Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Equity Bottom-Up

Hengan International Group / Equity Bottom-Up

<ul>
<li>Hong Kong Conglomerate Sector is showing renewed strength with Materials and Energy under pressure.  HK market 30 day volatility at 5 year low as market continues to de-risk.</li>
<li>
<a href="https://www.smartkarma.com/entities/hengan-international-group-co-ltd" target="_blank" data-smartkarma-citation="entities:29:1" rel="noopener">Hengan International Group (1044 HK)</a> chart broke down from its Descending Triangle pattern after reporting its 1H24 results. <a href="https://www.smartkarma.com/entities/j-t-global-express-ltd" target="_blank" data-smartkarma-citation="entities:36819:1" rel="noopener">J&amp;T Global Express (1519 HK)</a> broke down from its double bottom pattern.
</li>
<li>
<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> price relative to the MSCI China index broke to a new high.  The company reported good results in a difficult environment for China brokers.
</li>
</ul>


Hong Kong Conglomerate Sector is showing renewed strength with Materials and Energy under pressure.  HK market 30 day volatility at 5 year low as market continues to de-risk.

Hengan International Group (1044 HK) chart broke down from its Descending Triangle pattern after reporting its 1H24 results. J&amp;T Global Express (1519 HK) broke down from its double bottom pattern.


China Galaxy Securities (H) (6881 HK) price relative to the MSCI China index broke to a new high.  The company reported good results in a difficult environment for China brokers.



Technically Speaking, Breakouts and Breakdowns: HONG KONG (SEPTEMBER 13)

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Haitong Securities Co Ltd (H) / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/guotai-junan-securities-co-ltd-5dfaf2c5-76d3-4f34-a77d-118787fd7091" target="_blank" data-smartkarma-citation="entities:23752:1" rel="noopener">Guotai Junan Securities (2611 HK)</a> and <a href="https://www.smartkarma.com/entities/haitong-securities-co-ltd-h" target="_blank" data-smartkarma-citation="entities:5665:1" rel="noopener">Haitong Securities Co Ltd (H) (6837 HK)</a>, two of China's leading state-backed brokerages, <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0905/2024090502014.pdf" target="_blank" rel="noopener">intend to merge</a>r via a share swap, subject to regulatory approvals.</li>
<li>Via a Merger by Absorption. GJS will issue new A and H shares to Haitong shareholders. The ratio hasn't been firmed. Upon completion, the MergeCo creates China's largest securities entity.</li>
<li>A merger is welcome - possibly mandated - amid challenging capital markets and a tightening regulatory backdrop.</li>
</ul>



Guotai Junan Securities (2611 HK) and Haitong Securities Co Ltd (H) (6837 HK), two of China's leading state-backed brokerages, intend to merger via a share swap, subject to regulatory approvals.
Via a Merger by Absorption. GJS will issue new A and H shares to Haitong shareholders. The ratio hasn't been firmed. Upon completion, the MergeCo creates China's largest securities entity.
A merger is welcome - possibly mandated - amid challenging capital markets and a tightening regulatory backdrop.


Guotai Junan (2611 HK) & Haitong (6837 HK) Merger Creates China's Major Player

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>On 6 September, <a href="https://www.smartkarma.com/entities/guotai-junan-securities-co-ltd-5dfaf2c5-76d3-4f34-a77d-118787fd7091" target="_blank" data-smartkarma-citation="entities:23752:1" rel="noopener">Guotai Junan Securities (2611 HK)</a> and <a href="https://www.smartkarma.com/entities/haitong-securities-co-ltd-h" target="_blank" data-smartkarma-citation="entities:5665:1" rel="noopener">Haitong Securities Co Ltd (H) (6837 HK)</a> entered a legally binding agreement to merge through absorption and share exchange. </li>
<li>The high-profile merger aligns with the Chinese government’s ambition to reform the brokerage sector and create world-class investment banks. The merger would result in the largest China broker by assets.</li>
<li>In this note, we evaluate the potential share exchange ratio and the risks to satisfying the conditions for implementing the potential merger.</li>
</ul>


On 6 September, Guotai Junan Securities (2611 HK) and Haitong Securities Co Ltd (H) (6837 HK) entered a legally binding agreement to merge through absorption and share exchange. 
The high-profile merger aligns with the Chinese government’s ambition to reform the brokerage sector and create world-class investment banks. The merger would result in the largest China broker by assets.
In this note, we evaluate the potential share exchange ratio and the risks to satisfying the conditions for implementing the potential merger.


Haitong Securities (6837 HK): Evaluating the Potential Merger with GTJA (2611 HK)

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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.

Quantitative Analysis

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of August 16th.</li>
<li>We estimate the weekly outflows to be US$600.9 million, led by materials, industrials, consumer discretionary, and offset by financials, communication services, health care.</li>
<li>Outflows were driven by Material, Industries and Consumer Discretionary sectors. We highlight flows for CATL (300750 CH).</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of August 16th.
We estimate the weekly outflows to be US$600.9 million, led by materials, industrials, consumer discretionary, and offset by financials, communication services, health care.
Outflows were driven by Material, Industries and Consumer Discretionary sectors. We highlight flows for CATL (300750 CH).


Travis Lundy

<ul>
<li>The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.</li>
<li>Last week saw NORTHBOUND net SELL RMB 5.0bn of A-shares. NORTHBOUND volumes were very, very low overall.</li>
<li>HK large caps again outperformed Mainland large caps generally. Tech (HSTECH vs Star50 and ChiNext) saw even better HK outperformance.</li>
</ul>


The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
Last week saw NORTHBOUND net SELL RMB 5.0bn of A-shares. NORTHBOUND volumes were very, very low overall.
HK large caps again outperformed Mainland large caps generally. Tech (HSTECH vs Star50 and ChiNext) saw even better HK outperformance.


Mainland Connect NORTHBOUND Flows (To 16 Aug 2024): Banks Bought, Industry & Materials Sold

China

CITIC Securities Co., Ltd. provides securities brokerage, trading, underwriting, investment banking, asset management, and investment consulting services.

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Citic Securities (H) (6030 HK)

Technically Speaking, Breakouts and Breakdowns: HONG KONG (SEPTEMBER 13)

Hong Kong conglomerate sector shows increased momentum. Hengan and J&T technical patterns broke down. J&T fell to new lows since its listing last...

David Mudd

Guotai Junan (2611 HK) & Haitong (6837 HK) Merger Creates China's Major Player

A Guotai Junan (2611 HK)/Haitong (6837 HK) merger is welcome - possibly mandated - amid challenging capital markets and a tightening regulatory...

David Blennerhassett

Haitong Securities (6837 HK): Evaluating the Potential Merger with GTJA (2611 HK)

In this note, we evaluate the potential share exchange ratio and the risks to satisfying the conditions for implementing the potential merger.

Arun George

Northbound Flows (Aug 16th): CATL

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlighted flows for CATL (ticker: 300750 CH).

Ke Yan, CFA, FRM

Mainland Connect NORTHBOUND Flows (To 16 Aug 2024): Banks Bought, Industry & Materials Sold

NORTHBOUND was again a net sell, but volumes were very low. Renewables and appliances were again tilted sell - not surprising as property...

Travis Lundy

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