HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/dongfang-electric-corporation-limited" target="_blank" data-smartkarma-citation="entities:1251:1" rel="noopener">Dongfang Electric (1072 HK)</a> showed encouraging QoQ improvements in profit trend, margins, new orders, and operating cash flow in 3Q24, though reported profit was still down in 9M24.</li>
<li>Cost control has contributed to 4.6pp QoQ gross margin expansion. Meanwhile, new order growth has accelerated to 63.8% YoY, from just a teens level in 1Q24 and 2Q24.</li>
<li>Our estimate suggests that backlog is enough to cover 1.9x its annual revenue, enhancing visibility. Its PER, dividend yield and P/B are all standing on attractive levels.</li>
</ul>



Dongfang Electric (1072 HK) showed encouraging QoQ improvements in profit trend, margins, new orders, and operating cash flow in 3Q24, though reported profit was still down in 9M24.
Cost control has contributed to 4.6pp QoQ gross margin expansion. Meanwhile, new order growth has accelerated to 63.8% YoY, from just a teens level in 1Q24 and 2Q24.
Our estimate suggests that backlog is enough to cover 1.9x its annual revenue, enhancing visibility. Its PER, dividend yield and P/B are all standing on attractive levels.


Dongfang Electric (1072 HK): Good Sequential Improvement Masked

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyse the changes of A-H premium on 149 stocks over the last week. The average A-H premium was 98.6% as of Nov 1st.</li>
<li>The average A-H premium changed by 2.7ppt week-on-week, led by utilities, information technology, materials.</li>
<li>We highlight weekly changes in A-H premium for Chalco, ZOOMLION, FDZJ, FLAT GROUP, RemeGen, CanSinoBIO.</li>
</ul>


We analyse the changes of A-H premium on 149 stocks over the last week. The average A-H premium was 98.6% as of Nov 1st.
The average A-H premium changed by 2.7ppt week-on-week, led by utilities, information technology, materials.
We highlight weekly changes in A-H premium for Chalco, ZOOMLION, FDZJ, FLAT GROUP, RemeGen, CanSinoBIO.


A-H Premium Weekly (Nov 1st):Chalco, ZOOMLION, FDZJ, FLAT GROUP, RemeGen, CanSinoBIO

<ul>
<li>We analyze the monthly Hong Kong Connect flows with our data engine.</li>
<li>We tabulate the top stocks by inflows, outflows, and holding by mainland investors.</li>
<li>We highlight inflows into Alibaba, Xiaomi, SMIC, Geely, CCB and outflows from Meituan.</li>
</ul>


We analyze the monthly Hong Kong Connect flows with our data engine.
We tabulate the top stocks by inflows, outflows, and holding by mainland investors.
We highlight inflows into Alibaba, Xiaomi, SMIC, Geely, CCB and outflows from Meituan.


Hong Kong Connect Flows (October): $12 Bn Inflows

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Shanghai Electric Group Company / Equity Bottom-Up

<ul>
<li>Hong Kong markets continue to outperform global equity markets this year outperforming the MSCI Asia Pacific index by a substantial margin.</li>
<li>
<a href="https://www.smartkarma.com/entities/shanghai-electric-group-company-limited-d542164d-4d5a-4ce0-b33e-5fe6bc34722c" target="_blank" data-smartkarma-citation="entities:8777:1" rel="noopener">Shanghai Electric Group Company (2727 HK)</a> has a breakout pattern to a new high as it re-rates as a China robotics company.
</li>
<li>
<a href="https://www.smartkarma.com/entities/china-railway-construction-corp-limited" target="_blank" data-smartkarma-citation="entities:263:1" rel="noopener">China Railway Construction Corp (1186 HK)</a> has a breakout from a symmetrical triangle pattern showing further upside as valuations within the sector remain depressed. 
</li>
</ul>


Hong Kong markets continue to outperform global equity markets this year outperforming the MSCI Asia Pacific index by a substantial margin.

Shanghai Electric Group Company (2727 HK) has a breakout pattern to a new high as it re-rates as a China robotics company.


China Railway Construction Corp (1186 HK) has a breakout from a symmetrical triangle pattern showing further upside as valuations within the sector remain depressed. 



Technically Speaking, Breakouts and Breakdowns: HONG KONG (OCTOBER 27)

<ul>
<li>We analyse the changes of A-H premium on 149 stocks over the last week. The average A-H premium was 95.8% as of Oct 25th.</li>
<li>The average A-H premium changed by 1.4ppt week-on-week, led by consumer staples, information technology, real estate and offset by utilities, consumer discretionary, financials.</li>
<li>We highlight weekly changes in A-H premium for SMIC, ZOOMLION, PICC, FDZJ, FLAT GROUP, INNOCARE.</li>
</ul>


We analyse the changes of A-H premium on 149 stocks over the last week. The average A-H premium was 95.8% as of Oct 25th.
The average A-H premium changed by 1.4ppt week-on-week, led by consumer staples, information technology, real estate and offset by utilities, consumer discretionary, financials.
We highlight weekly changes in A-H premium for SMIC, ZOOMLION, PICC, FDZJ, FLAT GROUP, INNOCARE.


A-H Premium Weekly (Oct 25th):SMIC, ZOOMLION, PICC, FDZJ, FLAT GROUP, INNOCARE

China

Shanghai Electric Group Company Limited, through its subsidiaries, designs, manufactures, sells, and services a wide range of products and services in the power equipment, electromechanical equipment, transportation equipment and environmental system industries.

Shanghai Electric Group Company (2727 HK)

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
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Shanghai Electric Group Company (2727 HK)

Dongfang Electric (1072 HK): Good Sequential Improvement Masked

DEC shows positive QoQ improvements in profit trend, margins, new orders, and cash flow in 3Q24, despite a reported profit decline in 9M24. Order...

Osbert Tang, CFA

A-H Premium Weekly (Nov 1st):Chalco, ZOOMLION, FDZJ, FLAT GROUP, RemeGen, CanSinoBIO

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Chalco, ZOOMLION, FDZJ, FLAT GROUP, RemeGen, CanSinoBIO.

Ke Yan, CFA, FRM

Hong Kong Connect Flows (October): $12 Bn Inflows

We analyzed the Hong Kong Connect Scheme for October and highlighted flows for Alibaba, Xiaomi, SMIC, Geely, CCB, and Meituan.

Ke Yan, CFA, FRM

Technically Speaking, Breakouts and Breakdowns: HONG KONG (OCTOBER 27)

HK markets are the star performers in Asia beating the MSCI Asia Pacific index. Shanghai Electric has a breakout as it re-rates as a robotic...

David Mudd

A-H Premium Weekly (Oct 25th):SMIC, ZOOMLION, PICC, FDZJ, FLAT GROUP, INNOCARE

We analyzed A-H premium changes in the past week and highlight A-H premium changes for SMIC, ZOOMLION, PICC, FDZJ, FLAT GROUP, INNOCARE.

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Dongfang Electric (1072 HK): Good Sequential Improvement Masked

​DEC shows positive QoQ improvements in profit trend, margins, new orders, and cash flow in 3Q24, despite a reported profit decline in 9M24. Order...

Osbert Tang, CFA

A-H Premium Weekly (Nov 1st):Chalco, ZOOMLION, FDZJ, FLAT GROUP, RemeGen, CanSinoBIO

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Chalco, ZOOMLION, FDZJ, FLAT GROUP, RemeGen, CanSinoBIO.

Ke Yan, CFA, FRM

Hong Kong Connect Flows (October): $12 Bn Inflows

We analyzed the Hong Kong Connect Scheme for October and highlighted flows for Alibaba, Xiaomi, SMIC, Geely, CCB, and Meituan.

Ke Yan, CFA, FRM

Technically Speaking, Breakouts and Breakdowns: HONG KONG (OCTOBER 27)

HK markets are the star performers in Asia beating the MSCI Asia Pacific index. Shanghai Electric has a breakout as it re-rates as a robotic...

David Mudd

A-H Premium Weekly (Oct 25th):SMIC, ZOOMLION, PICC, FDZJ, FLAT GROUP, INNOCARE

We analyzed A-H premium changes in the past week and highlight A-H premium changes for SMIC, ZOOMLION, PICC, FDZJ, FLAT GROUP, INNOCARE.

Ke Yan, CFA, FRM

DEC shows positive QoQ improvements in profit trend, margins, new orders, and cash flow in 3Q24, despite a reported profit decline in 9M24. Order...