HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

Meituan is a Chinese technology company that operates a platform for local services, including on-demand food delivery, in-store services, consumer reviews, hotel and travel bookings, and instant retail. The company also offers bike sharing, e-moped sharing, and grocery delivery services. Meituan is headquartered in Beijing, China, and was founded in 2010.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/meituan-class-b" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> achieved a significant QoQ narrowing down in losses, with improvements at both the Core Local Commerce and New Initiatives segments.</li>
<li>Management appears positive towards the outlook as irrational subsidies have tamed and New Initiatives achieved better efficiency and economics.</li>
<li>The stock trades on 2.8x P/B (over 1SD below average) and the turnaround in next two years means PERs of 21.6x and 14.4x for FY27 and FY28 justified.</li>
</ul>



Meituan (3690 HK) achieved a significant QoQ narrowing down in losses, with improvements at both the Core Local Commerce and New Initiatives segments.
Management appears positive towards the outlook as irrational subsidies have tamed and New Initiatives achieved better efficiency and economics.
The stock trades on 2.8x P/B (over 1SD below average) and the turnaround in next two years means PERs of 21.6x and 14.4x for FY27 and FY28 justified.


2026 High Conviction Update: Meituan (3690 HK) - Seeing Positive Signs

Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

GitLab Inc. designs and develops software solutions. The Company offers platform for authentication, authorization, devops score, audit, and value stream management. GitLab serves customers worldwide.

<ul>
<li>GitLab shares have materially underperformed the NASDAQ; GTLB shares down ~28% over the year versus a 14.5% gain on the NASDAQ and a 10.6% loss on the IGV.</li>
<li>Shares saw pressure early in the year because investors reassessed the company’s long-term growth profile in the context of the AI transition in software development.</li>
<li>The stock has since bottomed in the low $20s and gained ~44%. I continue to like GTLB for its superior gross margins, improving FCF and $400M in authorized share buyback.</li>
</ul>


GitLab shares have materially underperformed the NASDAQ; GTLB shares down ~28% over the year versus a 14.5% gain on the NASDAQ and a 10.6% loss on the IGV.
Shares saw pressure early in the year because investors reassessed the company’s long-term growth profile in the context of the AI transition in software development.
The stock has since bottomed in the low $20s and gained ~44%. I continue to like GTLB for its superior gross margins, improving FCF and $400M in authorized share buyback.


2026 High Conviction Update: GitLab Inc., Valuation Is Cheap But No Major Catalysts In Sight

<ul>
<li>
<a href="https://www.smartkarma.com/entities/meituan" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>'s FY25 result is at the low end of the loss range it indicated. However, gross and operating margins have signs of stabilisation in 4Q25. </li>
<li>We have already passed the trough of the Core Local Commerce as the government has stepped up anti-involution efforts, and losses and margins have improved QoQ.</li>
<li>Loss of New Initiatives has expanded QoQ, but Keeta in Saudi Arabia is breaking even sooner than expected, which is positive.</li>
</ul>



Meituan (3690 HK)'s FY25 result is at the low end of the loss range it indicated. However, gross and operating margins have signs of stabilisation in 4Q25. 
We have already passed the trough of the Core Local Commerce as the government has stepped up anti-involution efforts, and losses and margins have improved QoQ.
Loss of New Initiatives has expanded QoQ, but Keeta in Saudi Arabia is breaking even sooner than expected, which is positive.


2026 High Conviction Update: Meituan (3690 HK) - Still Convinced

Equity/Index & Cross Asset Volatility Specialist, Cameron Design

Jay Cameron

Equity/Index & Cross Asset Volatility Specialist

Cameron Design

We specialize in financial products and volatility. Our strategies balance speed, data, and risk control to capture opportunities across global markets. Our research leverages AI and data analytics to continuously refine our algorithms and adapt to evolving market dynamics.

Equity Derivatives

SK Hynix Inc. provides products and services for the electronic components industry. The Company manufactures semiconductors, such as dynamic random access memory (DRAM), NAND flash memory, and static random access memory (SRAM) chips.

<ul>
<li>SK Hynix is positioned as the structural leader in the AI memory supercycle, leveraging its proprietary MR-MUF and HBM4 technology for unparalleled sales visibility through 2026.</li>
<li>The company's record 3Q 2025 financial results and strong Free Cash Flow indicate a dramatic cyclical turnaround, suggesting a possible valuation gap compared to US peers.</li>
<li>The stock's potential for accelerated appreciation, driven by the HBM4 ramp-up and potential US listing, provides a possible opportunity to establish a directional volatility position.</li>
</ul>


SK Hynix is positioned as the structural leader in the AI memory supercycle, leveraging its proprietary MR-MUF and HBM4 technology for unparalleled sales visibility through 2026.
The company's record 3Q 2025 financial results and strong Free Cash Flow indicate a dramatic cyclical turnaround, suggesting a possible valuation gap compared to US peers.
The stock's potential for accelerated appreciation, driven by the HBM4 ramp-up and potential US listing, provides a possible opportunity to establish a directional volatility position.


[2026 High Conviction] SK Hynix Technology Moat: Leveraging HBM4, MR-MUF for the FEB26 Call Strategy

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

SK Holdings Co., Ltd. is a holdings company that is engaged in various industries including energy, chemicals, information technology, semiconductors, marketing, and services businesses in South Korea and internationally.

<ul>
<li>Three main reasons why SK Inc is our high conviction in 2026 include mandatory cancellation of treasury shares, deep discount to NAV, and the end of divorce for Chairman Chey. </li>
<li>SK Inc has 17.98 million shares in treasury, representing 24.8% of outstanding shares. Among the stocks included in KOSPI200, this is one of the highest percentage of treasury shares.</li>
<li>Our NAV valuation analysis suggests NAV of 28 trillion won or NAV per share of 386,469 won. This represents a 46% upside to its current price.</li>
</ul>


Three main reasons why SK Inc is our high conviction in 2026 include mandatory cancellation of treasury shares, deep discount to NAV, and the end of divorce for Chairman Chey. 
SK Inc has 17.98 million shares in treasury, representing 24.8% of outstanding shares. Among the stocks included in KOSPI200, this is one of the highest percentage of treasury shares.
Our NAV valuation analysis suggests NAV of 28 trillion won or NAV per share of 386,469 won. This represents a 46% upside to its current price.


2026 High Conviction Ideas
High Conviction Ideas going into 2026

2026 High Conviction Update: Meituan (3690 HK) - Seeing Positive Signs

Meituan sees QoQ loss reduction with positive outlook on improved efficiency and economics. The stock trades on 1SD below average P/B but this is...

Osbert Tang, CFA

2026 High Conviction Update: GitLab Inc., Valuation Is Cheap But No Major Catalysts In Sight

GitLab is my 2026 high conviction idea in the U.S. software sector. In my follow-up piece, I provide a brief update, focus on investor concerns...

Andrei Zakharov

2026 High Conviction Update: Meituan (3690 HK) - Still Convinced

Meituan's FY25 results show signs of stabilisation in margins with losses at the low end of the profit warning, indicating improvement in core...

Osbert Tang, CFA

[2026 High Conviction] SK Hynix Technology Moat: Leveraging HBM4, MR-MUF for the FEB26 Call Strategy

SK hynix was up nearly 50% since the start of the year, one of our 2026 high conviction trade ideas moving rather rapidly with the AI Memory sector...

Jay Cameron

2026 High Conviction Idea: SK Inc

SK Inc (034730 KS) just announced that it will cancel about 20% of its outstanding shares, representing 4.8 trillion won ($3.3 billion). This is...

Douglas Kim

2026 High Conviction Update: Meituan (3690 HK) - Seeing Positive Signs

​Meituan sees QoQ loss reduction with positive outlook on improved efficiency and economics. The stock trades on 1SD below average P/B but this is...

Osbert Tang, CFA

2026 High Conviction Update: GitLab Inc., Valuation Is Cheap But No Major Catalysts In Sight

GitLab is my 2026 high conviction idea in the U.S. software sector. In my follow-up piece, I provide a brief update, focus on investor concerns...

Andrei Zakharov

2026 High Conviction Update: Meituan (3690 HK) - Still Convinced

​Meituan's FY25 results show signs of stabilisation in margins with losses at the low end of the profit warning, indicating improvement in core...

Osbert Tang, CFA

[2026 High Conviction] SK Hynix Technology Moat: Leveraging HBM4, MR-MUF for the FEB26 Call Strategy

SK hynix was up nearly 50% since the start of the year, one of our 2026 high conviction trade ideas moving rather rapidly with the AI Memory sector...

Jay Cameron

2026 High Conviction Idea: SK Inc

SK Inc (034730 KS) just announced that it will cancel about 20% of its outstanding shares, representing 4.8 trillion won ($3.3 billion). This is...

Douglas Kim

Meituan sees QoQ loss reduction with positive outlook on improved efficiency and economics. The stock trades on 1SD below average P/B but this is...

Meituan's FY25 results show signs of stabilisation in margins with losses at the low end of the profit warning, indicating improvement in core...