HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

Chow Tai Fook Jewellery / Equity Bottom-Up

<ul>
<li>While <a href="https://www.smartkarma.com/entities/chow-tai-fook-jewellery-group" target="_blank" data-smartkarma-citation="entities:549:1" rel="noopener">Chow Tai Fook Jewellery (1929 HK)</a> has a stellar share price performance YTD, it still lags the HSI since 2023. The solid 2H FY25 result should support further upside. </li>
<li>SSS growth has recovered sharply in Apr-May 2025 (the first two months of 1Q FY26), and CTF should reap further benefits from cost management and product transformation.</li>
<li>FY26F ROE may reach 27.2%. While its current yield is only 4.6%, it is possible to declare special dividend this year, easily pushing it to over 10%.</li>
</ul>


While Chow Tai Fook Jewellery (1929 HK) has a stellar share price performance YTD, it still lags the HSI since 2023. The solid 2H FY25 result should support further upside. 
SSS growth has recovered sharply in Apr-May 2025 (the first two months of 1Q FY26), and CTF should reap further benefits from cost management and product transformation.
FY26F ROE may reach 27.2%. While its current yield is only 4.6%, it is possible to declare special dividend this year, easily pushing it to over 10%.


Chow Tai Fook (1929 HK): A Decent Rebound

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The value realisation of selling cross-holdings should not be contingent on selling your shares to someone else too cheaply but that is exactly what Toyota is proposing here.</li>
<li>OCBC is doing the right thing. Although a 17.8% bump in terms for <a href="https://www.smartkarma.com/entities/great-eastern-holdings-ltd" target="_blank" data-smartkarma-citation="entities:13993:1" rel="noopener">Great Eastern Holdings (GE SP)</a>'s minorities is probably not enough to dislodge Palliser.</li>
<li>Cosette has lodged a termination notice, which <a href="https://www.smartkarma.com/entities/mayne-pharma-group-ltd" target="_blank" data-smartkarma-citation="entities:757:1" rel="noopener">Mayne Pharma (MYX AU)</a> rejects. It's anyone's guess whether this saga concludes with a price cut; or Cosette walking.</li>
</ul>


The value realisation of selling cross-holdings should not be contingent on selling your shares to someone else too cheaply but that is exactly what Toyota is proposing here.
OCBC is doing the right thing. Although a 17.8% bump in terms for Great Eastern Holdings (GE SP)'s minorities is probably not enough to dislodge Palliser.
Cosette has lodged a termination notice, which Mayne Pharma (MYX AU) rejects. It's anyone's guess whether this saga concludes with a price cut; or Cosette walking.


Last Week in Event SPACE: Toyota Indust. Great Eastern, Mayne Pharma, Shibaura Elect., New World

<ul>
<li>0.052x P/B! That's <a href="https://www.smartkarma.com/entities/new-world-development" target="_blank" data-smartkarma-citation="entities:7037:1" rel="noopener">New World Development (17 HK)</a>'s current trailing  P/B ratio; roughly a quarter of the next comparable real estate peer.</li>
<li>
What's new? The latest decline followed an announcement on the 30th May that it would defer payments on its perpetual bonds.</li>
<li>NWD's 6.15% and 4.8% perpetuals fell to 23 cents and 15.5 cents on the dollar on 2nd June, suggesting the market is pricing in the possibility of a bust.</li>
</ul>


0.052x P/B! That's New World Development (17 HK)'s current trailing  P/B ratio; roughly a quarter of the next comparable real estate peer.

What's new? The latest decline followed an announcement on the 30th May that it would defer payments on its perpetual bonds.
NWD's 6.15% and 4.8% perpetuals fell to 23 cents and 15.5 cents on the dollar on 2nd June, suggesting the market is pricing in the possibility of a bust.


Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

<ul>
<li>US treasuries ended mixed yesterday, with the curve steepening materially amid concerns over the US budget deficit and President Donald Trump’s impending tax-cut bill.</li>
<li>The yield on the 2Y UST fell 1 bp to 3.97%, while the yield on the 10Y UST rose 4 bps to 4.49%.</li>
<li>US equities retreated after a six-day rally, with the S&amp;P 500 and Nasdaq both declining 0.4% to 5,940 and 19,143, respectively. </li>
</ul>


US treasuries ended mixed yesterday, with the curve steepening materially amid concerns over the US budget deficit and President Donald Trump’s impending tax-cut bill.
The yield on the 2Y UST fell 1 bp to 3.97%, while the yield on the 10Y UST rose 4 bps to 4.49%.
US equities retreated after a six-day rally, with the S&amp;P 500 and Nasdaq both declining 0.4% to 5,940 and 19,143, respectively. 


<ul>
<li>US President Donald Trump has announced a minimum 10% tariff on all exporters to the US, as well as additional reciprocal duties on c. 60 nations.</li>
<li>Vietnam faces one of the steepest tariff increases at 46%, while China will be subject to an additional tariff hike of 34% (on top of an existing 20% duty tied to fentanyl trafficking).</li>
<li>Meanwhile, India, South Korea and Japan have been hit with tariffs of 26%, 25% and 24%, respectively. </li>
</ul>


US President Donald Trump has announced a minimum 10% tariff on all exporters to the US, as well as additional reciprocal duties on c. 60 nations.
Vietnam faces one of the steepest tariff increases at 46%, while China will be subject to an additional tariff hike of 34% (on top of an existing 20% duty tied to fentanyl trafficking).
Meanwhile, India, South Korea and Japan have been hit with tariffs of 26%, 25% and 24%, respectively. 


Hong Kong

New World Development is a Hong Kong-based conglomerate primarily engaged in property development and investment, hotels, infrastructure and services, and department stores in Greater China, particularly the Greater Bay Area. Its portfolio includes residential, retail, office, and industrial properties, as well as hotel operations and various infrastructure projects. The company was founded in 1970 and is headquartered in Central, Hong Kong.

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New World Development (17 HK)

Chow Tai Fook (1929 HK): A Decent Rebound

Despite lagging the HSI since end-2023, CTF's solid 2H FY25 results, product transformation, and cost control achievement will boost the share...

Osbert Tang, CFA

Last Week in Event SPACE: Toyota Indust. Great Eastern, Mayne Pharma, Shibaura Elect., New World

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

NWD (17 HK): Markets Pricing In A Bust

0.05x P/B says it all. Conversely, NWD is so beaten up here, it's probably worth a punt if you think it will be rescued and/or perpetually supported.

David Blennerhassett

Lucror Analytics - Morning Views Asia

US treasuries ended mixed yesterday, with the curve steepening materially amid concerns over the US budget deficit and President Donald Trump’s...

Lucror Analytics

Lucror Analytics - Morning Views Asia

US President Donald Trump has announced a minimum 10% tariff on all exporters to the US, as well as additional reciprocal duties on c. 60 nations.

Lucror Analytics

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Chow Tai Fook (1929 HK): A Decent Rebound

Despite lagging the HSI since end-2023, ​CTF's solid 2H FY25 results, product transformation, and cost control achievement will boost the share...

Osbert Tang, CFA

Last Week in Event SPACE: Toyota Indust. Great Eastern, Mayne Pharma, Shibaura Elect., New World

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

NWD (17 HK): Markets Pricing In A Bust

0.05x P/B says it all. Conversely, NWD is so beaten up here, it's probably worth a punt if you think it will be rescued and/or perpetually supported.

David Blennerhassett

Lucror Analytics - Morning Views Asia

US treasuries ended mixed yesterday, with the curve steepening materially amid concerns over the US budget deficit and President Donald Trump’s...

Lucror Analytics

Lucror Analytics - Morning Views Asia

US President Donald Trump has announced a minimum 10% tariff on all exporters to the US, as well as additional reciprocal duties on c. 60 nations.

Lucror Analytics

Despite lagging the HSI since end-2023, CTF's solid 2H FY25 results, product transformation, and cost control achievement will boost the share...