Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Derivatives

<ul>
<li>Over the past five trading days, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> multi-leg option strategies showcased a variety of approaches. Strategy highlights are provided.</li>
<li>Calendar and Diagonal Spreads make up a quarter of all strategies. Several examples are presented incorporating upfront cost, upfront credit, or zero-cost combinations. </li>
<li>While there is a bias towards bullish strategies, 26% of all strategies express a market-neutral view in the form of Straddles, Strangles, Butterflies or Condors.</li>
</ul>


Over the past five trading days, Tencent (700 HK) multi-leg option strategies showcased a variety of approaches. Strategy highlights are provided.
Calendar and Diagonal Spreads make up a quarter of all strategies. Several examples are presented incorporating upfront cost, upfront credit, or zero-cost combinations. 
While there is a bias towards bullish strategies, 26% of all strategies express a market-neutral view in the form of Straddles, Strangles, Butterflies or Condors.


Tencent (700 HK): Strategic Insights and Top Trades from HKEX Options Trading

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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 Bottom-Up

<ul>
<li>China announced game approval for the May batch. The number of games approved remained at a higher level than 2023.</li>
<li>The pace of China's game approval appears to have accelerated to the same level as pre-tightening.</li>
<li>Of the companies that we are monitoring, none of them got approval for domestic games but a handful approvals of imported games save their day.</li>
</ul>


China announced game approval for the May batch. The number of games approved remained at a higher level than 2023.
The pace of China's game approval appears to have accelerated to the same level as pre-tightening.
Of the companies that we are monitoring, none of them got approval for domestic games but a handful approvals of imported games save their day.


Tencent/Netease: None Gets Approvals for Domestic Games

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

<ul>
<li>Tencent reported C1Q25 rev., IFRS op. profit, and IFRS net inc, in-line, (3.1%), (5.6%) vs. our est. and 3.8%, (2.3%), (4.9%) vs. cons. </li>
<li>As predicted, Tencent maintained a transitional game quarter well, going forward new game launches shall fill the pipeline while recovering consumption helping on advertising and fintech. </li>
<li>We raised our TP to HK$584 for better outlook and place Tencent back to the TOP BUY list. Our TP implies 21x PE.</li>
</ul>


Tencent reported C1Q25 rev., IFRS op. profit, and IFRS net inc, in-line, (3.1%), (5.6%) vs. our est. and 3.8%, (2.3%), (4.9%) vs. cons. 
As predicted, Tencent maintained a transitional game quarter well, going forward new game launches shall fill the pipeline while recovering consumption helping on advertising and fintech. 
We raised our TP to HK$584 for better outlook and place Tencent back to the TOP BUY list. Our TP implies 21x PE.


[Tencent (700 HK, BUY, TP HK$584) TP Change]: C1Q25 Review: Outperformance in Low Game Season

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Gross SOUTHBOUND volumes averaged more than HK$100bn a day this past week, which gets us back above halfway to the peak earlier this spring. Net flows were negative HK$8bn+.</li>
<li>Among the top buys as a percentage of volume, financials, utilities, and energy REALLY stand out. Among top sells, industrials, info tech, and consumer discretionary are tops.</li>
<li>The data tables below update on a daily basis in the <a href="https://www.smartkarma.com/tools" target="_blank" rel="noopener">Tools</a> section of Smartkarma. The <a href="https://www.smartkarma.com/tools/quiddity/south-flow-monitor" target="_blank" rel="noopener">SOUTHBOUND Flow Monitor</a> and <a href="https://www.smartkarma.com/tools/quiddity/ah-shares-monitor" target="_blank" rel="noopener">AH Monitor</a> are both there free for SK readers.</li>
</ul>


Gross SOUTHBOUND volumes averaged more than HK$100bn a day this past week, which gets us back above halfway to the peak earlier this spring. Net flows were negative HK$8bn+.
Among the top buys as a percentage of volume, financials, utilities, and energy REALLY stand out. Among top sells, industrials, info tech, and consumer discretionary are tops.
The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers.


HK Connect SOUTHBOUND Flows (To 16 May 2025); Volumes Pick Up, Net Flows Drop; Banks Still Strong

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

<ul>
<li>In 1Q25, both total revenue and game revenue growth rates accelerated.</li>
<li>The authorities have been turning from containing games to encouraging games.</li>
<li>We expect the stock has an upside of 34% and a price target of HK$700. Buy.</li>
</ul>


In 1Q25, both total revenue and game revenue growth rates accelerated.
The authorities have been turning from containing games to encouraging games.
We expect the stock has an upside of 34% and a price target of HK$700. Buy.


Tencent (700 HK): 1Q25, Game Revenue Up by 24% YoY, as Industry Encouraged by Authorities

China

Tencent Holdings Limited operates as an investment holding company. The Company, through its subsidiaries, provides Internet and mobile value-added services (VAS), online advertising, and e-commerce transactions. Tencent Holdings offers services to users worldwide.

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Tencent Holdings (ADR) (TCEHY US)

Tencent (700 HK): Strategic Insights and Top Trades from HKEX Options Trading

Tencent's multi-leg option strategies feature a mix of bullish, bearish and market-neutral approaches, including Calendar and Diagonal Spreads....

Gaudenz Schneider

Tencent/Netease: None Gets Approvals for Domestic Games

We analyzed the game approval issued by NPPA for Chinese online game players for the month of May. Game approvals for large players are slow so far...

Ke Yan, CFA, FRM

[Tencent (700 HK, BUY, TP HK$584) TP Change]: C1Q25 Review: Outperformance in Low Game Season

Tencent's Q1 performance meets expectations, with new game launches and recovering consumption driving future growth. Analysts raise target price...

Blue Lotus Research Institute

HK Connect SOUTHBOUND Flows (To 16 May 2025); Volumes Pick Up, Net Flows Drop; Banks Still Strong

SOUTHBOUND volumes pick up. Net flows drop into negative territory again for only the second week in a few months. Banks saw strong inflows. Tech...

Travis Lundy

Tencent (700 HK): 1Q25, Game Revenue Up by 24% YoY, as Industry Encouraged by Authorities

In 1Q25, both total revenue and game revenue growth rates accelerated. We believe the authorities are turning from containing games to encouraging...

Ming Lu

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Tencent (700 HK): Strategic Insights and Top Trades from HKEX Options Trading

​Tencent's multi-leg option strategies feature a mix of bullish, bearish and market-neutral approaches, including Calendar and Diagonal Spreads....

Gaudenz Schneider

Tencent/Netease: None Gets Approvals for Domestic Games

We analyzed the game approval issued by NPPA for Chinese online game players for the month of May. Game approvals for large players are slow so far...

Ke Yan, CFA, FRM

[Tencent (700 HK, BUY, TP HK$584) TP Change]: C1Q25 Review: Outperformance in Low Game Season

​Tencent's Q1 performance meets expectations, with new game launches and recovering consumption driving future growth. Analysts raise target price...

Blue Lotus Research Institute

HK Connect SOUTHBOUND Flows (To 16 May 2025); Volumes Pick Up, Net Flows Drop; Banks Still Strong

SOUTHBOUND volumes pick up. Net flows drop into negative territory again for only the second week in a few months. Banks saw strong inflows. Tech...

Travis Lundy

Tencent (700 HK): 1Q25, Game Revenue Up by 24% YoY, as Industry Encouraged by Authorities

In 1Q25, both total revenue and game revenue growth rates accelerated. We believe the authorities are turning from containing games to encouraging...

Ming Lu

Tencent's multi-leg option strategies feature a mix of bullish, bearish and market-neutral approaches, including Calendar and Diagonal Spreads....

Tencent's Q1 performance meets expectations, with new game launches and recovering consumption driving future growth. Analysts raise target price...