Hong Kong. It was a fairly quiet night as the “Two Sessions” important policy meetings in China roll on.<\/p>\n\n\n\n

February Export\/Import data beat expectations. Exports increased by +7.1% year-to-date (YTD) versus last year versus an expected increase of only +1.9%. Meanwhile, imports increased +3.5% versus an expected +2%. This is a promising sign for the global economy!<\/p>\n\n\n\n

JD.com gained +6% in Hong Kong after reporting great results yesterday. Hong Kong and Mainland China slipped in afternoon trading as several macroeconomic headlines weighed on investor sentiment.<\/p>\n\n\n\n

Health care was the worst-performing sector in both Hong Kong and Mainland China, falling -5.83% and -2.81% in each market, respectively, as a US Senate advanced a bill that would bar Chinese biotech companies from doing business with health care providers that accept medicaid and medicare. However, as discussed below, it has a LONG way to go before coming law. Meanwhile, concerns about EU tariffs on Chinese electric vehicles (EVs) weighed on the ecosystem in both Hong Kong and Mainland China. Foreign Minister Wang Yi\u2019s press conference noted the increase in US government actions against China despite progress made at APEC. The market lacked a catalyst to overcome the negative headlines that weighed on sentiment.<\/p>\n\n\n\n

After the Hong Kong close, Bilibili and Full Truck Alliance reported their Q4 financial results, discussed below. The National Team likely intervened in the afternoon as two of their favorite ETFs saw spikes in volume during the afternoon dip, indicating the continued effort to stabilize the market. Mainland investors bought the dip in Hong Kong via Southbound Stock Connect, as Tencent posting its third net buying day via Southbound Stock Connect, though, yes, it was a small amount. Tencent has seen net selling year to date.<\/p>\n\n\n\n

The US Senate Homeland Security Committee passed a bill that would bar WuXi Biologics, WuXi AppTec, and other Chinese biotech companies from doing business with US government-funded healthcare providers to prevent the companies from sending US citizens\u2019 DNA data to the Chinese government. That\u2019s not a typo! The bill has a long way to go before it is law, as the House and Senate would have to pass it, and then the President has to sign it into law. The Wuxi companies are domiciled in the Cayman Islands and have facilities pretty much everywhere (the US, Ireland, Germany, etc.).<\/p>\n\n\n\n

Despite this, WuXi Biologics (2269 HK) fell -21.47% and WuXi AppTec (2359 HK) fell -20.56% overnight due to their high US revenue exposure. WuXi AppTec\u2019s seven largest shareholders include six US asset managers, according to the latest SEC 13F data. Those six US asset managers\u2019 shareholders lost $231 million today based on their ownership of 154 million shares! Since January 24th<\/sup>, those six US asset managers\u2019 shareholders have lost $693 million on the US Congress’ actions! Many US asset managers own the shares, and I don\u2019t have time to calculate them. WuXi AppTech has denied the allegations against it while employing thousands of Americans in its US facilities. It hasn\u2019t sued, which it should, in my opinion.<\/p>\n\n\n\n

One must wonder how much of Apple\u2019s recent China market share loss is a consequence of US restrictions on Huawei, which forced the company to innovate and become a formidable opponent. Today\u2019s Wall Street Journal has an article on China\u2019s push for technology independence. Gee, I wonder why? The article briefly acknowledges that the actions result from recent US policies restricting their technology purchases and the US government’s spying on China, as revealed by Edward Snowden.<\/p>\n\n\n\n

Bilbili Earnings Highlights<\/h2>\n\n\n\n

Bilibili (BILI US, 9626 HK) calls itself \u201can iconic brand and a leading video community for young generations in China.\u201d The company allows users, particularly those who enjoy video games, to make videos, watch others play video games, and participate in online group videos. The company released Q4 financial results after the Hong Kong close\/US market open. % changes are year-over-year.<\/p>\n\n\n\n