ASX Small Caps Lunch Wrap: Who’s risking their lives to sell Chinese lingerie this week?

The ASX has opened lower this morning, hitting a hard bottom at -0.3% and while it is doing its best to work its way back to break even, it’s still down 0.1% as we head into lunch.

All eyes are on the Reserve Bank of Australia Board, which is meeting today for its traditional feast of endangered condor eggs stuffed with microscopic lobsters, before deciding just how hard Aussie mortgage holders are going to get kicked in the rate rise cobblers this afternoon.

It’s a dangerous game RBA Governor Philip “How High Can We Go” Lowe is playing… but nowhere near as dangerous as a handful of Very Brave male models in China.

So for now, we’re all taking a slow boat to China where The Pantomime of the Grand Poobah has been underway since the weekend, as China’s national Congress is hard at work installing an upgraded version of Xi Jinping as President for an “unprecedented third term”, whether they like it, or not.

Xi’s tightening of his grip on power has come at the expense of state premier Li Keqiang, who has been ousted in favour of Li Qiang – a man who has been tasked with delivering on a raft of policy initiatives aimed at bringing the most cumbersome economic and military beast in the world under some sort of control.

Because there’s a lot going on in China at the moment, as Stockhead’s very own deputy editor Christian Edwards has already pointed out.

But something that even the might of Chedward’s throbbing, rippling journalistic muscle missed was the  issue that a lot of Chinese manufacturers are facing – they are producing vast quantities of stuff, and some of it is proving difficult to market.

Case in point, Chinese lingerie, which is just like the fancy French stuff, except it’s made out of super-fluffy asbestos or something.

Around 10% of the Chinese retail sector is now handled through online shopping, and the rise of social media has turned the online sales landscape in markets like China into something of an arms race, as retailers scramble for their chunk of a market that is reportedly going to grow to $1 trillion this year.

Taking a leaf from the early days of television, online retailers have been producing their own version of late night live Shopping Channel action – livestreaming salespeople showcasing products and advertising the sort of impulse buy “specials” that saw 1980s households drowning in useless kitchen gew-gaws and credit card debt.

The issue facing Chinese lingerie retailers is that, under China’s strict anti-pornography laws, showing a woman in lingerie on a livestream is hugely illegal.

But, as is apparently the way in China, if there’s a law then there must be a way around it – and in this case, women modelling lingerie in online livestreams have been replaced with… men.

How China’s anti-porn laws are going to fare when they’re up against China’s famously poor tolerance of anything non-binary remains to be seen.

But, for anyone into the idea of young Chinese chaps dressed up in fancy frilly lingerie, it might be time to sign up for a Douyin account and get in on the action, because there’s no way this is going to last very long.

TO MARKETS

Aussie markets opened lower today, sinking 0.3% in under an hour, before staging something of a comeback to be down just 0.1% at lunch time.

A look across the sectors this morning shows that the market’s been split, with Materials weighing heaviest on -0.97%, alongside InfoTech (-0.42%) and Real Estate (-0.38%).

That said, there is some good news. Consumer Staples has risen 0.68%, Telcos are doing okay on +0.40% and the Energy sector has lifted, up 0.31% after the market got wind of the size of my power bill, which is sure to drive demand for coal-powered nuclear wind farms through the roof.

Up the top end of town, the big mover – and this is a solid jump – is funeral provider Invocare (ASX:IVC), which dead-set looked like it was headed for an appointment with one of its own morticians in late February.

IVC released its earnings on 27 February, and the market reacted to the numbers with gusto, digging a 6-foot-deep grave (that’s $2.11, or ~19% in metric money units) and tossing the company in head first.

But, an unsolicited offer from TPG (not the local internet mob… a different one from America) to buy 100% of IVC dropped this morning, and – like former NRL great Glen Lazarus – IVC is now a lot fatter than it used to be, racing from $8.95 to $12.11 at lunch time, a 35.3% gain.

Elsewhere, good ol’ Swingin’ Sayona (ASX:SYA) is also on the rise, up 8.5% at lunch after announcing a CAD$50 million cap raise to fund further exploration and resource drilling at the company’s lithium projects in Québec, as the company advances leading hard rock lithium resource base in North America (NAL).

“Sayona has made significant progress in developing the leading hard rock lithium resource base in North America, with the pending restart of production at NAL set to mark our progression from explorer to producer,” Sayona managing director Brett Lynch’s PR team told him he said.

“This funding will provide an added boost to our expansion plans, with the FTS provisions allowing us to raise capital at a premium to the current share price, thereby minimising dilution for the benefit of our shareholders.”

Groovy.

NOT THE ASX

In the US overnight, Wall Street closed flattish after China made a bold pronouncement that it wants to reign in its GDP growth to 5% for 2023.

The Dow did best, up 0.12%, with the S&P up 0.07% while the Nasdaq dropped 0.11%.

Last year, Beijing set a few targets, including GDP growth of 5.5%, and massive patches of International Waters.

The first target was a bust, with GDP growth of just 3.0% recorded in the official annals of Chinese history, but the rampant expansionism is going gangbusters, to the dismay of Vietnam, Japan, The Philippines and pretty much everyone else in the area.

In Japan, the Nikkei has risen 0.41% on news that the country’s “Self-Defense Force” – that’s Japanese for “Army” – has been holding drills in an effort to curb a rising scourge that threatens to destroy all of humanity.

The drill was built around a scenario where “nuisance-style YouTubers attempt to force their way onto a JSDF base”, which should hopefully give pause to the “It’S JuSt A PrAnK BrO!!” crowd that has infested social media with lame stunts featuring “jokes” that are little more than random assaults.

I think we should all take a leaf from the Japanese Self-Defence Force’s books, and hit all YouTubers and Tik Tok stars with sticks until they get the message that they are pimples on the buttocks of humanity, and need to stop and have a long, hard think about their lives.

Meanwhile in China, the markets have been buoyed by viral footage of men in ladies’ unmentionables, with the Hang Seng up 0.71% and Shanghai climbing 0.37%.

Is it getting hot in here?

ASX SMALL CAP WINNERS

Here are the best performing ASX small cap stocks for March 7 [intraday]:

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In the blistering heat of the Small Caps Cauldron this morning, tech fiends at Pentanet (ASX:5GG) have dropped a double-whammy of announcements, and been handsomely rewarded by investors dropping loot boxes chock-full of Very Rare, Exotic and Legendary gains.

Pentanet has inked a deal with Optus to deliver the NVIDIA GeForce NOW cloud gaming service to Optus customers, as 5GG remains the sole Australian distributor of that particular  cloud gaming service in Australia.

The two companies will work together on a program that enables enhanced experience for GeForce NOW users on Optus SubHub, with a specific focus on 5G and the GeForce NOW user management platform, CloudGG, which is great news for everyone except Fortnite players, because mobile gamers are terrifyingly annoying n00bs.

Also banking a win today is Caprice Resources (ASX:CRS), coming out of a four-day trading halt with news that the company has done pretty well with exploratory drill work at its Northampton polymetallic project, located in the Northampton Mineral Field of Western Australia, hence the name.

The company says it’s returned “exceptional results from the first hole of the Lady Sampson RC drilling”, which look like this:

• 14m at 7.6% lead, 1.1% zinc and 3.1g/t silver from 39m incl.
  • 6m at 11.4% lead, 1.7% zinc and 4.4g/t silver from 40m; and
• 3m at 4.2% lead, 2.2% zinc and 4.6g/t silver from 67m to EOH.

And last one for this morning is Pancontinental Energy (ASX:PCL), which has been swinging around a bit in recent days, but is up 18% this morning following the recent announcement that Woodside (ASX:WDS) has thrown its considerable bulk behind PCL’s exploration efforts.

WDS is set to fully fund an extensive 3D seismic survey of roughly 6,800km2 over the Saturn turbidite complex offshore Namibia in Block PEL 87, which kicked off today by the looks of things, and is set to take about three months to complete.

For its money, Woodside has been granted an option to acquire a participating interest in PEL 87, which will presumably be exercised if the survey coughs up the results that Pancontinental is hoping for.

ASX SMALL CAP LOSERS

Here are the most-worst performing ASX small cap stocks for March 7 [intraday]:

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