HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>Following Trump's threats on tariffs and pull-out of meeting with Xi, the 5% collapse in the HSI futures implies a heavy sell-off in HK when the market reopens.</li>
<li>The stocks with the best YTD performance and significant strengths in the last month are the prime candidates most vulnerable to the initial collapse. </li>
<li>
<a href="https://www.smartkarma.com/entities/semiconductor-manufacturing-international-corp-smic" target="_blank" data-smartkarma-citation="entities:14231:1" rel="noopener">Semiconductor Manufacturing International Corp (SMIC) (981 HK)</a>, <a href="https://www.smartkarma.com/entities/kuaishou-technology" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a>, <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba (9988 HK)</a>, and <a href="https://www.smartkarma.com/entities/hua-hong-semiconductor-ltd" target="_blank" data-smartkarma-citation="entities:7201:1" rel="noopener">Hua Hong Semiconductor (1347 HK)</a> are badly exposed.</li>
</ul>


Following Trump's threats on tariffs and pull-out of meeting with Xi, the 5% collapse in the HSI futures implies a heavy sell-off in HK when the market reopens.
The stocks with the best YTD performance and significant strengths in the last month are the prime candidates most vulnerable to the initial collapse. 

Semiconductor Manufacturing International Corp (SMIC) (981 HK), Kuaishou Technology (1024 HK), Alibaba (9988 HK), and Hua Hong Semiconductor (1347 HK) are badly exposed.


Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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.

Quantitative Analysis

<ul>
<li>We analyse the changes of A-H premium on 157 stocks over the last week. The average A-H premium was 58.2% as of Oct 10th.</li>
<li>The average A-H premium changed by 1.9ppt week-on-week, led by real estate, financials, consumer discretionary and offset by utilities, information technology, communication services.</li>
<li>We highlight weekly changes in A-H premium for Cosco Shipping Development, Innocare Pharma, Shanghai Electric, SMIC, CIMC, Gf Securities.</li>
</ul>


We analyse the changes of A-H premium on 157 stocks over the last week. The average A-H premium was 58.2% as of Oct 10th.
The average A-H premium changed by 1.9ppt week-on-week, led by real estate, financials, consumer discretionary and offset by utilities, information technology, communication services.
We highlight weekly changes in A-H premium for Cosco Shipping Development, Innocare Pharma, Shanghai Electric, SMIC, CIMC, Gf Securities.


A-H Premium Weekly (Oct 10th): Cosco Shipping Development, Innocare Pharma, Shanghai Electric, SMIC

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Jiangsu Hengrui Medicine / Equity Bottom-Up

<ul>
<li>The 11th national VBP has optimized the selection of price difference control "anchor points", which is an important signal, implying that future VBP will follow the general direction of “anti-involution”.</li>
<li>As long as there’s no significant difference in pipeline data, buyers are more concerned about the speed of R&amp;D progress and may not necessarily dwell on potential advantages and disadvantages.</li>
<li>Hengrui's innovative drug revenue was slightly lower-than-expected. The Company's 2025 employee stock ownership plan has lowered the compound growth target for innovative drugs from 30% to 25%.</li>
</ul>


The 11th national VBP has optimized the selection of price difference control "anchor points", which is an important signal, implying that future VBP will follow the general direction of “anti-involution”.
As long as there’s no significant difference in pipeline data, buyers are more concerned about the speed of R&amp;D progress and may not necessarily dwell on potential advantages and disadvantages.
Hengrui's innovative drug revenue was slightly lower-than-expected. The Company's 2025 employee stock ownership plan has lowered the compound growth target for innovative drugs from 30% to 25%.


China Healthcare Weekly (Oct.12) - 11th National VBP, Future BD Trend, Hengrui Is Facing Headwinds

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Circle Internet Group / Technical Analysis

<ul>
<li>We remain bullish since our 4/22/25 Compass, and we will maintain our bullish outlook as long as market dynamics remain healthy and the S&amp;P 500 (SPX) is above 6028-6059.</li>
<li>For now, we continue to expect support to show up at the 4-month uptrend, which generally coincides with the 20-day MA.</li>
<li>Speculative growth themes (quantum,nuclear, hydrogen, space, robotics, drones, data centers, solar, biotech, WGMI,ARKK,ARKQ,ARKX,ARKW,ARKG, etc.) have been rolling, and we've been recommending them in this section every week for 1+ months.</li>
</ul>


We remain bullish since our 4/22/25 Compass, and we will maintain our bullish outlook as long as market dynamics remain healthy and the S&amp;P 500 (SPX) is above 6028-6059.
For now, we continue to expect support to show up at the 4-month uptrend, which generally coincides with the 20-day MA.
Speculative growth themes (quantum,nuclear, hydrogen, space, robotics, drones, data centers, solar, biotech, WGMI,ARKK,ARKQ,ARKX,ARKW,ARKG, etc.) have been rolling, and we've been recommending them in this section every week for 1+ months.


Downgrading Financials to Underweight; Growth Themes Galore; Health Care Breaking Out

<ul>
<li>We analysed the earning revision of component stocks of HSCEI in the past month.</li>
<li>We tabulated stocks with the top impact on index's EPS, stocks' EPS revision, and revenue revision.</li>
<li>We highlighted EPS revision on Pop Mart Intl, TENCENT, MEITUAN, BOC, BYD, LI AUTO, Pop Mart, BOC, Meituan, BYD, Tencent, Li Auto.</li>
</ul>


We analysed the earning revision of component stocks of HSCEI in the past month.
We tabulated stocks with the top impact on index's EPS, stocks' EPS revision, and revenue revision.
We highlighted EPS revision on Pop Mart Intl, TENCENT, MEITUAN, BOC, BYD, LI AUTO, Pop Mart, BOC, Meituan, BYD, Tencent, Li Auto.


HSCEI Index Earning Revision (Sep): Pop Mart Intl, TENCENT, MEITUAN, BOC, BYD, LI AUTO, Pop Mart

China

BeiGene, Ltd. operates as a commercial stage biopharmaceutical company. The Company focuses on discovery, development, and commercialization of molecularly targeted and immuno-oncology drugs for the treatment of cancer. BeiGene serves patients worldwide.

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BeOne (ONC US)

HK Strategy: Who Will Suffer the Most?

Trump's tariff threats and market uncertainty lead to a potential heavy sell-off in HK, with top-performing stocks like SMIC, Kuaishou, Alibaba,...

Osbert Tang, CFA

A-H Premium Weekly (Oct 10th): Cosco Shipping Development, Innocare Pharma, Shanghai Electric, SMIC

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Cosco Shipping Development, Innocare Pharma, Shanghai...

Ke Yan, CFA, FRM

China Healthcare Weekly (Oct.12) - 11th National VBP, Future BD Trend, Hengrui Is Facing Headwinds

The 11th national VBP signals a shift towards "anti-involution". We shared views on licensing cooperation trend. Due to declining innovative drug...

Xinyao (Criss) Wang

Downgrading Financials to Underweight; Growth Themes Galore; Health Care Breaking Out

Downgrading Financials $XLF to Underweight; Growth Themes Galore: quantum, nuclear, hydrogen, space, robotics, drones, data centers, solar,...

Vermilion Research

HSCEI Index Earning Revision (Sep): Pop Mart Intl, TENCENT, MEITUAN, BOC, BYD, LI AUTO, Pop Mart

We analyzed HSCEI's consensus for Sep 2025 and highlighted changes of EPS in Pop Mart Intl, TENCENT, MEITUAN, BOC, BYD, LI AUTO, Pop Mart, BOC,...

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

HK Strategy: Who Will Suffer the Most?

​Trump's tariff threats and market uncertainty lead to a potential heavy sell-off in HK, with top-performing stocks like SMIC, Kuaishou, Alibaba,...

Osbert Tang, CFA

A-H Premium Weekly (Oct 10th): Cosco Shipping Development, Innocare Pharma, Shanghai Electric, SMIC

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Cosco Shipping Development, Innocare Pharma, Shanghai...

Ke Yan, CFA, FRM

China Healthcare Weekly (Oct.12) - 11th National VBP, Future BD Trend, Hengrui Is Facing Headwinds

​The 11th national VBP signals a shift towards "anti-involution". We shared views on licensing cooperation trend. Due to declining innovative drug...

Xinyao (Criss) Wang

Downgrading Financials to Underweight; Growth Themes Galore; Health Care Breaking Out

Downgrading Financials $XLF to Underweight; Growth Themes Galore: quantum, nuclear, hydrogen, space, robotics, drones, data centers, solar,...

Vermilion Research

HSCEI Index Earning Revision (Sep): Pop Mart Intl, TENCENT, MEITUAN, BOC, BYD, LI AUTO, Pop Mart

We analyzed HSCEI's consensus for Sep 2025 and highlighted changes of EPS in Pop Mart Intl, TENCENT, MEITUAN, BOC, BYD, LI AUTO, Pop Mart, BOC,...

Ke Yan, CFA, FRM

Trump's tariff threats and market uncertainty lead to a potential heavy sell-off in HK, with top-performing stocks like SMIC, Kuaishou, Alibaba,...

The 11th national VBP signals a shift towards "anti-involution". We shared views on licensing cooperation trend. Due to declining innovative drug...