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.


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 remain near-term bullish since our 4/22/25 Compass, and our intermediate-term outlook remains bullish as well (as of our 5/14/25 Compass), with Int’l Compass reports all echoing this sentiment.</li>
<li>China (Shanghai Composite) has been a major focus ever since our July 3 report titled "China and Japan Breaking Out," and it's pulling back toward 10-year base support at 3675-3725;buy.</li>
<li>Japan's TOPIX and TOPIX Small indexes remain bullish (BUY), but RS remains below multi-month resistances; we would upgrade Japan to overweight on RS breakouts.</li>
</ul>


We remain near-term bullish since our 4/22/25 Compass, and our intermediate-term outlook remains bullish as well (as of our 5/14/25 Compass), with Int’l Compass reports all echoing this sentiment.
China (Shanghai Composite) has been a major focus ever since our July 3 report titled "China and Japan Breaking Out," and it's pulling back toward 10-year base support at 3675-3725;buy.
Japan's TOPIX and TOPIX Small indexes remain bullish (BUY), but RS remains below multi-month resistances; we would upgrade Japan to overweight on RS breakouts.


Buys in Japan and Europe; China Pulling Back -- Buy; MSCI ACWI Uptrend Intact

Global Healthcare Analyst

Tina Banerjee

<ul>
<li>Terumo is acquiring OrganOx, a leading innovator in organ preservation devices. Eisai received FDA approval for once weekly Leqembi subcutaneous injection for maintenance dosing.</li>
<li>Chugai Pharmaceutical’s partner Eli Lilly announced positive topline results from the Phase 3 trial of oral GLP-1 drug candidate. Daiichi Sankyo received approval for Datroway in China.</li>
<li>Beigene announced positive topline results from a Phase 1/2 study of sonrotoclax in mantle cell lymphoma. Telix Pharmaceuticals received a Complete Response Letter from the FDA regarding Zircaix.</li>
</ul>


Terumo is acquiring OrganOx, a leading innovator in organ preservation devices. Eisai received FDA approval for once weekly Leqembi subcutaneous injection for maintenance dosing.
Chugai Pharmaceutical’s partner Eli Lilly announced positive topline results from the Phase 3 trial of oral GLP-1 drug candidate. Daiichi Sankyo received approval for Datroway in China.
Beigene announced positive topline results from a Phase 1/2 study of sonrotoclax in mantle cell lymphoma. Telix Pharmaceuticals received a Complete Response Letter from the FDA regarding Zircaix.


APAC Healthcare Weekly (Aug 31) – Terumo, Eisai, Chugai, Daiichi Sankyo, Beigene, Remegen, Telix

<ul>
<li>Celltrion is acquiring a biopharmaceutical production plant in the U.S. capable of producing key biopharmaceuticals. Alteogen received positive opinion from European Medicines Agency for its Eylea biosimilar.</li>
<li>Wuxi Biologics has begun construction for new modular Drug Product facility in Singapore. CSPC Pharmaceutical entered into an exclusive license agreement with Madrigal Pharmaceuticals, for its oral GLP-1 drug candidate.</li>
<li>Jiangsu Hengrui Pharmaceuticals has entered into agreements with GlaxoSmithKline, to grant GSK an exclusive worldwide right (excluding China) of HRS-9821 and up to 11 other programs.</li>
</ul>


Celltrion is acquiring a biopharmaceutical production plant in the U.S. capable of producing key biopharmaceuticals. Alteogen received positive opinion from European Medicines Agency for its Eylea biosimilar.
Wuxi Biologics has begun construction for new modular Drug Product facility in Singapore. CSPC Pharmaceutical entered into an exclusive license agreement with Madrigal Pharmaceuticals, for its oral GLP-1 drug candidate.
Jiangsu Hengrui Pharmaceuticals has entered into agreements with GlaxoSmithKline, to grant GSK an exclusive worldwide right (excluding China) of HRS-9821 and up to 11 other programs.


APAC Healthcare Weekly (Aug 3)– Celltrion, Alteogen, Wuxi Bio, CSPC, Jiangsu Hengrui, Eisai, Kissei

Switzerland

BeOne Medicines is a global oncology biotechnology company focused on the discovery, development, and commercialization of cancer medicines. Its portfolio includes commercial-stage products like BRUKINSA, TEVIMBRA, and PARTRUVIX, which target various blood cancers and solid tumors. The company was founded in 2010 and is headquartered in Basel, Switzerland.

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BeOne Medicines (6160 HK)

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

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

Buys in Japan and Europe; China Pulling Back -- Buy; MSCI ACWI Uptrend Intact

Buys in Japan and Europe; China's Shanghai Composite Pulling Back to 10-year Base Support -- Buy; MSCI $ACWI Uptrend Intact. Actionable Themes:...

Vermilion Research

APAC Healthcare Weekly (Aug 31) – Terumo, Eisai, Chugai, Daiichi Sankyo, Beigene, Remegen, Telix

Terumo announced new acquisition. Eisai got FDA approval for Leqembi subcutaneous maintenance dosing. Chugai’s oral GLP-1 drug showed positive P3...

Tina Banerjee

APAC Healthcare Weekly (Aug 3)– Celltrion, Alteogen, Wuxi Bio, CSPC, Jiangsu Hengrui, Eisai, Kissei

Celltrion is acquiring a biopharmaceutical production plant in US. Wuxi Bio starts construction of new facility. CSPC and Jiangsu Hengrui stuck...

Tina Banerjee

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52-week Range

Market Cap (USDm)

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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

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

Buys in Japan and Europe; China Pulling Back -- Buy; MSCI ACWI Uptrend Intact

Buys in Japan and Europe; China's Shanghai Composite Pulling Back to 10-year Base Support -- Buy; MSCI $ACWI Uptrend Intact. Actionable Themes:...

Vermilion Research

APAC Healthcare Weekly (Aug 31) – Terumo, Eisai, Chugai, Daiichi Sankyo, Beigene, Remegen, Telix

Terumo announced new acquisition. Eisai got FDA approval for Leqembi subcutaneous maintenance dosing. Chugai’s oral GLP-1 drug showed positive P3...

Tina Banerjee

APAC Healthcare Weekly (Aug 3)– Celltrion, Alteogen, Wuxi Bio, CSPC, Jiangsu Hengrui, Eisai, Kissei

Celltrion is acquiring a biopharmaceutical production plant in US. Wuxi Bio starts construction of new facility. CSPC and Jiangsu Hengrui stuck...

Tina Banerjee

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