Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

China Life Insurance Company / Event-Driven

<ul>
<li>AH Premia are lower over the last two weeks spanning the CNY holiday. HK stocks up. H/A discounts slightly narrower on average. </li>
<li>The past two weeks saw Consumer and Financial AH premia drop. Utilities, energy, and Industrials widened slightly on average. Narrow premia AH dropped more than wide premia.</li>
<li>AH Premia on average at a new five year low. Some may be foreigners returning to HK. Some may be just drift. Many wide spreads still exist.</li>
</ul>


AH Premia are lower over the last two weeks spanning the CNY holiday. HK stocks up. H/A discounts slightly narrower on average. 
The past two weeks saw Consumer and Financial AH premia drop. Utilities, energy, and Industrials widened slightly on average. Narrow premia AH dropped more than wide premia.
AH Premia on average at a new five year low. Some may be foreigners returning to HK. Some may be just drift. Many wide spreads still exist.


A/H Premium Tracker (To 7 Feb 2025):  AH Premia Fall Again - Tech Good, Foreigners Buying HK

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

China Life Insurance Company / Equity Bottom-Up

<ul><li>China Life released prelim. earnings alert. The company expects net profit to grow 122%-144% YoY (or at RMB56.2-66.4bn) under IFRS and 100%-120% YoY (or at RMB 51.2-61.4bn) under China Accounting Standards (ASBE) in FY24, easing from the increase of 174% in year-to-3Q24.</li><li>4Q bottom-line could range from a net loss of RMB 2.16bn to a gain of RMB 8.08bn, implying at most 0.8% YoY increase vs RMB8.02bn in 4Q23.</li><li>We attribute this more-than-doubled net profit primarily to the equity market rally in 3Q, which surged the insurer’s total investment income by +152.4% YoY in 9M24. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Life released prelim. earnings alert. The company expects net profit to grow 122%-144% YoY (or at RMB56.2-66.4bn) under IFRS and 100%-120% YoY (or at RMB 51.2-61.4bn) under China Accounting Standards (ASBE) in FY24, easing from the increase of 174% in year-to-3Q24.4Q bottom-line could range from a net loss of RMB 2.16bn to a gain of RMB 8.08bn, implying at most 0.8% YoY increase vs RMB8.02bn in 4Q23.We attribute this more-than-doubled net profit primarily to the equity market rally in 3Q, which surged the insurer’s total investment income by +152.4% YoY in 9M24. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Life (2628 HK) - 4Q Net Profit Could Decline Despite Better Capital Market

Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Derivatives

Ping An Insurance (H) / Equity Derivatives

<ul>
<li>
Be inspired by sophisticated, live, multi-leg options strategies on <a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" data-smartkarma-citation="entities:12880:1" rel="noopener">Ping An Insurance (2318 HK)</a>, executed over the period from 6 to 12 June on the Hong Kong exchange.</li>
<li>
Highlights: Many strategies creatively utilize weekly expiries, sometimes employing options with as little as one or two days to maturity to generate upfront yield or financing.</li>
<li>
Why read: Detailed examples and break-down of complex option strategies provide actionable insights that could inspire similar strategies,</li>
</ul>



Be inspired by sophisticated, live, multi-leg options strategies on Ping An Insurance (2318 HK), executed over the period from 6 to 12 June on the Hong Kong exchange.

Highlights: Many strategies creatively utilize weekly expiries, sometimes employing options with as little as one or two days to maturity to generate upfront yield or financing.

Why read: Detailed examples and break-down of complex option strategies provide actionable insights that could inspire similar strategies,


Ping An (2318 HK): Strategic Insights and Top Option Trades

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>Hong Kong market quietly broke its downward trend channel last week, however the HSI met strong resistance at 18200 (100 Week Moving Average).</li>
<li>
<a href="https://www.smartkarma.com/entities/picc-property-casualty-h" target="_blank" data-smartkarma-citation="entities:350:1" rel="noopener">PICC Property &amp; Casualty H (2328 HK)</a> and <a href="https://www.smartkarma.com/entities/china-petroleum-chemical-h" target="_blank" data-smartkarma-citation="entities:369:1" rel="noopener">China Petroleum &amp; Chemical (386 HK)</a> broke to new highs relative to MSCI indices.  Sinopec may benefit from stronger RMB in 2H24.
</li>
<li><a href="https://www.smartkarma.com/entities/shenzhou-intl-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10415:1" rel="noopener">Shenzhou Intl Group Holdings (2313 HK)</a> had a short-term turnaround from its downtrend.  The company reported growth in sales and better margins in 2Q24.</li>
</ul>


Hong Kong market quietly broke its downward trend channel last week, however the HSI met strong resistance at 18200 (100 Week Moving Average).

PICC Property &amp; Casualty H (2328 HK) and China Petroleum &amp; Chemical (386 HK) broke to new highs relative to MSCI indices.  Sinopec may benefit from stronger RMB in 2H24.

Shenzhou Intl Group Holdings (2313 HK) had a short-term turnaround from its downtrend.  The company reported growth in sales and better margins in 2Q24.


Technically Speaking, Breakouts and Breakdowns: HONG KONG (SEPTEMBER 3)

Product Marketing Manager, Criat

Raghav Chandra Mathur

Product Marketing Manager

Next-Generation Credit Analytics Provider

Criat

Criat specializes in new-generation data-driven credit analytics. Leveraging our industry-leading DeepCredit analytical technologies, we produce daily-updated forward-looking credit assessment and valuation to help financial institutions stay ahead of risks. Coupled with use-case-driven applications, we extract insights, answer questions and enable smarter credit decisions.

Thematic (Sector/Industry)

<ul><li>Insurers domiciled in Advanced Asian Economies have reaped the benefits of the higher-for-longer interest rate environment that has buoyed profitability for the sub-sector, even though operational headwinds and policy uncertainty remain key challenges for the sector in the latter half of the year.</li><li>Suffice to say the trend in Insurers’ credit risk profiles, measured using Criat’s Credit Cycle Indices (CCCIs), has been non-homogenous across the continent with firms domiciled in economies such as South Korea and Hong Kong facing a substantially higher risk than those domiciled in Singapore, Japan, and Taiwan.</li><li>Strong net investment returns over the past year have helped boost profitability for most of the sub-sector that has increased its exposure to government securities. </li></ul>

Insurers domiciled in Advanced Asian Economies have reaped the benefits of the higher-for-longer interest rate environment that has buoyed profitability for the sub-sector, even though operational headwinds and policy uncertainty remain key challenges for the sector in the latter half of the year.Suffice to say the trend in Insurers’ credit risk profiles, measured using Criat’s Credit Cycle Indices (CCCIs), has been non-homogenous across the continent with firms domiciled in economies such as South Korea and Hong Kong facing a substantially higher risk than those domiciled in Singapore, Japan, and Taiwan.Strong net investment returns over the past year have helped boost profitability for most of the sub-sector that has increased its exposure to government securities. 

Leaders and Laggards in Advanced Asia-Domiciled Insurance Sector

China

China Life Insurance Co., Limited offers a wide range of life, accident, and health insurance products and services.

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China Life Insurance Co (Adr) (LFC US)

A/H Premium Tracker (To 7 Feb 2025): AH Premia Fall Again - Tech Good, Foreigners Buying HK

Over the two weeks spanning the Chinese New Year, AH Premia fell again. SB flows were large in gross terms, small in net terms, but foreigners...

Travis Lundy

China Life (2628 HK) - 4Q Net Profit Could Decline Despite Better Capital Market

Considering investment fluctuations, we revise FY24E/25E/26E EPS forecasts to RMB 3.85/2.68/2.81 (vs previous: 4.45/2.58/2.61, implying changes as...

CMB International

Ping An (2318 HK): Strategic Insights and Top Option Trades

Noteworthy options strategies executed on the Hong Kong exchange, utilizing weekly expiries and short-term options for upfront yield or financing....

Gaudenz Schneider

Technically Speaking, Breakouts and Breakdowns: HONG KONG (SEPTEMBER 3)

Hong Kong market broke its downtrend however it met strong resistance just above 18k. PICC and Sinopec broke to new highs relative to MSCI...

David Mudd

Leaders and Laggards in Advanced Asia-Domiciled Insurance Sector

Insurers domiciled in Advanced Asian Economies have reaped the benefits of the higher-for-longer interest rate environment that has buoyed...

Criat

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