HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>Many have missed out on the 14%, or 2,300 points, rally of the HSI in the last 9 trading days. There are still several stocks that look interesting now.</li>
<li>
<a href="https://www.smartkarma.com/entities/li-auto-inc-3dbe6187-544f-40dd-b9f9-72fba9c0110e" target="_blank" data-smartkarma-citation="entities:33811:1" rel="noopener">Li Auto (2015 HK)</a>, <a href="https://www.smartkarma.com/entities/link-reit" target="_blank" data-smartkarma-citation="entities:872:1" rel="noopener">Link REIT (823 HK)</a>, <a href="https://www.smartkarma.com/entities/china-mengniu-dairy-co" target="_blank" data-smartkarma-citation="entities:354:1" rel="noopener">China Mengniu Dairy Co (2319 HK)</a>, <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> and <a href="https://www.smartkarma.com/entities/galaxy-entertainment-group-limited" target="_blank" data-smartkarma-citation="entities:806:1" rel="noopener">Galaxy Entertainment Group (27 HK)</a> are massive laggards YTD.</li>
<li>As they have only experienced limited rebounds from the 19-Apr trough, they are set to catch up. Also, their earnings prospects look positive this year. </li>
</ul>


Many have missed out on the 14%, or 2,300 points, rally of the HSI in the last 9 trading days. There are still several stocks that look interesting now.

Li Auto (2015 HK), Link REIT (823 HK), China Mengniu Dairy Co (2319 HK), Hang Lung Properties (101 HK) and Galaxy Entertainment Group (27 HK) are massive laggards YTD.
As they have only experienced limited rebounds from the 19-Apr trough, they are set to catch up. Also, their earnings prospects look positive this year. 


HK Strategy: Where Are the Short-Term Opportunities?

Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

<ul>
<li>There may be overly optimistic expectations for BOC HK's credit costs, which have been relatively benign for many years. </li>
<li>Worsening economic developments in Hong Kong and China suggest that BOC HK will show a dramatic deterioration in credit metrics in coming interim results. </li>
<li>Loan growth in Hong Kong is now hitting zero and funding cost growth has been extravagant, making for a poor combination to net interest income. </li>
</ul>


There may be overly optimistic expectations for BOC HK's credit costs, which have been relatively benign for many years. 
Worsening economic developments in Hong Kong and China suggest that BOC HK will show a dramatic deterioration in credit metrics in coming interim results. 
Loan growth in Hong Kong is now hitting zero and funding cost growth has been extravagant, making for a poor combination to net interest income. 


BOC HK - Credit Costs Have Flat Lined for Years, a Blow Out in 2H23 or 1H24 Can Be a Shock

Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

Cross Asset Strategy

<ul>
<li>Risk-Reward now skewed towards reward in the Hong Kong market.</li>
<li>Barbell strategy with both high-beta and lower volatility dividend stocks.</li>
<li>Some initial ideas included to add or start a portfolio  incorporating HK stocks.</li>
</ul>


Risk-Reward now skewed towards reward in the Hong Kong market.
Barbell strategy with both high-beta and lower volatility dividend stocks.
Some initial ideas included to add or start a portfolio  incorporating HK stocks.


2024 High Conviction Idea: The Case for a Rotation Out of Japan into Hong Kong - Part 3

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shein-global-holdings-limited" target="_blank" data-smartkarma-citation="entities:55372:1" rel="noopener">SHEIN Global Holdings (625 HK)</a> could raise up to US$2bn in its IPO if the overallotment option is exercised, valuing the company at HK$212bn (US$27bn).</li>
<li>Cornerstone investors will take up between 21.7-22.6% of the base offering and those shares will be locked up for 6 months from listing date.</li>
<li>Fast Entry inclusion in the HSCI is likely but Southbound Stock Connect could take over a year from listing date. Earliest global index inclusion in March.</li>
</ul>



SHEIN Global Holdings (625 HK) could raise up to US$2bn in its IPO if the overallotment option is exercised, valuing the company at HK$212bn (US$27bn).
Cornerstone investors will take up between 21.7-22.6% of the base offering and those shares will be locked up for 6 months from listing date.
Fast Entry inclusion in the HSCI is likely but Southbound Stock Connect could take over a year from listing date. Earliest global index inclusion in March.


SHEIN Global (625 HK): Delayed Index Inclusions; Stock Connect Next September

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

<ul><li>Israel-Palestine /Cover Story: Hamas attack on Israel reignites region’s cycle of violence</li><li>Fraud /: Hong Kong takes aim at banking fraud as complaints surge</li><li>Securities /: China tightens rules for short selling to prop up stocks</li></ul>

Israel-Palestine /Cover Story: Hamas attack on Israel reignites region’s cycle of violenceFraud /: Hong Kong takes aim at banking fraud as complaints surgeSecurities /: China tightens rules for short selling to prop up stocks

CX Daily: Hamas Attack on Israel Reignites Region’s Cycle of Violence

Hong Kong

Hong Kong Exchanges and Clearing Limited (HKEX) operates a range of equity, commodity, fixed income, and currency markets, providing listing, trading, clearing, and settlement services for securities and derivatives. It also functions as a frontline regulator for companies listed in Hong Kong. HKEX was formally established on March 6, 2000, and is headquartered in Exchange Square, Central, Hong Kong.

Hong Kong Exchanges and Clearing (388 HK)

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Hong Kong Exchanges and Clearing (388 HK)

HK Strategy: Where Are the Short-Term Opportunities?

Li Auto, Link REIT, China Mengniu, Hang Lung Properties, and Galaxy Entertainment are massive laggards YTD but the recent rebound from the trough...

Osbert Tang, CFA

BOC HK - Credit Costs Have Flat Lined for Years, a Blow Out in 2H23 or 1H24 Can Be a Shock

BOC HK has seen credit costs flat line for some years, possibly making it appear as though this bank does not experience credit cycles. Long term...

Daniel Tabbush

2024 High Conviction Idea: The Case for a Rotation Out of Japan into Hong Kong - Part 3

The Hong Kong market offers a favorable risk-reward ratio, suggesting a barbell strategy with high-beta and low volatility dividend stocks could...

Rikki Malik

SHEIN Global (625 HK): Delayed Index Inclusions; Stock Connect Next September

SHEIN could raise up to US$2bn in its IPO, valuing the company at US$27bn. Likely HSCI Fast Entry but Stock Connect only next Sept. One global...

Brian Freitas

CX Daily: Hamas Attack on Israel Reignites Region’s Cycle of Violence

Israel-Palestine /Cover Story: Hamas attack on Israel reignites region’s cycle of violence Fraud /: Hong Kong takes aim at banking fraud as...

Caixin Global

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

HK Strategy: Where Are the Short-Term Opportunities?

Li Auto, Link REIT, China Mengniu, Hang Lung Properties, and Galaxy Entertainment are massive laggards YTD but the recent rebound from the trough...

Osbert Tang, CFA

BOC HK - Credit Costs Have Flat Lined for Years, a Blow Out in 2H23 or 1H24 Can Be a Shock

BOC HK has seen credit costs flat line for some years, possibly making it appear as though this bank does not experience credit cycles. Long term...

Daniel Tabbush

2024 High Conviction Idea: The Case for a Rotation Out of Japan into Hong Kong - Part 3

​The Hong Kong market offers a favorable risk-reward ratio, suggesting a barbell strategy with high-beta and low volatility dividend stocks could...

Rikki Malik

SHEIN Global (625 HK): Delayed Index Inclusions; Stock Connect Next September

SHEIN could raise up to US$2bn in its IPO, valuing the company at US$27bn. Likely HSCI Fast Entry but Stock Connect only next Sept. One global...

Brian Freitas

CX Daily: Hamas Attack on Israel Reignites Region’s Cycle of Violence

Israel-Palestine /Cover Story: Hamas attack on Israel reignites region’s cycle of violence Fraud /: Hong Kong takes aim at banking fraud as...

Caixin Global

The Hong Kong market offers a favorable risk-reward ratio, suggesting a barbell strategy with high-beta and low volatility dividend stocks could...