EV, tech stocks fret as China halts expansion

June Chen and Bloomberg

Chinese electric vehicle and tech stocks fell in Hong Kong yesterday on news that Beijing has asked its automakers to halt expansion plans in Europe amid escalating trade tensions.

However, companies from other sectors like Sands China (1928) and Giordano International (0709) saw their shares rise.

The benchmark Hang Seng Index fell by 1.3 percent or 270 points, with a HK$165 billion turnover.

Shares of Geely Automobile (0175) dropped by 4.4 percent, closing at HK$13.9. BYD Electronic (0285) fell more than 4 percent to HK$32.95. Li Auto (2015) edged down by 1.4 percent to HK$105.8.

The declines came amid news that Beijing has told manufacturers to stop active searches for production sites in the European Union, the signing of new deals and generally keep a low profile while negotiations over EU tariffs on Chinese EVs are ongoing, according to people familiar with the matter.

State-owned Dongfeng Motor (0489) has already halted plans to manufacture cars in Italy in response, the people said.

Meanwhile, shares of Chinese tech titans Alibaba (9988) and Meituan (3690) dropped 3.24 percent and 4 percent respectively.

Semiconductor Manufacturing International's (0981) shares dropped by more than 2 percent before closing at HK$28.5 apiece.

Earlier, Taiwan Semiconductor Manufacturing suspended shipments to a customer after it discovered that one of the chips supplied to the client ended up in a Huawei product.

Apple-related stocks dropped on news that Apple has reduced sales expectations for the iPhone 16 series by about 10 million units and sharply cut back on Vision Pro production, according to analyst Kuo Ming-chi and Reuters.

Shares of Apple supplier AAC Technologies (2018) and Cowell E Holdings (1415) were down by nearly 6 percent and more than 5 percent respectively.

In other news, Sands China (1928) saw its net profit increase by 16 percent year-on-year in the third quarter to US$268 million (HK$2.09 billion) with revenue edging down 1 percent to US$1.77 billion.

The company hopes that SCL can resume paying out dividends in the upcoming year. The developer's share price rose nearly 4 percent yesterday.

Fashion retailer Giordano International (0709) saw its revenue increase by 4.4 percent year-on-year in the third quarter to HK$907 million, driven by robust performances in key markets across Southeast Asia and its online business in the mainland.

Its share price advanced by nearly 6 percent yesterday.