Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>HK Alpha portfolio gained 3.45% in August, outperforming its benchmark by 2.67%.  Since inception, the portfolio has outperformed HK indexes by 60% to 84%. HK ALPHA is up 14.35% YTD.</li>
<li>The Sharpe ratio stands at 1.21, compared with a benchmark of 0.68 since inception.  This higher Sharpe ratio is driven by excess alpha, which represents more than 50% of returns.</li>
<li>The portfolio gained in the healthcare, industrial, and technology sectors in August, while utilities and telecom exposure dragged on performance.</li>
</ul>


HK Alpha portfolio gained 3.45% in August, outperforming its benchmark by 2.67%.  Since inception, the portfolio has outperformed HK indexes by 60% to 84%. HK ALPHA is up 14.35% YTD.
The Sharpe ratio stands at 1.21, compared with a benchmark of 0.68 since inception.  This higher Sharpe ratio is driven by excess alpha, which represents more than 50% of returns.
The portfolio gained in the healthcare, industrial, and technology sectors in August, while utilities and telecom exposure dragged on performance.


HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

COSCO SHIPPING Energy Transportation / Equity Bottom-Up

COSCO SHIPPING Energy Transportation (1138 HK)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/cosco-shipping-energy-tran-h" target="_blank" data-smartkarma-citation="entities:646:1" rel="noopener">Cosco Shipping Energy (1138 HK)</a> has a significant 91.5% rally YTD. However, the market seems to have assumed that the current elevated VLCC rate is sustainable, and we doubt it.</li>
<li>Despite the attack on Iran and the paralysis of the Strait of Hormuz, history has taught us that such an outrageous rate level will normalise within a couple of months.  </li>
<li>Its 2x P/B is 4SD higher than the average since FY22. To justify it, the FY26 net profit needs to be 4.4x above the consensus - this is not possible. </li>
</ul>



Cosco Shipping Energy (1138 HK) has a significant 91.5% rally YTD. However, the market seems to have assumed that the current elevated VLCC rate is sustainable, and we doubt it.
Despite the attack on Iran and the paralysis of the Strait of Hormuz, history has taught us that such an outrageous rate level will normalise within a couple of months.  
Its 2x P/B is 4SD higher than the average since FY22. To justify it, the FY26 net profit needs to be 4.4x above the consensus - this is not possible. 


COSCO Shipping Energy (1138 HK): Is It Too Stretched?

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.

Event-Driven

<ul>
<li>Mr Liu Jichun’s preconditional VGO for <a href="https://www.smartkarma.com/entities/xin-yuan-enterprises-group-ltd" target="_blank" data-smartkarma-citation="entities:40062:1" rel="noopener">Xin Yuan Enterprises (1748 HK)</a> is HK$2.21, a 25.6% premium to the last pre-suspension price. There is a 50% minimum acceptance condition.</li>
<li>The resumption pre-condition looks achievable. The forensic report largely cleared the company of financial issues, and Xin Yuan says it has met all the conditions for resumption.</li>
<li>Acceptance is on a knife-edge: the offeror reaches just 50.01% if all EGM supporters accept. The outcome turns on Danube Bridge's 15m shares and Chen Maochun's legal challenges.</li>
</ul>


Mr Liu Jichun’s preconditional VGO for Xin Yuan Enterprises (1748 HK) is HK$2.21, a 25.6% premium to the last pre-suspension price. There is a 50% minimum acceptance condition.
The resumption pre-condition looks achievable. The forensic report largely cleared the company of financial issues, and Xin Yuan says it has met all the conditions for resumption.
Acceptance is on a knife-edge: the offeror reaches just 50.01% if all EGM supporters accept. The outcome turns on Danube Bridge's 15m shares and Chen Maochun's legal challenges.


Xin Yuan (1748 HK): Resumption Likely, Min Acceptance Condition a Coin Toss for Liu's HK$2.21 VGO

<ul>
<li>
The Hong Kong Alpha portfolio posted a -0.5% return for April. Since its inception, the HK Alpha portfolio has outperformed the HK indexes by 38.69% to 60.42%.  </li>
<li>Overall alpha generation remains at 64% of overall returns.  The Sharpe ratio for the portfolio is 1.15, compared with 0.89 for the benchmark.</li>
<li>As the US retreats from its war in Iran, we have repositioned the portfolio by adding exposure to the AI-related tech sector, including platform, agentic, and hardware.</li>
</ul>



The Hong Kong Alpha portfolio posted a -0.5% return for April. Since its inception, the HK Alpha portfolio has outperformed the HK indexes by 38.69% to 60.42%.  
Overall alpha generation remains at 64% of overall returns.  The Sharpe ratio for the portfolio is 1.15, compared with 0.89 for the benchmark.
As the US retreats from its war in Iran, we have repositioned the portfolio by adding exposure to the AI-related tech sector, including platform, agentic, and hardware.


<ul>
<li>The Hong Kong Alpha portfolio's March performance was -11.25%, compared with -7.75% for the benchmark index.  The Hang Seng Index lost 6.92% for the month.</li>
<li>Performance was hurt by its exposure to the oil equipment and fertilizer sectors, which normally benefit from higher energy prices. China imposed price and export restrictions in the energy sector.</li>
<li>At the end of March, we positioned the portfolio to better cope with the difficulties in China's economy and in the global market due to persistently high energy prices.</li>
</ul>


The Hong Kong Alpha portfolio's March performance was -11.25%, compared with -7.75% for the benchmark index.  The Hang Seng Index lost 6.92% for the month.
Performance was hurt by its exposure to the oil equipment and fertilizer sectors, which normally benefit from higher energy prices. China imposed price and export restrictions in the energy sector.
At the end of March, we positioned the portfolio to better cope with the difficulties in China's economy and in the global market due to persistently high energy prices.


China

COSCO SHIPPING Energy Transportation is a specialized company primarily engaged in the global shipment of energy, including crude oil, refined oil products, liquefied natural gas (LNG), and liquefied petroleum gas (LPG). It also provides vessel chartering and shipping agency services. The company is headquartered in Shanghai, China, and was established in 2016.

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COSCO SHIPPING Energy Transportation (1138 HK)

HONG KONG ALPHA PORTFOLIO: (August 2026)

HK Alpha portfolio gained 3.45% in August, outperforming its benchmark by 2.67%. Since inception, the portfolio has outperformed HK indexes by 60%...

David Mudd

COSCO Shipping Energy (1138 HK): Is It Too Stretched?

CSET's impressive YTD rally may be unsustainable as the market assumes elevated VLCC rates will continue, but history suggests otherwise. Its P/B...

Osbert Tang, CFA

Xin Yuan (1748 HK): Resumption Likely, Min Acceptance Condition a Coin Toss for Liu's HK$2.21 VGO

Mr Liu's HK$2.21 precon VGO is a 25.6% premium to the last pre-suspension price. Trading looks likely to resume before the 30 October long-stop,...

Arun George

HONG KONG ALPHA PORTFOLIO: (April 2026)

The Hong Kong Alpha portfolio posted a -0.5% return for April. Since its inception, the HK Alpha portfolio has outperformed the HK indexes by...

David Mudd

HONG KONG ALPHA PORTFOLIO: (March 2026)

Guoquan Food announced that management sold a 4.74% stake at a discounted price of $3.8 to boost the liquidity of the shares. We viewed the move...

David Mudd

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

HONG KONG ALPHA PORTFOLIO: (August 2026)

HK Alpha portfolio gained 3.45% in August, outperforming its benchmark by 2.67%. Since inception, the portfolio has outperformed HK indexes by 60%...

David Mudd

COSCO Shipping Energy (1138 HK): Is It Too Stretched?

​CSET's impressive YTD rally may be unsustainable as the market assumes elevated VLCC rates will continue, but history suggests otherwise. Its P/B...

Osbert Tang, CFA

Xin Yuan (1748 HK): Resumption Likely, Min Acceptance Condition a Coin Toss for Liu's HK$2.21 VGO

Mr Liu's HK$2.21 precon VGO is a 25.6% premium to the last pre-suspension price. Trading looks likely to resume before the 30 October long-stop,...

Arun George

HONG KONG ALPHA PORTFOLIO: (April 2026)

The Hong Kong Alpha portfolio posted a -0.5% return for April. Since its inception, the HK Alpha portfolio has outperformed the HK indexes by...

David Mudd

HONG KONG ALPHA PORTFOLIO: (March 2026)

Guoquan Food announced that management sold a 4.74% stake at a discounted price of $3.8 to boost the liquidity of the shares. We viewed the move...

David Mudd

CSET's impressive YTD rally may be unsustainable as the market assumes elevated VLCC rates will continue, but history suggests otherwise. Its P/B...