Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Thematic (Sector/Industry)

<ul>
<li>President Trump has indicated that he will lower tariffs on ASEAN countries in exchange for future supply commitments of Rare Earth Elements (REEs) to counter China's industry dominance.</li>
<li>Although the supply commitments of REEs to supplant China's production will take years to fulfill, the tariff relief will provide immediate benefits to Chinese textile manufacturers with Southeast Asian production.</li>
<li>
<a href="https://www.smartkarma.com/entities/shenzhou-intl-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10415:1" rel="noopener">Shenzhou Intl Group Holdings (2313 HK)</a> , <a href="https://www.smartkarma.com/entities/bosideng-international-holdings-ltd" target="_blank" data-smartkarma-citation="entities:6537:1" rel="noopener">Bosideng International Holdings (3998 HK)</a> ,<a href="https://www.smartkarma.com/entities/yue-yuen-industrial-holdings-limited" target="_blank" data-smartkarma-citation="entities:12281:1" rel="noopener">Yue Yuen Industrial Holdings (551 HK)</a> , and <a href="https://www.smartkarma.com/entities/stella-international" target="_blank" data-smartkarma-citation="entities:7610:1" rel="noopener">Stella International (1836 HK)</a> will benefit from the tariff relief.
</li>
</ul>


President Trump has indicated that he will lower tariffs on ASEAN countries in exchange for future supply commitments of Rare Earth Elements (REEs) to counter China's industry dominance.
Although the supply commitments of REEs to supplant China's production will take years to fulfill, the tariff relief will provide immediate benefits to Chinese textile manufacturers with Southeast Asian production.

Shenzhou Intl Group Holdings (2313 HK) , Bosideng International Holdings (3998 HK) ,Yue Yuen Industrial Holdings (551 HK) , and Stella International (1836 HK) will benefit from the tariff relief.



How Rare Earth Elements Helped China's Textile Companies

Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Equity Bottom-Up

<ul>
<li>We discuss <a href="https://www.smartkarma.com/entities/jnby-design-limited" target="_blank" data-smartkarma-citation="entities:23642:1" rel="noopener">JNBY Design (3306 HK)</a>, <a href="https://www.smartkarma.com/insights/jnby-design-limited-3306-hk-fy26-results-update-8-5x-pe-30-roce-and-rich-dividends" target="_blank" data-smartkarma-citation="insights:263616" rel="noopener">JNBY Design Limited (3306 HK) FY26 Results Update: 8.5x PE, &gt;30% ROCE and Rich Dividends</a>/<a href="https://www.smartkarma.com/insights/hk-high-roce-compounders-hiding-in-plain-sight" target="_blank" data-smartkarma-citation="insights:268054" rel="noopener">HK High ROCE - Compounders Hiding in Plain Sight</a>. </li>
<li>
<a href="https://www.smartkarma.com/entities/fountain-set-holdings-limited" target="_blank" data-smartkarma-citation="entities:11520:1" rel="noopener">Fountain Set Hldgs (420 HK)</a> as a net-net, and its recent <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2026/0909/2026090900829.pdf" target="_blank" rel="noopener">acquisition</a>, which the market dislikes. </li>
<li>We also provide brief updates on the remaining sector names, as the results season has concluded and inflationary pressures are affecting the sector.   </li>
</ul>


We discuss JNBY Design (3306 HK), JNBY Design Limited (3306 HK) FY26 Results Update: 8.5x PE, &gt;30% ROCE and Rich Dividends/HK High ROCE - Compounders Hiding in Plain Sight. 

Fountain Set Hldgs (420 HK) as a net-net, and its recent acquisition, which the market dislikes. 
We also provide brief updates on the remaining sector names, as the results season has concluded and inflationary pressures are affecting the sector.   


HK-Listed Apparel & Footwear Screener September 2026: 12 Stock Universe With Average Yield >9%

Cross Asset Strategy

<ul>
<li>The Hong Kong Alpha portfolio underperformed its benchmark index during April by 1.1%.  Since its inception last year, the portfolio has outperformed its benchmark by 18%.</li>
<li>Although the tech sector was hit after April 2nd, the portfolio made 2% in its tech exposure for the month.  We reduced the portfolio's volatility &amp; increased its Sharpe ratio.</li>
<li>At the end of April, sold positions that are at risk from the tariff uncertainty and increased our exposure to China domestic consumption.</li>
</ul>


The Hong Kong Alpha portfolio underperformed its benchmark index during April by 1.1%.  Since its inception last year, the portfolio has outperformed its benchmark by 18%.
Although the tech sector was hit after April 2nd, the portfolio made 2% in its tech exposure for the month.  We reduced the portfolio's volatility &amp; increased its Sharpe ratio.
At the end of April, sold positions that are at risk from the tariff uncertainty and increased our exposure to China domestic consumption.


<ul>
<li>China ETF flows in June continued to show positive momentum while other categories remained flat.  Southbound Connect Flows were positive while Northbound Connect recorded a Net Sell.</li>
<li>Midea Real Estate Holdings jumped on plans to privatize its property development business</li>
<li>Shanghai Microport fell after launching a share placement at a 15% discount.  The share price  is hitting all time lows.</li>
</ul>


China ETF flows in June continued to show positive momentum while other categories remained flat.  Southbound Connect Flows were positive while Northbound Connect recorded a Net Sell.
Midea Real Estate Holdings jumped on plans to privatize its property development business
Shanghai Microport fell after launching a share placement at a 15% discount.  The share price  is hitting all time lows.


The Heat Is On: News Flow and Sentiment in HONG KONG

<ul>
<li>The bad news is that Hong Kong will not have a V-Shaped recovery which will keep market sentiment subdued</li>
<li>The good news is that Hong Kong will not have a V-Shaped recovery which will contribute to a reduction in overall market volatility</li>
<li>After an epic bear market, Hong Kong will enter a secular bull market this year</li>
</ul>


The bad news is that Hong Kong will not have a V-Shaped recovery which will keep market sentiment subdued
The good news is that Hong Kong will not have a V-Shaped recovery which will contribute to a reduction in overall market volatility
After an epic bear market, Hong Kong will enter a secular bull market this year


Hong Kong: A Tale of Two Markets and When to Re-Enter

Hong Kong

Stella International is an investment holding company primarily engaged in the development, manufacturing, and sale of premium footwear products and leather goods. The company also operates in footwear retailing and wholesaling, offering products under its own brands such as Stella Luna. It was founded in 1982 and is headquartered in Kowloon, Hong Kong.

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Stella International (1836 HK)

How Rare Earth Elements Helped China's Textile Companies

President Trump will lower tariffs on ASEAN countries in exchange for future supply commitments of Rare Earth Elements (REEs) to counter China's...

David Mudd

HK-Listed Apparel & Footwear Screener September 2026: 12 Stock Universe With Average Yield >9%

Our textile screener universe is a high-yield value hunting ground. The basket of stocks averages a yield of>9%. Following a recent market...

Sameer Taneja

HONG KONG ALPHA PORTFOLIO (April 2025)

The Hong Kong Alpha portfolio underperformed its benchmark index during April by 1.1%. Since its inception last year, the portfolio has...

David Mudd

The Heat Is On: News Flow and Sentiment in HONG KONG

China had positive flows into equity ETF's for June and mainland investors continued to direct money to Hong Kong stocks through the Stock Connect...

David Mudd

Hong Kong: A Tale of Two Markets and When to Re-Enter

HSI has now broken key resistance levels or 17k (Bear Market Trend Channel), 17,300 (200 Day Moving Average) and 17,500 (Upper Bollinger Band). ...

David Mudd

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