HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

China International Capital Corporation / Equity Bottom-Up

China International Capital Corporation (3908 HK)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-international-capital-corporation-ltd" target="_blank" data-smartkarma-citation="entities:1071:1" rel="noopener">CICC (3908 HK)</a>'s announced merger with <a href="https://www.smartkarma.com/entities/dongxing-securities-co-ltd" target="_blank" data-smartkarma-citation="entities:25320:1" rel="noopener">Dongxing Securities (601198 CH)</a> and <a href="https://www.smartkarma.com/entities/cinda-securities-company-limited" target="_blank" data-smartkarma-citation="entities:45389:1" rel="noopener">Cinda Securities (601059 CH)</a> will elevate it to the 3rd largest HK-listed Chinese securities company.</li>
<li>Based on our assumptions, its EPS will be diluted by 7.1%, BPS enhanced by 12.2%, and ROE lowered by 1pp for FY26, before accounting for synergy.</li>
<li>Its presence in Fujian (+616.7%), Liaoning (+500%), and Beijing (+100%) will be significantly enlarged. Additionally, it will open up potential benefits from optimisation.</li>
</ul>



CICC (3908 HK)'s announced merger with Dongxing Securities (601198 CH) and Cinda Securities (601059 CH) will elevate it to the 3rd largest HK-listed Chinese securities company.
Based on our assumptions, its EPS will be diluted by 7.1%, BPS enhanced by 12.2%, and ROE lowered by 1pp for FY26, before accounting for synergy.
Its presence in Fujian (+616.7%), Liaoning (+500%), and Beijing (+100%) will be significantly enlarged. Additionally, it will open up potential benefits from optimisation.


CICC (3908 HK): Initial Assessment of the Merger

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

Rikki Malik

Cross Asset Strategy

<ul>
<li>The time is right to increase exposure to the Hong Kong market</li>
<li>A confluence of factors and catalysts will drive the index higher</li>
<li>We suggest a few names that we believe will benefit.</li>
</ul>


The time is right to increase exposure to the Hong Kong market
A confluence of factors and catalysts will drive the index higher
We suggest a few names that we believe will benefit.


Tactical Trading – Increasing Hong Kong Exposure

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 analyzed the latest HK SFC report for aggregate short position as of Sep 18th.</li>
<li>Top short increases and decreases were tabulated for one week and four week period.</li>
<li>We highlight short changes in Lenovo, Knowledge Atlas, ABC, AIA, HKEx, China Resources Land, Trip.Com, Bidu, Cicc.</li>
</ul>


We analyzed the latest HK SFC report for aggregate short position as of Sep 18th.
Top short increases and decreases were tabulated for one week and four week period.
We highlight short changes in Lenovo, Knowledge Atlas, ABC, AIA, HKEx, China Resources Land, Trip.Com, Bidu, Cicc.


HK Short Interest Weekly: Lenovo, Knowledge Atlas, ABC, AIA, HKEx, China Resources Land, Trip.Com

Thematic (Sector/Industry)

<ul>
<li>Excluding an outlier, our coverage universe is expected to witness a 56.6% YoY earnings growth in 4Q25, rapidly accelerating from the previous quarter.</li>
<li>Stocks with the best growth are <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>, <a href="https://www.smartkarma.com/entities/sany-heavy-equipment-intl" target="_blank" data-smartkarma-citation="entities:11104:1" rel="noopener">Sany Heavy Equip. (631 HK)</a>, <a href="https://www.smartkarma.com/entities/dongfang-electric-corporation-limited" target="_blank" data-smartkarma-citation="entities:1251:1" rel="noopener">Dongfang Electric (1072 HK)</a>, <a href="https://www.smartkarma.com/entities/china-tourism-group-duty-free" target="_blank" data-smartkarma-citation="entities:36229:1" rel="noopener">CTG Duty Free (1880 HK)</a>, and <a href="https://www.smartkarma.com/entities/cosco-shipping-energy-tran-h" target="_blank" data-smartkarma-citation="entities:646:1" rel="noopener">Cosco Shipping Energy (1138 HK)</a>.. </li>
<li>
<a href="https://www.smartkarma.com/entities/china-international-capital-corporation-ltd" target="_blank" data-smartkarma-citation="entities:1071:1" rel="noopener">CICC (3908 HK)</a>, <a href="https://www.smartkarma.com/entities/china-national-building-ma-h" target="_blank" data-smartkarma-citation="entities:184:1" rel="noopener">CNBM (3323 HK)</a>, <a href="https://www.smartkarma.com/entities/shanghai-electric-group-company-limited-d542164d-4d5a-4ce0-b33e-5fe6bc34722c" target="_blank" data-smartkarma-citation="entities:8777:1" rel="noopener">Shanghai Electric (2727 HK)</a>, <a href="https://www.smartkarma.com/entities/sinotrans-limited-h" target="_blank" data-smartkarma-citation="entities:1321:1" rel="noopener">Sinotrans (598 HK)</a>, <a href="https://www.smartkarma.com/entities/anjoy-foods-group" target="_blank" data-smartkarma-citation="entities:44280:1" rel="noopener">Anjoy Foods (2648 HK)</a>, <a href="https://www.smartkarma.com/entities/cosco-shipping-ports-ltd" target="_blank" data-smartkarma-citation="entities:360:1" rel="noopener">Cosco Shipping Ports (1199 HK)</a>, and <a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd-b3ef445f-0f54-4586-8c58-9073de98d60e" target="_blank" data-smartkarma-citation="entities:31105:1" rel="noopener">Haier Smart Home (6690 HK)</a> may upgrade. </li>
</ul>


Excluding an outlier, our coverage universe is expected to witness a 56.6% YoY earnings growth in 4Q25, rapidly accelerating from the previous quarter.
Stocks with the best growth are Xinjiang Goldwind (2208 HK), Sany Heavy Equip. (631 HK), Dongfang Electric (1072 HK), CTG Duty Free (1880 HK), and Cosco Shipping Energy (1138 HK).. 

CICC (3908 HK), CNBM (3323 HK), Shanghai Electric (2727 HK), Sinotrans (598 HK), Anjoy Foods (2648 HK), Cosco Shipping Ports (1199 HK), and Haier Smart Home (6690 HK) may upgrade. 


China & HK Strategy: Stock Implications for 4Q25

<ul>
<li>YTD, H-share securities companies outperformed the HSI and HSCEI, but valuations are still undemanding at 12.7x and 11.7x PERs for FY25 and FY26.</li>
<li>2H25F earnings for the sector are too conservative at -2.5%, compared with 64.9% YoY growth in 1H25. There is significant earnings upgrade potential after the 3Q25 result announcements.</li>
<li>
<a href="https://www.smartkarma.com/entities/china-international-capital-corporation-ltd" target="_blank" data-smartkarma-citation="entities:1071:1" rel="noopener">China International Capital Corporation (3908 HK)</a>, <a href="https://www.smartkarma.com/entities/china-galaxy-securities-co-h" target="_blank" data-smartkarma-citation="entities:165:1" rel="noopener">China Galaxy Securities (H) (6881 HK)</a>, <a href="https://www.smartkarma.com/entities/everbright-securities-h" target="_blank" data-smartkarma-citation="entities:22736:1" rel="noopener">Everbright Securities (H) (6178 HK)</a>, and <a href="https://www.smartkarma.com/entities/csc-financial-co-ltd-115216b6-b1c3-42f3-a314-a7ed93ea0b8e" target="_blank" data-smartkarma-citation="entities:23710:1" rel="noopener">CSC Financial (6066 HK)</a> appear interesting.</li>
</ul>


YTD, H-share securities companies outperformed the HSI and HSCEI, but valuations are still undemanding at 12.7x and 11.7x PERs for FY25 and FY26.
2H25F earnings for the sector are too conservative at -2.5%, compared with 64.9% YoY growth in 1H25. There is significant earnings upgrade potential after the 3Q25 result announcements.

China International Capital Corporation (3908 HK), China Galaxy Securities (H) (6881 HK), Everbright Securities (H) (6178 HK), and CSC Financial (6066 HK) appear interesting.


China Strategy: Interesting H-Share Securities Companies

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.

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China International Capital Corporation (3908 HK)

CICC (3908 HK): Initial Assessment of the Merger

CICC's merger with Dongxing and Cinda will make it the 3rd largest Chinese securities company, with diluted EPS, enhanced BPS, and lowered ROE for...

Osbert Tang, CFA

Tactical Trading – Increasing Hong Kong Exposure

Now is an opportune time to increase investments in the Hong Kong market, as various factors are aligning to propel the index upward. We discuss...

Rikki Malik

HK Short Interest Weekly: Lenovo, Knowledge Atlas, ABC, AIA, HKEx, China Resources Land, Trip.Com

We analyzed the latest HK SFC report for aggregate short position as of Sep 18th and highlight short interest changes in Lenovo (992 HK), Knowledge...

Ke Yan, CFA, FRM

China & HK Strategy: Stock Implications for 4Q25

Expect a 56.6% YoY profit growth in 4Q25 for our coverage universe, with top growth stocks being Xinjiang Goldwind, Sany Heavy Equipment, Dongfang...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

CICC (3908 HK): Initial Assessment of the Merger

​CICC's merger with Dongxing and Cinda will make it the 3rd largest Chinese securities company, with diluted EPS, enhanced BPS, and lowered ROE for...

Osbert Tang, CFA

Tactical Trading – Increasing Hong Kong Exposure

​Now is an opportune time to increase investments in the Hong Kong market, as various factors are aligning to propel the index upward. We discuss...

Rikki Malik

HK Short Interest Weekly: Lenovo, Knowledge Atlas, ABC, AIA, HKEx, China Resources Land, Trip.Com

We analyzed the latest HK SFC report for aggregate short position as of Sep 18th and highlight short interest changes in Lenovo (992 HK), Knowledge...

Ke Yan, CFA, FRM

China & HK Strategy: Stock Implications for 4Q25

​Expect a 56.6% YoY profit growth in 4Q25 for our coverage universe, with top growth stocks being Xinjiang Goldwind, Sany Heavy Equipment, Dongfang...

Osbert Tang, CFA

China Strategy: Interesting H-Share Securities Companies

​H-share securities companies show strong performance and potential for earnings upgrades, with undemanding valuations. CICC, China Galaxy,...

Osbert Tang, CFA

CICC's merger with Dongxing and Cinda will make it the 3rd largest Chinese securities company, with diluted EPS, enhanced BPS, and lowered ROE for...

Now is an opportune time to increase investments in the Hong Kong market, as various factors are aligning to propel the index upward. We discuss...

Expect a 56.6% YoY profit growth in 4Q25 for our coverage universe, with top growth stocks being Xinjiang Goldwind, Sany Heavy Equipment, Dongfang...

H-share securities companies show strong performance and potential for earnings upgrades, with undemanding valuations. CICC, China Galaxy,...