Dahua And Hikvision Stocks Soar, First Since Ban Passes Congress, On Chinese Government Assistance Announcement

Dahua and Hikvision's stock soared today, up respectively 9% and 10%, first major up move since the US Congress ban, e.g.:

The reason: This official Chinese government notice announcing they are dropping the word 'education' from the "National Science and Technology Education Leading Group." this is being interpreted as increasing assistance to China's tech companies facing pressure from the trade war with the US. What assistance will be provided was not detailed in any English or Chinese filings we reviewed.

Dahua and Hikvision already tremendously benefit from Chinese government assistance and massive domestic projects. If the Chinese government does provide them more assistance, this will certainly help them inside of China. However, what they do outside of China to combat the US ban remains to be seen.

So is all Chinese tech up ~10%?

No. From the same Reuters article:

An index tracking major IT firms rose more than 4 percent, while an index tracking major telecoms firms gained nearly 4 pct. China’s tech-heavy start-up board ChiNextP was up 3.4 percent.

We do not know enough about Chinese tech companies to evaluate why they would not rise as much as Dahua or Hikvision. Also, as stated above, since there is so little public information nor even theories about what this group will now do, it is hard to evaluate.

Here is a theory from CFR researcher Lorand Laskai

Interestingly, at the same time the US is increasingly worried about these companies China government connections, the Chinese government may be deepening their connections with them.