HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

Chow Tai Fook Jewellery / Equity Bottom-Up

<ul>
<li>The 4Q FY26 operating statistics suggest that <a href="https://www.smartkarma.com/entities/luk-fook-holdings-intl-ltd" target="_blank" data-smartkarma-citation="entities:19054:1" rel="noopener">Luk Fook Holdings Intl (590 HK)</a> is outperforming <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 Jewellery (1929 HK)</a> due to its Hong Kong exposure.</li>
<li>Since entering 2026, Luk Fook has outperformed Chow Tai Fook by a significant margin of 9pp. We believe such a trend will continue for the rest of the year. </li>
<li>Our "Long Luk Fook, Short Chow Tai Fook" strategy is further supported by Luk Fook's cheaper PER and PEG multiples. </li>
</ul>


The 4Q FY26 operating statistics suggest that Luk Fook Holdings Intl (590 HK) is outperforming Chow Tai Fook Jewellery (1929 HK) due to its Hong Kong exposure.
Since entering 2026, Luk Fook has outperformed Chow Tai Fook by a significant margin of 9pp. We believe such a trend will continue for the rest of the year. 
Our "Long Luk Fook, Short Chow Tai Fook" strategy is further supported by Luk Fook's cheaper PER and PEG multiples. 


China Pair Trade: Long Luk Fook (590 HK), Short Chow Tai Fook (1929 HK)

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/soundwill-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19318:1" rel="noopener">Soundwill Holdings (878 HK)</a> announced a privatisation offer from the Foo Family, the largest shareholder, at HK$8.50 (HK$7.50 cash + HK$1.00 special dividend), a 62.8% premium to the undisturbed price.</li>
<li>Key conditions include approval by at least 75% of independent shareholders (&lt;10% of independent shareholders rejection) and a headcount test. No disinterested shareholder holds a blocking stake.</li>
<li>While the offer is light compared to peer multiples, it is attractive compared to historical trading ranges. A low AGM minority participation rate facilitates the vote. </li>
</ul>



Soundwill Holdings (878 HK) announced a privatisation offer from the Foo Family, the largest shareholder, at HK$8.50 (HK$7.50 cash + HK$1.00 special dividend), a 62.8% premium to the undisturbed price.
Key conditions include approval by at least 75% of independent shareholders (&lt;10% of independent shareholders rejection) and a headcount test. No disinterested shareholder holds a blocking stake.
While the offer is light compared to peer multiples, it is attractive compared to historical trading ranges. A low AGM minority participation rate facilitates the vote. 


Soundwill Holdings (878 HK): Foo Family’s Offer at HK$8.50

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>
0.08x P/B. That's where <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> is currently trading. Less than half the P/B of the next comparable real estate peer.</li>
<li>
So, what's going on? Announcing an expected <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0830/2024083003082.pdf" target="_blank" rel="noopener">HK$19-20bn loss for FY24 </a>last week didn't help matters. Shares are down 14% this week and 85% since Covid.</li>
<li>Landlords need to drastically cut rents to jumpstart the retail sector. That translates to further impairment losses for property developers. </li>
</ul>



0.08x P/B. That's where New World Development (17 HK) is currently trading. Less than half the P/B of the next comparable real estate peer.

So, what's going on? Announcing an expected HK$19-20bn loss for FY24 last week didn't help matters. Shares are down 14% this week and 85% since Covid.
Landlords need to drastically cut rents to jumpstart the retail sector. That translates to further impairment losses for property developers. 


<ul>
<li>Last month, a Cheng family vehicle with 24.06% of <a href="https://www.smartkarma.com/entities/giordano-international-ltd" target="_blank" data-smartkarma-citation="entities:13899:1" rel="noopener">Giordano (709 HK)</a>, requisitioned an SGM to remove CEO Peter Lau, and install Colin Currie as CEO, plus three other NEDs/INEDs.</li>
<li>That SGM will be held on the 3rd April. The director resolutions - both the removal and appointments - are "ordinary", requiring a simple majority vote. </li>
<li>The outcome will likely pivot off how the shareholders under Halcyon Securities will vote. So I dug a little deeper as to who these shareholders are, with some surprising results.  </li>
</ul>


Last month, a Cheng family vehicle with 24.06% of Giordano (709 HK), requisitioned an SGM to remove CEO Peter Lau, and install Colin Currie as CEO, plus three other NEDs/INEDs.
That SGM will be held on the 3rd April. The director resolutions - both the removal and appointments - are "ordinary", requiring a simple majority vote. 
The outcome will likely pivot off how the shareholders under Halcyon Securities will vote. So I dug a little deeper as to who these shareholders are, with some surprising results.  


Giordano (709 HK): A Closer Look At The Shareholder Register Ahead Of The SGM

Travis Lundy

<ul>
<li>RTHK just reporting that HK Finance Secretary Paul Chan has said in his budget speech that HK will remove all property cooling measures in place, with immediate effect. </li>
<li>That would be That is Special Stamp Duty, Buyer's Stamp Duty, New Residential Stamp Duty. "Measures no longer necessary given the current economic and market conditions."</li>
<li>This should cause people to get excited short-term about property developers.</li>
</ul>


RTHK just reporting that HK Finance Secretary Paul Chan has said in his budget speech that HK will remove all property cooling measures in place, with immediate effect. 
That would be That is Special Stamp Duty, Buyer's Stamp Duty, New Residential Stamp Duty. "Measures no longer necessary given the current economic and market conditions."
This should cause people to get excited short-term about property developers.


Hong Kong To Scrap All "Spicy Measures" (Property Cooling Measures)

Hong Kong

New World Development is a Hong Kong-based conglomerate primarily engaged in property development and investment, hotels, infrastructure and services, and department stores in Greater China, particularly the Greater Bay Area. Its portfolio includes residential, retail, office, and industrial properties, as well as hotel operations and various infrastructure projects. The company was founded in 1970 and is headquartered in Central, Hong Kong.

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New World Development (17 HK)

China Pair Trade: Long Luk Fook (590 HK), Short Chow Tai Fook (1929 HK)

Luk Fook issued a positive profit alert, saying that FY26 net profit will grow by 80-90%, well ahead of Chow Tai Fook's 45-55% growth. For 2H FY26...

Osbert Tang, CFA

Soundwill Holdings (878 HK): Foo Family’s Offer at HK$8.50

While the offer is light compared to peer multiples, it is attractive compared to historical trading ranges. A low AGM minority participation rate...

Arun George

We Need To Talk About New World (17 HK)

Avoid NWD. Landlords need to materially reduce rents to kickstart the retail sector. That translates to more impairment losses. And further woes...

David Blennerhassett

Giordano (709 HK): A Closer Look At The Shareholder Register Ahead Of The SGM

Spilling the board will likely pivot off how the shareholders under Halcyon Securities will vote. So I dug a little deeper as to who these...

David Blennerhassett

Hong Kong To Scrap All "Spicy Measures" (Property Cooling Measures)

HK Finance Secretary has introduced the 2024-2025 Budget. All "spicy measures" (property cooling measures) are now lifted. This should push the...

Travis Lundy

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