Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Equity Bottom-Up

<ul>
<li>As Hong Kong market continues to consolidate, the consumer discretionary sector is leading in momentum and strength while the energy and materials sectors lag.</li>
<li>
<a href="https://www.smartkarma.com/entities/trip-com-group-ltd-23a341d0-4f63-4175-a8c5-ee990906cacd" target="_blank" data-smartkarma-citation="entities:36424:1" rel="noopener">Trip.com Group (9961 HK)</a> , <a href="https://www.smartkarma.com/entities/trip-com-group-ltd" target="_blank" data-smartkarma-citation="entities:180:1" rel="noopener">Trip.com (TCOM US)</a> received BUY ratings after a strong 3Q24 announcement on revenue and earnings.  China's tourist numbers are projected to reach Pre-COVID levels soon.
</li>
<li><a href="https://www.smartkarma.com/entities/yum-china-holdings-inc-0533692c-6dae-4014-baa1-ed0b050638f2" target="_blank" data-smartkarma-citation="entities:29259:1" rel="noopener">Yum China Holdings (9987 HK)</a> , <a href="https://www.smartkarma.com/entities/yum-china-holdings-inc" target="_blank" data-smartkarma-citation="entities:23677:1" rel="noopener">Yum China Holdings (YUMC US)</a> received BUY ratings after initial success from its small store/franchising strategy.  The company is actively returning capital to shareholders.</li>
</ul>


As Hong Kong market continues to consolidate, the consumer discretionary sector is leading in momentum and strength while the energy and materials sectors lag.

Trip.com Group (9961 HK) , Trip.com (TCOM US) received BUY ratings after a strong 3Q24 announcement on revenue and earnings.  China's tourist numbers are projected to reach Pre-COVID levels soon.

Yum China Holdings (9987 HK) , Yum China Holdings (YUMC US) received BUY ratings after initial success from its small store/franchising strategy.  The company is actively returning capital to shareholders.


BUY/SELL/HOLD: Hong Kong Stock Updates (NOVEMBER 29)

<ul>
<li>Although Hong Kong markets have slumped after Trump's election, mainland China's markets have gained.  Southbound net buying of HK stocks hit a 2024 high on the day Trump won.</li>
<li>
<a href="https://www.smartkarma.com/entities/sands-china-ltd" target="_blank" data-smartkarma-citation="entities:182:1" rel="noopener">Sands China (1928 HK)</a> had a breakout from a double top as Macau recorded good Golden Week arrivals.  <a href="https://www.smartkarma.com/entities/blue-moon-group-holdings" target="_blank" data-smartkarma-citation="entities:29179:1" rel="noopener">Blue Moon Group Holdings (6993 HK)</a> had a breakout after 3 years.
</li>
<li>
<a href="https://www.smartkarma.com/entities/cansino-biologics-inc" target="_blank" data-smartkarma-citation="entities:27739:1" rel="noopener">CanSino Biologics (6185 HK)</a> formed a breakout after a new vaccine was approved and it reported better results.  <a href="https://www.smartkarma.com/entities/haidilao-international-holding" target="_blank" data-smartkarma-citation="entities:27044:1" rel="noopener">Haidilao International Holding (6862 HK)</a> share price advanced as it expands stores.
</li>
</ul>


Although Hong Kong markets have slumped after Trump's election, mainland China's markets have gained.  Southbound net buying of HK stocks hit a 2024 high on the day Trump won.

Sands China (1928 HK) had a breakout from a double top as Macau recorded good Golden Week arrivals.  Blue Moon Group Holdings (6993 HK) had a breakout after 3 years.


CanSino Biologics (6185 HK) formed a breakout after a new vaccine was approved and it reported better results.  Haidilao International Holding (6862 HK) share price advanced as it expands stores.



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

<ul>
<li>Hong Kong markets continue to outperform this year with the HSCEI up 30% year to date.  Market breadth continues to be healthy with 80% of stocks over &gt; 200 DMA.</li>
<li>
<a href="https://www.smartkarma.com/entities/xpeng-inc-4cc65854-d10c-4d20-bf7e-ca0e016715ff" target="_blank" data-smartkarma-citation="entities:33772:1" rel="noopener">XPeng (9868 HK)</a> announced its new hybrid technology which gives vehicles a range of more than 870 miles (1400 Kms).  The company has delivered more than 120k vehicles YTD.</li>
<li>
<a href="https://www.smartkarma.com/entities/china-merchants-securities-co-4f5d644c-0051-426f-9706-eaa74b0ba280" target="_blank" data-smartkarma-citation="entities:22738:1" rel="noopener">China Merchants Securities Co Ltd (H) (6099 HK)</a> benefits from increased market turnover.   <a href="https://www.smartkarma.com/entities/yum-china-holdings-inc-0533692c-6dae-4014-baa1-ed0b050638f2" target="_blank" data-smartkarma-citation="entities:29259:1" rel="noopener">Yum China Holdings (9987 HK)</a> beat consensus for 3Q24 earnings and will continue its buyback program.</li>
</ul>


Hong Kong markets continue to outperform this year with the HSCEI up 30% year to date.  Market breadth continues to be healthy with 80% of stocks over &gt; 200 DMA.

XPeng (9868 HK) announced its new hybrid technology which gives vehicles a range of more than 870 miles (1400 Kms).  The company has delivered more than 120k vehicles YTD.

China Merchants Securities Co Ltd (H) (6099 HK) benefits from increased market turnover.   Yum China Holdings (9987 HK) beat consensus for 3Q24 earnings and will continue its buyback program.


The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (November 7)

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>What is new? Sales of shares by the 2nd largest shareholder of DPC Dash (1405 HK).</li><li>Domino’s Pizza (DPZ US), the 2nd largest shareholder of DPC Dash (1405 HK), has sold 10mn shares (about 7.66% of total shares issued), at the price of HK$ 65.0 per share, with a 12.8% discount to last closing price of HK$ 74.55.</li><li>After this trade, Domino’s Pizza’s ownership in DPC Dash will be reduced from around 18.1mn shares (13.87% of the total) to about 8.1mn shares</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

What is new? Sales of shares by the 2nd largest shareholder of DPC Dash (1405 HK).Domino’s Pizza (DPZ US), the 2nd largest shareholder of DPC Dash (1405 HK), has sold 10mn shares (about 7.66% of total shares issued), at the price of HK$ 65.0 per share, with a 12.8% discount to last closing price of HK$ 74.55.After this trade, Domino’s Pizza’s ownership in DPC Dash will be reduced from around 18.1mn shares (13.87% of the total) to about 8.1mn sharesContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

DPC Dash (1405 HK) - Our View on Placement by Domino’s Pizza

Thematic (Sector/Industry)

<ul><li>Upgrade our rating to OUTPERFORM on the consumer discretionary sector.</li><li>The foot traffic of the 2024 10-1 National Day holidays was strong (recovery rate has improved vs Mid-autumn and Dragon Boat Festival) but the spending power remained fairly week.</li><li>Even though the retail sales growth was still under pressure, a sequential improvement was observed compared with Sep 2024, and this should be able to support the further re-rating of the sector valuation. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Upgrade our rating to OUTPERFORM on the consumer discretionary sector.The foot traffic of the 2024 10-1 National Day holidays was strong (recovery rate has improved vs Mid-autumn and Dragon Boat Festival) but the spending power remained fairly week.Even though the retail sales growth was still under pressure, a sequential improvement was observed compared with Sep 2024, and this should be able to support the further re-rating of the sector valuation. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Consumer Discretionary - Sequential Improvement May Support Re-Rating

China

DPC Dash Ltd, also known as "Domino's Pizza China", operates franchise fast food restaurants. The Company through its chain stores, supplies pizza, drinks, and other related snacks. DPC Dash operates as the master franchisee in China Mainland, Hong Kong, and Macau.

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DPC Dash (1405 HK)

BUY/SELL/HOLD: Hong Kong Stock Updates (NOVEMBER 29)

Hong Kong and China markets are outperforming their Asian peers this year. Trip.com announced strong results as China's tourism industry...

David Mudd

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

Mainland China's A-share market advanced after Trump's election as South Connect buying hit a 3 year high. Sands China had a breakout as Macau...

David Mudd

The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (November 7)

Hong Kong markets are among the top performers this year. Short selling has declined as Southbound buying increases. Xpeng introduced a new hybrid...

David Mudd

DPC Dash (1405 HK) - Our View on Placement by Domino’s Pizza

After this trade, Domino’s Pizza’s ownership in DPC Dash will be reduced from around 18.1mn shares (13.87% of the total) to about 8.1mn shares

CMB International

Consumer Discretionary - Sequential Improvement May Support Re-Rating

Upgrade our rating to OUTPERFORM on the consumer discretionary sector. The foot traffic of the 2024 10-1 National Day holidays was strong

CMB International

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