Smartkarma AI, Smartkarma

αSK

Smartkarma AI

Smartkarma

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

Research Reinvented

Equity Bottom-Up

<ul>
 <li>MTR's unique 'Rail plus Property' (R+P) model provides a significant competitive advantage, using property development profits to fund railway operations and expansion, ensuring financial sustainability without heavy reliance on government subsidies.</li>
 <li>The company is embarking on a significant capital expenditure program, committing over HK$100 billion for new railway projects like the Tung Chung Line Extension and Northern Link, which are crucial for Hong Kong's long-term development.</li>
 <li>While ridership is recovering to pre-pandemic levels, the company faces headwinds from a challenging Hong Kong property market, rising operational costs, and a substantial future capital outlay that may pressure free cash flow.</li>
</ul>This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.


  MTR's unique 'Rail plus Property' (R+P) model provides a significant competitive advantage, using property development profits to fund railway operations and expansion, ensuring financial sustainability without heavy reliance on government subsidies.
  The company is embarking on a significant capital expenditure program, committing over HK$100 billion for new railway projects like the Tung Chung Line Extension and Northern Link, which are crucial for Hong Kong's long-term development.
  While ridership is recovering to pre-pandemic levels, the company faces headwinds from a challenging Hong Kong property market, rising operational costs, and a substantial future capital outlay that may pressure free cash flow.
This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>The Hong Kong Alpha portfolio returned -2.89% in November versus +1.72% for its benchmark index. The HK Alpha portfolio has outperformed Hong Kong indexes by 33% to 45% since inception.</li>
<li>The portfolio continues to generate 57% of its returns from alpha (idiosyncratic returns) while maintaining a Sharpe ratio of 2.19 YTD.</li>
<li>We have sold positions in the materials and industrials sectors and added positions in telecom, gold, and insurance industries at the end of November.</li>
</ul>


The Hong Kong Alpha portfolio returned -2.89% in November versus +1.72% for its benchmark index. The HK Alpha portfolio has outperformed Hong Kong indexes by 33% to 45% since inception.
The portfolio continues to generate 57% of its returns from alpha (idiosyncratic returns) while maintaining a Sharpe ratio of 2.19 YTD.
We have sold positions in the materials and industrials sectors and added positions in telecom, gold, and insurance industries at the end of November.


HONG KONG ALPHA PORTFOLIO: (November 2025)

Equity Derivatives and Volatility Specialist, Clifton Derivatives

John Ley

Equity Derivatives and Volatility Specialist

Clifton Derivatives

Independent derivative and volatility research firm focusing on events/catalysts, earnings, relative value and cross asset volatility strategies.

Equity Derivatives

<ul>
<li>Broad declines set a cautious tone as only a handful of single stocks avoided losses last week amid rising option volumes.</li>
<li>Market breadth deteriorated sharply, marking the weakest showing of the past year and highlighting the pressure across Hong Kong equities.</li>
<li>We highlight companies reporting next week in what shapes up as a busy week ahead with Baba and Meituan both reporting.</li>
</ul>


Broad declines set a cautious tone as only a handful of single stocks avoided losses last week amid rising option volumes.
Market breadth deteriorated sharply, marking the weakest showing of the past year and highlighting the pressure across Hong Kong equities.
We highlight companies reporting next week in what shapes up as a busy week ahead with Baba and Meituan both reporting.


Hong Kong Single Stock Options Weekly (Nov 17 – 21): Breadth Collapses, Put Volumes Rise

Asia Real Estate News Tracker, Asia Real Estate Tracker

Asia Real Estate Tracker

Asia Real Estate News Tracker

Tracking developments across Asia's regional real estate markets

<ul><li>Centurion is considering an REIT IPO amidst a rebound in Singapore property trusts, indicating positive market sentiment.</li><li>Microsoft plans to make a significant investment of $3 billion in India's digital infrastructure, the largest commitment in Asia.</li><li>Hong Kong is testing the market by announcing a land tender following the successful sale of an MTR plot, signaling confidence in the property sector.</li></ul>

Centurion is considering an REIT IPO amidst a rebound in Singapore property trusts, indicating positive market sentiment.Microsoft plans to make a significant investment of $3 billion in India's digital infrastructure, the largest commitment in Asia.Hong Kong is testing the market by announcing a land tender following the successful sale of an MTR plot, signaling confidence in the property sector.

Asia Real Estate Tracker (09-Jan-2025): Centurion explores REIT IPO as Singapore trusts rebound.

HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>With the US interest rate heading lower, the HSI constituent companies with the highest gearing levels are the prime beneficiaries as their interest burden will lessen.</li>
<li>
<a href="https://www.smartkarma.com/entities/sands-china-ltd" target="_blank" data-smartkarma-citation="entities:182:1" rel="noopener">Sands China (1928 HK)</a>, while it has the highest leverage, is not a near-term gain. This is because its debt structure with 100% fixed rate borrowings. </li>
<li>Based on the gearing level, floating rate proportion, and YTD performance, <a href="https://www.smartkarma.com/entities/new-world-development" target="_blank" data-smartkarma-citation="entities:7037:1" rel="noopener">New World Development (17 HK)</a> and <a href="https://www.smartkarma.com/entities/hang-lung-properties-ltd" target="_blank" data-smartkarma-citation="entities:49:1" rel="noopener">Hang Lung Properties (101 HK)</a> are the two potential best bets.</li>
</ul>


With the US interest rate heading lower, the HSI constituent companies with the highest gearing levels are the prime beneficiaries as their interest burden will lessen.

Sands China (1928 HK), while it has the highest leverage, is not a near-term gain. This is because its debt structure with 100% fixed rate borrowings. 
Based on the gearing level, floating rate proportion, and YTD performance, New World Development (17 HK) and Hang Lung Properties (101 HK) are the two potential best bets.


HK Strategy: Rate Cut Beneficiaries - Fixed & Floating Rate Debt Analysis

Hong Kong

MTR Corporation Limited provides public transport services in Hong Kong.  The Company owns and operates the Mass Transit Railway.  The Company also develops, sells, and manages residential and commercial properties.  In addition, MTR leases commercial facilities and provides services along the Railway, such as advertising, telecommunication facilities, and provides consultancy services.

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MTR Corp (66 HK)

Primer: MTR Corp (66 HK) - Sep 2025

MTR's unique 'Rail plus Property' (R+P) model provides a significant competitive advantage, using property development profits to fund railway...

αSK

HONG KONG ALPHA PORTFOLIO: (November 2025)

The Hong Kong Alpha portfolio returned -2.89% in November versus +1.72% for its benchmark index. The HK Alpha portfolio has outperformed Hong Kong...

David Mudd

Hong Kong Single Stock Options Weekly (Nov 17 – 21): Breadth Collapses, Put Volumes Rise

Hong Kong single stocks faced sharp declines and the weakest breadth of the year, while option flows strengthened and implied vols softened.

John Ley

Asia Real Estate Tracker (09-Jan-2025): Centurion explores REIT IPO as Singapore trusts rebound.

Centurion is considering an REIT IPO amidst a rebound in Singapore property trusts, indicating positive market sentiment.

Asia Real Estate Tracker

HK Strategy: Rate Cut Beneficiaries - Fixed & Floating Rate Debt Analysis

With the Fed hinting at a slower rate cut path, the beneficiaries mentioned in this Insight will turn to suffer more. The names with the highest...

Osbert Tang, CFA

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