Airlines stall. On the heels of an April Sell rating for China Southern, HK 01055; Daiwa downgraded China Eastern, HK 00670 to underperform, with a target price of 4 hkd from 3.8. The research firm considered its expansion capacity for 2016 as too aggressive and the positive reaction to Shanghai Disney’s, DIS, opening in June, 2016, to be overly optimistic.
China Shenhua, HK 01088 , rose over 4% as it contemplated a spin-off of wind power assets. Shenhua Group appointed CICC, Goldman Sachs and UBS to reconstruct its wind power assets, Reuters’ IFR reported. IFR had reported in July 2015 that Shenhua Group plans to spin-off the wind power assets for listing in Hong Kong, raising about HK$6.24-7.8 billion. (Shenhua is a component of both the H.S.I, up .31%. and the H.S.E.I., up .4%).
A day after signing an infrastructure agreement with Henan provincial government, China Railway, HK 00390, rose 3.37%. (On April 1st, 2016, Citi rated it a buy, target price of 7.8hkd vs. last close of 6.14).
As analyzed here, Chow Tai Fook, HK 1929 , reported a whopping 26% drop in same store sales for the group in the 1st quarter of 2016. This $7 Billion market cap company performance is a negative sign for Chinese discretionary and luxury stocks.