Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Capital Markets

<ul>
<li>Didi's China business showed solid Y/Y growth, but International worsened dramatically</li>
<li>Spending on Sales &amp; Marketing (including incentives) was up CNY 1.7 bn Y/Y, or +55%</li>
<li>Should it seek an IPO soon, Didi will have to show a path to profits for International segment</li>
</ul>


Didi's China business showed solid Y/Y growth, but International worsened dramatically
Spending on Sales &amp; Marketing (including incentives) was up CNY 1.7 bn Y/Y, or +55%
Should it seek an IPO soon, Didi will have to show a path to profits for International segment


Didi Global Q325 Results | China Solid, But International Goes From Bad to Worse | How to Fix?

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>Hong Kong market continues to languish, trading flat for the year.  The telecom sector has shown some strength following the rollout of new token packages in May.</li>
<li>Materials and energy sectors have gone from top performers to lagging sectors since the ceasefire was announced in early April.  </li>
<li>
<a href="https://www.smartkarma.com/entities/pony-ai-inc-class-a" target="_blank" data-smartkarma-citation="entities:46237:1" rel="noopener">Pony.ai (2026 HK)</a> shares jumped after the company announced it's increasing its robotaxi fleet target for this year, following stronger-than-expected 1Q26 revenue driven by growth in robotaxi and intelligent solutions.
</li>
</ul>


Hong Kong market continues to languish, trading flat for the year.  The telecom sector has shown some strength following the rollout of new token packages in May.
Materials and energy sectors have gone from top performers to lagging sectors since the ceasefire was announced in early April.  

Pony.ai (2026 HK) shares jumped after the company announced it's increasing its robotaxi fleet target for this year, following stronger-than-expected 1Q26 revenue driven by growth in robotaxi and intelligent solutions.



The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (May 2026)

<ul>
<li>The Hong Kong market continues to trade sideways, with pockets of AI-themed stocks surging.  IPO activity remains robust in the technology sector.</li>
<li>Growth and momentum factors have underperformed so far in 2026, as stagnation in mainland domestic consumption is reflected in the underperformance of the consumer discretionary and staples sectors.</li>
<li>
<a href="https://www.smartkarma.com/entities/baidu-inc-class-a" target="_blank" data-smartkarma-citation="entities:32212:1" rel="noopener">Baidu (9888 HK)</a> received a BUY rating from Deutsche Bank with a target price of $186.  The company's cloud infrastructure revenue rose 79% in 1Q26.
</li>
</ul>


The Hong Kong market continues to trade sideways, with pockets of AI-themed stocks surging.  IPO activity remains robust in the technology sector.
Growth and momentum factors have underperformed so far in 2026, as stagnation in mainland domestic consumption is reflected in the underperformance of the consumer discretionary and staples sectors.

Baidu (9888 HK) received a BUY rating from Deutsche Bank with a target price of $186.  The company's cloud infrastructure revenue rose 79% in 1Q26.



BUY/SELL/HOLD: Hong Kong Market Update (5/27/26)

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Thematic (Sector/Industry)

<ul>
<li>Active conviction rising: China Industrials allocations are nearing all-time highs, with record participation and expanding net overweights despite a declining MSCI EM benchmark weight.</li>
<li>Clear conviction overweight: 76% of GEM funds are overweight China &amp; HK Industrials, making it the strongest country/sector conviction play across the EM universe.</li>
<li>Broadening beyond CATL: While CATL remains dominant, ownership is widening to emerging names, even as second-tier stocks show sharper rotations and selective positioning.</li>
</ul>


Active conviction rising: China Industrials allocations are nearing all-time highs, with record participation and expanding net overweights despite a declining MSCI EM benchmark weight.
Clear conviction overweight: 76% of GEM funds are overweight China &amp; HK Industrials, making it the strongest country/sector conviction play across the EM universe.
Broadening beyond CATL: While CATL remains dominant, ownership is widening to emerging names, even as second-tier stocks show sharper rotations and selective positioning.


China & HK Industrials: EM’s Key Overweight Grows Stronger

<ul>
<li>The Hong Kong Alpha portfolio's performance was -2.01% in October versus returns of -0.81 for the benchmark and -3.53 to  -8.62 for Hong Kong indexes.</li>
<li>The Hong Kong Alpha portfolio has captured most of the market gains and minimized drawdowns since inception. The portfolio's outperformance is more than 40% since inception in October 2024.</li>
<li>At month-end, we reduced materials and healthcare exposure.  We had already reduced the tech exposure earlier in the month.  We established positions in the utility, textile, and battery sectors.</li>
</ul>


The Hong Kong Alpha portfolio's performance was -2.01% in October versus returns of -0.81 for the benchmark and -3.53 to  -8.62 for Hong Kong indexes.
The Hong Kong Alpha portfolio has captured most of the market gains and minimized drawdowns since inception. The portfolio's outperformance is more than 40% since inception in October 2024.
At month-end, we reduced materials and healthcare exposure.  We had already reduced the tech exposure earlier in the month.  We established positions in the utility, textile, and battery sectors.


HONG KONG ALPHA PORTFOLIO: (October 2025)

China

DiDi Chuxing Inc operates passenger transportation platforms. The Company provides mobility solutions, cloud computing, and other application based services. DiDi Chuxing serves customers worldwide.

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DiDi Global (DIDIY US)

Didi Global Q325 Results | China Solid, But International Goes From Bad to Worse | How to Fix?

Didi Global's Q325 results show continued improvement in the main China business, but also a dramatic worsening of losses in the International...

Tracking Traffic

The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (May 2026)

Pony.ai shares jumped after the company announced it's increasing its robotaxi fleet target for 2026, after stronger-than-expected 1Q26 revenue...

David Mudd

BUY/SELL/HOLD: Hong Kong Market Update (5/27/26)

The Hong Kong market continues to trade sideways, with pockets of AI-themed stocks surging. IPO activity remains robust in the technology sector.

David Mudd

China & HK Industrials: EM’s Key Overweight Grows Stronger

China Industrials are back in focus. Active EM managers are increasing exposure, participation is at record highs, and conviction is spreading...

Steven Holden

HONG KONG ALPHA PORTFOLIO: (October 2025)

We made mid-month adjustments to the portfolio due to sudden re-escalation of tensions with the US & concurrent sectoral de-rating. Several...

David Mudd

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