HK/China Equity Long-Short

Osbert Tang, CFA

Equity Capital Markets

Foshan Haitian Flavouring & Food Company / Equity Capital Markets

<ul>
<li>Hong Kong's IPO market has gathered momentum lately, especially with the overwhelming response to <a href="https://www.smartkarma.com/entities/contemporary-amperex-technology-catl-co-limited" target="_blank" data-smartkarma-citation="entities:45179:1" rel="noopener">CATL (3750 HK)</a>. Consumer IPOs are the next ones to gather interest. </li>
<li>
<a href="https://www.smartkarma.com/entities/foshan-haitian-flavouring-food-company" target="_blank" data-smartkarma-citation="entities:44279:1" rel="noopener">Foshan Haitian Flavouring &amp; Food Co (FHF HK)</a> is the most imminent one, potentially seeking up to US$1bn. Without significant peers in Hong Kong, it should attract good attention.</li>
<li>The other interesting ones include <a href="https://www.smartkarma.com/entities/zhou-liu-fu-jewellery-co-ltd" target="_blank" data-smartkarma-citation="entities:43706:1" rel="noopener">Zhou Liu Fu Jewellery Co., Ltd. (1716396D CH)</a>, <a href="https://www.smartkarma.com/entities/three-squirrels" target="_blank" data-smartkarma-citation="entities:45113:1" rel="noopener">Three Squirrels (TRS HK)</a>, and <a href="https://www.smartkarma.com/entities/eastroc-beverage-group-co-ltd-f3283290-a611-4cb4-8857-93101786e283" target="_blank" data-smartkarma-citation="entities:45048:1" rel="noopener">Eastroc Beverage Group (EBG HK)</a>. </li>
</ul>


Hong Kong's IPO market has gathered momentum lately, especially with the overwhelming response to CATL (3750 HK). Consumer IPOs are the next ones to gather interest. 

Foshan Haitian Flavouring &amp; Food Co (FHF HK) is the most imminent one, potentially seeking up to US$1bn. Without significant peers in Hong Kong, it should attract good attention.
The other interesting ones include Zhou Liu Fu Jewellery Co., Ltd. (1716396D CH), Three Squirrels (TRS HK), and Eastroc Beverage Group (EBG HK). 


HK Strategy: Some Consumer IPO Pipelines and Their Proxies

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Thematic (Sector/Industry)

<ul>
<li>Chinese Real Estate prices have been the major driver of the Chinese stock market slump, but the fall seemed to stop. </li>
<li>Recently sworn-in President Trump is no longer considered an enemy of China, and his tariff punishment will no longer be across the board but more selective. </li>
<li>A few stocks in Hong Kong listing that trade at lower PE multiples to the dividend yield, indicating the undemanding valuation to obtain yield. </li>
</ul>


Chinese Real Estate prices have been the major driver of the Chinese stock market slump, but the fall seemed to stop. 
Recently sworn-in President Trump is no longer considered an enemy of China, and his tariff punishment will no longer be across the board but more selective. 
A few stocks in Hong Kong listing that trade at lower PE multiples to the dividend yield, indicating the undemanding valuation to obtain yield. 


Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Equity Bottom-Up

<ul>
<li>The H share market continues to be the top performing market in Asia in 2024.  The HSCEI has outperformed all Asian markets on a USD basis.
</li>
<li>
<a href="https://www.smartkarma.com/entities/china-longyuan-power-group-corp-ltd" target="_blank" data-smartkarma-citation="entities:14215:1" rel="noopener">China Longyuan Power (916 HK)</a> was rated a BUY at JP Morgan with the company hosting a roadshow to discuss its future growth strategy. 
</li>
<li>
<a href="https://www.smartkarma.com/entities/china-resources-beverage" target="_blank" data-smartkarma-citation="entities:41984:1" rel="noopener">China Resources Beverage (2460 HK)</a> was initiated as a BUY at CMB International as the company rapidly expands into the ready-to-drink category with teas and sports drinks.
</li>
</ul>


The H share market continues to be the top performing market in Asia in 2024.  The HSCEI has outperformed all Asian markets on a USD basis.


China Longyuan Power (916 HK) was rated a BUY at JP Morgan with the company hosting a roadshow to discuss its future growth strategy. 


China Resources Beverage (2460 HK) was initiated as a BUY at CMB International as the company rapidly expands into the ready-to-drink category with teas and sports drinks.



BUY/SELL/HOLD: Hong Kong Stock Updates (December 13)

Cross Asset Strategy

<ul>
<li>China and Hong Kong saw positive ETF flows for the week.</li>
<li>Dividend Yield, Low Volatility and Value strategies have outperformed during the market correction in Hong Kong.</li>
<li>Lufax Holdings jumps after announcement that Ping An will increase stake.  Fufeng slumps after announcing a decline in 1st half profit.</li>
</ul>


China and Hong Kong saw positive ETF flows for the week.
Dividend Yield, Low Volatility and Value strategies have outperformed during the market correction in Hong Kong.
Lufax Holdings jumps after announcement that Ping An will increase stake.  Fufeng slumps after announcing a decline in 1st half profit.


The Heat Is On: News Flow and Sentiment in CHINA/HONG KONG (July 5th)

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>Fufeng (546 HK)'s core businesses include food additives such as MSG, animal nutrition, high-end amino acids, and colloid such as xanthan gum. </li>
<li>Xantham gum is increasingly becoming popular as millions of people around the world purchase gluten free foods.</li>
<li>Fufeng's dividend yield averaged 7.5% annually from 2018 to 2022. Its current dividend yield is about 11-12%. Fufeng is trading at P/E of 2.9x and EV/EBITDA of 1.8x in 2024. </li>
</ul>


Fufeng (546 HK)'s core businesses include food additives such as MSG, animal nutrition, high-end amino acids, and colloid such as xanthan gum. 
Xantham gum is increasingly becoming popular as millions of people around the world purchase gluten free foods.
Fufeng's dividend yield averaged 7.5% annually from 2018 to 2022. Its current dividend yield is about 11-12%. Fufeng is trading at P/E of 2.9x and EV/EBITDA of 1.8x in 2024. 


China

Fufeng Group Limited manufactures corn-based bio-chemical products utilizing fermentation technology. The Company's products include glutamic acid and xanthan gum.

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Fufeng (546 HK)

HK Strategy: Some Consumer IPO Pipelines and Their Proxies

HK's IPO market gains momentum with CATL leading the way. Consumer IPOs like Foshan Haitian are next in line, attracting attention. Others include...

Osbert Tang, CFA

China: Revival 2.0?

Chinese real estate prices impact stock market, Trump's tariff approach to China changes, undervalued stocks in Hong Kong offer high yield potential.

Henry Soediarko

BUY/SELL/HOLD: Hong Kong Stock Updates (December 13)

H shares have outperformed all Asian markets this year on a USD basis. Longyuan Power continues to expand its offshore capacity & overseas...

David Mudd

The Heat Is On: News Flow and Sentiment in CHINA/HONG KONG (July 5th)

ETF flows continued to be positive for China during the week and Southbound Connect program continued to show inflows into HK market. Dividend,...

David Mudd

Asian Dividend Gems: Fufeng

Fufeng (546 HK)'s core businesses include food additives such as MSG, animal nutrition, high-end amino acids, and colloid such as xanthan gum. Its...

Douglas Kim

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

HK Strategy: Some Consumer IPO Pipelines and Their Proxies

HK's IPO market gains momentum with CATL leading the way. Consumer IPOs like Foshan Haitian are next in line, attracting attention. Others include...

Osbert Tang, CFA

China: Revival 2.0?

​Chinese real estate prices impact stock market, Trump's tariff approach to China changes, undervalued stocks in Hong Kong offer high yield potential.

Henry Soediarko

BUY/SELL/HOLD: Hong Kong Stock Updates (December 13)

H shares have outperformed all Asian markets this year on a USD basis. Longyuan Power continues to expand its offshore capacity & overseas...

David Mudd

The Heat Is On: News Flow and Sentiment in CHINA/HONG KONG (July 5th)

ETF flows continued to be positive for China during the week and Southbound Connect program continued to show inflows into HK market. Dividend,...

David Mudd

Asian Dividend Gems: Fufeng

Fufeng (546 HK)'s core businesses include food additives such as MSG, animal nutrition, high-end amino acids, and colloid such as xanthan gum. Its...

Douglas Kim

Chinese real estate prices impact stock market, Trump's tariff approach to China changes, undervalued stocks in Hong Kong offer high yield potential.