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 analyse the changes of A-H premium on 196 stocks over the last week. The average A-H premium was 83.5% as of Sep 11th.</li>
<li>The average A-H premium changed by 1.7ppt week-on-week, led by real estate, information technology, materials.</li>
<li>We highlight weekly changes in A-H premium for Minsheng Bank, Innocare Pharma, Yofc, Citic Sec.</li>
</ul>


We analyse the changes of A-H premium on 196 stocks over the last week. The average A-H premium was 83.5% as of Sep 11th.
The average A-H premium changed by 1.7ppt week-on-week, led by real estate, information technology, materials.
We highlight weekly changes in A-H premium for Minsheng Bank, Innocare Pharma, Yofc, Citic Sec.


A-H Premium Weekly (Sep 11th): Minsheng Bank, Innocare Pharma, Yofc, Citic Sec

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Bottom-Up

<ul>
<li>Trip.com will finally report Q2 results after the US close on Tuesday, September 15</li>
<li>Earlier investigation, now concluded, was likely a drag on growth &amp; earnings in period</li>
<li>Management commentary could indicate pace of recovery from Trip.com's latest stumble</li>
</ul>


Trip.com will finally report Q2 results after the US close on Tuesday, September 15
Earlier investigation, now concluded, was likely a drag on growth &amp; earnings in period
Management commentary could indicate pace of recovery from Trip.com's latest stumble


Trip.com Q226 Earnings Preview | Impact of Investigation | Accommodation Segment | Q3 Guidance Key

HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-southern-airlines-co-ltd" target="_blank" data-smartkarma-citation="entities:1078:1" rel="noopener">China Southern Airlines (1055 HK) </a>will suffer from a higher USD rate as Trump's massive deportation plan raises inflation.  High-cash companies will better position, however.</li>
<li>The surge in tariffs on US imports of goods from China will further accelerate supply chain diversification, boosting intra-Asia trade and driving <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>. </li>
<li>
<a href="https://www.smartkarma.com/entities/cnooc-ltd" target="_blank" data-smartkarma-citation="entities:175:1" rel="noopener">CNOOC (883 HK)</a> may gain from a slowdown in the green transition in the US as oil prices are supported. <a href="https://www.smartkarma.com/entities/meitu-inc" target="_blank" data-smartkarma-citation="entities:23573:1" rel="noopener">Meitu Inc (1357 HK)</a>, given its crypto investments, will benefit. </li>
</ul>



China Southern Airlines (1055 HK) will suffer from a higher USD rate as Trump's massive deportation plan raises inflation.  High-cash companies will better position, however.
The surge in tariffs on US imports of goods from China will further accelerate supply chain diversification, boosting intra-Asia trade and driving SITC International (1308 HK). 

CNOOC (883 HK) may gain from a slowdown in the green transition in the US as oil prices are supported. Meitu Inc (1357 HK), given its crypto investments, will benefit. 


China & HK Strategy: Some Stocks for Trump Trade

<ul>
<li>All three Chinese airlines trimmed their losses in 1H24, suggesting a pick-up in sector fundamentals. However, their 2Q24 bottom line displayed different trends.</li>
<li>
<a href="https://www.smartkarma.com/entities/air-china-ltd-h" target="_blank" data-smartkarma-citation="entities:8239:1" rel="noopener">Air China Ltd (H) (753 HK)</a> is performing the best, with QoQ improvement in both reported and recurring losses (reduction by 41.7% and 7.4%, respectively).</li>
<li>
<a href="https://www.smartkarma.com/entities/china-southern-airlines-co-ltd" target="_blank" data-smartkarma-citation="entities:1078:1" rel="noopener">China Southern Airlines (1055 HK)</a>, however, dipped back into red in 2Q24 after making a profit in 1Q24. With Air China underperforming YTD, there is room to revenge in 2H24.</li>
</ul>


All three Chinese airlines trimmed their losses in 1H24, suggesting a pick-up in sector fundamentals. However, their 2Q24 bottom line displayed different trends.

Air China Ltd (H) (753 HK) is performing the best, with QoQ improvement in both reported and recurring losses (reduction by 41.7% and 7.4%, respectively).

China Southern Airlines (1055 HK), however, dipped back into red in 2Q24 after making a profit in 1Q24. With Air China underperforming YTD, there is room to revenge in 2H24.


<ul>
<li>The companies that suffered exchange losses in FY23 due to Rmb depreciation will now benefit from potential Rmb appreciation in 2H24 and FY25. Meanwhile, gainers will become losers. </li>
<li>The beneficiaries are <a href="https://www.smartkarma.com/entities/air-china-ltd-h" target="_blank" data-smartkarma-citation="entities:8239:1" rel="noopener">Air China Ltd (753 HK)</a>, <a href="https://www.smartkarma.com/entities/shenzhen-international-holdings-limited" target="_blank" data-smartkarma-citation="entities:9:1" rel="noopener">Shenzhen International (152 HK)</a>, <a href="https://www.smartkarma.com/entities/china-southern-airlines-co-ltd" target="_blank" data-smartkarma-citation="entities:1078:1" rel="noopener">China Southern Airlines (1055 HK)</a>, <a href="https://www.smartkarma.com/entities/xinjiang-goldwind-science-technology-h" target="_blank" data-smartkarma-citation="entities:10112:1" rel="noopener">Xinjiang Goldwind (2208 HK)</a>, and <a href="https://www.smartkarma.com/entities/china-eastern-airlines-co-h" target="_blank" data-smartkarma-citation="entities:1079:1" rel="noopener">China Eastern Airlines (670 HK)</a>. </li>
<li>
<a href="https://www.smartkarma.com/entities/fosun-tourism-group" target="_blank" data-smartkarma-citation="entities:27439:1" rel="noopener">Fosun Tourism (1992 HK)</a>, <a href="https://www.smartkarma.com/entities/china-east-education-holdings" target="_blank" data-smartkarma-citation="entities:27843:1" rel="noopener">China East Education (667 HK)</a>, and <a href="https://www.smartkarma.com/entities/china-communications-construction-co-ltd" target="_blank" data-smartkarma-citation="entities:265:1" rel="noopener">China Communications Construction (1800 HK)</a> may need to book exchange losses (vs. gains in FY23). </li>
</ul>


The companies that suffered exchange losses in FY23 due to Rmb depreciation will now benefit from potential Rmb appreciation in 2H24 and FY25. Meanwhile, gainers will become losers. 
The beneficiaries are Air China Ltd (753 HK), Shenzhen International (152 HK), China Southern Airlines (1055 HK), Xinjiang Goldwind (2208 HK), and China Eastern Airlines (670 HK). 

Fosun Tourism (1992 HK), China East Education (667 HK), and China Communications Construction (1800 HK) may need to book exchange losses (vs. gains in FY23). 


China Strategy: Re-Assessing the Rmb Exchange Impacts

China

Air China is the flag carrier airline of the People's Republic of China, primarily providing air passenger and air cargo services, including both domestic and international flights. The company also offers a range of airline-related services such as aircraft engineering and airport ground handling. It was founded in 1988 and is headquartered in Beijing, People's Republic of China.

Price Gauge
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Air China (753 HK)

A-H Premium Weekly (Sep 11th): Minsheng Bank, Innocare Pharma, Yofc, Citic Sec

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Minsheng Bank, Innocare Pharma, Yofc, Citic Sec.

Ke Yan, CFA, FRM

Trip.com Q226 Earnings Preview | Impact of Investigation | Accommodation Segment | Q3 Guidance Key

Trip.com will finally report Q2 results on Tuesday evening (US time). Expectations for Q2 are low but forward guidance could indicate how quickly...

Tracking Traffic

China & HK Strategy: Some Stocks for Trump Trade

A higher USD rate due to Trump's deportation plan will impact CSA. Tariff surge on US imports from China will boost SITC. CNOOC may benefit from...

Osbert Tang, CFA

Chinese Airlines: Diverging Performance

Chinese airlines are the key beneficiaries of stronger Rmb as US rates drop, driven primarily by their high gearing and significant USD borrowings....

Osbert Tang, CFA

China Strategy: Re-Assessing the Rmb Exchange Impacts

With the US kick-starting the lower interest rate cycle with a 50bp cut overnight and indicated an expectation of an aggregate further 50bp cut in...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

A-H Premium Weekly (Sep 11th): Minsheng Bank, Innocare Pharma, Yofc, Citic Sec

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Minsheng Bank, Innocare Pharma, Yofc, Citic Sec.

Ke Yan, CFA, FRM

Trip.com Q226 Earnings Preview | Impact of Investigation | Accommodation Segment | Q3 Guidance Key

Trip.com will finally report Q2 results on Tuesday evening (US time). Expectations for Q2 are low but forward guidance could indicate how quickly...

Tracking Traffic

China & HK Strategy: Some Stocks for Trump Trade

​A higher USD rate due to Trump's deportation plan will impact CSA. Tariff surge on US imports from China will boost SITC. CNOOC may benefit from...

Osbert Tang, CFA

Chinese Airlines: Diverging Performance

Chinese airlines are the key beneficiaries of stronger Rmb as US rates drop, driven primarily by their high gearing and significant USD borrowings....

Osbert Tang, CFA

China Strategy: Re-Assessing the Rmb Exchange Impacts

With the US kick-starting the lower interest rate cycle with a 50bp cut overnight and indicated an expectation of an aggregate further 50bp cut in...

Osbert Tang, CFA

A higher USD rate due to Trump's deportation plan will impact CSA. Tariff surge on US imports from China will boost SITC. CNOOC may benefit from...