HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>With the US interest rate heading lower, the HSI constituent companies with the highest gearing levels are the prime beneficiaries as their interest burden will lessen.</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>, while it has the highest leverage, is not a near-term gain. This is because its debt structure with 100% fixed rate borrowings. </li>
<li>Based on the gearing level, floating rate proportion, and YTD performance, <a href="https://www.smartkarma.com/entities/new-world-development" target="_blank" data-smartkarma-citation="entities:7037:1" rel="noopener">New World Development (17 HK)</a> and <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> are the two potential best bets.</li>
</ul>


With the US interest rate heading lower, the HSI constituent companies with the highest gearing levels are the prime beneficiaries as their interest burden will lessen.

Sands China (1928 HK), while it has the highest leverage, is not a near-term gain. This is because its debt structure with 100% fixed rate borrowings. 
Based on the gearing level, floating rate proportion, and YTD performance, New World Development (17 HK) and Hang Lung Properties (101 HK) are the two potential best bets.


HK Strategy: Rate Cut Beneficiaries - Fixed & Floating Rate Debt Analysis

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyse the changes of A-H premium on 150 stocks over the last week. The average A-H premium was 101.0% as of Dec 13th.</li>
<li>The average A-H premium changed by -1.9ppt week-on-week, led by consumer staples, consumer discretionary, industrials and offset by real estate.</li>
<li>We highlight weekly changes in A-H premium for ZOOMLION, QDP, BeiGene, INNOCARE, TEC, MA STEEL, AIR CHINA.</li>
</ul>


We analyse the changes of A-H premium on 150 stocks over the last week. The average A-H premium was 101.0% as of Dec 13th.
The average A-H premium changed by -1.9ppt week-on-week, led by consumer staples, consumer discretionary, industrials and offset by real estate.
We highlight weekly changes in A-H premium for ZOOMLION, QDP, BeiGene, INNOCARE, TEC, MA STEEL, AIR CHINA.


A-H Premium Weekly (Dec 13th):ZOOMLION, QDP, BeiGene, INNOCARE, TEC, MA STEEL, AIR CHINA

<ul>
<li>We analyse the changes of A-H premium on 150 stocks over the last week. The average A-H premium was 104.8% as of Nov 15th.</li>
<li>The average A-H premium changed by 6.9ppt week-on-week, led by financials, information technology, consumer discretionary and offset by communication services.</li>
<li>We highlight weekly changes in A-H premium for Chalco, CICC, HUAHONG GROUP, CanSinoBIO.</li>
</ul>


We analyse the changes of A-H premium on 150 stocks over the last week. The average A-H premium was 104.8% as of Nov 15th.
The average A-H premium changed by 6.9ppt week-on-week, led by financials, information technology, consumer discretionary and offset by communication services.
We highlight weekly changes in A-H premium for Chalco, CICC, HUAHONG GROUP, CanSinoBIO.


A-H Premium Weekly (Nov 15th):Chalco, CICC, HUAHONG GROUP, CanSinoBIO

Equity Bottom-Up

<ul>
<li>The spin-off of the value-added business (VAS) of <a href="https://www.smartkarma.com/entities/china-gas-holdings-ltd" target="_blank" data-smartkarma-citation="entities:14315:1" rel="noopener">China Gas Holdings (384 HK)</a> may add HK$0.22-0.83/share to the stock price, or 3.4-12.8%, based on our initial assessment.</li>
<li>VAS generated an operating profit of HK$1.58bn in FY24, up by 5.7% YoY. It is significant to China Gas as this accounted for 23.5% of its total segment profit.</li>
<li>The share price has not reacted much to the news because weak Chinese equity market and uncertainties on the upcoming 1H FY25 result. Once cleared, we see good upside.</li>
</ul>


The spin-off of the value-added business (VAS) of China Gas Holdings (384 HK) may add HK$0.22-0.83/share to the stock price, or 3.4-12.8%, based on our initial assessment.
VAS generated an operating profit of HK$1.58bn in FY24, up by 5.7% YoY. It is significant to China Gas as this accounted for 23.5% of its total segment profit.
The share price has not reacted much to the news because weak Chinese equity market and uncertainties on the upcoming 1H FY25 result. Once cleared, we see good upside.


China Gas Holdings (384 HK): Assessing the Spin-Off of Value-Added Business

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of November 1st.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight flows for Alibaba, Xiaomi, Geely Automobile, CCB, Xinyi Solar, China Mobile, CNOOC, Zto Express.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of November 1st.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for Alibaba, Xiaomi, Geely Automobile, CCB, Xinyi Solar, China Mobile, CNOOC, Zto Express.


Hong Kong Connect Flows (Nov 1st): Alibaba, Xiaomi, Geely Automobile, CCB, Xinyi Solar, China Mobile

China

Haier Smart Home Co. Ltd. manufactures and distributes appliances. The Company produces air conditioners, refrigerators, freezers, small household electrical appliances, and other related products. Haier Smart Home markets its products domestically and internationally.

Price Gauge
52-week Range	0.00 - 0.00
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Haier Smart Home (6690 HK)

HK Strategy: Rate Cut Beneficiaries - Fixed & Floating Rate Debt Analysis

With the Fed hinting at a slower rate cut path, the beneficiaries mentioned in this Insight will turn to suffer more. The names with the highest...

Osbert Tang, CFA

A-H Premium Weekly (Dec 13th):ZOOMLION, QDP, BeiGene, INNOCARE, TEC, MA STEEL, AIR CHINA

We analyzed A-H premium changes in the past week and highlight A-H premium changes for ZOOMLION, QDP, BeiGene, INNOCARE, TEC, MA STEEL, AIR CHINA.

Ke Yan, CFA, FRM

A-H Premium Weekly (Nov 15th):Chalco, CICC, HUAHONG GROUP, CanSinoBIO

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Chalco, CICC, HUAHONG GROUP, CanSinoBIO.

Ke Yan, CFA, FRM

China Gas Holdings (384 HK): Assessing the Spin-Off of Value-Added Business

China Gas' spin-off of value-added services could boost the stock by 3.4-12.8%, with VAS contributing 23.5% of total segment profit. Weak market...

Osbert Tang, CFA

Hong Kong Connect Flows (Nov 1st): Alibaba, Xiaomi, Geely Automobile, CCB, Xinyi Solar, China Mobile

We analyzed southbound Hong Kong connect flows in the past week and highlighted flows for Alibaba, Xiaomi, Geely Automobile, CCB, Xinyi Solar,...

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

HK Strategy: Rate Cut Beneficiaries - Fixed & Floating Rate Debt Analysis

With the Fed hinting at a slower rate cut path, the beneficiaries mentioned in this Insight will turn to suffer more. The names with the highest...

Osbert Tang, CFA

A-H Premium Weekly (Dec 13th):ZOOMLION, QDP, BeiGene, INNOCARE, TEC, MA STEEL, AIR CHINA

We analyzed A-H premium changes in the past week and highlight A-H premium changes for ZOOMLION, QDP, BeiGene, INNOCARE, TEC, MA STEEL, AIR CHINA.

Ke Yan, CFA, FRM

A-H Premium Weekly (Nov 15th):Chalco, CICC, HUAHONG GROUP, CanSinoBIO

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Chalco, CICC, HUAHONG GROUP, CanSinoBIO.

Ke Yan, CFA, FRM

China Gas Holdings (384 HK): Assessing the Spin-Off of Value-Added Business

​China Gas' spin-off of value-added services could boost the stock by 3.4-12.8%, with VAS contributing 23.5% of total segment profit. Weak market...

Osbert Tang, CFA

Hong Kong Connect Flows (Nov 1st): Alibaba, Xiaomi, Geely Automobile, CCB, Xinyi Solar, China Mobile

We analyzed southbound Hong Kong connect flows in the past week and highlighted flows for Alibaba, Xiaomi, Geely Automobile, CCB, Xinyi Solar,...

Ke Yan, CFA, FRM

China Gas' spin-off of value-added services could boost the stock by 3.4-12.8%, with VAS contributing 23.5% of total segment profit. Weak market...