HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>For 1H25, the companies under our coverage will report a 16.8% earnings growth. Breaking down by quarter, 2Q25 growth will accelerate to 30.8%, from 14.1% in 1Q25. </li>
<li>The best growth rates are at <a href="https://www.smartkarma.com/entities/china-national-building-ma-h" target="_blank" data-smartkarma-citation="entities:184:1" rel="noopener">China National Building Material (3323 HK)</a>, <a href="https://www.smartkarma.com/entities/china-international-capital-corporation-ltd" target="_blank" data-smartkarma-citation="entities:1071:1" rel="noopener">CICC (3908 HK)</a>, <a href="https://www.smartkarma.com/entities/beijing-capital-international-airport-bcia" target="_blank" data-smartkarma-citation="entities:10626:1" rel="noopener">Beijing Capital Intl Airport (694 HK)</a>, <a href="https://www.smartkarma.com/entities/tongcheng-travel-holdings-ltd" target="_blank" data-smartkarma-citation="entities:27363:1" rel="noopener">Tongcheng Travel (780 HK)</a>, and <a href="https://www.smartkarma.com/entities/sitc-international-holdings" target="_blank" data-smartkarma-citation="entities:15301:1" rel="noopener">SITC Intl (1308 HK)</a>. </li>
<li>The worst ones are <a href="https://www.smartkarma.com/entities/china-travel-international-investment-hong-kong" target="_blank" data-smartkarma-citation="entities:3879:1" rel="noopener">China Travel Intl (308 HK)</a>, <a href="https://www.smartkarma.com/entities/cosco-shipping-energy-tran-h" target="_blank" data-smartkarma-citation="entities:646:1" rel="noopener">Cosco Shipping Energy Transp (1138 HK)</a>, <a href="https://www.smartkarma.com/entities/china-southern-airlines-co-ltd" target="_blank" data-smartkarma-citation="entities:1078:1" rel="noopener">China Southern Airlines (1055 HK)</a>, <a href="https://www.smartkarma.com/entities/china-tourism-group-duty-free" target="_blank" data-smartkarma-citation="entities:36229:1" rel="noopener">CTG Duty Free (1880 HK)</a>, and <a href="https://www.smartkarma.com/entities/pacific-basin-shipping-ltd" target="_blank" data-smartkarma-citation="entities:929:1" rel="noopener">Pacific Basin (2343 HK)</a>. </li>
</ul>


For 1H25, the companies under our coverage will report a 16.8% earnings growth. Breaking down by quarter, 2Q25 growth will accelerate to 30.8%, from 14.1% in 1Q25. 
The best growth rates are at China National Building Material (3323 HK), CICC (3908 HK), Beijing Capital Intl Airport (694 HK), Tongcheng Travel (780 HK), and SITC Intl (1308 HK). 
The worst ones are China Travel Intl (308 HK), Cosco Shipping Energy Transp (1138 HK), China Southern Airlines (1055 HK), CTG Duty Free (1880 HK), and Pacific Basin (2343 HK). 


China & HK Strategy: 1H25 Preview - Where Are the Upside and Downside Surprises?

Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Derivatives

<ul>
<li>
Context: <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> is set to release Q2 earnings on 13 April 2025. In the lead-up, options strategies on the Hong Kong Exchange showcase a variety of approaches.</li>
<li>
Highlights: Recent option trades show a mix of bullish and bearish sentiment. Calendar Spreads, Strangles, and Spreads using weekly options are explored.</li>
<li>
Why Read: This review offers real-market insight into how sophisticated participants are positioning around Tencent’s earnings — providing actionable reference points for structuring trades or assessing market expectations.</li>
</ul>



Context: Tencent (700 HK) is set to release Q2 earnings on 13 April 2025. In the lead-up, options strategies on the Hong Kong Exchange showcase a variety of approaches.

Highlights: Recent option trades show a mix of bullish and bearish sentiment. Calendar Spreads, Strangles, and Spreads using weekly options are explored.

Why Read: This review offers real-market insight into how sophisticated participants are positioning around Tencent’s earnings — providing actionable reference points for structuring trades or assessing market expectations.


Tencent (700 HK): How Traders Are Positioning Into Earnings

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

Index Rebalance

<ul>
<li>There should be big passive inflows to <a href="https://www.smartkarma.com/entities/horizon-robotics-inc" target="_blank" data-smartkarma-citation="entities:35637:1" rel="noopener">Horizon Robotics (9660 HK)</a> over the next 6 weeks and that could take the stock higher in the short term.</li>
<li>Southbound Stock Connect investors have bought more than 10% of the Class B shares outstanding since the stock was added to the link a couple of months ago.</li>
<li>Short interest jumped following the Stock Connect inclusion but there has been covering over the last few weeks. Short-term direction for the stock price looks to be higher.</li>
</ul>


There should be big passive inflows to Horizon Robotics (9660 HK) over the next 6 weeks and that could take the stock higher in the short term.
Southbound Stock Connect investors have bought more than 10% of the Class B shares outstanding since the stock was added to the link a couple of months ago.
Short interest jumped following the Stock Connect inclusion but there has been covering over the last few weeks. Short-term direction for the stock price looks to be higher.


Horizon Robotics (9660 HK): Index Inclusion & Upweights to Drive US$1bn Inflows

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-mobile-ltd" target="_blank" data-smartkarma-citation="entities:27:1" rel="noopener">China Mobile (941 HK)</a> / <a href="https://www.smartkarma.com/entities/china-mobile-ltd-cca8f162-fa93-4d59-944e-86bad7251e5c" target="_blank" data-smartkarma-citation="entities:35371:1" rel="noopener">China Mobile (600941 CH)</a> will release 2024 interim results on Thursday, 7 August 2025. The stock is a key constituent of the HSI and HSCEI.</li>
<li>
Highlights: Past earnings moves have been modest, but the options skew hints at potential for surprises. Dividend decision also due.</li>
<li>
Why Read: Helps time exposure and evaluate short-term risks ahead of results and dividend announcement for cash investors and option traders.</li>
</ul>



China Mobile (941 HK) / China Mobile (600941 CH) will release 2024 interim results on Thursday, 7 August 2025. The stock is a key constituent of the HSI and HSCEI.

Highlights: Past earnings moves have been modest, but the options skew hints at potential for surprises. Dividend decision also due.

Why Read: Helps time exposure and evaluate short-term risks ahead of results and dividend announcement for cash investors and option traders.


China Mobile (941 HK) Results on 7 Aug: Low Volatility History Faces Test

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

Rikki Malik

Cross Asset Strategy

<ul>
<li>A review of recent events/data impacting our investment themes and outlook</li>
<li>What the dollar bear market rally means for our themes</li>
<li>The domestic Chinese market starts to rally, outperforming in Asia</li>
</ul>


A review of recent events/data impacting our investment themes and outlook
What the dollar bear market rally means for our themes
The domestic Chinese market starts to rally, outperforming in Asia


Overview #31 - China Breaks Out and the USD Has Its Moment

Hong Kong

The Hang Seng Index is a free-float capitalization-weighted index of a selection of companies from the Stock Exchange of Hong Kong. The components of the index are divided into four subindices: Commerce and Industry, Finance, Utilities, and Properties. The index was developed with a base level of 100 as of July 31, 1964.

Hang Seng Index (HSI INDEX)

China & HK Strategy: 1H25 Preview - Where Are the Upside and Downside Surprises?

The companies under our coverage are expected to report 16.8% earnings growth for 1H25, with 2Q25 accelerating to 30.8%. Top performers include...

Osbert Tang, CFA

Tencent (700 HK): How Traders Are Positioning Into Earnings

An in-depth review of recent option trades on Tencent (700 HK), revealing how market participants are positioning ahead of the Q2 earnings...

Gaudenz Schneider

Horizon Robotics (9660 HK): Index Inclusion & Upweights to Drive US$1bn Inflows

Index inclusion and float increase over the next 6 weeks could lead to US$1bn of inflows to Horizon Robotics. Stock Connect investors hold around...

Brian Freitas

China Mobile (941 HK) Results on 7 Aug: Low Volatility History Faces Test

Options markets remain calm ahead of results but price in a fat-tailed return distribution, indicating traders are hedging against potential...

Gaudenz Schneider

Overview #31 - China Breaks Out and the USD Has Its Moment

A review of recent events/data impacting our investment themes and outlook. We look at the Dollar bear market rally and the domestic Chinese market.

Rikki Malik

China & HK Strategy: 1H25 Preview - Where Are the Upside and Downside Surprises?

The companies under our coverage are expected to report 16.8% earnings growth for 1H25, with 2Q25 accelerating to 30.8%. Top performers include...

Osbert Tang, CFA

Tencent (700 HK): How Traders Are Positioning Into Earnings

​An in-depth review of recent option trades on Tencent (700 HK), revealing how market participants are positioning ahead of the Q2 earnings...

Gaudenz Schneider

Horizon Robotics (9660 HK): Index Inclusion & Upweights to Drive US$1bn Inflows

Index inclusion and float increase over the next 6 weeks could lead to US$1bn of inflows to Horizon Robotics. Stock Connect investors hold around...

Brian Freitas

China Mobile (941 HK) Results on 7 Aug: Low Volatility History Faces Test

Options markets remain calm ahead of results but price in a fat-tailed return distribution, indicating traders are hedging against potential...

Gaudenz Schneider

Overview #31 - China Breaks Out and the USD Has Its Moment

A review of recent events/data impacting our investment themes and outlook. We look at the Dollar bear market rally and the domestic Chinese market.

Rikki Malik

An in-depth review of recent option trades on Tencent (700 HK), revealing how market participants are positioning ahead of the Q2 earnings...