Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://skr.ma/SRsXc" target="_blank" rel="noopener">StubWorld: GMO Internet (4784) Remains An Avoid. Get Involved With GMO Internet Group (9449 JP)</a> flagged <a href="https://www.smartkarma.com/entities/hang-lung-group-ltd" target="_blank" data-smartkarma-citation="entities:50:1" rel="noopener">Hang Lung (10 HK)</a> as coming up "expensive" to <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>Back in January 2024 HLP offered a scrip dividend option, and HLG has taken full advantage, increasing its stake by 4%.</li>
<li>As HLG adds more HLP, long-term deep value play Dodge &amp; Cox gradually sells HLG. That makes things interesting. And HLG's P/B is inexpensive.</li>
</ul>



StubWorld: GMO Internet (4784) Remains An Avoid. Get Involved With GMO Internet Group (9449 JP) flagged Hang Lung (10 HK) as coming up "expensive" to Hang Lung Properties (101 HK).
Back in January 2024 HLP offered a scrip dividend option, and HLG has taken full advantage, increasing its stake by 4%.
As HLG adds more HLP, long-term deep value play Dodge &amp; Cox gradually sells HLG. That makes things interesting. And HLG's P/B is inexpensive.


Hang Lung (10 HK) Is Inexpensive As Dodge & Cox Sells (A Little)

Equity Bottom-Up

<ul>
<li>Four years ago, almost to the day, Bloomberg ran an article, "China Merchants Group Ltd. is exploring taking China Merchants Port Holdings private". <a href="https://www.smartkarma.com/entities/china-merchants-port-holdings-company-ltd" target="_blank" data-smartkarma-citation="entities:15155:1" rel="noopener">China Merchants Ports (144 HK)</a> popped 23%.</li>
<li>CMP gave back (most) of that gain a month later. Shares are up just ~10% since. </li>
<li>CMP's implied stub is bouncing around a multi-year low; and the simple ratio (CMP/ <a href="https://www.smartkarma.com/entities/shanghai-international-port-group-co-ltd" target="_blank" data-smartkarma-citation="entities:14806:1" rel="noopener">Shanghai International Port Group (600018 CH)</a>) is around an all-time low.</li>
</ul>


Four years ago, almost to the day, Bloomberg ran an article, "China Merchants Group Ltd. is exploring taking China Merchants Port Holdings private". China Merchants Ports (144 HK) popped 23%.
CMP gave back (most) of that gain a month later. Shares are up just ~10% since. 
CMP's implied stub is bouncing around a multi-year low; and the simple ratio (CMP/ Shanghai International Port Group (600018 CH)) is around an all-time low.


Revisiting China Merchants Ports (144 HK)

<ul>
<li>Back in January 2024, <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> (HLP) offered a scrip dividend option for FY23, a first for the company. Scrip dividends have been afforded ever since.</li>
<li>HLP's major shareholder, <a href="https://www.smartkarma.com/entities/hang-lung-group-ltd" target="_blank" data-smartkarma-citation="entities:50:1" rel="noopener">Hang Lung (10 HK)</a>, has taken full advantage of this option, increasing its stake by 4%; and potentially up to 5% when factoring in FY25 dividends.</li>
<li>Interestingly, the implied stub has widened since the commencement of scrip dividends, with the market assigning HK$600mn less for the stub ops. </li>
</ul>


Back in January 2024, Hang Lung Properties (101 HK) (HLP) offered a scrip dividend option for FY23, a first for the company. Scrip dividends have been afforded ever since.
HLP's major shareholder, Hang Lung (10 HK), has taken full advantage of this option, increasing its stake by 4%; and potentially up to 5% when factoring in FY25 dividends.
Interestingly, the implied stub has widened since the commencement of scrip dividends, with the market assigning HK$600mn less for the stub ops. 


Hang Lung (10 HK) Is Still Inexpensive. Lack Of Liquidity Not Helping

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

<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 (up from 5700-5785) and $119-$121.</li>
<li>$128, $125-$126, and $123-$123.50 are short-term supports to watch on ACWI-US; we will maintain our near-term bullish outlook as long as $123 support holds.</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 (up from 5700-5785) and $119-$121.
$128, $125-$126, and $123-$123.50 are short-term supports to watch on ACWI-US; we will maintain our near-term bullish outlook as long as $123 support holds.


Continue Adding Exposure to China; Short-Term Supports to for This ACWI-US Pullback

Thematic (Sector/Industry)

<ul>
<li>When property advisors (JLL, Knight Frank, CBRE etc) debate the bottom of Hong Kong's office/retail market, such commentary is often infused with cautious optimism. </li>
<li>And for good reason, as vacancies increase, and rents soften.</li>
<li>Recent press articles and anecdotal evidence suggests market uncertainty lingers, prompting  landlords to (further) assess their stance on rents.</li>
</ul>


When property advisors (JLL, Knight Frank, CBRE etc) debate the bottom of Hong Kong's office/retail market, such commentary is often infused with cautious optimism. 
And for good reason, as vacancies increase, and rents soften.
Recent press articles and anecdotal evidence suggests market uncertainty lingers, prompting  landlords to (further) assess their stance on rents.


Hong Kong Property: In Need Of A Good Story

Hong Kong

Hang Lung Group is an investment holding company primarily engaged in property leasing, development, and sales. It develops and manages a diversified portfolio of world-class properties, including large-scale commercial complexes, office towers, retail outlets, residential units, and serviced apartments across Hong Kong and Mainland China. The company is headquartered in Hong Kong and was founded on September 13, 1960.

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Hang Lung Group (10 HK)

Hang Lung (10 HK) Is Inexpensive As Dodge & Cox Sells (A Little)

HLG remains dirt cheap at 0.23x P/B, albeit illiquid. Expect HLG to continue to chip away at HLP minorities. I'd be getting some exposure in HLG.

David Blennerhassett

Revisiting China Merchants Ports (144 HK)

For now, I would expect CMG to continue to chip away at CMP (144 HK)'s minorities - it currently holds 72.02%, up from 63.09% when the...

David Blennerhassett

Hang Lung (10 HK) Is Still Inexpensive. Lack Of Liquidity Not Helping

HLG's implied stub has widened since the commencement of the scrip dividends in 2024, with the market assigning HK$600mn less for the stub ops.

David Blennerhassett

Continue Adding Exposure to China; Short-Term Supports to for This ACWI-US Pullback

Continue Adding Exposure to China; $ACWI Short-Term Supports for this pullback: $128, $125-$126, and $123-$123.50. Pullbacks = buy opportunities,...

Vermilion Research

Hong Kong Property: In Need Of A Good Story

Upgrading and flight-to-quality in the office space has the affect of lifting occupancy in new projects; however such activity largely foreshadows...

David Blennerhassett

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