Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Derivatives

<ul>
<li>With a 5-week rally <a href="https://www.smartkarma.com/entities/china-mobile-ltd" target="_blank" data-smartkarma-citation="entities:27:1" rel="noopener">China Mobile (941 HK)</a> is in overbought territory and quantitative models flag potential for a pullback.</li>
<li>Options may be underpricing the downside risk, creating an attractive opportunity to buy cheap options with high payoff potential.</li>
<li>This Insight outlines an option strategy combining quantitative signals with volatility analysis.</li>
</ul>


With a 5-week rally China Mobile (941 HK) is in overbought territory and quantitative models flag potential for a pullback.
Options may be underpricing the downside risk, creating an attractive opportunity to buy cheap options with high payoff potential.
This Insight outlines an option strategy combining quantitative signals with volatility analysis.


China Mobile (941 HK) Poised for Pullback: A Tactical Low-Cost Options Play With High Upside

Quantitative Researcher, MRM Research

Nico Rosti

Quantitative Researcher

MRM Research

Quantitative Research

<ul>
<li>Our <a href="https://www.smartkarma.com/insights/china-mobile-941-hk-tactical-outlook-following-q1-2025-results" target="_blank" rel="noopener">previous insight</a> indicated a potential buy opportunity immediately followed by higher prices, but <a href="https://www.smartkarma.com/entities/china-mobile-ltd" target="_blank" data-smartkarma-citation="entities:27:1" rel="noopener">China Mobile (941 HK)</a> hasn't really rallied much since our signal was released, 2 weeks ago.</li>
<li>Monday, news about a US-China tariffs deal sent global stocks sharply higher. However, <strong>the stock closed the day at 84.25, our model's Q2 profit target (i.e. not a strong rally...).</strong>
</li>
<li>
<strong>Our time model also indicates an overbought state (74% probability of reversal)</strong>: we're not bearish on the stock, but in this insight we will discuss a few tactical scenarios.</li>
</ul>


Our previous insight indicated a potential buy opportunity immediately followed by higher prices, but China Mobile (941 HK) hasn't really rallied much since our signal was released, 2 weeks ago.
Monday, news about a US-China tariffs deal sent global stocks sharply higher. However, the stock closed the day at 84.25, our model's Q2 profit target (i.e. not a strong rally...).


Our time model also indicates an overbought state (74% probability of reversal): we're not bearish on the stock, but in this insight we will discuss a few tactical scenarios.


Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>A week after the State Council issued "Several Opinions" (关于加强监管防范风险推动资本市场高质量发展的若干意见》), the CSRC <a href="http://www.csrc.gov.cn/csrc/c100028/c7474875/content.shtml" target="_blank" rel="noopener">announced</a> Friday five capital market cooperation measures with HK Connect. The goals are to increase cross-border investor flows.</li>
<li>They include: a broader range of ETFs in Connect, including REITs in both directions, include RMB counters in Southbound, improve mutual recognition of funds, increasing China IPOs in Hong Kong.</li>
<li>RMB Dual Counters Southbound-eligible will take time. They have some homework, but it is on the "To Do" list "as soon as possible and smoothly." Watch impact on H/A Pairs.</li>
</ul>


A week after the State Council issued "Several Opinions" (关于加强监管防范风险推动资本市场高质量发展的若干意见》), the CSRC announced Friday five capital market cooperation measures with HK Connect. The goals are to increase cross-border investor flows.
They include: a broader range of ETFs in Connect, including REITs in both directions, include RMB counters in Southbound, improve mutual recognition of funds, increasing China IPOs in Hong Kong.
RMB Dual Counters Southbound-eligible will take time. They have some homework, but it is on the "To Do" list "as soon as possible and smoothly." Watch impact on H/A Pairs.


RMB Dual Counter Trading Is Coming - This Changes AH Relationships

<ul>
<li>In March, the HK Secretary for Financial Services announced a waiver of stamp duty on dual counter trading market making. In November, the Govt of HK <a href="https://www.info.gov.hk/gia/general/202211/18/P2022111800254.htm" target="_blank" rel="noopener">gazetted</a> a bill.</li>
<li>HKEX launched plans in December. 9 large HK names announced in March they'd apply (Tencent, Kuaishou, Geely, BOC, Anta, AIA, China Resources Beer, Bidu, HKEX). Six more in April.</li>
<li>All the announcements are similar. But one on 21 April caught my eye because it is a big H/A with strong southbound support. That's <a href="https://www.smartkarma.com/entities/china-mobile-ltd" target="_blank" data-smartkarma-citation="entities:27:1" rel="noopener">China Mobile (941 HK)</a>. </li>
</ul>


In March, the HK Secretary for Financial Services announced a waiver of stamp duty on dual counter trading market making. In November, the Govt of HK gazetted a bill.
HKEX launched plans in December. 9 large HK names announced in March they'd apply (Tencent, Kuaishou, Geely, BOC, Anta, AIA, China Resources Beer, Bidu, HKEX). Six more in April.
All the announcements are similar. But one on 21 April caught my eye because it is a big H/A with strong southbound support. That's China Mobile (941 HK). 


Another Reason To Like China Mobile (941 HK)

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jingdong-jd-industrials-inc" target="_blank" data-smartkarma-citation="entities:36875:1" rel="noopener">JD Industrials (7618 HK)</a> is now looking to raise up to US$421m, in its Hong Kong IPO.</li>
<li>JDI is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.</li>
<li>We looked at the company’s past performance in our earlier notes. In this note, we talk about valuations.</li>
</ul>



JD Industrials (7618 HK) is now looking to raise up to US$421m, in its Hong Kong IPO.
JDI is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.
We looked at the company’s past performance in our earlier notes. In this note, we talk about valuations.


JD Industrials IPO - Valuation Cut Means Its Priced to Go

Hong Kong

China Mobile Limited provides telecommunication services. The Company offers wireline voice, broadband, roaming, and other related services. China Mobile serves customers in Hong Kong.

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China Mobile (941 HK)