Hong Kong Stocks Rise as Tencent Rebounds Before Earnings

Hong Kong’s stocks advanced, with the benchmark index climbing from a five-week low, as Tencent Holdings Ltd. and train companies jumped.

Tencent surged 5.8 percent as Asia’s biggest Internet company snapped a four-day, 11.5 percent rout before releasing earnings tomorrow. CSR Corp., China’s biggest trainmaker, rose the most since October 2011 after saying it won orders worth 20.8 billion yuan ($3.4 billion). Casino shares slid after Credit Suisse Group AG cut its estimate on Macau gaming revenue.

The Hang Seng Index added 0.5 percent to 21,583.50 at the close in Hong Kong, paring its loss this year to 7.4 percent. About five stocks advanced for every four that dropped on the 50-member gauge. Tencent had tumbled after China’s central bank blocked plans by the company to offer virtual credit cards. The Hang Seng China Enterprises Index, also known as the H-share index, advanced 0.1 percent to 9,342.28.

“We are seeing a strong recovery in Tencent after a significant correction over the past few days, and as people cover their shorts ahead of the results announcement,” said Alex Wong, a Hong Kong-based director of asset management at Ample Capital Ltd.

Tencent gained to HK$578, the steepest advance on the Hang Seng Index, after yesterday sliding to its lowest level since Feb. 13.

CSR jumped 13 percent to HK$6.30 after saying it signed contracts to sell or repair train cars. Citigroup Inc. recommended buying the stock, boosting its rating from sell. Zhuzhou CSR Times Electric Co., a provider of electrical systems for trains, jumped 13 percent to HK$25.10, its biggest gain since November 2011.

Macau Casinos

China Resources Power Holdings Co. climbed 4.5 percent to HK$19.24, extending yesterday’s advance after its full-year profit beat analyst estimates.

Wynn Macau Ltd., a unit of billionaire Steve Wynn’s gaming company, fell 3 percent and SJM Holdings Ltd., Asia’s biggest casino operator, slid 2.5 percent, leading declines on the MSCI Hong Kong Index.

Macau’s March gaming growth estimate may grow between 9 percent to 14 percent, Credit Suisse wrote in a note, compared with its previous estimate of 18 percent to 22 percent.

China Overseas Land & Investment Ltd., the biggest mainland developer listed in Hong Kong by market value, fell 1.3 percent after a private property developer collapsed and data today showed growth in new-home prices in China’s biggest cities slowed last month.

Home Prices

Zhejiang Xingrun Real Estate Co. doesn’t have enough cash to repay 3.5 billion yuan of debt, government officials familiar with the matter said yesterday. Its collapse comes less than two weeks after Shanghai Chaori Solar Energy Science & Technology Co. became the first company to default on its onshore corporate bonds.

Home prices in Beijing and the southern business hub of Shenzhen each rose 0.2 percent in February from a month earlier, the National Bureau of Statistics said today. That was the slowest pace since October 2012. They added 0.4 percent in Shanghai, the smallest increase since November 2012, and gained 0.5 percent in Guangzhou. Prices climbed in 57 of the 70 cities tracked by the government, compared with 62 in January.

Wind-farm operator China Longyuan Power Group Corp. tumbled by a record 14 percent after last year’s profit missed analyst estimates.

The H-share measure traded at 6.3 times estimated earnings today, compared with 15.8 for the Standard & Poor’s 500 Index yesterday.

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