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

Rikki Malik

Thematic (Sector/Industry)

<ul>
<li>Continued tailwinds for oil tanker stocks with tight markets keeping rates high</li>
<li>The copper supply and demand story is becoming more widely known and speculative interest is rising</li>
<li>Oil corrects  as the geopolitical premium subsides,but the longer-term story remains intact</li>
</ul>


Continued tailwinds for oil tanker stocks with tight markets keeping rates high
The copper supply and demand story is becoming more widely known and speculative interest is rising
Oil corrects  as the geopolitical premium subsides,but the longer-term story remains intact


Update on Some of the HK Commodity Stocks We Follow

Director, Head of Research, Smartkarma

Pranav Rao

Director, Head of Research

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Equity Bottom-Up

<ul>
<li>Welcome to Curator’s Cut - a fortnightly roundup of standout themes from the 2,000+ insights published on Smartkarma.</li>
<li>In this cut, we examine the windfall for brokers amid market volatility and other tailwinds, index rule changes to accommodate megacap IPOs, and the prospects in markets for physical AI.</li>
<li>Want to dig deeper? Comment or message with the themes you’d like to see highlighted next.</li>
</ul>


Welcome to Curator’s Cut - a fortnightly roundup of standout themes from the 2,000+ insights published on Smartkarma.
In this cut, we examine the windfall for brokers amid market volatility and other tailwinds, index rule changes to accommodate megacap IPOs, and the prospects in markets for physical AI.
Want to dig deeper? Comment or message with the themes you’d like to see highlighted next.


Curator's Cut: Brokering Records, Race to SpaceX & The Rise of Physical AI

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Shanghai Electric Group / Equity Bottom-Up

<ul>
<li>Hong Kong Long-Only portfolio launched on October 1st with objective to generate alpha in the Hong Kong market.</li>
<li>Stocks are chosen from single stock insights as well as sector and weekly publications.</li>
<li>Positions will be adjusted once a month and the cash position will vary based on market conditions.</li>
</ul>


Hong Kong Long-Only portfolio launched on October 1st with objective to generate alpha in the Hong Kong market.
Stocks are chosen from single stock insights as well as sector and weekly publications.
Positions will be adjusted once a month and the cash position will vary based on market conditions.


Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Back in March, the CSRC said it aimed to "form two to three investment banks and institutions with international competitiveness and market leadership by 2035".
</li>
<li>Last week's announced merger between China's leading state-backed brokerages, <a href="https://www.smartkarma.com/entities/guotai-junan-securities-co-ltd-5dfaf2c5-76d3-4f34-a77d-118787fd7091" target="_blank" data-smartkarma-citation="entities:23752:1" rel="noopener">Guotai Junan Securities (2611 HK)</a> and <a href="https://www.smartkarma.com/entities/haitong-securities-co-ltd-h" target="_blank" data-smartkarma-citation="entities:5665:1" rel="noopener">Haitong (6837 HK)</a>, is a move in that direction. Expect more scrip mergers to follow. </li>
<li>There have also been some media reports that the GJS/Haitong terms disadvantage holders of other Hong Kong broker stocks if potentially acquired in a merger. It's not quite that simple. </li>
</ul>


Back in March, the CSRC said it aimed to "form two to three investment banks and institutions with international competitiveness and market leadership by 2035".

Last week's announced merger between China's leading state-backed brokerages, Guotai Junan Securities (2611 HK) and Haitong (6837 HK), is a move in that direction. Expect more scrip mergers to follow. 
There have also been some media reports that the GJS/Haitong terms disadvantage holders of other Hong Kong broker stocks if potentially acquired in a merger. It's not quite that simple. 


HK/China Equity Long-Short

Osbert Tang, CFA

<ul>
<li>By way of its 54.79% ownership in <a href="https://www.smartkarma.com/entities/zheshang-securities-co-ltd" target="_blank" data-smartkarma-citation="entities:29981:1" rel="noopener">Zheshang Securities (601878 CH)</a>, <a href="https://www.smartkarma.com/entities/zhejiang-expressway-co-h" target="_blank" data-smartkarma-citation="entities:2178:1" rel="noopener">Zhejiang Expressway Co H (576 HK)</a> is an attractive indirect vehicle to access the mainland securities sector.  </li>
<li>The attributable market cap of Zheshang equals 90% of ZJE's market cap, implying that the toll road business is almost free. However, Zheshang only contributed 16% of ZJE's 1H24 profit.</li>
<li>ZJE trades on 6.7x FY24F PER, vs. 31.3x for Zheshang and 17.6x for H-share securities companies. A stable toll road business also minimises the risk for ZJE.</li>
</ul>


By way of its 54.79% ownership in Zheshang Securities (601878 CH), Zhejiang Expressway Co H (576 HK) is an attractive indirect vehicle to access the mainland securities sector.  
The attributable market cap of Zheshang equals 90% of ZJE's market cap, implying that the toll road business is almost free. However, Zheshang only contributed 16% of ZJE's 1H24 profit.
ZJE trades on 6.7x FY24F PER, vs. 31.3x for Zheshang and 17.6x for H-share securities companies. A stable toll road business also minimises the risk for ZJE.


Zhejiang Expressway (576 HK): Cheap Access to the Roaring Securities Sector

China

China International Capital Corporation (CICC) is a comprehensive financial services provider offering investment banking, equities, fixed income, currencies and commodities (FICC), asset management, private equity, and wealth management services. It provides a wide array of products including equity and debt financing, M&A advisory, securities trading, and fund management to corporations, institutions, and individuals. CICC was founded in 1995 and is headquartered in Beijing, China.

China International Capital Corporation (3908 HK)

Price Gauge
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China International Capital Corporation (3908 HK)

Update on Some of the HK Commodity Stocks We Follow

Revisiting some of the Hong Kong commodity stocks we have highlighted previously. Tanker rates remain high, copper demand grows amid speculation,...

Rikki Malik

Curator's Cut: Brokering Records, Race to SpaceX & The Rise of Physical AI

This Curator’s Cut highlights windfall for brokers amidst market volatility, index rule changes for megacap IPOs, and prospects for physical AI....

Pranav Rao

HONG KONG ALPHA PORTFOLIO - Introduction

We have launched a Hong Kong portfolio with the aim to outperform HK indexes and generate alpha. Stocks are chosen from those highlighted in our...

David Mudd

GJS/Haitong Merger Musings

Some media outlets believe that the GJS/Haitong terms may place holders of other Hong Kong broker stocks at a disadvantage if potentially acquired...

David Blennerhassett

Zhejiang Expressway (576 HK): Cheap Access to the Roaring Securities Sector

Zhejiang Expressway provides indirect cheap access to mainland securities through its ownership in Zheshang Securities, with a stable toll road...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Update on Some of the HK Commodity Stocks We Follow

Revisiting some of the Hong Kong commodity stocks we have highlighted previously. ​Tanker rates remain high, copper demand grows amid speculation,...

Rikki Malik

Curator's Cut: Brokering Records, Race to SpaceX & The Rise of Physical AI

​This Curator’s Cut highlights windfall for brokers amidst market volatility, index rule changes for megacap IPOs, and prospects for physical AI....

Pranav Rao

HONG KONG ALPHA PORTFOLIO - Introduction

We have launched a Hong Kong portfolio with the aim to outperform HK indexes and generate alpha. Stocks are chosen from those highlighted in our...

David Mudd

GJS/Haitong Merger Musings

Some media outlets believe that the GJS/Haitong terms may place holders of other Hong Kong broker stocks at a disadvantage if potentially acquired...

David Blennerhassett

Zhejiang Expressway (576 HK): Cheap Access to the Roaring Securities Sector

​Zhejiang Expressway provides indirect cheap access to mainland securities through its ownership in Zheshang Securities, with a stable toll road...

Osbert Tang, CFA

Revisiting some of the Hong Kong commodity stocks we have highlighted previously. Tanker rates remain high, copper demand grows amid speculation,...

This Curator’s Cut highlights windfall for brokers amidst market volatility, index rule changes for megacap IPOs, and prospects for physical AI....

Zhejiang Expressway provides indirect cheap access to mainland securities through its ownership in Zheshang Securities, with a stable toll road...