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)

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/didi-chuxing-inc" target="_blank" data-smartkarma-citation="entities:27467:1" rel="noopener">DiDi Global (DIDI US)</a> has begun to generate positive EBITDA after several challenging years post-IPO.  With a high degree of operating leverage, the company is poised to grow quickly.
</li>
<li>Didi which maintains a 70% market share in the ride-hailing industry in China is expanding into Tier 3 cities where there is a large untapped opportunity.</li>
<li>The company has indicated that it wants to list in Hong Kong in 2025 providing a catalyst for share price re-rating next year.</li>
</ul>



DiDi Global (DIDI US) has begun to generate positive EBITDA after several challenging years post-IPO.  With a high degree of operating leverage, the company is poised to grow quickly.

Didi which maintains a 70% market share in the ride-hailing industry in China is expanding into Tier 3 cities where there is a large untapped opportunity.
The company has indicated that it wants to list in Hong Kong in 2025 providing a catalyst for share price re-rating next year.


2025 High Conviction Idea - DIDI Global, Smooth Ride to Higher Profits

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>Shocking performance from International segment caused large Adj EBITA loss in Q425</li>
<li>The core Chinese ridehailing business continues to grow and generate improving margins</li>
<li>Ahead of a potential HK IPO, Didi must offer a pathway towards International recovery </li>
</ul>


Shocking performance from International segment caused large Adj EBITA loss in Q425
The core Chinese ridehailing business continues to grow and generate improving margins
Ahead of a potential HK IPO, Didi must offer a pathway towards International recovery 


Didi Q425 Results | China Biz Hums, International Losses Explode | Before an IPO, Didi Needs a Plan

<ul>
<li>Hong Kong Alpha portfolio gained 8.45% in September and 60.89% and 62.80% YTD and since launch one year ago.  The portfolio has outperformed Hong Kong indexes by more than 40%.</li>
<li>The portfolio has a Sharpe ratio of 3.23 YTD and has generated more than 40% of its returns from stock-picking (alpha).  Its beta is low at only 1.17.</li>
<li>At the end of September, we increased exposure to AI and robotics and sold positions in the consumer and finance sectors.</li>
</ul>


Hong Kong Alpha portfolio gained 8.45% in September and 60.89% and 62.80% YTD and since launch one year ago.  The portfolio has outperformed Hong Kong indexes by more than 40%.
The portfolio has a Sharpe ratio of 3.23 YTD and has generated more than 40% of its returns from stock-picking (alpha).  Its beta is low at only 1.17.
At the end of September, we increased exposure to AI and robotics and sold positions in the consumer and finance sectors.


HONG KONG ALPHA PORTFOLIO: (September 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)

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

2025 High Conviction Idea - DIDI Global, Smooth Ride to Higher Profits

Didi's share price has now broken major resistance levels at $5 and $6 on surging volume. The company's profit remains on track to double in 2025....

David Mudd

Didi Q425 Results | China Biz Hums, International Losses Explode | Before an IPO, Didi Needs a Plan

Didi Q425 results showed a solid performance in China ridehailing and a shocking loss in the International segment. Management needs to formulate a...

Tracking Traffic

HONG KONG ALPHA PORTFOLIO: (September 2025)

Due to the sudden escalation of US/China tensions we have decided to reduce AI and other risk exposure in the Hong Kong Alpha portfolio at the open...

David Mudd

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