HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>2024 marks another year that our "Buy the worst" strategy underperformed the HSI. The strategy yielded -1.7% YTD, against HSI's +17.9%. <a href="https://www.smartkarma.com/entities/meituan" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> is the only winner.</li>
<li>For 2025, the strategy will switch to <a href="https://www.smartkarma.com/entities/budweiser-brewing-co-apac-ltd" target="_blank" data-smartkarma-citation="entities:28077:1" rel="noopener">Budweiser Brewing (1876 HK)</a>, <a href="https://www.smartkarma.com/entities/chow-tai-fook-jewellery-group" target="_blank" data-smartkarma-citation="entities:549:1" rel="noopener">Chow Tai Fook (1929 HK)</a>, <a href="https://www.smartkarma.com/entities/hang-lung-properties-ltd" target="_blank" data-smartkarma-citation="entities:49:1" rel="noopener">Hang Lung Props (101 HK)</a>, <a href="https://www.smartkarma.com/entities/wuxi-apptec" target="_blank" data-smartkarma-citation="entities:23679:1" rel="noopener">Wuxi Biologics (2269 HK)</a>, and <a href="https://www.smartkarma.com/entities/cspc-pharmaceutical-group-ltd" target="_blank" data-smartkarma-citation="entities:229:1" rel="noopener">CSPC Pharmaceutical (1093 HK)</a>.  </li>
<li>The top five HSI winners YTD 2024 have generated an average gain of 92.7%, outperforming the HSI massively. Given their current high valuations, this is unlikely to repeat in 2025.</li>
</ul>


2024 marks another year that our "Buy the worst" strategy underperformed the HSI. The strategy yielded -1.7% YTD, against HSI's +17.9%. Meituan (3690 HK) is the only winner.
For 2025, the strategy will switch to Budweiser Brewing (1876 HK), Chow Tai Fook (1929 HK), Hang Lung Props (101 HK), Wuxi Biologics (2269 HK), and CSPC Pharmaceutical (1093 HK).  
The top five HSI winners YTD 2024 have generated an average gain of 92.7%, outperforming the HSI massively. Given their current high valuations, this is unlikely to repeat in 2025.


"Buy the Worst" HSI Strategy: Another Disappointing Year in 2024, Let's See 2025

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

<ul>
<li>TCOM US/ ATAT US: China Extends Transit Visa-Free Policy to 240 Hours(+/+)</li>
<li>1024 HK: Kuaishou Introduces Subscription Service for Micro Drama Business (+)</li>
<li>700 HK/1439927D CH/BIDU US: Apple Negotiates with Tencent and ByteDance to Launch AI Features in China (+/+/-)</li>
</ul>


TCOM US/ ATAT US: China Extends Transit Visa-Free Policy to 240 Hours(+/+)
1024 HK: Kuaishou Introduces Subscription Service for Micro Drama Business (+)
700 HK/1439927D CH/BIDU US: Apple Negotiates with Tencent and ByteDance to Launch AI Features in China (+/+/-)


[Blue Lotus Daily-TMT Update]:TCOM US/ ATAT US/1024 HK/700 HK/1439927D CH /BIDU/3690 HK/JD/BABA/PDD

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

Cross Asset Strategy

<ul><li>EVs / In Depth: How shift to EVs risks sidelining auto parts giants</li><li>Toy /In Depth: China’s trendy toy makers march into Southeast Asia</li><li>Delivery /China’s food delivery giants to introduce mandatory rest breaks for riders</li></ul>

EVs / In Depth: How shift to EVs risks sidelining auto parts giantsToy /In Depth: China’s trendy toy makers march into Southeast AsiaDelivery /China’s food delivery giants to introduce mandatory rest breaks for riders

CX Daily: How Shift to EVs Risks Sidelining Auto Parts Giants 

Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy Research

<ul>
<li>Given Trump’s overhaul of US economy and world trade, US interest rate may stay high and Renminbi might depreciate further, both negative for our sectors from a foreign investor perspective;</li>
<li>We expect China to respond strongly to Trump Tariff 2.0, which will necessitate bigger stimulus, leading to a scenario of a policy overdose;</li>
<li>We look for: (1) high dividend yield, (2) US-dollar exposure, (3) policy overdose in stock selection. We add TRIP and ATAT to our DMC and reiterate our MMC  portfolios</li>
</ul>


Given Trump’s overhaul of US economy and world trade, US interest rate may stay high and Renminbi might depreciate further, both negative for our sectors from a foreign investor perspective;
We expect China to respond strongly to Trump Tariff 2.0, which will necessitate bigger stimulus, leading to a scenario of a policy overdose;
We look for: (1) high dividend yield, (2) US-dollar exposure, (3) policy overdose in stock selection. We add TRIP and ATAT to our DMC and reiterate our MMC  portfolios


Invest in China Growth Equity in High-Rate Environment

<ul>
<li>BABA US/PDD US/VIPS US/JD US/3690 HK: NBS retail consumption data for November 2024 shows impact of early Double 11 (-/-/-/-/+)</li>
<li>BABA US/600177 CH: Alibaba rumored to sell Intime to Youngor (+//)</li>
<li>PDD US/1519 HK: Temu launches semi-consignment model in Mexico (-/+)</li>
</ul>


BABA US/PDD US/VIPS US/JD US/3690 HK: NBS retail consumption data for November 2024 shows impact of early Double 11 (-/-/-/-/+)
BABA US/600177 CH: Alibaba rumored to sell Intime to Youngor (+//)
PDD US/1519 HK: Temu launches semi-consignment model in Mexico (-/+)


[Blue Lotus Daily-TMT Update]:BABA US/PDD US/VIPS US/JD US/3690 HK/600177 CH/1519 HK/NTES US

China

Meituan is a Chinese technology company that operates a platform for local services, including on-demand food delivery, in-store services, consumer reviews, hotel and travel bookings, and instant retail. The company also offers bike sharing, e-moped sharing, and grocery delivery services. Meituan is headquartered in Beijing, China, and was founded in 2010.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Meituan (3690 HK)

"Buy the Worst" HSI Strategy: Another Disappointing Year in 2024, Let's See 2025

The 2024 "Buy the worst" strategy has underperformed HSI, and the new picks for 2025 are Budweiser APAC, Chow Tai Fook, Hang Lung Properties, Wuxi...

Osbert Tang, CFA

[Blue Lotus Daily-TMT Update]:TCOM US/ ATAT US/1024 HK/700 HK/1439927D CH /BIDU/3690 HK/JD/BABA/PDD

China expands visa-free transit policy, Kuaishou offers subscription service for micro dramas, Apple in talks with Tencent and ByteDance for AI...

Blue Lotus Research Institute

CX Daily: How Shift to EVs Risks Sidelining Auto Parts Giants

EVs / In Depth: How shift to EVs risks sidelining auto parts giants As China’s auto market pivots rapidly to new-energy vehicles (NEVs), the...

Caixin Global

Invest in China Growth Equity in High-Rate Environment

Trump's policies may lead to high US interest rates and a depreciating Renminbi. As remedy outside of buying high dividend stocks, we propose a...

Blue Lotus Research Institute

[Blue Lotus Daily-TMT Update]:BABA US/PDD US/VIPS US/JD US/3690 HK/600177 CH/1519 HK/NTES US

Retail consumption data for November 2024 reflects early Double 11 impact, Alibaba rumored to sell Intime to Youngor, and Temu launches semi...

Blue Lotus Research Institute

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

"Buy the Worst" HSI Strategy: Another Disappointing Year in 2024, Let's See 2025

​The 2024 "Buy the worst" strategy has underperformed HSI, and the new picks for 2025 are Budweiser APAC, Chow Tai Fook, Hang Lung Properties, Wuxi...

Osbert Tang, CFA

[Blue Lotus Daily-TMT Update]:TCOM US/ ATAT US/1024 HK/700 HK/1439927D CH /BIDU/3690 HK/JD/BABA/PDD

​China expands visa-free transit policy, Kuaishou offers subscription service for micro dramas, Apple in talks with Tencent and ByteDance for AI...

Blue Lotus Research Institute

CX Daily: How Shift to EVs Risks Sidelining Auto Parts Giants

EVs / In Depth: How shift to EVs risks sidelining auto parts giants As China’s auto market pivots rapidly to new-energy vehicles (NEVs), the...

Caixin Global

Invest in China Growth Equity in High-Rate Environment

​Trump's policies may lead to high US interest rates and a depreciating Renminbi. As remedy outside of buying high dividend stocks, we propose a...

Blue Lotus Research Institute

[Blue Lotus Daily-TMT Update]:BABA US/PDD US/VIPS US/JD US/3690 HK/600177 CH/1519 HK/NTES US

​Retail consumption data for November 2024 reflects early Double 11 impact, Alibaba rumored to sell Intime to Youngor, and Temu launches semi...

Blue Lotus Research Institute

The 2024 "Buy the worst" strategy has underperformed HSI, and the new picks for 2025 are Budweiser APAC, Chow Tai Fook, Hang Lung Properties, Wuxi...

China expands visa-free transit policy, Kuaishou offers subscription service for micro dramas, Apple in talks with Tencent and ByteDance for AI...

Trump's policies may lead to high US interest rates and a depreciating Renminbi. As remedy outside of buying high dividend stocks, we propose a...

Retail consumption data for November 2024 reflects early Double 11 impact, Alibaba rumored to sell Intime to Youngor, and Temu launches semi...