Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>HK Alpha portfolio gained 2.22% in September, outperforming its benchmark by 5.36%. Since inception, the portfolio has outperformed HK indexes by 66% to 93%. HK ALPHA is up 14.35% YTD.</li>
<li>The Sharpe ratio stands at 1.22, compared with a benchmark of 0.56 since inception. This higher Sharpe ratio is driven by excess alpha, which represents more than 50% of returns.</li>
<li>The portfolio gained in the healthcare and energy sectors in August, while exposure to materials and communication services dragged on performance.</li>
</ul>


HK Alpha portfolio gained 2.22% in September, outperforming its benchmark by 5.36%. Since inception, the portfolio has outperformed HK indexes by 66% to 93%. HK ALPHA is up 14.35% YTD.
The Sharpe ratio stands at 1.22, compared with a benchmark of 0.56 since inception. This higher Sharpe ratio is driven by excess alpha, which represents more than 50% of returns.
The portfolio gained in the healthcare and energy sectors in August, while exposure to materials and communication services dragged on performance.


HONG KONG ALPHA PORTFOLIO: (September 2026)

HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

Pacific Basin Shipping / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/pacific-basin-shipping-ltd" target="_blank" data-smartkarma-citation="entities:929:1" rel="noopener">Pacific Basin Shipping (2343 HK)</a> may realise at least US$60m of revenue, or around 10% higher total TCE, in 2H24, based on its solid forward vessel coverage.  </li>
<li>Sustained re-routing of vessels due to Middle East tension and higher demand from China due to fixed asset spending are supportive of rates. FFA is now 3-4% higher than spot.</li>
<li>The stock is inexpensive at 9.7x PER and 0.8x P/B, and its 7.6% dividend yield is attractive. A solid balance sheet also means an upside on the payout ratio. </li>
</ul>



Pacific Basin Shipping (2343 HK) may realise at least US$60m of revenue, or around 10% higher total TCE, in 2H24, based on its solid forward vessel coverage.  
Sustained re-routing of vessels due to Middle East tension and higher demand from China due to fixed asset spending are supportive of rates. FFA is now 3-4% higher than spot.
The stock is inexpensive at 9.7x PER and 0.8x P/B, and its 7.6% dividend yield is attractive. A solid balance sheet also means an upside on the payout ratio. 


Pacific Basin (2343 HK): Looking for a 2H24 Upturn

<ul>
<li>HK Alpha portfolio gained 3.45% in August, outperforming its benchmark by 2.67%.  Since inception, the portfolio has outperformed HK indexes by 60% to 84%. HK ALPHA is up 14.35% YTD.</li>
<li>The Sharpe ratio stands at 1.21, compared with a benchmark of 0.68 since inception.  This higher Sharpe ratio is driven by excess alpha, which represents more than 50% of returns.</li>
<li>The portfolio gained in the healthcare, industrial, and technology sectors in August, while utilities and telecom exposure dragged on performance.</li>
</ul>


HK Alpha portfolio gained 3.45% in August, outperforming its benchmark by 2.67%.  Since inception, the portfolio has outperformed HK indexes by 60% to 84%. HK ALPHA is up 14.35% YTD.
The Sharpe ratio stands at 1.21, compared with a benchmark of 0.68 since inception.  This higher Sharpe ratio is driven by excess alpha, which represents more than 50% of returns.
The portfolio gained in the healthcare, industrial, and technology sectors in August, while utilities and telecom exposure dragged on performance.


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>Mr Liu Jichun’s preconditional VGO for <a href="https://www.smartkarma.com/entities/xin-yuan-enterprises-group-ltd" target="_blank" data-smartkarma-citation="entities:40062:1" rel="noopener">Xin Yuan Enterprises (1748 HK)</a> is HK$2.21, a 25.6% premium to the last pre-suspension price. There is a 50% minimum acceptance condition.</li>
<li>The resumption pre-condition looks achievable. The forensic report largely cleared the company of financial issues, and Xin Yuan says it has met all the conditions for resumption.</li>
<li>Acceptance is on a knife-edge: the offeror reaches just 50.01% if all EGM supporters accept. The outcome turns on Danube Bridge's 15m shares and Chen Maochun's legal challenges.</li>
</ul>


Mr Liu Jichun’s preconditional VGO for Xin Yuan Enterprises (1748 HK) is HK$2.21, a 25.6% premium to the last pre-suspension price. There is a 50% minimum acceptance condition.
The resumption pre-condition looks achievable. The forensic report largely cleared the company of financial issues, and Xin Yuan says it has met all the conditions for resumption.
Acceptance is on a knife-edge: the offeror reaches just 50.01% if all EGM supporters accept. The outcome turns on Danube Bridge's 15m shares and Chen Maochun's legal challenges.


Xin Yuan (1748 HK): Resumption Likely, Min Acceptance Condition a Coin Toss for Liu's HK$2.21 VGO

Thematic (Sector/Industry)

<ul>
<li>The airlines and marine transportation sectors are the most exposed to the rise in Brent oil prices caused by the current US-Iran conflicts in the Middle East.</li>
<li>For the airlines, <a href="https://www.smartkarma.com/entities/china-eastern-airlines-co-h" target="_blank" data-smartkarma-citation="entities:1079:1" rel="noopener">China Eastern Airlines (670 HK)</a> is the most vulnerable, while <a href="https://www.smartkarma.com/entities/cathay-pacific-airways-ltd" target="_blank" data-smartkarma-citation="entities:243:1" rel="noopener">Cathay Pacific Airways (293 HK)</a> is relatively more insulated.</li>
<li>For marine transportation, <a href="https://www.smartkarma.com/entities/sitc-international-holdings" target="_blank" data-smartkarma-citation="entities:15301:1" rel="noopener">SITC International (1308 HK)</a> is the least exposed, but <a href="https://www.smartkarma.com/entities/pacific-basin-shipping-ltd" target="_blank" data-smartkarma-citation="entities:929:1" rel="noopener">Pacific Basin Shipping (2343 HK)</a> looks to be more negatively affected.</li>
</ul>


The airlines and marine transportation sectors are the most exposed to the rise in Brent oil prices caused by the current US-Iran conflicts in the Middle East.
For the airlines, China Eastern Airlines (670 HK) is the most vulnerable, while Cathay Pacific Airways (293 HK) is relatively more insulated.
For marine transportation, SITC International (1308 HK) is the least exposed, but Pacific Basin Shipping (2343 HK) looks to be more negatively affected.


HK Strategy: Assessing the Oil Vulnerability

Hong Kong

Pacific Basin Shipping is a maritime transport company specializing in international dry bulk shipping, operating a global fleet of Handysize and Supramax vessels. The company transports a wide range of commodities including grains, coal, iron ore, cement, and forest products. It was founded in 1987 and is headquartered in Hong Kong.

Price Gauge
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Pacific Basin Shipping (2343 HK)

HONG KONG ALPHA PORTFOLIO: (September 2026)

We made mid-month changes in the portfolio yesterday. We sold 148, 6185, 3696, 3759, 669 and 2268. We added 322, 2319, 1579, 6186, 9633, 2688,...

David Mudd

Pacific Basin (2343 HK): Looking for a 2H24 Upturn

Pacific Basin should see a revenue increase in 2H24, driven by strong forward vessel coverage and a favourable market, making it attractive with...

Osbert Tang, CFA

HONG KONG ALPHA PORTFOLIO: (August 2026)

HK Alpha portfolio gained 3.45% in August, outperforming its benchmark by 2.67%. Since inception, the portfolio has outperformed HK indexes by 60%...

David Mudd

Xin Yuan (1748 HK): Resumption Likely, Min Acceptance Condition a Coin Toss for Liu's HK$2.21 VGO

Mr Liu's HK$2.21 precon VGO is a 25.6% premium to the last pre-suspension price. Trading looks likely to resume before the 30 October long-stop,...

Arun George

HK Strategy: Assessing the Oil Vulnerability

Rise in Brent oil prices due to US-Iran conflicts hits airlines and marine transportation sectors as fuel and bunker costs increase, with China...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

HONG KONG ALPHA PORTFOLIO: (September 2026)

We made mid-month changes in the portfolio yesterday. We sold 148, 6185, 3696, 3759, 669 and 2268. We added 322, 2319, 1579, 6186, 9633, 2688,...

David Mudd

Pacific Basin (2343 HK): Looking for a 2H24 Upturn

​Pacific Basin should see a revenue increase in 2H24, driven by strong forward vessel coverage and a favourable market, making it attractive with...

Osbert Tang, CFA

HONG KONG ALPHA PORTFOLIO: (August 2026)

HK Alpha portfolio gained 3.45% in August, outperforming its benchmark by 2.67%. Since inception, the portfolio has outperformed HK indexes by 60%...

David Mudd

Xin Yuan (1748 HK): Resumption Likely, Min Acceptance Condition a Coin Toss for Liu's HK$2.21 VGO

Mr Liu's HK$2.21 precon VGO is a 25.6% premium to the last pre-suspension price. Trading looks likely to resume before the 30 October long-stop,...

Arun George

HK Strategy: Assessing the Oil Vulnerability

​Rise in Brent oil prices due to US-Iran conflicts hits airlines and marine transportation sectors as fuel and bunker costs increase, with China...

Osbert Tang, CFA

Pacific Basin should see a revenue increase in 2H24, driven by strong forward vessel coverage and a favourable market, making it attractive with...

Rise in Brent oil prices due to US-Iran conflicts hits airlines and marine transportation sectors as fuel and bunker costs increase, with China...