HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lonking-holdings-ltd" target="_blank" data-smartkarma-citation="entities:3944:1" rel="noopener">Lonking Holdings (3339 HK)</a>'s demand should pick up in 2H24 supported by the government's "Action plan to promote large-scale equipment renewals and consumer goods trade-ins". </li>
<li>Industry volume sales have already witnessed a narrower YoY decline in Mar, with solid exports of wheel loaders and domestic sales of excavators.</li>
<li>After going ex- in late-May, its PER will drop to 7.0x and yield will rise to 6.6%. Net cash of HK$1.56/share is more than fully cover its share price.</li>
</ul>



Lonking Holdings (3339 HK)'s demand should pick up in 2H24 supported by the government's "Action plan to promote large-scale equipment renewals and consumer goods trade-ins". 
Industry volume sales have already witnessed a narrower YoY decline in Mar, with solid exports of wheel loaders and domestic sales of excavators.
After going ex- in late-May, its PER will drop to 7.0x and yield will rise to 6.6%. Net cash of HK$1.56/share is more than fully cover its share price.


Chief Executive Officer, Emmer Capital Partners Limited

Manishi Raychaudhuri

Chief Executive Officer

Emmer Capital Partners Limited

Emmer Capital Partners is an Asia Pacific focused financial advisory firm engaging in strategic financial asset allocation advice, bespoke thematic research and advising early-stage companies and connecting them to investors. Emmer Capital provides macro-economic and multi-asset investment strategy inputs to institutions, family offices, private wealth managers, private equity, and corporate boards directly and through independent research platforms. Emmer Capital also advises a wide range of startup companies on fund raising and business strategy. Emmer Capital's active engagement with the print and electronic media reaches a broad spectrum of investors across the globe.

<ul>
<li>Following our Large Cap basket (<a href="https://www.smartkarma.com/insights/asian-equities-the-asian-large-cap-focus-list-73-stocks-with-growth-value-quality-balance-sheet" target="_blank" data-smartkarma-citation="insights:240767" rel="noopener">Asian Equities: The Asian Large Cap Focus List - 73 Stocks with Growth, Value, Quality Balance Sheet</a>), we screen Asian Small Caps (US$1-5bn market cap).</li>
<li>93 small caps across Hong Kong (34), Korea (18), Taiwan (18), Indonesia (9), India (8) and Singapore-Malaysia (6) come up on our screen. </li>
<li>The HK and Singapore-Malaysia stocks are the most diversified across sectors. Korea is moderately so. India is dominated by financials, Taiwan by electronic hardware and Indonesia by energy and minerals.</li>
</ul>


Following our Large Cap basket (Asian Equities: The Asian Large Cap Focus List - 73 Stocks with Growth, Value, Quality Balance Sheet), we screen Asian Small Caps (US$1-5bn market cap).
93 small caps across Hong Kong (34), Korea (18), Taiwan (18), Indonesia (9), India (8) and Singapore-Malaysia (6) come up on our screen. 
The HK and Singapore-Malaysia stocks are the most diversified across sectors. Korea is moderately so. India is dominated by financials, Taiwan by electronic hardware and Indonesia by energy and minerals.


Asian Equities: Small Caps with Strong Growth, Reasonable Valuations, and Strong Balance Sheets

<ul>
<li>Despite a 15.4% post-result rally, <a href="https://www.smartkarma.com/entities/lonking-holdings-ltd" target="_blank" data-smartkarma-citation="entities:3944:1" rel="noopener">Lonking Holdings (3339 HK)</a> remains inexpensive at 8.4x FY26F PER, with net cash equaling 68.8% of the share price.</li>
<li>Its exposure to higher oil prices and the Middle East war is limited, as sales are on an FOB basis, and none of these countries is among its top 10.</li>
<li>It targets a 15% revenue growth for FY26, and the 1Q26 trend is in line. Industry sales are encouraging in 2M26, with excavators grew 13.1% and loaders 27.9%.</li>
</ul>


Despite a 15.4% post-result rally, Lonking Holdings (3339 HK) remains inexpensive at 8.4x FY26F PER, with net cash equaling 68.8% of the share price.
Its exposure to higher oil prices and the Middle East war is limited, as sales are on an FOB basis, and none of these countries is among its top 10.
It targets a 15% revenue growth for FY26, and the 1Q26 trend is in line. Industry sales are encouraging in 2M26, with excavators grew 13.1% and loaders 27.9%.


Lonking (3339 HK): A Real Gem, Net Cash = 69% Market Cap

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>Lonking is a leading Chinese construction machinery manufacturer, well-positioned to benefit from domestic infrastructure spending and a strategic government push for high-end manufacturing exports.</li>
  <li>The company possesses a robust balance sheet, with a substantial net cash position equivalent to a significant portion of its market capitalization, underpinning valuation attractiveness and potential for increased shareholder returns.</li>
  <li>Market earnings forecasts appear conservative in light of strong industry sales growth and the company's operational enhancements, suggesting a high probability of positive earnings surprises in upcoming reporting periods.</li>
</ul><p><em>This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.</em></p>


  Lonking is a leading Chinese construction machinery manufacturer, well-positioned to benefit from domestic infrastructure spending and a strategic government push for high-end manufacturing exports.
  The company possesses a robust balance sheet, with a substantial net cash position equivalent to a significant portion of its market capitalization, underpinning valuation attractiveness and potential for increased shareholder returns.
  Market earnings forecasts appear conservative in light of strong industry sales growth and the company's operational enhancements, suggesting a high probability of positive earnings surprises in upcoming reporting periods.
This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

Primer: Lonking Holdings (3339 HK) - Jan 2026

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?

China

Lonking Holdings Limited is a major manufacturer and distributor of construction machinery, including wheel loaders, excavators, road rollers, forklifts, motor graders, and skid steer loaders. The company also develops and produces core components such as gearboxes, torque converters, axles, and hydraulic components. It was founded in 1993 and is headquartered in Shanghai, China.

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Lonking (3339 HK)

Lonking (3339 HK): Policy Tailwind

Government policy support and improving industry demand should drive a potential uptick in sales for Lonking in 2H24. Attractive valuations and a...

Osbert Tang, CFA

Asian Equities: Small Caps with Strong Growth, Reasonable Valuations, and Strong Balance Sheets

Screening Asian Small Caps reveals 93 stocks across markets. HK & SG-Malaysia are the most diversified. India is dominated by financials, TW by...

Manishi Raychaudhuri

Lonking (3339 HK): A Real Gem, Net Cash = 69% Market Cap

Lonking remains undervalued at 8.4x FY26F PER with strong revenue growth targets and limited exposure to higher oil prices and Middle East...

Osbert Tang, CFA

Primer: Lonking Holdings (3339 HK) - Jan 2026

Lonking is a leading Chinese construction machinery manufacturer, well-positioned to benefit from domestic infrastructure spending and a...

αSK Primers

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

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Lonking (3339 HK): Policy Tailwind

Government policy support and improving industry demand should drive a potential uptick in sales for Lonking in 2H24. Attractive valuations and a...

Osbert Tang, CFA

Asian Equities: Small Caps with Strong Growth, Reasonable Valuations, and Strong Balance Sheets

​Screening Asian Small Caps reveals 93 stocks across markets. HK & SG-Malaysia are the most diversified. India is dominated by financials, TW by...

Manishi Raychaudhuri

Lonking (3339 HK): A Real Gem, Net Cash = 69% Market Cap

​Lonking remains undervalued at 8.4x FY26F PER with strong revenue growth targets and limited exposure to higher oil prices and Middle East...

Osbert Tang, CFA

Primer: Lonking Holdings (3339 HK) - Jan 2026

Lonking is a leading Chinese construction machinery manufacturer, well-positioned to benefit from domestic infrastructure spending and a...

αSK Primers

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

Screening Asian Small Caps reveals 93 stocks across markets. HK & SG-Malaysia are the most diversified. India is dominated by financials, TW by...

Lonking remains undervalued at 8.4x FY26F PER with strong revenue growth targets and limited exposure to higher oil prices and Middle East...