Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

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 83.5% as of Mar 14th.</li>
<li>The average A-H premium changed by -0.9ppt week-on-week, led by consumer discretionary, consumer staples, energy and offset by information technology, real estate, materials.</li>
<li>We highlight weekly changes in A-H premium for CIMC, Sinotrans, Joinn Lab, Huahong Semicon, Huaneng Power, Tigermed, Asymchem Lab.</li>
</ul>


We analyse the changes of A-H premium on 150 stocks over the last week. The average A-H premium was 83.5% as of Mar 14th.
The average A-H premium changed by -0.9ppt week-on-week, led by consumer discretionary, consumer staples, energy and offset by information technology, real estate, materials.
We highlight weekly changes in A-H premium for CIMC, Sinotrans, Joinn Lab, Huahong Semicon, Huaneng Power, Tigermed, Asymchem Lab.


A-H Premium Weekly (Mar 14th): CIMC, Sinotrans, Joinn Lab, Huahong Semicon, Huaneng Power

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Gross SOUTHBOUND volumes cleared HK$800bn for the second week in a row. NET buying by SOUTHBOUND was HK$75bn which was perhaps a new record.</li>
<li>Notable again is the HUGE back-and-forth. If HK$865bn traded and SOUTHBOUND "only" bought HK$75bn, HK$395bn was round-tripped for short-term purposes.</li>
<li>Last week I flipped to short <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group Holding (9988 HK)</a>. Sentiment may worsen and there's lots to sell later this week. Staying short Alibaba for now. </li>
</ul>


Gross SOUTHBOUND volumes cleared HK$800bn for the second week in a row. NET buying by SOUTHBOUND was HK$75bn which was perhaps a new record.
Notable again is the HUGE back-and-forth. If HK$865bn traded and SOUTHBOUND "only" bought HK$75bn, HK$395bn was round-tripped for short-term purposes.
Last week I flipped to short Alibaba Group Holding (9988 HK). Sentiment may worsen and there's lots to sell later this week. Staying short Alibaba for now. 


HK Connect SOUTHBOUND Flows (To 28 Feb 2025); Big Volumes, HUGE Net Buys on Blue Chips, Tech-Y Names

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Equity Bottom-Up

Sunny Optical Technology / Equity Bottom-Up

<ul>
<li>HK Alpha Portfolio returned -1.29% in December and outperformed the benchmark by 0.34%. The portfolio has outperformed Hong Kong indexes by 7.93% to 9.64% since its inception on 10/01/24.  </li>
<li> About 75% of the portfolio's excess returns have been from alpha generation. The portfolio had no exposure to Real Estate, Energy or Materials. </li>
<li>At month-end we sold <a href="https://www.smartkarma.com/entities/china-cinda-asset-management-co-ltd" target="_blank" data-smartkarma-citation="entities:372:1" rel="noopener">China Cinda Asset Management (1359 HK)</a> , <a href="https://www.smartkarma.com/entities/citic-ltd" target="_blank" data-smartkarma-citation="entities:20590:1" rel="noopener">Citic Ltd (267 HK)</a> , <a href="https://www.smartkarma.com/entities/china-galaxy-securities-co-h" target="_blank" data-smartkarma-citation="entities:165:1" rel="noopener">China Galaxy Securities (H) (6881 HK)</a> and <a href="https://www.smartkarma.com/entities/gds-holdings-ltd" target="_blank" data-smartkarma-citation="entities:32157:1" rel="noopener">GDS Holdings (9698 HK)</a> .  </li>
</ul>


HK Alpha Portfolio returned -1.29% in December and outperformed the benchmark by 0.34%. The portfolio has outperformed Hong Kong indexes by 7.93% to 9.64% since its inception on 10/01/24.  
 About 75% of the portfolio's excess returns have been from alpha generation. The portfolio had no exposure to Real Estate, Energy or Materials.  
At month-end we sold China Cinda Asset Management (1359 HK) , Citic Ltd (267 HK) , China Galaxy Securities (H) (6881 HK) and GDS Holdings (9698 HK) .  


SMIC (Semiconductor Manufacturing International Corp) / Equity Bottom-Up

SMIC (Semiconductor Manufacturing International Corp) (981 HK)

SMIC (Semiconductor Manufacturing International Corp)

<ul>
<li>The HSTECH index is trading higher on higher breadth and momentum in January, up 6% so far.  Analysts project an upside of 23% over 12 months.</li>
<li>China's semiconductor sector is advancing this year from AI enthusiasm and accelerated localization in the chip industry.  <a href="https://www.smartkarma.com/entities/semiconductor-manufacturing-international-corp-smic" target="_blank" data-smartkarma-citation="entities:14231:1" rel="noopener">Semiconductor Manufacturing International Corp (SMIC) (981 HK)</a> shares have benefited from this trend.</li>
<li>
<a href="https://www.smartkarma.com/entities/sunny-optical-technology-group" target="_blank" data-smartkarma-citation="entities:13363:1" rel="noopener">Sunny Optical Technology Group (2382 HK)</a> benefits from China's announcement that it will subsidize more consumer products, including smartphones and new vehicles.
</li>
</ul>


The HSTECH index is trading higher on higher breadth and momentum in January, up 6% so far.  Analysts project an upside of 23% over 12 months.
China's semiconductor sector is advancing this year from AI enthusiasm and accelerated localization in the chip industry.  Semiconductor Manufacturing International Corp (SMIC) (981 HK) shares have benefited from this trend.

Sunny Optical Technology Group (2382 HK) benefits from China's announcement that it will subsidize more consumer products, including smartphones and new vehicles.



The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (January 25)

SMIC (Semiconductor Manufacturing International Corp) / Event-Driven

<ul>
<li>SOUTHBOUND gross trading activity was again not stronger per day than the previous several weeks, but SB Net Buying was again BIG. Given the change in Tencent, remarkable even.</li>
<li>The story was follow-through, but SMIC and Xiaomi were also big buys. This is shaping up to be a "let's buy what US Persons cannot" moment.</li>
<li>No sectors saw net selling through CCASS data five days to Weds. Top 10 activity was quite concentrated this week. Very few stray names.</li>
</ul>


SOUTHBOUND gross trading activity was again not stronger per day than the previous several weeks, but SB Net Buying was again BIG. Given the change in Tencent, remarkable even.
The story was follow-through, but SMIC and Xiaomi were also big buys. This is shaping up to be a "let's buy what US Persons cannot" moment.
No sectors saw net selling through CCASS data five days to Weds. Top 10 activity was quite concentrated this week. Very few stray names.


HK Connect SOUTHBOUND Flows (To 17 Jan 2025); Again Big Net Buying by SB, Again on Tech

China

Hua Hong Semiconductor is a global pure-play semiconductor foundry specializing in embedded/standalone non-volatile memory, power discrete, analog & power management, and logic & RF technologies. The company provides diversified wafer fabrication and supporting services for various specialty process platforms. It is headquartered in Shanghai, China, and was founded in 2005.

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Hua Hong Semiconductor (1347 HK)

A-H Premium Weekly (Mar 14th): CIMC, Sinotrans, Joinn Lab, Huahong Semicon, Huaneng Power

We analyzed A-H premium changes in the past week and highlight A-H premium changes for CIMC, Sinotrans, Joinn Lab, Huahong Semicon, Huaneng Power,...

Ke Yan, CFA, FRM

HK Connect SOUTHBOUND Flows (To 28 Feb 2025); Big Volumes, HUGE Net Buys on Blue Chips, Tech-Y Names

HK SOUTHBOUND Connect flows were again huge, both short-term trading and actual net buying. Last week flipped to short Alibaba. This week stays...

Travis Lundy

HONG KONG ALPHA PORTFOLIO (January 2025)

Hong Kong Alpha portfolio lost 1.29% in January and outperformed its benchmark. We sold GDS, Citic, Cinda and China Galaxy Securities. We added...

David Mudd

The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (January 25)

HSTECH advances with good market breadth in January. SMIC is benefiting from AI advances as well as the localization trend in semi industry. ...

David Mudd

HK Connect SOUTHBOUND Flows (To 17 Jan 2025); Again Big Net Buying by SB, Again on Tech

SOUTHBOUND continues to buy heavily in tech and finance. Gross flows remain light but net flows are very strong. AH Premia are now the lowest in...

Travis Lundy

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