HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>The China Power Sector has revived on the back of industry tariff reforms, higher consumption driven by AI adoption, and an increase in grid investments. Yet, there are still values.</li>
<li>
<a href="https://www.smartkarma.com/entities/china-power-international" target="_blank" data-smartkarma-citation="entities:15548:1" rel="noopener">China Power International (2380 HK)</a> and <a href="https://www.smartkarma.com/entities/huaneng-power-intl-inc-h" target="_blank" data-smartkarma-citation="entities:28:1" rel="noopener">Huaneng Power Intl Inc H (902 HK)</a> are the power conglomerates that look attractive on fundamentals, earnings and valuations.</li>
<li>Among clean energy names, <a href="https://www.smartkarma.com/entities/china-longyuan-power-group-corp-ltd" target="_blank" data-smartkarma-citation="entities:14215:1" rel="noopener">China Longyuan Power (916 HK)</a> is a laggard YTD. However, earnings growth should accelerate and its multiples are not stretched.</li>
</ul>


The China Power Sector has revived on the back of industry tariff reforms, higher consumption driven by AI adoption, and an increase in grid investments. Yet, there are still values.

China Power International (2380 HK) and Huaneng Power Intl Inc H (902 HK) are the power conglomerates that look attractive on fundamentals, earnings and valuations.
Among clean energy names, China Longyuan Power (916 HK) is a laggard YTD. However, earnings growth should accelerate and its multiples are not stretched.


China Power Sector: Where Can We Still Find Value?

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

Oil & Natural Gas Corporation / Technical Analysis

<ul>
<li>MSCI EM (EEM-US) has continued to hold above our $37-$37.50 line-in-the-sand, meaning we are constructive from a price perspective.</li>
<li>We have maintained an underweight to emerging markets, and we are overweight developed international (MSCI EAFE, Europe, Japan) as discussed in in Int’l Compass and ETF Pathfinder reports throughout 2023.</li>
<li>Still, there are plenty of attractive countries and Sectors within the EM landscape, which is what we are focusing on today.</li>
</ul>


MSCI EM (EEM-US) has continued to hold above our $37-$37.50 line-in-the-sand, meaning we are constructive from a price perspective.
We have maintained an underweight to emerging markets, and we are overweight developed international (MSCI EAFE, Europe, Japan) as discussed in in Int’l Compass and ETF Pathfinder reports throughout 2023.
Still, there are plenty of attractive countries and Sectors within the EM landscape, which is what we are focusing on today.


EM Strategy: MSCI EM Financials & Energy Improving-Overweight; Overweights: Taiwan, India, Mexico

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 81.7% as of Aug 7th.</li>
<li>The average A-H premium changed by 0.8ppt week-on-week, led by communication services, health care, utilities and offset by consumer staples, materials.</li>
<li>We highlight weekly changes in A-H premium for Remegen, Cmoc, Shandong Gold Mining Co Lt-H, Luxshare Ict, Beone Medicines.</li>
</ul>


We analyse the changes of A-H premium on 196 stocks over the last week. The average A-H premium was 81.7% as of Aug 7th.
The average A-H premium changed by 0.8ppt week-on-week, led by communication services, health care, utilities and offset by consumer staples, materials.
We highlight weekly changes in A-H premium for Remegen, Cmoc, Shandong Gold Mining Co Lt-H, Luxshare Ict, Beone Medicines.


A-H Premium Weekly (Aug 7th): Remegen, Cmoc, Shandong Gold Mining Co Lt-H, Luxshare Ict

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Asia is the focal region globally where nuclear power is growing significantly to meet its increasing demand for clean electricity. There are approximately 135 operable nuclear power reactors, with 35 under construction - around two-thirds of the reactors under construction worldwide. China is the clear leader in nuclear generation growth.
There were divergent responses to the Fukushima accident, leading some countries to reassess their long-term domestic energy policy, while others experienced a short-term pause, before continuing with long-term strategies, with few to no changes. 
The debate is ongoing whether nuclear power is a safe energy source for mitigating global climate change, or presents an unnecessary risk, given past disasters, coupled with the unavoidable by-product of radioactive waste. Additionally, renewable energy such as solar and wind has become increasingly competitive and sustainable.
For countries such as China, India, and South Korea, there remain solid economic reasons for the expansion of global nuclear power, and its role in lowering emissions from energy production.
The vast majority of nuclear power plants in Asia are operated by unlisted government entities; or in Japan, the bulk of reactors remain in shutdown mode after Fukushima.
<a href="https://www.smartkarma.com/entities/cgn-power-co-ltd-h" target="_blank" data-smartkarma-citation="entities:58:1" rel="noopener">CGN Power Co Ltd H (1816 HK)</a> is one of the few listed nuclear pure-plays in Asia, and trades at undemanding multiples, together with an attractive ROE and yield.
<div class="content-highlight">
What's Original?
This insight presents a comprehensive view of the Asian nuclear energy industry, and its value chain
</div>

Asia is the focal region globally where nuclear power is growing significantly to meet its increasing demand for clean electricity. There are approximately 135 operable nuclear power reactors, with 35 under construction - around two-thirds of the reactors under construction worldwide. China is the clear leader in nuclear generation growth.
There were divergent responses to the Fukushima accident, leading some countries to reassess their long-term domestic energy policy, while others experienced a short-term pause, before continuing with long-term strategies, with few to no changes. 
The debate is ongoing whether nuclear power is a safe energy source for mitigating global climate change, or presents an unnecessary risk, given past disasters, coupled with the unavoidable by-product of radioactive waste. Additionally, renewable energy such as solar and wind has become increasingly competitive and sustainable.
For countries such as China, India, and South Korea, there remain solid economic reasons for the expansion of global nuclear power, and its role in lowering emissions from energy production.
The vast majority of nuclear power plants in Asia are operated by unlisted government entities; or in Japan, the bulk of reactors remain in shutdown mode after Fukushima.
CGN Power Co Ltd H (1816 HK) is one of the few listed nuclear pure-plays in Asia, and trades at undemanding multiples, together with an attractive ROE and yield.

What's Original?
This insight presents a comprehensive view of the Asian nuclear energy industry, and its value chain


Asian Nuclear Energy Industry: The Value Chain

DZT Research

DZT 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.

<ul>
<li>We analyse the changes of A-H premium on 184 stocks over the last week. The average A-H premium was 76.3% as of Jun 5th.</li>
<li>The average A-H premium changed by -0.6ppt week-on-week, led by health care, consumer discretionary, consumer staples and offset by materials, information technology, energy.</li>
<li>We highlight weekly changes in A-H premium for Yankuang Energy, Haier Smarthome, Times Electric, China Coal, Ping An, Cgn Power.</li>
</ul>


We analyse the changes of A-H premium on 184 stocks over the last week. The average A-H premium was 76.3% as of Jun 5th.
The average A-H premium changed by -0.6ppt week-on-week, led by health care, consumer discretionary, consumer staples and offset by materials, information technology, energy.
We highlight weekly changes in A-H premium for Yankuang Energy, Haier Smarthome, Times Electric, China Coal, Ping An, Cgn Power.


A-H Premium Weekly (Jun 5th): Yankuang Energy, Haier Smarthome, Times Electric, China Coal, Ping An

China

CGN Power Co., Ltd. is a holding company primarily engaged in the generation and sale of nuclear power, as well as the construction, operation, and management of nuclear and non-nuclear clean energy projects. It is China's largest domestic nuclear power operator. The company was founded on March 25, 2014, and is headquartered in Shenzhen, China.

Price Gauge
52-week Range	0.00 - 0.00
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CGN Power (1816 HK)

China Power Sector: Where Can We Still Find Value?

China's power sector is thriving with industry reforms and AI adoption, making China Power and Huaneng Power attractive. China Longyuan is a clean...

Osbert Tang, CFA

EM Strategy: MSCI EM Financials & Energy Improving-Overweight; Overweights: Taiwan, India, Mexico

MSCI EM Financials & Energy Improving -- Upgrading to Overweight; MSCI EM Technology remains an Overweight. Top Country Overweights: Taiwan, India,...

Vermilion Research

A-H Premium Weekly (Aug 7th): Remegen, Cmoc, Shandong Gold Mining Co Lt-H, Luxshare Ict

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Remegen, Cmoc, Shandong Gold Mining Co Lt-H, Luxshare Ict,...

Ke Yan, CFA, FRM

Asian Nuclear Energy Industry: The Value Chain

China leads the world in nuclear generation growth. CGN Power appears undemanding at 7.8x PER and 1.4x PB, with a 10.6% ROE (vs. 9% for peers). A...

David Blennerhassett

A-H Premium Weekly (Jun 5th): Yankuang Energy, Haier Smarthome, Times Electric, China Coal, Ping An

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Yankuang Energy, Haier Smarthome, Times Electric, China...

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China Power Sector: Where Can We Still Find Value?

​China's power sector is thriving with industry reforms and AI adoption, making China Power and Huaneng Power attractive. China Longyuan is a clean...

Osbert Tang, CFA

EM Strategy: MSCI EM Financials & Energy Improving-Overweight; Overweights: Taiwan, India, Mexico

MSCI EM Financials & Energy Improving -- Upgrading to Overweight; MSCI EM Technology remains an Overweight. Top Country Overweights: Taiwan, India,...

Vermilion Research

A-H Premium Weekly (Aug 7th): Remegen, Cmoc, Shandong Gold Mining Co Lt-H, Luxshare Ict

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Remegen, Cmoc, Shandong Gold Mining Co Lt-H, Luxshare Ict,...

Ke Yan, CFA, FRM

Asian Nuclear Energy Industry: The Value Chain

China leads the world in nuclear generation growth. CGN Power appears undemanding at 7.8x PER and 1.4x PB, with a 10.6% ROE (vs. 9% for peers). A...

David Blennerhassett

A-H Premium Weekly (Jun 5th): Yankuang Energy, Haier Smarthome, Times Electric, China Coal, Ping An

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Yankuang Energy, Haier Smarthome, Times Electric, China...

Ke Yan, CFA, FRM

China's power sector is thriving with industry reforms and AI adoption, making China Power and Huaneng Power attractive. China Longyuan is a clean...