HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>The companies that suffered exchange losses in FY23 due to Rmb depreciation will now benefit from potential Rmb appreciation in 2H24 and FY25. Meanwhile, gainers will become losers. </li>
<li>The beneficiaries are <a href="https://www.smartkarma.com/entities/air-china-ltd-h" target="_blank" data-smartkarma-citation="entities:8239:1" rel="noopener">Air China Ltd (753 HK)</a>, <a href="https://www.smartkarma.com/entities/shenzhen-international-holdings-limited" target="_blank" data-smartkarma-citation="entities:9:1" rel="noopener">Shenzhen International (152 HK)</a>, <a href="https://www.smartkarma.com/entities/china-southern-airlines-co-ltd" target="_blank" data-smartkarma-citation="entities:1078:1" rel="noopener">China Southern Airlines (1055 HK)</a>, <a href="https://www.smartkarma.com/entities/xinjiang-goldwind-science-technology-h" target="_blank" data-smartkarma-citation="entities:10112:1" rel="noopener">Xinjiang Goldwind (2208 HK)</a>, and <a href="https://www.smartkarma.com/entities/china-eastern-airlines-co-h" target="_blank" data-smartkarma-citation="entities:1079:1" rel="noopener">China Eastern Airlines (670 HK)</a>. </li>
<li>
<a href="https://www.smartkarma.com/entities/fosun-tourism-group" target="_blank" data-smartkarma-citation="entities:27439:1" rel="noopener">Fosun Tourism (1992 HK)</a>, <a href="https://www.smartkarma.com/entities/china-east-education-holdings" target="_blank" data-smartkarma-citation="entities:27843:1" rel="noopener">China East Education (667 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 Communications Construction (1800 HK)</a> may need to book exchange losses (vs. gains in FY23). </li>
</ul>


The companies that suffered exchange losses in FY23 due to Rmb depreciation will now benefit from potential Rmb appreciation in 2H24 and FY25. Meanwhile, gainers will become losers. 
The beneficiaries are Air China Ltd (753 HK), Shenzhen International (152 HK), China Southern Airlines (1055 HK), Xinjiang Goldwind (2208 HK), and China Eastern Airlines (670 HK). 

Fosun Tourism (1992 HK), China East Education (667 HK), and China Communications Construction (1800 HK) may need to book exchange losses (vs. gains in FY23). 


China Strategy: Re-Assessing the Rmb Exchange Impacts

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Bottom-Up

<ul>
<li>Total US border crossings in July 2026 were up just 0.6% Y/Y (and down 5% vs July 2024)</li>
<li>July 2026 crossings by aircraft were down over 3% Y/Y, and down 2% Y/Y in US West</li>
<li>The figures from peak Summer travel period seem to confirm sluggish US tourism activity</li>
</ul>


Total US border crossings in July 2026 were up just 0.6% Y/Y (and down 5% vs July 2024)
July 2026 crossings by aircraft were down over 3% Y/Y, and down 2% Y/Y in US West
The figures from peak Summer travel period seem to confirm sluggish US tourism activity


Latest US Customs & Border Protection Data Appear to Confirm Sluggish US Tourism Activity

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 81.8% as of Sep 4th.</li>
<li>The average A-H premium changed by 0.4ppt week-on-week, led by communication services, consumer staples, consumer discretionary and offset by energy, financials, utilities.</li>
<li>We highlight weekly changes in A-H premium for China South Air, Remegen, China Telecom, Muyuan Foods, Conch Cement, Minsheng Bank.</li>
</ul>


We analyse the changes of A-H premium on 196 stocks over the last week. The average A-H premium was 81.8% as of Sep 4th.
The average A-H premium changed by 0.4ppt week-on-week, led by communication services, consumer staples, consumer discretionary and offset by energy, financials, utilities.
We highlight weekly changes in A-H premium for China South Air, Remegen, China Telecom, Muyuan Foods, Conch Cement, Minsheng Bank.


A-H Premium Weekly (Sep 4th): China South Air, Remegen, China Telecom, Muyuan Foods, Conch Cement

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

Cross Asset Strategy

<ul><li>Airlines / In Depth: Domestic carriers add global routes as foreign rivals quit China amid sluggish demand, Russia ban Since China dropped the Covid-era restrictions that slowed international flights to a trickle, the experience of domestic and foreign airlines has diverged sharply.</li><li>Many foreign carriers are scaling back their operations in China and in some cases completely withdrawing from the market, largely because the need to avoid Russian airspace has sent their costs spiraling and made them uncompetitive against Chinese rivals who can still fly over the country’s northern neighbor.</li><li>Meanwhile, Chinese airlines are ramping up their overseas routes, particularly to the Middle East.</li></ul>

Airlines / In Depth: Domestic carriers add global routes as foreign rivals quit China amid sluggish demand, Russia ban Since China dropped the Covid-era restrictions that slowed international flights to a trickle, the experience of domestic and foreign airlines has diverged sharply.Many foreign carriers are scaling back their operations in China and in some cases completely withdrawing from the market, largely because the need to avoid Russian airspace has sent their costs spiraling and made them uncompetitive against Chinese rivals who can still fly over the country’s northern neighbor.Meanwhile, Chinese airlines are ramping up their overseas routes, particularly to the Middle East.

CX Daily: Domestic Carriers Add Global Routes as Foreign Rivals Quit China Amid Sluggish Demand

<ul><li>Middle East / In Depth: Why Chinese PE and VC firms are chasing Middle East money</li><li>China-France /: China to further open up telecom, medical sectors to foreign investors, Xi says</li><li>Insurance /: Shanghai Insurance Exchange appoints new chief as ex-chair falls to probe</li></ul>

Middle East / In Depth: Why Chinese PE and VC firms are chasing Middle East moneyChina-France /: China to further open up telecom, medical sectors to foreign investors, Xi saysInsurance /: Shanghai Insurance Exchange appoints new chief as ex-chair falls to probe

CX Daily: Why Chinese PE and VC Firms Are Chasing Middle East Money 

China

China Eastern Airlines Corporation Limited operates airline businesses. The Company provides passenger transport, air freight, air catering, and other related services. China Eastern Airlines conducts businesses worldwide.

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China Eastern Airlines Lt (600115 CH)

China Strategy: Re-Assessing the Rmb Exchange Impacts

With the US kick-starting the lower interest rate cycle with a 50bp cut overnight and indicated an expectation of an aggregate further 50bp cut in...

Osbert Tang, CFA

Latest US Customs & Border Protection Data Appear to Confirm Sluggish US Tourism Activity

The latest figures for US border crossings suggest international travel into and out of the US remains sluggish. The figures show little growth...

Tracking Traffic

A-H Premium Weekly (Sep 4th): China South Air, Remegen, China Telecom, Muyuan Foods, Conch Cement

We analyzed A-H premium changes in the past week and highlight A-H premium changes for China South Air, Remegen, China Telecom, Muyuan Foods, Conch...

Ke Yan, CFA, FRM

CX Daily: Domestic Carriers Add Global Routes as Foreign Rivals Quit China Amid Sluggish Demand

Airlines / In Depth: Domestic carriers add global routes as foreign rivals quit China amid sluggish demand, Russia ban Since China dropped the...

Caixin Global

CX Daily: Why Chinese PE and VC Firms Are Chasing Middle East Money

Middle East / In Depth: Why Chinese PE and VC firms are chasing Middle East money Chinese venture capital (VC) and private equity (PE) firms are...

Caixin Global

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