Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>AI is poised to drive a large increase in power consumption on the mainland.  Data demand from generative AI necessitates more data centers and consequently more power.</li>
<li>China energy consumption is at the beginning of a super cycle as AI becomes integral to everyday corporate and eventually personal lives.</li>
<li>China's clean energy names will benefit from the China's energy strategy as its power needs from data centers surge.</li>
</ul>


AI is poised to drive a large increase in power consumption on the mainland.  Data demand from generative AI necessitates more data centers and consequently more power.
China energy consumption is at the beginning of a super cycle as AI becomes integral to everyday corporate and eventually personal lives.
China's clean energy names will benefit from the China's energy strategy as its power needs from data centers surge.


Equity Bottom-Up

<ul>
<li>Hong Kong continued a correction in its Bull market which has lifted the HSCEI to be the best performing Asian index this year.  Southboune buying is strong.</li>
<li>
<a href="https://www.smartkarma.com/entities/aac-technologies-holdings-inc" target="_blank" data-smartkarma-citation="entities:6544:1" rel="noopener">AAC Technologies Holdings (2018 HK)</a> share price had a breakout relative to the MSCI AC Asia Index.  The company reported solid results benifitting from the smartphone and auto sectors.
</li>
<li>
<a href="https://www.smartkarma.com/entities/cgn-power-co-ltd-h" target="_blank" data-smartkarma-citation="entities:58:1" rel="noopener">CGN Power (1816 HK)</a> share price relative to MSCI China broke down.  The company reported a disappointing 3Q24 results even as power generation increased by 15% YoY for the period.
</li>
</ul>


Hong Kong continued a correction in its Bull market which has lifted the HSCEI to be the best performing Asian index this year.  Southboune buying is strong.

AAC Technologies Holdings (2018 HK) share price had a breakout relative to the MSCI AC Asia Index.  The company reported solid results benifitting from the smartphone and auto sectors.


CGN Power (1816 HK) share price relative to MSCI China broke down.  The company reported a disappointing 3Q24 results even as power generation increased by 15% YoY for the period.



Technically Speaking, Breakouts and Breakdowns: HONG KONG (NOVEMBER 25)

<ul>
<li>The Hong Kong Alpha portfolio beat the Hong Kong indexes in June and was flat to its benchmark with a loss of 6.98%.</li>
<li>The Hong Kong market experienced heavy selling in the second half of June, as both foreign and mainland investors reduced their exposure.</li>
<li>At the end of June, we sold positions in the electric utilities, technology, consumer, and property sectors. We added positions in the broker, biotech, telecom, and industrial sectors.</li>
</ul>


The Hong Kong Alpha portfolio beat the Hong Kong indexes in June and was flat to its benchmark with a loss of 6.98%.
The Hong Kong market experienced heavy selling in the second half of June, as both foreign and mainland investors reduced their exposure.
At the end of June, we sold positions in the electric utilities, technology, consumer, and property sectors. We added positions in the broker, biotech, telecom, and industrial sectors.


<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.


<ul>
<li>The Hong Kong market has been range-trading over the last month, with pockets of strength in the AI-related sectors.  Korea and Taiwan markets are the star performers in Asia YTD.</li>
<li>Value and dividend yield factors have been the best-performing in the market, with the growth factor showing negative returns.  Energy, industrials, and conglomerates are the best-performing sectors YTD.</li>
<li>
<a href="https://www.smartkarma.com/entities/huaneng-power-international-inc-class-h" target="_blank" data-smartkarma-citation="entities:28:1" rel="noopener">Huaneng Power International (902 HK)</a> broke out to new highs.  The company has rapidly expanded its renewable energy segment and has benefited from AI/datacenter demand.
</li>
</ul>


The Hong Kong market has been range-trading over the last month, with pockets of strength in the AI-related sectors.  Korea and Taiwan markets are the star performers in Asia YTD.
Value and dividend yield factors have been the best-performing in the market, with the growth factor showing negative returns.  Energy, industrials, and conglomerates are the best-performing sectors YTD.

Huaneng Power International (902 HK) broke out to new highs.  The company has rapidly expanded its renewable energy segment and has benefited from AI/datacenter demand.



Technically Speaking Breakouts & Breakdowns - HONG KONG (May 2026)

Hong Kong

China Power International Development Ltd. is an investment holding company primarily engaged in the generation and sale of electricity. It develops, constructs, owns, operates, and manages power plants in the People's Republic of China, encompassing hydropower, wind power, photovoltaic power, thermal power, natural gas power, environmental power, and energy storage, as well as green power transportation and integrated intelligent energy solution services. The company was incorporated in Hong Kong on March 24, 2004, and its headquarters are located in Hong Kong, China.

China Power International Development (2380 HK)

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China Power International Development (2380 HK)

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The Hong Kong market has been range-trading over the last month, with pockets of strength in the AI-related sectors. Korea and Taiwan markets are...

David Mudd

Price Gauge

52-week Range

Market Cap (USDm)

P/E

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