Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Bottom-Up

China Construction Bank H / Equity Bottom-Up

<ul>
<li>The Hong Kong earnings season enters its final week with at least 17 <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index</a> companies reporting their 2024 results and announcing dividends.</li>
<li>The proportion of companies reporting in the coming week and the week after is significant at an index level, with notable weightings in the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">HSI</a>, <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">HSCEI</a>, and <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">HS TECH </a>indices.</li>
<li>Opportunities to profit from price movement around earnings are manifold and include event-focused trading, statistical arbitrage, hedging, and capitalizing on changes in dividends and implied volatility.</li>
</ul>


The Hong Kong earnings season enters its final week with at least 17 Hang Seng Index companies reporting their 2024 results and announcing dividends.
The proportion of companies reporting in the coming week and the week after is significant at an index level, with notable weightings in the HSI, HSCEI, and HS TECH indices.
Opportunities to profit from price movement around earnings are manifold and include event-focused trading, statistical arbitrage, hedging, and capitalizing on changes in dividends and implied volatility.


Hong Kong Earnings in the Week Commencing March 24

HK/China Equity Long-Short

Osbert Tang, CFA

<ul>
<li>
<a href="https://www.smartkarma.com/entities/anta-sports-products-ltd" target="_blank" data-smartkarma-citation="entities:10261:1" rel="noopener">Anta Sports Products (2020 HK)</a>'s strong FY24 result is masked by one-offs and <a href="https://www.smartkarma.com/entities/amer-sports-inc" target="_blank" data-smartkarma-citation="entities:21751:1" rel="noopener">Amer Sports (AS US)</a>. Without them, its earnings would have declined by an alarming 5.4% in 2H24. </li>
<li>Its ANTA and FILA brands have seen YoY operating profit drop in 2H24, with heavy margin pressure. Their revenue growth has also showed meaningful slowdown sequentially.</li>
<li>The 18.6x PER for FY25 is at a 50% premium to the sector, but the market expectation of 15% growth looks challenging. The YTD rally has opened room for profit-taking.</li>
</ul>



Anta Sports Products (2020 HK)'s strong FY24 result is masked by one-offs and Amer Sports (AS US). Without them, its earnings would have declined by an alarming 5.4% in 2H24. 
Its ANTA and FILA brands have seen YoY operating profit drop in 2H24, with heavy margin pressure. Their revenue growth has also showed meaningful slowdown sequentially.
The 18.6x PER for FY25 is at a 50% premium to the sector, but the market expectation of 15% growth looks challenging. The YTD rally has opened room for profit-taking.


Anta Sports (2020 HK): Need to Exercise Caution

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of March 14th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight flows for Alibaba, Guotai Junan Securities, Tencent, Kuaishou, Xiaomi, Geely Automobile, SMIC.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of March 14th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for Alibaba, Guotai Junan Securities, Tencent, Kuaishou, Xiaomi, Geely Automobile, SMIC.


Hong Kong Connect Flows (Mar 14th): Alibaba, Guotai Junan, Tencent, Kuaishou, Xiaomi, Geely, SMIC

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>The March rebalance of the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">HSI</a>, <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">HSCEI INDEX</a>, <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">HSTECH</a> and HSIII indices will use today's closing prices to cap the index constituent weights at 8%/12%. This leads to large flows.</li>
<li>The gross round-trip trade across all stocks across the four indices is estimated at HK$41.1bn (US$5.3bn). The net round-trip trade is HK$37.3bn (US$4.8bn).</li>
<li>
<a href="https://www.smartkarma.com/entities/meituan" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan</a> ,  <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com</a>, <a href="https://www.smartkarma.com/entities/baidu-inc-a55ca720-5968-48f0-8194-ac94390d065c" target="_blank" data-smartkarma-citation="entities:32212:1" rel="noopener">Baidu</a>, <a href="https://www.smartkarma.com/entities/horizon-robotics-inc" target="_blank" data-smartkarma-citation="entities:35637:1" rel="noopener">Horizon Robotics</a>, <a href="https://www.smartkarma.com/entities/industrial-and-commercial-bank-of-china-limited" target="_blank" data-smartkarma-citation="entities:1119:1" rel="noopener">ICBC</a>, <a href="https://www.smartkarma.com/entities/beigene-ltd" target="_blank" data-smartkarma-citation="entities:27352:1" rel="noopener">BeiGene</a>, <a href="https://www.smartkarma.com/entities/kuaishou-technology" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology</a> and <a href="https://www.smartkarma.com/entities/china-construction-bank-h" target="_blank" data-smartkarma-citation="entities:45:1" rel="noopener">China Construction Bank</a> are the largest buys. <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</a>, <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi</a>, <a href="https://www.smartkarma.com/entities/hsbc-holdings-plc" target="_blank" data-smartkarma-citation="entities:516:1" rel="noopener">HSBC</a>, <a href="https://www.smartkarma.com/entities/zhongan-online-p-c-insurance-c" target="_blank" data-smartkarma-citation="entities:23681:1" rel="noopener">ZhongAn Online</a> and <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent </a>are the largest sells.</li>
</ul>


The March rebalance of the HSI, HSCEI INDEX, HSTECH and HSIII indices will use today's closing prices to cap the index constituent weights at 8%/12%. This leads to large flows.
The gross round-trip trade across all stocks across the four indices is estimated at HK$41.1bn (US$5.3bn). The net round-trip trade is HK$37.3bn (US$4.8bn).

Meituan ,  JD.com, Baidu, Horizon Robotics, ICBC, BeiGene, Kuaishou Technology and China Construction Bank are the largest buys. Alibaba, Xiaomi, HSBC, ZhongAn Online and Tencent are the largest sells.


HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$5.3bn of Flows Post Capping (Mar 2025)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-dongxiang-group-co" target="_blank" data-smartkarma-citation="entities:1068:1" rel="noopener">China Dongxiang (3818 HK)</a>'s share price change has not sufficiently reflected <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 (9988 HK)</a>'s movement. Their share price ratio is now at a historical low. </li>
<li>Its SOTP value increased by HK$927m with the surge in its PE, unlisted and fixed-income investment value, but its market capitalisation has gone up by just HK$258m.</li>
<li>Holdings in unlisted assets like Ant Financial and JD Technology (JD Digital) will benefit from the AI bonanza and the better sentiment in the HK IPO market.</li>
</ul>



China Dongxiang (3818 HK)'s share price change has not sufficiently reflected Alibaba Group (9988 HK)'s movement. Their share price ratio is now at a historical low. 
Its SOTP value increased by HK$927m with the surge in its PE, unlisted and fixed-income investment value, but its market capitalisation has gone up by just HK$258m.
Holdings in unlisted assets like Ant Financial and JD Technology (JD Digital) will benefit from the AI bonanza and the better sentiment in the HK IPO market.


China Dongxiang (3818 HK): More than Just BABA

China

Li Ning Company Limited researches, designs, manufactures, distributes, and retails sports footwear, apparel and accessories for sport and leisure use.

Price Gauge
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Li Ning (2331 HK)

Hong Kong Earnings in the Week Commencing March 24

The Hong Kong earnings season wraps up with 17 Hang Seng Index companies reporting 2024 results and dividends, offering various profit...

Gaudenz Schneider

Anta Sports (2020 HK): Need to Exercise Caution

Anta's strong FY24 result was overshadowed by one-offs and Amer's impact, with earnings declining by 5.4% in 2H24. ANTA and FILA brands facing...

Osbert Tang, CFA

Hong Kong Connect Flows (Mar 14th): Alibaba, Guotai Junan, Tencent, Kuaishou, Xiaomi, Geely, SMIC

We analyzed southbound Hong Kong connect flows in the past week and highlighted flows for Alibaba, Guotai Junan Securities, Tencent, Kuaishou,...

Ke Yan, CFA, FRM

HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$5.3bn of Flows Post Capping (Mar 2025)

The March rebalance of the HSI, HSCEI, HSTECH and HSIII indices will use today's closing prices for capping. The round-trip trade across the four...

Brian Freitas

China Dongxiang (3818 HK): More than Just BABA

CNDX's share price has not reflected BABA's, and the price ratio is at a historical low. The change in market cap has not kept pace with SOTP. Its...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Hong Kong Earnings in the Week Commencing March 24

​The Hong Kong earnings season wraps up with 17 Hang Seng Index companies reporting 2024 results and dividends, offering various profit...

Gaudenz Schneider

Anta Sports (2020 HK): Need to Exercise Caution

​Anta's strong FY24 result was overshadowed by one-offs and Amer's impact, with earnings declining by 5.4% in 2H24. ANTA and FILA brands facing...

Osbert Tang, CFA

Hong Kong Connect Flows (Mar 14th): Alibaba, Guotai Junan, Tencent, Kuaishou, Xiaomi, Geely, SMIC

We analyzed southbound Hong Kong connect flows in the past week and highlighted flows for Alibaba, Guotai Junan Securities, Tencent, Kuaishou,...

Ke Yan, CFA, FRM

HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$5.3bn of Flows Post Capping (Mar 2025)

The March rebalance of the HSI, HSCEI, HSTECH and HSIII indices will use today's closing prices for capping. The round-trip trade across the four...

Brian Freitas

China Dongxiang (3818 HK): More than Just BABA

​CNDX's share price has not reflected BABA's, and the price ratio is at a historical low. The change in market cap has not kept pace with SOTP. Its...

Osbert Tang, CFA

The Hong Kong earnings season wraps up with 17 Hang Seng Index companies reporting 2024 results and dividends, offering various profit...

Anta's strong FY24 result was overshadowed by one-offs and Amer's impact, with earnings declining by 5.4% in 2H24. ANTA and FILA brands facing...

CNDX's share price has not reflected BABA's, and the price ratio is at a historical low. The change in market cap has not kept pace with SOTP. Its...