Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>The Hong Kong Alpha portfolio gained 9.7% in May, outperforming its benchmark by 10.57%.  The portfolio has outperformed Hong Kong indexes by 57% to 75% since its inception in 10/2024.</li>
<li>The portfolio has a Sharpe ratio of 1.37 since its inception, with a mean excess annualized return of 21% and a beta of 1.2.  </li>
<li>At the end of May, we sold our remaining positions in the mining and materials sectors and added positions in the power, consumer and property sectors.</li>
</ul>


The Hong Kong Alpha portfolio gained 9.7% in May, outperforming its benchmark by 10.57%.  The portfolio has outperformed Hong Kong indexes by 57% to 75% since its inception in 10/2024.
The portfolio has a Sharpe ratio of 1.37 since its inception, with a mean excess annualized return of 21% and a beta of 1.2.  
At the end of May, we sold our remaining positions in the mining and materials sectors and added positions in the power, consumer and property sectors.


Founder-CEO & Chief Analyst, Real Estate Foresight

Robert Ciemniak

Founder-CEO & Chief Analyst

Real Estate Foresight

Since 2012, REF has been helping investors with market research, project due diligence, and strategy development. This has ranged from detailed assessments and estimates on distressed developers' project portfolios to market due diligence on specific projects to macro-level questions linked to demand for commodities. The unique combination of the housing markets and developer data from data partner China Index Academy in Beijing, primary research, and technology-powered alternative data collection from public sources result in a valuable content set used in REF analytics and reports.

Predictive Analytics for China Property

Thematic (Sector/Industry)

<ul>
<li>In this note, we look at the latest May/June data, policy, and sentiment in China housing markets, with some reflections on where things are vs the expectations end of 2024. </li>
<li>"Less negative" summarises the data, while "Stabilise it" captures the policy approach.</li>
<li>New home sales are in line with our forecast, and in the upper range of group forecasts from China Property Outlook, but there are some new data caveats.</li>
</ul>


In this note, we look at the latest May/June data, policy, and sentiment in China housing markets, with some reflections on where things are vs the expectations end of 2024. 
"Less negative" summarises the data, while "Stabilise it" captures the policy approach.
New home sales are in line with our forecast, and in the upper range of group forecasts from China Property Outlook, but there are some new data caveats.


Listed Real Estate Asia, KT Capital Group

Jacob Cheng

Listed Real Estate Asia

KT Capital Group

Principal investments and advisory firm that focuses on connecting the CIS countries with East Asia.

Principal investments and advisory firm

Equity Bottom-Up

China Overseas Land & Investment / Equity Bottom-Up

China Overseas Land & Investment (688 HK)

<ul>
<li>Arbitrage the Extremes: Fading optimism in HK and peak pessimism in China presents a compelling pair trade: Short overvalued SHKP (up 46% YTD) against fundamentally robust, undervalued COLI (0% YTD)</li>
<li>HK Macro Headwinds: SHKP faces severe macro threats. Sticky inflation delaying Fed rate cuts creates HIBOR upside risks, threatening Hong Kong’s fragile property recovery amid a towering 2026 supply wall.</li>
<li>China Capitulation &amp; Alpha: Evergrande's legal closure signals the lifting of China's property overhang. Backed by aggressive state financing, SOE giant COLI is primed for a massive cyclical re-rating</li>
</ul>


Arbitrage the Extremes: Fading optimism in HK and peak pessimism in China presents a compelling pair trade: Short overvalued SHKP (up 46% YTD) against fundamentally robust, undervalued COLI (0% YTD)
HK Macro Headwinds: SHKP faces severe macro threats. Sticky inflation delaying Fed rate cuts creates HIBOR upside risks, threatening Hong Kong’s fragile property recovery amid a towering 2026 supply wall.
China Capitulation &amp; Alpha: Evergrande's legal closure signals the lifting of China's property overhang. Backed by aggressive state financing, SOE giant COLI is primed for a massive cyclical re-rating


Pair Trade: Shorting Peak HK Optimism SHKP 16HK to LONG China’s Real Estate Capitulation COLI 688HK

<ul>
<li>COLI, being a SOE residential developer, has no bankruptcy risk.  Under the current downturn, it is gaining market share and evolving into a stronger market leader</li>
<li>It recently issued onshore bond at historical low coupon 1.80% (5-year) and 2.37% (10-year), which is even lower than China’s LPR.  This is very significant </li>
<li>Valuation is almost all time low, and downside is limited.  We think it is the perfect beta play for China</li>
</ul>


COLI, being a SOE residential developer, has no bankruptcy risk.  Under the current downturn, it is gaining market share and evolving into a stronger market leader
It recently issued onshore bond at historical low coupon 1.80% (5-year) and 2.37% (10-year), which is even lower than China’s LPR.  This is very significant 
Valuation is almost all time low, and downside is limited.  We think it is the perfect beta play for China


COLI (688 HK): The Best Beta Play for China

<ul>
<li>In this note, we look at the issue of new homes that were pre-sold by developers but not yet delivered as developers struggled financially.</li>
<li>The estimates of the scale of the problem are wide, and many are rooted in likely misinterpretation of the official data.</li>
<li>The scale of the true problem is likely much smaller than most estimates and there are new indicators suggesting so.</li>
</ul>


In this note, we look at the issue of new homes that were pre-sold by developers but not yet delivered as developers struggled financially.
The estimates of the scale of the problem are wide, and many are rooted in likely misinterpretation of the official data.
The scale of the true problem is likely much smaller than most estimates and there are new indicators suggesting so.


China Property - Is The Delivery Of New Homes (Pre-Sold Pre-2022) Problem Solved?

Hong Kong

China Overseas Land & Investment is a Hong Kong-based real estate conglomerate primarily engaged in property development and sales, property investment, and property management services. The company develops residential and commercial properties, including office buildings, shopping malls, and hotels. It was founded in Hong Kong in 1979.

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China Overseas Land & Investment (688 HK)

HONG KONG ALPHA PORTFOLIO: (May 2026)

The Hong Kong Alpha portfolio gained 9.7% in May, outperforming its benchmark by 10.57%. The portfolio has outperformed Hong Kong indexes by 57%...

David Mudd

China Housing - A Mid-Year Check

In this note, we look at the latest May/June data, policy, and sentiment in China housing markets, with some reflections on where things are vs the...

Robert Ciemniak

Pair Trade: Shorting Peak HK Optimism SHKP 16HK to LONG China’s Real Estate Capitulation COLI 688HK

SHKP 16 HK is up 46% YTD while COLI 688 HK is flat YTD, we think it presents a compelling idea to LONG China 688 HK and Short HK 16 HK, on the back...

Jacob Cheng

COLI (688 HK): The Best Beta Play for China

Based on 1) SOE with no bankruptcy risk, 2) bond issuance at historical low coupon (1.80% for 5yr) and (2.37% for 10yr), and 3) historical low...

Jacob Cheng

China Property - Is The Delivery Of New Homes (Pre-Sold Pre-2022) Problem Solved?

In this note, we look at the issue of new homes that were pre-sold by developers but not yet delivered as developers struggled financially.

Robert Ciemniak

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