* CSI300 +1.3 pct; SSEC +1.1 pct; HSI flat;
* China’s factory activity contracts for 3rd month - survey
* ChiNext jumps again, with green shoots seen in Hangzhou
By Samuel Shen and Pete Sweeney
SHANGHAI, May 21 (Reuters) - China stocks remain bullish Thursday morning, despite a weak factory activity survey, with Shenzhen’s start-up board staying in the spotlight with a more than 3 percent jump to fresh highs.
Chinese factory activity contracted for the third month in May and output shrank at the fastest rate in just over a year, China May flash HSBC factory PMI showed.
But investors interpreted the weak number as suggesting China requires increased policy support.
“Under the current environment, any excuse seems good enough to cause a rally,” wrote Gerry Alfonso, director of Shenwan Hongyuan Securities Co in Shanghai.
The CSI300 index rose 1.3 percent, to 4,816.86 points at the end of the morning session, and the Shanghai Composite Index gained 1.1 percent, to 4,496.10 points.
Both indexes are on track to challenge seven-year highs after a month-long consolidation.
The Nasdaq-style, tech-heavy ChiNext continues to dominate the limelight.
After surging nearly 150 percent this year, the ChiNext shows no signs of taking a breather, unfettered by lofty valuations as its price-earnings ratio has topped 100.
Investors’ bet that a tech boom - or a bubble - would aid China’s economic transformation and industrial upgrade received some support from signs of green shoots in China’s eastern coastal city of Hangzhou. A booming high-tech and software sector there has fired up the local economy in defiance of a nationwide slowdown.
China’s market is so hot that Shengjing Group, a Chinese investment advisor and manager, is launching the country’s first investment fund dedicated to helping overseas-listed Chinese firms to delist and instead get on domestic stock markets, Chinese media reported.
In contrast to the mainland, the Hong Kong market was calm on Thursday.
The Hang Seng index was unchanged at 27,574.54 points, while the Hong Kong China Enterprises Index lost 0.4 percent, to 14,182.31.
China Cosco Holdings Co Ltd and China Shipping Development Co Ltd surged after the two firms set up a joint venture, China Ore Shipping, in Singapore to buy four ships from Brazil’s Vale
Shares of Chinese electric carmaker BYD Co Ltd surged in Shenzhen and Hong Kong, in reaction to central government’s “Made in China 2025” plan to promote global champions including in new energy vehicles.
Reporting by Samuel Shen and Pete Sweeney; Editing by Richard Borsuk