HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>Weaker OECD demand, diversification of supply chain out of China, lesser room for Rmb depreciation and high base effects all suggest challenging export environment for China in 2023. </li>
<li>We expect 5-10% drop in China's export in next year, against consensus of 0.2% growth. Except ASEAN, exports to all major trading partners are already deep in negative in Nov.</li>
<li>Long-Haul container shipping is the most disastrous, while port and logistics sectors are less vulnerable. We think <a href="https://www.smartkarma.com/entities/sitc-international-holdings" target="_blank" data-smartkarma-citation="entities:15301:1" rel="noopener">SITC International (1308 HK)</a> and <a href="https://www.smartkarma.com/entities/sinotrans-limited-h" target="_blank" data-smartkarma-citation="entities:1321:1" rel="noopener">Sinotrans (598 HK)</a> will fare better than others.</li>
</ul>


Weaker OECD demand, diversification of supply chain out of China, lesser room for Rmb depreciation and high base effects all suggest challenging export environment for China in 2023. 
We expect 5-10% drop in China's export in next year, against consensus of 0.2% growth. Except ASEAN, exports to all major trading partners are already deep in negative in Nov.
Long-Haul container shipping is the most disastrous, while port and logistics sectors are less vulnerable. We think SITC International (1308 HK) and Sinotrans (598 HK) will fare better than others.


China's Export Outlook 2023: How Port, Shipping and Logistics Fare?

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

Cross Asset Strategy

<ul><li>In Depth: Cosco alters course in the face of shipping headwinds.</li><li>China plans to put nuclear-powered base on the moon by 2028.</li><li>China’s ‘Big Six’ state banks offer developers $130 billion in credit lines.</li></ul>

In Depth: Cosco alters course in the face of shipping headwinds.China plans to put nuclear-powered base on the moon by 2028.China’s ‘Big Six’ state banks offer developers $130 billion in credit lines.

CX Daily: Cosco Alters Course in the Face of Shipping Headwinds

<ul><li>In Depth: The shadowy businessman behind a multibillion-dollar bank swindle</li><li>Chongqing monkeypox patient caught the disease in Berlin, China CDC says</li><li>Former Shanghai police chief sentenced to life in prison for corruption</li></ul>

In Depth: The shadowy businessman behind a multibillion-dollar bank swindleChongqing monkeypox patient caught the disease in Berlin, China CDC saysFormer Shanghai police chief sentenced to life in prison for corruption

CX Daily: The Shadowy Businessman Behind a Multibillion-Dollar Bank Swindle

Research from Quam Securities, Quam Securities

Quam Securities Research

Research from Quam Securities

Quam Securities

Since its inception in 1986, Quam Securities Limited (Quam Securities) has grown to become one of the few mid-tier securities brokerages in Hong Kong with global execution capabilities for both private and institutional clients. It boasts a well-established network in Greater China including Taiwan and in major world markets through the Global Alliance Partners (GAP). Quam Securities is well-positioned not only to harness and drive business within the China Tonghai International Financial Limited but also between China and the world markets.

<ul style="list-style-type: disc;"><li>Shipping rates continued their downtrend last week with the WCI Composite Container Index fell 5.4% w/w and the rate for one of the mostly watched key routes, SH-to-LA falling 9.2%</li><li>Dry bulk rates fell even more with the Baltic Dry Bulk Index falling 15.4% w/w and the latest level of 1082 basically normalized to pre-pandemic levels</li><li>Crude oil tanker rate was flat w/w and continued to outperform the other two sectors</li></ul>

Shipping rates continued their downtrend last week with the WCI Composite Container Index fell 5.4% w/w and the rate for one of the mostly watched key routes, SH-to-LA falling 9.2%Dry bulk rates fell even more with the Baltic Dry Bulk Index falling 15.4% w/w and the latest level of 1082 basically normalized to pre-pandemic levelsCrude oil tanker rate was flat w/w and continued to outperform the other two sectors

Tactical Trade Idea – Shipping Sector : Shipping Rates Remained Under Pressure

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

Shenton Research

Shenton Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Jul 31st based on HKEx daily reports.</li>
<li>In the past 7 days, the top 3 companies that repurchased the most shares from the market were Link Reit (823 HK), Forest Cabin (2657 HK), Xiaomi (1810 HK).</li>
<li>In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Kuaishou (1024 HK), Xiaomi (1810 HK).</li>
</ul>


We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Jul 31st based on HKEx daily reports.
In the past 7 days, the top 3 companies that repurchased the most shares from the market were Link Reit (823 HK), Forest Cabin (2657 HK), Xiaomi (1810 HK).
In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Kuaishou (1024 HK), Xiaomi (1810 HK).


Hong Kong Buybacks Weekly (Jul 31st): Link Reit, Forest Cabin, Xiaomi

China

COSCO SHIPPING Holdings is a global leader in container shipping and terminal operations, offering maritime container transportation, terminal management, and container leasing services. The company also provides digital supply chain solutions. It was founded on March 3, 2005, and is headquartered in Shanghai, China.

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COSCO SHIPPING Holdings (1919 HK)

China's Export Outlook 2023: How Port, Shipping and Logistics Fare?

We are cautious on China's export outlook in 2023, and operating environment of port, container shipping and logistics sectors will be challenging....

Osbert Tang, CFA

CX Daily: Cosco Alters Course in the Face of Shipping Headwinds

In Depth: Cosco alters course in the face of shipping headwinds. China plans to put nuclear-powered base on the moon by 2028.

Caixin Global

CX Daily: The Shadowy Businessman Behind a Multibillion-Dollar Bank Swindle

In Depth: The shadowy businessman behind a multibillion-dollar bank swindle. Chongqing monkeypox patient caught the disease in Berlin, China CDC says

Caixin Global

Tactical Trade Idea – Shipping Sector : Shipping Rates Remained Under Pressure

Dry bulk rates fell even more with the Baltic Dry Bulk Index falling 15.4% w/w and the latest level of 1082 basically normalized to pre-pandemic...

Quam Securities

Hong Kong Buybacks Weekly (Jul 31st): Link Reit, Forest Cabin, Xiaomi

We analyzed the Hong Kong buyback data in the past week and highlight the top 3 companies that repurchased the most shares were Link Reit (823 HK),...

Ke Yan, CFA, FRM

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