Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>Hong Kong market quietly broke its downward trend channel last week, however the HSI met strong resistance at 18200 (100 Week Moving Average).</li>
<li>
<a href="https://www.smartkarma.com/entities/picc-property-casualty-h" target="_blank" data-smartkarma-citation="entities:350:1" rel="noopener">PICC Property &amp; Casualty H (2328 HK)</a> and <a href="https://www.smartkarma.com/entities/china-petroleum-chemical-h" target="_blank" data-smartkarma-citation="entities:369:1" rel="noopener">China Petroleum &amp; Chemical (386 HK)</a> broke to new highs relative to MSCI indices.  Sinopec may benefit from stronger RMB in 2H24.
</li>
<li><a href="https://www.smartkarma.com/entities/shenzhou-intl-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10415:1" rel="noopener">Shenzhou Intl Group Holdings (2313 HK)</a> had a short-term turnaround from its downtrend.  The company reported growth in sales and better margins in 2Q24.</li>
</ul>


Hong Kong market quietly broke its downward trend channel last week, however the HSI met strong resistance at 18200 (100 Week Moving Average).

PICC Property &amp; Casualty H (2328 HK) and China Petroleum &amp; Chemical (386 HK) broke to new highs relative to MSCI indices.  Sinopec may benefit from stronger RMB in 2H24.

Shenzhou Intl Group Holdings (2313 HK) had a short-term turnaround from its downtrend.  The company reported growth in sales and better margins in 2Q24.


Technically Speaking, Breakouts and Breakdowns: HONG KONG (SEPTEMBER 3)

Analyst

Steve

Equity Bottom-Up

<ul>
<li>According to public news today afternoon during trading hours, the founder and biggest shareholder of <a href="https://www.smartkarma.com/entities/li-ning-co-ltd" target="_blank" data-smartkarma-citation="entities:6047:1" rel="noopener">Li Ning (2331 HK)</a>, Mr. Li Ning, is mulling privatizing the public company. </li>
<li>Mr. Li Ning has shown the opposite intention over the last few years, with several major sell-down of stake.</li>
<li>The company is trading at 16x 2024 PE, with visibility being quite low.  </li>
</ul>


According to public news today afternoon during trading hours, the founder and biggest shareholder of Li Ning (2331 HK), Mr. Li Ning, is mulling privatizing the public company. 
Mr. Li Ning has shown the opposite intention over the last few years, with several major sell-down of stake.
The company is trading at 16x 2024 PE, with visibility being quite low.  


Li Ning (2331 HK):  Update On The Name Given Potential Privatization News

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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 Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/giant-biogene-holding-co-ltd" target="_blank" data-smartkarma-citation="entities:35950:1" rel="noopener">Giant Biogene (2367 HK)</a> aims to raise up to US$205m via a top-up placement.</li>
<li>We have followed the company since listing and its recent performance has been great. Although it doesn’t seem to need the cash.</li>
<li>In this note, we will run the deal through our ECM framework and talk about the recent updates.</li>
</ul>



Giant Biogene (2367 HK) aims to raise up to US$205m via a top-up placement.
We have followed the company since listing and its recent performance has been great. Although it doesn’t seem to need the cash.
In this note, we will run the deal through our ECM framework and talk about the recent updates.


Giant Biogene Placement - Has Been Doing Well but Doesn’t Need the Cash

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

China Nonferrous Mining Corp / Event-Driven

<ul>
<li>A shares were down on the week, not maintaining the month-end bounce after the long weekend. H-shares were mixed. HSCEI was slightly up. </li>
<li>Net SOUTHBOUND buying was +HK23bn. SOUTHBOUND ended its consecutive post-CNY daily net buy streak on 25 March, then started a new one. No net sell days since.</li>
<li>This week saw a LOT of news. State Council Nine Points. CSRC draft regs and legislative work plan. Ratings agency action. Lots of movement. None of it hugely positive.</li>
</ul>


A shares were down on the week, not maintaining the month-end bounce after the long weekend. H-shares were mixed. HSCEI was slightly up. 
Net SOUTHBOUND buying was +HK23bn. SOUTHBOUND ended its consecutive post-CNY daily net buy streak on 25 March, then started a new one. No net sell days since.
This week saw a LOT of news. State Council Nine Points. CSRC draft regs and legislative work plan. Ratings agency action. Lots of movement. None of it hugely positive.


HK Connect SOUTHBOUND Flows (To 12 Apr 2024); Strong Net Buying. New State Council and CSRC Plans

HK/China Equity Long-Short

Osbert Tang, CFA

<ul>
<li>The turnaround of sports business at <a href="https://www.smartkarma.com/entities/china-dongxiang-group-co" target="_blank" data-smartkarma-citation="entities:1068:1" rel="noopener">China Dongxiang (3818 HK)</a> is very welcoming. We are glad that sales trend in Oct-Nov is sustained and Phenix brand is well-received.</li>
<li>Reported losses widened as poor market environment enlarged investment losses. However, net cash and investment portfolio are still valued at Rmb8.5bn, or 5.9x its market capitalisation. </li>
<li>CNDX looks comfortably at over 6% full-year dividend yield. Together with just 0.15x P/B, there are enough protections for the downside of the stock.  </li>
</ul>


The turnaround of sports business at China Dongxiang (3818 HK) is very welcoming. We are glad that sales trend in Oct-Nov is sustained and Phenix brand is well-received.
Reported losses widened as poor market environment enlarged investment losses. However, net cash and investment portfolio are still valued at Rmb8.5bn, or 5.9x its market capitalisation. 
CNDX looks comfortably at over 6% full-year dividend yield. Together with just 0.15x P/B, there are enough protections for the downside of the stock.  


China Dongxiang (3818 HK): Turned Around on Sports Business

China

ANTA Sports Products Limited designs, develops, manufactures, and markets sportswear, including sports footwear and apparel for professionals and the general public.

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Anta Sports Products (2020 HK)

Technically Speaking, Breakouts and Breakdowns: HONG KONG (SEPTEMBER 3)

Hong Kong market broke its downtrend however it met strong resistance just above 18k. PICC and Sinopec broke to new highs relative to MSCI...

David Mudd

Li Ning (2331 HK): Update On The Name Given Potential Privatization News

Share price on a downward momentum, likely due to bearish feedback from certain distributors on recent trends. I believe the company's target of...

Steve

Giant Biogene Placement - Has Been Doing Well but Doesn’t Need the Cash

Giant Biogene (2367 HK) aims to raise up to US$205m via a top-up placement. In this note, we talk about the deal dynamics and run the deal through...

Sumeet Singh

HK Connect SOUTHBOUND Flows (To 12 Apr 2024); Strong Net Buying. New State Council and CSRC Plans

Strong SOUTHBOUND Connect flows continue. Only one net sell day since the end of Chinese New Year. H-shares were flat to up while A-shares were...

Travis Lundy

China Dongxiang (3818 HK): Turned Around on Sports Business

Along with the encouraging 3Q FY24 (Oct-Dec 2023) sportswear sales - Kappa brand sales up mid 40%–50% YoY, China Dongxiang has benefited from the...

Osbert Tang, CFA

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