HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>CSRC's Market Value Management Guidelines will indirectly benefit the H-share stocks with their A-share counterparts with a P/B of below 1x.  </li>
<li>Chinese banks dominated the list with below-book A-shares. <a href="https://www.smartkarma.com/entities/china-everbright-bank-co-ltd" target="_blank" data-smartkarma-citation="entities:16221:1" rel="noopener">China Everbright Bank (6818 HK)</a>, <a href="https://www.smartkarma.com/entities/china-citic-bank-corp-ltd-ea6c25fd-4b20-45cb-a4a6-df7a60136f03" target="_blank" data-smartkarma-citation="entities:653:1" rel="noopener">China Citic Bank H (998 HK)</a>, and <a href="https://www.smartkarma.com/entities/industrial-and-commercial-bank-of-china-limited" target="_blank" data-smartkarma-citation="entities:1119:1" rel="noopener">ICBC (H) (1398 HK)</a> are the prime beneficiaries.</li>
<li>Infrastructure construction companies <a href="https://www.smartkarma.com/entities/china-railway-construction-corp-limited" target="_blank" data-smartkarma-citation="entities:263:1" rel="noopener">China Railway Cons Corp (1186 HK)</a>, <a href="https://www.smartkarma.com/entities/china-railway-group-ltd-h" target="_blank" data-smartkarma-citation="entities:264:1" rel="noopener">China Railway Group H (390 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 Comm Cons (1800 HK)</a> are also well-positioned to gain.</li>
</ul>


CSRC's Market Value Management Guidelines will indirectly benefit the H-share stocks with their A-share counterparts with a P/B of below 1x.  
Chinese banks dominated the list with below-book A-shares. China Everbright Bank (6818 HK), China Citic Bank H (998 HK), and ICBC (H) (1398 HK) are the prime beneficiaries.
Infrastructure construction companies China Railway Cons Corp (1186 HK), China Railway Group H (390 HK), and China Comm Cons (1800 HK) are also well-positioned to gain.


China & HK Strategy: Names to Watch for Market Value Management

<ul>
<li>The Rmb6trn of the new debt swap quota may disappoint the market given the lack of one-time direct stimulus. However, the underlying implications should not be overlooked.</li>
<li>A better balance sheet and savings in interest expenses will free up the resources of local governments, benefiting <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> and <a href="https://www.smartkarma.com/entities/china-everbright-environment-group-limited" target="_blank" data-smartkarma-citation="entities:15946:1" rel="noopener">China Everbright Environment (257 HK)</a>. </li>
<li>Shanghai has immediately rolled out consumption coupon distribution, which is positive for companies in the restaurant, travel, movies, and sports sectors. </li>
</ul>


The Rmb6trn of the new debt swap quota may disappoint the market given the lack of one-time direct stimulus. However, the underlying implications should not be overlooked.
A better balance sheet and savings in interest expenses will free up the resources of local governments, benefiting China Communications Construction (1800 HK) and China Everbright Environment (257 HK). 
Shanghai has immediately rolled out consumption coupon distribution, which is positive for companies in the restaurant, travel, movies, and sports sectors. 


China & HK Strategy: Stock Ideas on China's Debt Swap Plan

Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

Cross Asset Strategy

<ul>
<li>Representatives of all relevant major Ministries showed up and had their say</li>
<li>As is now usual from these events some positives as well as some disappointment</li>
<li>Further steps taken to put a floor under the property market</li>
</ul>


Representatives of all relevant major Ministries showed up and had their say
As is now usual from these events some positives as well as some disappointment
Further steps taken to put a floor under the property market


Ministry of Housing Press Conference – First Take

<ul>
<li>A correction was natural after the fast, strong move up</li>
<li>Any detailed fiscal stimulus plan will come from the State Council or the MoF</li>
<li>Capital market reforms moving in the right direction with continued focus on consumption.</li>
</ul>


A correction was natural after the fast, strong move up
Any detailed fiscal stimulus plan will come from the State Council or the MoF
Capital market reforms moving in the right direction with continued focus on consumption.


Stay Calm and Don’t Panic! Overbought Conditions Meet an Overhyped Meeting.

<ul>
<li>Change in strategy by the Chinese authorities mean this is more than a trade</li>
<li>Sentiment, valuations and positioning are still supportive despite the rally</li>
<li>Overbought conditions in the very short-term and the technical picture is mixed </li>
</ul>


Change in strategy by the Chinese authorities mean this is more than a trade
Sentiment, valuations and positioning are still supportive despite the rally
Overbought conditions in the very short-term and the technical picture is mixed 


China

China Communications Construction is a multinational engineering and construction company primarily engaged in the investment, design, construction, and operation of large-scale infrastructure assets, including ports, roads, bridges, railways, and airports. It also provides dredging services and equipment manufacturing. The company is headquartered in Beijing, China, and was established in 2005.

China Communications Construction (1800 HK)

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

China Communications Construction (1800 HK)

China & HK Strategy: Names to Watch for Market Value Management

SASAC issued "Several opinions on improving and strengthening the market value management of listed companies controlled by central enterprises"...

Osbert Tang, CFA

China & HK Strategy: Stock Ideas on China's Debt Swap Plan

China's new debt swap quota will benefit local governments and infrastructure companies. Shanghai's consumption coupon distribution is positive for...

Osbert Tang, CFA

Ministry of Housing Press Conference – First Take

The next step on more detailed measures on stabilising the property market in China. Some big positives but disappointment likely for some

Rikki Malik

Stay Calm and Don’t Panic! Overbought Conditions Meet an Overhyped Meeting.

Correction in markets expected after rapid rise, detailed fiscal stimulus plans to come from State Council or MoF, capital market reforms...

Rikki Malik

Examining the Bear Case for China

Chinese authorities shift strategy , and while sentiment and valuations support the rally, in short-term there are overbought conditions and a...

Rikki Malik

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China & HK Strategy: Names to Watch for Market Value Management

SASAC issued "Several opinions on improving and strengthening the market value management of listed companies controlled by central enterprises"...

Osbert Tang, CFA

China & HK Strategy: Stock Ideas on China's Debt Swap Plan

China's new debt swap quota will benefit local governments and infrastructure companies. Shanghai's consumption coupon distribution is positive for...

Osbert Tang, CFA

Ministry of Housing Press Conference – First Take

The next step on more detailed measures on stabilising the property market in China. Some big positives but disappointment likely for some

Rikki Malik

Stay Calm and Don’t Panic! Overbought Conditions Meet an Overhyped Meeting.

​Correction in markets expected after rapid rise, detailed fiscal stimulus plans to come from State Council or MoF, capital market reforms...

Rikki Malik

Examining the Bear Case for China

​Chinese authorities shift strategy , and while sentiment and valuations support the rally, in short-term there are overbought conditions and a...

Rikki Malik

Correction in markets expected after rapid rise, detailed fiscal stimulus plans to come from State Council or MoF, capital market reforms...

Chinese authorities shift strategy , and while sentiment and valuations support the rally, in short-term there are overbought conditions and a...