Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>HK Alpha portfolio gained 2.22% in September, outperforming its benchmark by 5.36%. Since inception, the portfolio has outperformed HK indexes by 66% to 93%. HK ALPHA is up 14.35% YTD.</li>
<li>The Sharpe ratio stands at 1.22, compared with a benchmark of 0.56 since inception. This higher Sharpe ratio is driven by excess alpha, which represents more than 50% of returns.</li>
<li>The portfolio gained in the healthcare and energy sectors in August, while exposure to materials and communication services dragged on performance.</li>
</ul>


HK Alpha portfolio gained 2.22% in September, outperforming its benchmark by 5.36%. Since inception, the portfolio has outperformed HK indexes by 66% to 93%. HK ALPHA is up 14.35% YTD.
The Sharpe ratio stands at 1.22, compared with a benchmark of 0.56 since inception. This higher Sharpe ratio is driven by excess alpha, which represents more than 50% of returns.
The portfolio gained in the healthcare and energy sectors in August, while exposure to materials and communication services dragged on performance.


HONG KONG ALPHA PORTFOLIO: (September 2026)

Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Equity Bottom-Up

Oriental Watch is an investment holding company primarily engaged in the trading of watches and clocks through an extensive retail network in Greater China. It sells watches from numerous prestigious brands, including Rolex, Tudor, Bulgari, Breitling, and Longines. The company also engages in property holding and securities investment activities. Headquartered in Central, Hong Kong, the company was founded in 1961.

<ul>
<li>This is a part of our series <a href="https://www.smartkarma.com/insights/timeless-a-follow-up-on-the-luxury-watch-retailer-space-and-their-impressive-capital-allocation" target="_blank" data-smartkarma-citation="insights:267136" rel="noopener">Timeless: A Follow-Up on the Luxury Watch Retailer Space and Their Impressive Capital Allocation</a>/ <a href="https://www.smartkarma.com/insights/ticking-different-a-comparison-of-the-world-s-listed-luxury-watch-retailers-with-exposure-to-rolex" target="_blank" data-smartkarma-citation="insights:241854" rel="noopener">Ticking Different: A Comparison of the Rolex Watch Retailers </a>
</li>
<li>We expect <a href="https://www.smartkarma.com/entities/oriental-watch-holdings-limited" target="_blank" data-smartkarma-citation="entities:19950:1" rel="noopener">Oriental Watch (398 HK)</a> to show 10-15% YoY earnings growth in its H1FY27 results, to be declared in November (this is a March-end company). </li>
<li>With a 100% payout, we expect a dividend of 23.5 HKD cents (47 HKD cents annualized, or a 14.6% dividend yield), with 62% of the market cap in net cash. </li>
</ul>


This is a part of our series Timeless: A Follow-Up on the Luxury Watch Retailer Space and Their Impressive Capital Allocation/ Ticking Different: A Comparison of the Rolex Watch Retailers 

We expect Oriental Watch (398 HK) to show 10-15% YoY earnings growth in its H1FY27 results, to be declared in November (this is a March-end company). 
With a 100% payout, we expect a dividend of 23.5 HKD cents (47 HKD cents annualized, or a 14.6% dividend yield), with 62% of the market cap in net cash. 


Oriental Watch (398 HK): Previewing Earnings For H1FY27

APAC IPOs & Placements, Aequitas Research

Nicholas Tan

APAC IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Shenzhen Transsion Holdings / Equity Capital Markets

Shenzhen Transsion Holdings Co., Ltd. manufactures and distributes communication devices. The Company produces mobile phones and phone accessories. Shenzhen Transsion Holdings markets products in China, Africa, and other countries and regions.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shenzhen-transsion-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:58740:1" rel="noopener">Shenzhen Transsion Holdings (2636 HK)</a> raised US$390m in its Hong Kong IPO</li>
<li>It is a smart device and mobile Internet service provider engaged in the design, R&amp;D, manufacturing, sales, and brand management of smart devices, with a core focus on mobile phones.</li>
<li>We have covered various aspects of the deal in our previous note. In this note, we will talk about the demand and trading dynamics.</li>
</ul>



Shenzhen Transsion Holdings (2636 HK) raised US$390m in its Hong Kong IPO
It is a smart device and mobile Internet service provider engaged in the design, R&amp;D, manufacturing, sales, and brand management of smart devices, with a core focus on mobile phones.
We have covered various aspects of the deal in our previous note. In this note, we will talk about the demand and trading dynamics.


Aequitas: Shenzhen Transsion IPO Trading - Weak Demand Though Shares Cheap

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Thematic (Sector/Industry)

<ul><li>Chinese auto stocks underperformed the broader market in 3Q26, which we attribute to the slower-than-expected recovery in domestic demand, the newly imposed consumption tax on batteries, and the expected reduction in NEV export tax rebates (announced on 12 Oct 2026, to take effect on 1 Apr 2027).</li><li>We further cut our forecasts for both retail and wholesale volumes in 2026.</li><li>We also cut China’s NEV sales volume forecast in 2026, despite the on-track or even slightly outperforming market share gains.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Chinese auto stocks underperformed the broader market in 3Q26, which we attribute to the slower-than-expected recovery in domestic demand, the newly imposed consumption tax on batteries, and the expected reduction in NEV export tax rebates (announced on 12 Oct 2026, to take effect on 1 Apr 2027).We further cut our forecasts for both retail and wholesale volumes in 2026.We also cut China’s NEV sales volume forecast in 2026, despite the on-track or even slightly outperforming market share gains.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Auto - Stable Pricing, Exports and Cost Discipline Cushion Weak Domestic Volume

HK/China Equity Long-Short

Osbert Tang, CFA

<ul>
<li>While the HSI lost 5.1% YTD, the bottom-most 5 constituents were down an average of 45.8%. As we approach the year-end, we examine whether there is room for performance revival.</li>
<li>
<a href="https://www.smartkarma.com/entities/trip-com-group-ltd-aaf6a428-6d9d-4e25-80e7-18533df0745e" target="_blank" data-smartkarma-citation="entities:36424:1" rel="noopener">Trip.com Group (9961 HK)</a> is the best bet, as the anti-monopoly penalty is now behind it. The sell-off has also moderated, suggesting the market is refocusing on the merits.</li>
<li>
<a href="https://www.smartkarma.com/entities/laopu-gold-co-ltd-class-h" target="_blank" data-smartkarma-citation="entities:44036:1" rel="noopener">Laopu Gold (6181 HK)</a> has a significant PER compression, leaving room for a rebound. However, the risk is more in a potential earnings downgrade. </li>
</ul>


While the HSI lost 5.1% YTD, the bottom-most 5 constituents were down an average of 45.8%. As we approach the year-end, we examine whether there is room for performance revival.

Trip.com Group (9961 HK) is the best bet, as the anti-monopoly penalty is now behind it. The sell-off has also moderated, suggesting the market is refocusing on the merits.

Laopu Gold (6181 HK) has a significant PER compression, leaving room for a rebound. However, the risk is more in a potential earnings downgrade. 


Hong Kong
Insights on Hong Kong

HONG KONG ALPHA PORTFOLIO: (September 2026)

We made mid-month changes in the portfolio yesterday. We sold 148, 6185, 3696, 3759, 669 and 2268. We added 322, 2319, 1579, 6186, 9633, 2688,...

David Mudd

Oriental Watch (398 HK): Previewing Earnings For H1FY27

We preview H1FY27 earnings for Oriental Watch 398 HK, to be declared in November. The stock trades at ~15% dividend yield (assuming a 100% payout)...

Sameer Taneja

Aequitas: Shenzhen Transsion IPO Trading - Weak Demand Though Shares Cheap

Shenzhen Transsion raised US$390m in its Hong Kong IPO. We have covered various aspects of the deal in our previous note. In this note, we will...

Nicholas Tan

Auto - Stable Pricing, Exports and Cost Discipline Cushion Weak Domestic Volume

We also cut China’s NEV sales volume forecast in 2026, despite the on-track or even slightly outperforming market share gains.

CMB International

HK Strategy: Losers Turn Winners?

As we approach year-end, the laggards this year may potentially revive given their underperformance. Trip.com appears to be best positioned, while...

Osbert Tang, CFA