HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>The HSI has already recovered to 2.2% above the pre-"reciprocal tariff" level, and the top 10 best-performing constituents have registered an average return of 15.6%.</li>
<li>Despite so, there are still 40 under-performing stocks, with 32 of them remain in the negative zone with an average of 4.8% loss. </li>
<li>Among them, <a href="https://www.smartkarma.com/entities/zto-express-cayman-inc" target="_blank" data-smartkarma-citation="entities:33488:1" rel="noopener">ZTO Express Cayman (2057 HK)</a>, <a href="https://www.smartkarma.com/entities/budweiser-brewing-co-apac-ltd" target="_blank" data-smartkarma-citation="entities:28077:1" rel="noopener">Budweiser Brewing APAC (1876 HK)</a>, <a href="https://www.smartkarma.com/entities/byd-electronic-international-co-ltd" target="_blank" data-smartkarma-citation="entities:1927:1" rel="noopener">BYD Electronics (285 HK)</a>, and <a href="https://www.smartkarma.com/entities/meituan" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> look well-positioned to catch up.</li>
</ul>


The HSI has already recovered to 2.2% above the pre-"reciprocal tariff" level, and the top 10 best-performing constituents have registered an average return of 15.6%.
Despite so, there are still 40 under-performing stocks, with 32 of them remain in the negative zone with an average of 4.8% loss. 
Among them, ZTO Express Cayman (2057 HK), Budweiser Brewing APAC (1876 HK), BYD Electronics (285 HK), and Meituan (3690 HK) look well-positioned to catch up.


HK Strategy: What Are Some of the HSI Laggards to Pick Up?

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

Cross Asset Strategy

<ul><li>Law firms / In Depth: The changing landscape of foreign law firms in China</li><li>Education /: Education ministry boosts scrutiny of dodgy overseas degrees</li><li>Bonds /China accelerates sci-tech bond plan to fuel innovation, aiming for $40 billion in issuance</li></ul>

Law firms / In Depth: The changing landscape of foreign law firms in ChinaEducation /: Education ministry boosts scrutiny of dodgy overseas degreesBonds /China accelerates sci-tech bond plan to fuel innovation, aiming for $40 billion in issuance

CX Daily: The Changing Landscape of Foreign Law Firms in China 

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

Shenton Research

Shenton Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Sep 18th based on HKEx daily reports.</li>
<li>In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Bidu (9888 HK), Link Reit (823 HK).</li>
<li>In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Bilibili (9626 HK), Kuaishou (1024 HK).</li>
</ul>


We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Sep 18th based on HKEx daily reports.
In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Bidu (9888 HK), Link Reit (823 HK).
In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Bilibili (9626 HK), Kuaishou (1024 HK).


Hong Kong Buybacks Weekly (Sep 18th): Tencent, Bidu, Link Reit

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

<ul>
<li>Bank Of China Ltd, Celltrion Inc and Li Auto top the list as the largest index constituents held by less that 5% of active Asia Ex-Japan funds.</li>
<li>Unloved stock numbers increase after China A-share inclusion in 2018/19 and further amplified by post-2020 restrictions on select Chinese military-linked firms.</li>
<li>Select funds do own sizeable positions in these stocks.  Are they the ultimate contrarian trades?</li>
</ul>


Bank Of China Ltd, Celltrion Inc and Li Auto top the list as the largest index constituents held by less that 5% of active Asia Ex-Japan funds.
Unloved stock numbers increase after China A-share inclusion in 2018/19 and further amplified by post-2020 restrictions on select Chinese military-linked firms.
Select funds do own sizeable positions in these stocks.  Are they the ultimate contrarian trades?


<ul>
<li>Our "Buy the Worst" strategy has outperformed the HSI by 1.7pp in the first two months. Meanwhile, the basket of best-performing constituents have underperformed 1.9pp. </li>
<li>More news on stimulating consumptions should be positive to <a href="https://www.smartkarma.com/entities/budweiser-brewing-co-apac-ltd" target="_blank" data-smartkarma-citation="entities:28077:1" rel="noopener">Budweiser Brewing APAC (1876 HK)</a>, <a href="https://www.smartkarma.com/entities/chow-tai-fook-jewellery-group" target="_blank" data-smartkarma-citation="entities:549:1" rel="noopener">Chow Tai Fook Jewellery (1929 HK)</a>, and even <a href="https://www.smartkarma.com/entities/hang-lung-properties-ltd" target="_blank" data-smartkarma-citation="entities:49:1" rel="noopener">Hang Lung Properties (101 HK)</a>. </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> has been weighed down by weaker profitability on higher costs. Earnings risks may negatively affect <a href="https://www.smartkarma.com/entities/meituan" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> and <a href="https://www.smartkarma.com/entities/china-hongqiao-group-ltd" target="_blank" data-smartkarma-citation="entities:1909:1" rel="noopener">China Hongqiao (1378 HK)</a>. </li>
</ul>


Our "Buy the Worst" strategy has outperformed the HSI by 1.7pp in the first two months. Meanwhile, the basket of best-performing constituents have underperformed 1.9pp. 
More news on stimulating consumptions should be positive to Budweiser Brewing APAC (1876 HK), Chow Tai Fook Jewellery (1929 HK), and even Hang Lung Properties (101 HK). 

Trip.com Group (9961 HK) has been weighed down by weaker profitability on higher costs. Earnings risks may negatively affect Meituan (3690 HK) and China Hongqiao (1378 HK). 


"Buy the Worst" HSI Strategy: Initial Win Against HSI This Year

Hong Kong

Geely Automobile Holdings Limited is a leading Chinese automotive company primarily engaged in the research, development, manufacturing, marketing, and sale of passenger vehicles and related components. It offers a diverse portfolio of products including sedans, SUVs, and electric vehicles under brands such as Geely Auto, Lynk & Co, and Zeekr. The company is headquartered in Hong Kong and was founded in 1973.

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Geely Auto (175 HK)

HK Strategy: What Are Some of the HSI Laggards to Pick Up?

HSI has rebounded above pre-reciprocal tariff levels, with top stocks up 15.6%. However, 32 stocks remain negative, with ZTO Express, Budweiser...

Osbert Tang, CFA

CX Daily: The Changing Landscape of Foreign Law Firms in China

Law firms / In Depth: The changing landscape of foreign law firms in China Education /: Education ministry boosts scrutiny of dodgy overseas...

Caixin Global

Hong Kong Buybacks Weekly (Sep 18th): Tencent, Bidu, Link Reit

We analyzed the Hong Kong buyback data in the past week and highlight the top 3 companies that repurchased the most shares were Tencent (700 HK),...

Ke Yan, CFA, FRM

Unloved Stocks in Asia Ex-Japan

Bank Of China Ltd, Celltrion Inc and Li Auto top the list as the largest index constituents held by less that 5% of active Asia Ex-Japan funds.

Steven Holden

"Buy the Worst" HSI Strategy: Initial Win Against HSI This Year

"Buy the worst" strategy outperforms HSI by 1.7pp, while best-performing stocks lag by 1.9pp. Stimulating consumption news could benefit...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

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HK Strategy: What Are Some of the HSI Laggards to Pick Up?

​HSI has rebounded above pre-reciprocal tariff levels, with top stocks up 15.6%. However, 32 stocks remain negative, with ZTO Express, Budweiser...

Osbert Tang, CFA

CX Daily: The Changing Landscape of Foreign Law Firms in China

Law firms / In Depth: The changing landscape of foreign law firms in China Education /: Education ministry boosts scrutiny of dodgy overseas...

Caixin Global

Hong Kong Buybacks Weekly (Sep 18th): Tencent, Bidu, Link Reit

We analyzed the Hong Kong buyback data in the past week and highlight the top 3 companies that repurchased the most shares were Tencent (700 HK),...

Ke Yan, CFA, FRM

Unloved Stocks in Asia Ex-Japan

Bank Of China Ltd, Celltrion Inc and Li Auto top the list as the largest index constituents held by less that 5% of active Asia Ex-Japan funds.

Steven Holden

"Buy the Worst" HSI Strategy: Initial Win Against HSI This Year

​"Buy the worst" strategy outperforms HSI by 1.7pp, while best-performing stocks lag by 1.9pp. Stimulating consumption news could benefit...

Osbert Tang, CFA

HSI has rebounded above pre-reciprocal tariff levels, with top stocks up 15.6%. However, 32 stocks remain negative, with ZTO Express, Budweiser...

"Buy the worst" strategy outperforms HSI by 1.7pp, while best-performing stocks lag by 1.9pp. Stimulating consumption news could benefit...