Some Chinese Stocks Are Doing Well Out of This U.S. Trade War

(Bloomberg) -- Not all Chinese stocks are getting hammered by the escalation in a trade war with the U.S.

Investors piled into agricultural and gold stocks as other equities plunged following U.S. President Donald Trump’s decision to slap tariffs on at least $50 billion of Chinese imports, and then China announcing levies of its own on products including U.S. nuts and wine. Also included in Beijing’s 128-item hit list are steel products, pork, fresh and dried fruits, and ginseng.

The Shanghai Composite Index was down 4 percent as of 2:10 p.m. local time, leading declines among major equity markets and nearing its worst loss in more than two years. The Hang Seng Index in Hong Kong slid 3.3 percent, without a single stock posting a gain, unlike some large caps on the mainland.

Here are some of the companies faring relatively well Friday, and some that aren’t.

WINNERS

Agricultural companies

Seed producers and pig breeders jumped on the mainland as Beijing announced reciprocal tariffs on U.S. imports. Investors are speculating that the levies will make U.S. products less price competitive, said Zhang Gang, an analyst at Central China Securities Holdings in Shanghai.

Of the top 10 biggest gainers on the Shanghai Composite Index, seven were agricultural companies. Gansu Dunhuang Seed Co. rose the 10 percent daily limit, as did pig farm operator Hunan New Wellful Co. Harbin High-tech Group Co., a soybean processor, also jumped 10 percent. China is the biggest buyer of U.S. soybeans.

Gold miners

Investors flocked to safe havens like gold producers as sentiment turned risk-off, Zhang said. Gold producers topped the CSI 300 Index, led by Shandong Gold Mining Co. and Zhongjin Gold Corp., which climbed 6.4 percent and 5.6 percent, respectively.

Wine makers

Organic wine producer Wei Long Grape Wine Co. was among the gainers, advancing as much as 9.7 percent in Shanghai, while milk and wine producer V V Food & Beverage Co. added as much as 8.7 percent.

LOSERS

Electronic component makers

Apple supplier AAC Technologies Holdings Inc., which got 62 percent of its revenue from the U.S. in 2016, slumped 8.2 percent in Hong Kong, the most since Dec. 6. AAC led declines on the Hang Seng Index. China Sinostar Group Co., which sells a wide range of electronic products, slumped 9 percent in Hong Kong.

Home appliances

Machinery equipment, including electronic components and home appliances, accounts for 48 percent of Chinese exports to the U.S., according to China International Capital Corp. Midea Group Co. and Gree Electric Appliances Inc. slumped 5.1 percent and 4.3 percent, respectively, on the mainland.

Furnishings, Shoes, Garments

Home furnishings producers listed in Hong Kong received 32 percent of their revenue from the U.S. on average in 2016, while shoemakers got 11 percent. Li & Fung Ltd., an exporter of goods from home furnishings to shoes, slumped 9.3 percent. Shoemaker Baofeng Modern International Holdings Co. plunged 7.8 percent and garment producer Carry Wealth Holdings lost 5 percent.

©2018 Bloomberg L.P.

Bloomberg
Stay Updated With News On The Chinese Economy On BloombergQuint