HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>The HSI has already recovered to 2.2% above the pre-"reciprocal tariff" level, and the top 10 best-performing constituents have registered an average return of 15.6%.</li>
<li>Despite so, there are still 40 under-performing stocks, with 32 of them remain in the negative zone with an average of 4.8% loss. </li>
<li>Among them, <a href="https://www.smartkarma.com/entities/zto-express-cayman-inc" target="_blank" data-smartkarma-citation="entities:33488:1" rel="noopener">ZTO Express Cayman (2057 HK)</a>, <a href="https://www.smartkarma.com/entities/budweiser-brewing-co-apac-ltd" target="_blank" data-smartkarma-citation="entities:28077:1" rel="noopener">Budweiser Brewing APAC (1876 HK)</a>, <a href="https://www.smartkarma.com/entities/byd-electronic-international-co-ltd" target="_blank" data-smartkarma-citation="entities:1927:1" rel="noopener">BYD Electronics (285 HK)</a>, and <a href="https://www.smartkarma.com/entities/meituan" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> look well-positioned to catch up.</li>
</ul>


The HSI has already recovered to 2.2% above the pre-"reciprocal tariff" level, and the top 10 best-performing constituents have registered an average return of 15.6%.
Despite so, there are still 40 under-performing stocks, with 32 of them remain in the negative zone with an average of 4.8% loss. 
Among them, ZTO Express Cayman (2057 HK), Budweiser Brewing APAC (1876 HK), BYD Electronics (285 HK), and Meituan (3690 HK) look well-positioned to catch up.


HK Strategy: What Are Some of the HSI Laggards to Pick Up?

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>BABA US: Alibaba’s Qwen Team to Launch AGI-like Deep Research Functionality for Free User Access(+)</li>
<li>BABA US: Ele.me's Retail Digital System Integrated into Taobao Instashopping (+)</li>
<li>JD US/3690 HK: JD, Meituan, Ele.me Summoned by Government (///)</li>
</ul>


BABA US: Alibaba’s Qwen Team to Launch AGI-like Deep Research Functionality for Free User Access(+)
BABA US: Ele.me's Retail Digital System Integrated into Taobao Instashopping (+)
JD US/3690 HK: JD, Meituan, Ele.me Summoned by Government (///)


[Blue Lotus Daily-TMT Update]:BABA US/JD US/3690 HK/PDD US/Red Note/BILI US/1810 HK

Chief Executive Officer, Emmer Capital Partners Limited

Manishi Raychaudhuri

Chief Executive Officer

Emmer Capital Partners Limited

Emmer Capital Partners is an Asia Pacific focused financial advisory firm engaging in strategic financial asset allocation advice, bespoke thematic research and advising early-stage companies and connecting them to investors. Emmer Capital provides macro-economic and multi-asset investment strategy inputs to institutions, family offices, private wealth managers, private equity, and corporate boards directly and through independent research platforms. Emmer Capital also advises a wide range of startup companies on fund raising and business strategy. Emmer Capital's active engagement with the print and electronic media reaches a broad spectrum of investors across the globe.

Cross Asset Strategy

<ul>
<li>We launch the Emmer Capital Asia ex Japan Equity Model Portfolio. We shall measure the absolute and relative performance (vi-a-vis MSCI Asia-ex-Japan Index) of the portfolio and rebalance it monthly.</li>
<li>Our sector and market choices are governed by macro-economic and policy considerations. Asian consumption support, inflation divergence strengthening Asian currencies and market leading domestic exposures are some of the themes.</li>
<li>We are overweight HK/China, India, Korea; underweight Taiwan, ASEAN. We like consumer discretionary, communication services and technology, despite the latter's global footprint. We prefer high ROEs and dividend yields.</li>
</ul>


We launch the Emmer Capital Asia ex Japan Equity Model Portfolio. We shall measure the absolute and relative performance (vi-a-vis MSCI Asia-ex-Japan Index) of the portfolio and rebalance it monthly.
Our sector and market choices are governed by macro-economic and policy considerations. Asian consumption support, inflation divergence strengthening Asian currencies and market leading domestic exposures are some of the themes.
We are overweight HK/China, India, Korea; underweight Taiwan, ASEAN. We like consumer discretionary, communication services and technology, despite the latter's global footprint. We prefer high ROEs and dividend yields.


Asian Equities: Launching Our Asia Ex Japan Model Portfolio

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.

<ul><li>On 12 May, China and the US issued a joint statement that the US and China will lower tariffs for 90 days by 14 May, with the US reducing its tariff from 145% to 30% and China reducing its tariff from 125% to 10%.</li><li>Overall, we believe this is a further relief on China technology supply chain after the US CBP’s exemption from reciprocal tariffs for 20 product categories on 11 Apr (our note).</li><li>Overall, we believe consumer technology (esp. Apple supply chain) with high US revenue exposure will benefit most from the China-US tariff deal. </li></ul><p><em>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.</em></p>

On 12 May, China and the US issued a joint statement that the US and China will lower tariffs for 90 days by 14 May, with the US reducing its tariff from 145% to 30% and China reducing its tariff from 125% to 10%.Overall, we believe this is a further relief on China technology supply chain after the US CBP’s exemption from reciprocal tariffs for 20 product categories on 11 Apr (our note).Overall, we believe consumer technology (esp. Apple supply chain) with high US revenue exposure will benefit most from the China-US tariff deal. 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.

Technology - Implications of China-US Tariff Reduction

Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy Research

<ul>
<li>BEKE US: Post-May Holiday Slowdown in Existing Home Transactions, Stabilized New Home Sales. (/)</li>
<li>1810 HK : Several Xiaomi Car Owners Demand Refunds (-)</li>
<li>ZK US: Zeekr Launches Channel Reform, Introduces Agent-Based Partnership Model(+)</li>
</ul>


BEKE US: Post-May Holiday Slowdown in Existing Home Transactions, Stabilized New Home Sales. (/)
1810 HK : Several Xiaomi Car Owners Demand Refunds (-)
ZK US: Zeekr Launches Channel Reform, Introduces Agent-Based Partnership Model(+)


[Blue Lotus Daily]:BEKE US/1810 HK/ZK US/LKNCY US/Macro/New Energy Vehicles

China

Xiaomi is a Chinese multinational corporation specializing in consumer electronics and technology, primarily known for its smartphones (Mi, Redmi, POCO series) and a wide range of AIoT (Artificial Intelligence of Things) devices, including smart home products, wearables, and laptops. The company also provides internet services, including its MIUI operating system. Xiaomi was founded in 2010 and is headquartered in Beijing, China.

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Xiaomi (1810 HK)

HK Strategy: What Are Some of the HSI Laggards to Pick Up?

HSI has rebounded above pre-reciprocal tariff levels, with top stocks up 15.6%. However, 32 stocks remain negative, with ZTO Express, Budweiser...

Osbert Tang, CFA

[Blue Lotus Daily-TMT Update]:BABA US/JD US/3690 HK/PDD US/Red Note/BILI US/1810 HK

Alibaba's Qwen Team to offer AGI-like deep research for free, Ele.me's retail system integrated into Taobao Instashopping, JD, Meituan, Ele.me...

Blue Lotus Research Institute

Asian Equities: Launching Our Asia Ex Japan Model Portfolio

Emmer Capital's Asia ex JP Equity Model Portfolio is Overwt on HK/CN, India, Korea & underwt Taiwan, ASEAN. We like consumer discretionary, comm...

Manishi Raychaudhuri

Technology - Implications of China-US Tariff Reduction

Overall, we believe this is a further relief on China technology supply chain after the US CBP’s exemption from reciprocal tariffs for 20 product...

CMB International

[Blue Lotus Daily]:BEKE US/1810 HK/ZK US/LKNCY US/Macro/New Energy Vehicles

Post-holiday slowdown in existing home transactions but stabilized new home sales; Xiaomi car owners demand refunds; Zeekr launches channel reform...

Blue Lotus Research Institute

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52-week Range

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HK Strategy: What Are Some of the HSI Laggards to Pick Up?

​HSI has rebounded above pre-reciprocal tariff levels, with top stocks up 15.6%. However, 32 stocks remain negative, with ZTO Express, Budweiser...

Osbert Tang, CFA

[Blue Lotus Daily-TMT Update]:BABA US/JD US/3690 HK/PDD US/Red Note/BILI US/1810 HK

​Alibaba's Qwen Team to offer AGI-like deep research for free, Ele.me's retail system integrated into Taobao Instashopping, JD, Meituan, Ele.me...

Blue Lotus Research Institute

Asian Equities: Launching Our Asia Ex Japan Model Portfolio

Emmer Capital's Asia ex JP Equity Model Portfolio is Overwt on HK/CN, India, Korea & underwt Taiwan, ASEAN. We like consumer discretionary, comm...

Manishi Raychaudhuri

Technology - Implications of China-US Tariff Reduction

Overall, we believe this is a further relief on China technology supply chain after the US CBP’s exemption from reciprocal tariffs for 20 product...

CMB International

[Blue Lotus Daily]:BEKE US/1810 HK/ZK US/LKNCY US/Macro/New Energy Vehicles

​Post-holiday slowdown in existing home transactions but stabilized new home sales; Xiaomi car owners demand refunds; Zeekr launches channel reform...

Blue Lotus Research Institute

HSI has rebounded above pre-reciprocal tariff levels, with top stocks up 15.6%. However, 32 stocks remain negative, with ZTO Express, Budweiser...

Alibaba's Qwen Team to offer AGI-like deep research for free, Ele.me's retail system integrated into Taobao Instashopping, JD, Meituan, Ele.me...

Post-holiday slowdown in existing home transactions but stabilized new home sales; Xiaomi car owners demand refunds; Zeekr launches channel reform...