HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>Supportive policies from central and local governments on the development of the hydrogen energy industry have boosted the share prices of the sector (up 12.3% YTD).</li>
<li>Inner Mongolia has eased regulations on electrolysis water hydrogen production projects while Shandong has waived hydrogen-powered vehicle tolls on highways. </li>
<li>
<a href="https://www.smartkarma.com/entities/beijing-sinohytec-co-ltd-57df3cd9-bd23-4f74-899b-d589f67fa85f" target="_blank" data-smartkarma-citation="entities:36866:1" rel="noopener">Beijing SinoHytec (2402 HK)</a>, <a href="https://www.smartkarma.com/entities/weichai-power-co-ltd-h" target="_blank" data-smartkarma-citation="entities:12508:1" rel="noopener">Weichai Power (2338 HK)</a>, <a href="https://www.smartkarma.com/entities/dongyue-group-ltd" target="_blank" data-smartkarma-citation="entities:20429:1" rel="noopener">Dongyue Group (189 HK)</a>, <a href="https://www.smartkarma.com/entities/cimc-enric-holdings-ltd" target="_blank" data-smartkarma-citation="entities:47:1" rel="noopener">CIMC Enric (3899 HK)</a>, and <a href="https://www.smartkarma.com/entities/dongfang-electric-corporation-limited" target="_blank" data-smartkarma-citation="entities:1251:1" rel="noopener">Dongfang Electric (1072 HK)</a> have recorded good progress in hydrogen business.</li>
</ul>


Supportive policies from central and local governments on the development of the hydrogen energy industry have boosted the share prices of the sector (up 12.3% YTD).
Inner Mongolia has eased regulations on electrolysis water hydrogen production projects while Shandong has waived hydrogen-powered vehicle tolls on highways. 

Beijing SinoHytec (2402 HK), Weichai Power (2338 HK), Dongyue Group (189 HK), CIMC Enric (3899 HK), and Dongfang Electric (1072 HK) have recorded good progress in hydrogen business.


China's Hydrogen Economy: Re-Igniting Interests

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>The Hong Kong market continues to underperform as investors focus on semiconductor investments in North Asian markets.  The market continues to trade at a significant valuation discount to other markets.</li>
<li>Dividend yield and value factors have outperformed YTD, while growth stocks have declined the most.  The industrials sector is the best-performing YTD, while tech, healthcare, and consumer sectors decline.</li>
<li>
<a href="https://www.smartkarma.com/entities/dongyue-group-limited" target="_blank" data-smartkarma-citation="entities:20429:1" rel="noopener">Dongyue (189 HK)</a> share price relative to the MSCI All Asia index has broken new highs.  The surge in shares is attributed to President Trump's easing of hydrofluorocarbon (HFC) regulations.
</li>
</ul>


The Hong Kong market continues to underperform as investors focus on semiconductor investments in North Asian markets.  The market continues to trade at a significant valuation discount to other markets.
Dividend yield and value factors have outperformed YTD, while growth stocks have declined the most.  The industrials sector is the best-performing YTD, while tech, healthcare, and consumer sectors decline.

Dongyue (189 HK) share price relative to the MSCI All Asia index has broken new highs.  The surge in shares is attributed to President Trump's easing of hydrofluorocarbon (HFC) regulations.



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

<ul>
<li>The Hong Kong market has retreated below its support/resistance level of 27100 as investors adopt a risk-off sentiment since the war started 3 weeks ago.</li>
<li>Value and dividend yield have been the best performing investment factors in 2026 YTD.  The energy sector is now up 31% this year.</li>
<li>
<a href="https://www.smartkarma.com/entities/china-risun-group-ltd" target="_blank" data-smartkarma-citation="entities:27956:1" rel="noopener">China Risun Group (1907 HK)</a> , the world's largest independent coking coal producer, saw a breakout for its share price as its hydrogen and chemical businesses benefit from higher prices.
</li>
</ul>


The Hong Kong market has retreated below its support/resistance level of 27100 as investors adopt a risk-off sentiment since the war started 3 weeks ago.
Value and dividend yield have been the best performing investment factors in 2026 YTD.  The energy sector is now up 31% this year.

China Risun Group (1907 HK) , the world's largest independent coking coal producer, saw a breakout for its share price as its hydrogen and chemical businesses benefit from higher prices.



Technically Speaking Breakouts & Breakdowns - HONG KONG (March 20)

<ul>
<li>After breaking resistance in January, the Hong Kong market is rangebound as sector rotation into energy, industrials and financials occurs before the next leg up in its Secular Bull Market.</li>
<li>As the tech and healthcare sectors lose momentum, the value factor has emerged as an outperformer so far in 2026.  </li>
<li>
<a href="https://www.smartkarma.com/entities/kingboard-holdings-ltd" target="_blank" data-smartkarma-citation="entities:8122:1" rel="noopener">Kingboard Holdings (148 HK)</a> broke out to new highs with technical momentum and strength indicators support the move.  
</li>
</ul>


After breaking resistance in January, the Hong Kong market is rangebound as sector rotation into energy, industrials and financials occurs before the next leg up in its Secular Bull Market.
As the tech and healthcare sectors lose momentum, the value factor has emerged as an outperformer so far in 2026.  

Kingboard Holdings (148 HK) broke out to new highs with technical momentum and strength indicators support the move.  



Technically Speaking Breakouts & Breakdowns - HONG KONG (February 13)

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Giant Network Group Co Ltd / Technical Analysis

<ul>
<li>We remain near-term bullish since our 4/22/25 Compass, and our intermediate-term outlook remains bullish as well (as of our 5/14/25 Compass), with Int’l Compass reports all echoing this sentiment.</li>
<li>We will maintain our bullish intermediate-term view as long as market dynamics remain healthy and the SPX and ACWI-US are above 6028-6059 and $119-$121.</li>
<li>We remain overweight/continue to have a major focus on China (Shanghai Composite). It continues to offer the most attractive opportunities, with a significant number of today's recommendations coming from China.</li>
</ul>


We remain near-term bullish since our 4/22/25 Compass, and our intermediate-term outlook remains bullish as well (as of our 5/14/25 Compass), with Int’l Compass reports all echoing this sentiment.
We will maintain our bullish intermediate-term view as long as market dynamics remain healthy and the SPX and ACWI-US are above 6028-6059 and $119-$121.
We remain overweight/continue to have a major focus on China (Shanghai Composite). It continues to offer the most attractive opportunities, with a significant number of today's recommendations coming from China.


Sticking With China; Bullish Outlook Intact. Buys in Consumer Discretionary, Materials, and Tech

China

Dongyue Group Limited is an investment holding company primarily engaged in the fluorosilicon chemical business. It manufactures and distributes a range of products including polymers, refrigerants, organic silicon, dichloromethane, polyvinyl chloride (PVC), and liquid alkali, focusing on new energy, environmental protection, and new material industries. The company was founded in 1987 and is headquartered in Zibo, Shandong Province, China.

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Dongyue (189 HK)

China's Hydrogen Economy: Re-Igniting Interests

Sichuan province held "the conference on further promoting the development and promotion of the entire green hydrogen industry chain" in the last...

Osbert Tang, CFA

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

Dongyue (189 HK) share price relative to the MSCI All Asia index has broken new highs. The surge in shares is attributed to President Trump's...

David Mudd

Technically Speaking Breakouts & Breakdowns - HONG KONG (March 20)

The Hong Kong market has retreated below its support/resistance level of 27100 as investors adopt a risk-off sentiment since the war started 3...

David Mudd

Technically Speaking Breakouts & Breakdowns - HONG KONG (February 13)

After breaking resistance in January, the Hong Kong market is rangebound as sector rotation into energy, industrials and financials occurs before...

David Mudd

Sticking With China; Bullish Outlook Intact. Buys in Consumer Discretionary, Materials, and Tech

Still Bullish. China (Shanghai Composite) has been a major focus ever since our July 3 Int'l Compass titled "China and Japan Breaking Out." It...

Vermilion Research

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