HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>The recent surge in Eurozone sovereign yields, particularly for France, has created pressure on the outlook for some HK-listed companies. </li>
<li>While the 100 largest companies generated an average of only 6% of revenue from Europe, 10 companies derived over 20%.</li>
<li>
<a href="https://www.smartkarma.com/entities/ck-hutchison-holdings-ltd" target="_blank" data-smartkarma-citation="entities:132:1" rel="noopener">CK Hutchison (1 HK)</a> group, <a href="https://www.smartkarma.com/entities/shein-global-holdings-limited" target="_blank" data-smartkarma-citation="entities:55372:1" rel="noopener">SHEIN Global (625 HK)</a>, <a href="https://www.smartkarma.com/entities/xiaomi-corporation-class-b" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi (1810 HK)</a>, <a href="https://www.smartkarma.com/entities/lenovo-group-limited" target="_blank" data-smartkarma-citation="entities:13359:1" rel="noopener">Lenovo (992 HK)</a>, <a href="https://www.smartkarma.com/entities/wuxi-biologics-cayman-inc" target="_blank" data-smartkarma-citation="entities:23679:1" rel="noopener">Wuxi Biologics (2269 HK)</a> group, and <a href="https://www.smartkarma.com/entities/cosco-shipping-holdings-co-ltd-class-h" target="_blank" data-smartkarma-citation="entities:286:1" rel="noopener">COSCO SHIPPING Holdings (1919 HK)</a> are the top. </li>
</ul>


The recent surge in Eurozone sovereign yields, particularly for France, has created pressure on the outlook for some HK-listed companies. 
While the 100 largest companies generated an average of only 6% of revenue from Europe, 10 companies derived over 20%.

CK Hutchison (1 HK) group, SHEIN Global (625 HK), Xiaomi (1810 HK), Lenovo (992 HK), Wuxi Biologics (2269 HK) group, and COSCO SHIPPING Holdings (1919 HK) are the top. 


HK Strategy: Exposure to Europe - Who Are at Risk?

Insurance & Central Asia-focused Analyst, KT Capital Group

Alec Tseung

Insurance & Central Asia-focused Analyst

KT Capital Group

Principal investments and advisory firm that focuses on connecting the CIS countries with East Asia.

Principal investments and advisory firm

Private Capital Markets

<ul>
<li>HSBC reported to have shortlisted 3 bidders for its Singapore life insurance manufacturing business at a valuation of up to USD 2 billion, a premium valuation given its 2024 BV.</li>
<li>We view that Sumitomo Life appears the most competitive bidder, esp. given its previous willingness to pay premium valuations to acquire life insurance assets in Singapore.</li>
<li>Allianz retains strategic conviction, underscored by its earlier, ultimately aborted attempt to acquire Income Insurance, but likely faces a much higher price hurdle now than in 2024.</li>
</ul>


HSBC reported to have shortlisted 3 bidders for its Singapore life insurance manufacturing business at a valuation of up to USD 2 billion, a premium valuation given its 2024 BV.
We view that Sumitomo Life appears the most competitive bidder, esp. given its previous willingness to pay premium valuations to acquire life insurance assets in Singapore.
Allianz retains strategic conviction, underscored by its earlier, ultimately aborted attempt to acquire Income Insurance, but likely faces a much higher price hurdle now than in 2024.


HSBC Life Singapore Sale: Which Bidder Is Likely Going to Win?

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.

Equity Bottom-Up

<ul>
<li>HSBC holds 19% of BoCom and still carries it with a value of USD23.3bn despite the stock market valuation putting it closer to USD8.1bn on YE22 figures. </li>
<li>The bank cites its Value In Use testing as the justifiable reason for this gap, and this testing will include major assumptions like discount rates and long term growth rates.</li>
<li>Goodwill and other intangible charges were USD10.6bn in FY08, USD3.4bn in FY16, and USD7.4bn in FY19 for HSBC. </li>
</ul>


HSBC holds 19% of BoCom and still carries it with a value of USD23.3bn despite the stock market valuation putting it closer to USD8.1bn on YE22 figures. 
The bank cites its Value In Use testing as the justifiable reason for this gap, and this testing will include major assumptions like discount rates and long term growth rates.
Goodwill and other intangible charges were USD10.6bn in FY08, USD3.4bn in FY16, and USD7.4bn in FY19 for HSBC. 


HSBC - Gap of USD15bn on Carrying Value Vs Fair Value of BoCom, as China Economy Weakens More

Smartkarma AI Primers, Smartkarma

αSK Primers

Smartkarma AI Primers

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

<ul>
  <li>
<a href="https://smartkarma.com/entities/hsbc-holdings-plc">HSBC</a>'s strategic pivot towards Asia, a higher-growth region, and its focus on wealth management and commercial banking are expected to be key earnings drivers.</li>
  <li>The bank maintains a strong capital position and a globally diversified business model, which provides resilience against localized economic downturns. However, it faces significant geopolitical risks, particularly from US-China tensions.</li>
  <li>Valuation appears moderate compared to some peers, but the company's profitability and growth are subject to the global interest rate environment, regulatory changes, and intense competition from traditional banks and fintech challengers.</li>
</ul><p><em>This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.</em></p>


  
HSBC's strategic pivot towards Asia, a higher-growth region, and its focus on wealth management and commercial banking are expected to be key earnings drivers.
  The bank maintains a strong capital position and a globally diversified business model, which provides resilience against localized economic downturns. However, it faces significant geopolitical risks, particularly from US-China tensions.
  Valuation appears moderate compared to some peers, but the company's profitability and growth are subject to the global interest rate environment, regulatory changes, and intense competition from traditional banks and fintech challengers.
This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

United Kingdom

HSBC Holdings Plc is a British universal bank and financial services group operating worldwide. It offers a wide range of services including retail and personal banking, wealth management, commercial banking, global banking, and markets and securities services. The company was founded in British Hong Kong in 1865 and is headquartered in London, England.

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HSBC (HSBA LN)

HK Strategy: Exposure to Europe - Who Are at Risk?

A recent surge in Eurozone sovereign yields will put pressure on some companies. The 100 largest HK companies have only 6% of their revenue from...

Osbert Tang, CFA

HSBC Life Singapore Sale: Which Bidder Is Likely Going to Win?

HSBC Life Singapore reported to have selected three bidders for binding bids. But, the valuation ask likely tilts the playing field in Sumitomo...

Alec Tseung

HSBC - Gap of USD15bn on Carrying Value Vs Fair Value of BoCom, as China Economy Weakens More

HSBC still carries its 19% investment in BoCom at a very high value compared with the market value and with a far weaker China outlook, we are not...

Daniel Tabbush

Primer: HSBC (5 HK) - Aug 2026

HSBC's strategic pivot towards Asia, a higher-growth region, and its focus on wealth management and commercial banking are expected to be key...

αSK Primers

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