Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Yesterday afternoon (5th Dec), <a href="https://www.smartkarma.com/entities/swire-pacific-ltd-cl-a" target="_blank" data-smartkarma-citation="entities:10433:1" rel="noopener">Swire Pacific (A) (19 HK)</a> (and <a href="https://www.smartkarma.com/entities/swire-pacific-ltd" target="_blank" data-smartkarma-citation="entities:23726:1" rel="noopener">Swire Pacific (B) (87 HK)</a>) <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2023/1205/2023120501177.pdf" target="_blank" rel="noopener">announced</a> a large (HK$6bn) buyback.</li>
<li>The response this morning sees Swire A up 14.4% (as I type), and 11.8% for Swire Bs.</li>
<li>I still like the idea of buying Swire A and Swire B outright here.</li>
</ul>


Yesterday afternoon (5th Dec), Swire Pacific (A) (19 HK) (and Swire Pacific (B) (87 HK)) announced a large (HK$6bn) buyback.
The response this morning sees Swire A up 14.4% (as I type), and 11.8% for Swire Bs.
I still like the idea of buying Swire A and Swire B outright here.


Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>The Hong Kong market continues to consolidate, holding above its long-term support levels but without the momentum to break out to new highs.</li>
<li>Healthcare is the only sector in positive territory in September.  The materials sector benefited from gains in the gold sector.</li>
<li>
<a href="https://www.smartkarma.com/entities/zte-corporation-class-h" target="_blank" data-smartkarma-citation="entities:6922:1" rel="noopener">ZTE (763 HK)</a> is maintained a BUY at CMB International with a +48% 12-month upside target price.  The company is transitioning to international and AI sectors for growth.
</li>
</ul>


The Hong Kong market continues to consolidate, holding above its long-term support levels but without the momentum to break out to new highs.
Healthcare is the only sector in positive territory in September.  The materials sector benefited from gains in the gold sector.

ZTE (763 HK) is maintained a BUY at CMB International with a +48% 12-month upside target price.  The company is transitioning to international and AI sectors for growth.



BUY/SELL/HOLD: Hong Kong Market Update (September 2026)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/swire-pacific-limited-class-a" target="_blank" data-smartkarma-citation="entities:10433:1" rel="noopener">Swire Pacific (19 HK)</a> announced plans to raise HK$4.7bn via the issuance of bonds exchangeable into shares of <a href="https://www.smartkarma.com/entities/cathay-pacific-airways-limited" target="_blank" data-smartkarma-citation="entities:243:1" rel="noopener">Cathay Pacific (293 HK)</a>.</li>
<li>The zero-coupon bonds can be converted into ~356.6mn Cathay Pacific, ~5.9% of shares out. The initial exchange price is HK$13.18/Cathay share, a 2.9% premium to last close.</li>
<li>This development follows Swire's announcement in March this year it sold 153.05mn shares in Cathay at HK$11.74/share, raising HK$1.8bn for working capital.</li>
</ul>



Swire Pacific (19 HK) announced plans to raise HK$4.7bn via the issuance of bonds exchangeable into shares of Cathay Pacific (293 HK).
The zero-coupon bonds can be converted into ~356.6mn Cathay Pacific, ~5.9% of shares out. The initial exchange price is HK$13.18/Cathay share, a 2.9% premium to last close.
This development follows Swire's announcement in March this year it sold 153.05mn shares in Cathay at HK$11.74/share, raising HK$1.8bn for working capital.


Swire Pac (19 HK) Further Trims Cathay Exposure

<ul>
<li>
<a href="https://www.smartkarma.com/entities/swire-pacific-ltd-cl-a" target="_blank" data-smartkarma-citation="entities:10433:1" rel="noopener">Swire Pacific (A) (19 HK)</a>'s FY25 recuring underlying profit was HK$9.7bn, 5% higher than in FY24.</li>
<li>83%-Held <a href="https://www.smartkarma.com/entities/swire-properties-ltd" target="_blank" data-smartkarma-citation="entities:5775:1" rel="noopener">Swire Properties (1972 HK)</a> reported an attributable loss of HK$1.53bn in FY25, up from HK$766mn, as Hong Kong property writedowns dented strong(er) mainland China retail ops. </li>
<li>Swire Pac also announced it would place out 2.52% of its stake in <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>. Cathay's FY25 bottom line gained 9.5% yoy. </li>
</ul>



Swire Pacific (A) (19 HK)'s FY25 recuring underlying profit was HK$9.7bn, 5% higher than in FY24.
83%-Held Swire Properties (1972 HK) reported an attributable loss of HK$1.53bn in FY25, up from HK$766mn, as Hong Kong property writedowns dented strong(er) mainland China retail ops. 
Swire Pac also announced it would place out 2.52% of its stake in Cathay Pacific Airways (293 HK). Cathay's FY25 bottom line gained 9.5% yoy. 


Swire (19 HK): On The FY25 Results, Swire Props' HK Writedowns, & Cathay Placement

<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.


Hong Kong

Swire Pacific is a diversified global conglomerate with core businesses in property, aviation, beverages, healthcare, and trading & industrial. It holds interests in property development and investment through Swire Properties, airline operations via Cathay Pacific, and is a major Coca-Cola bottler. Swire Pacific Limited was incorporated in 1974 and is headquartered in Hong Kong.

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Swire Pacific (87 HK)

StubWorld: Swire's Latest Buyback

Swire Pac is cheap at 0.28x P/B, prior to this latest buyback announcement. The conglomerate may get a boost from recent property tweaks. On...

David Blennerhassett

BUY/SELL/HOLD: Hong Kong Market Update (September 2026)

The Hong Kong market continues to consolidate, holding above its long-term support levels but without the momentum to break out to new highs.

David Mudd

Swire Pac (19 HK) Further Trims Cathay Exposure

Swire Pac announced plans to raise HK$4.7bn via the issuance of bonds exchangeable into shares of Cathay. At 0.34x forward P/B, Pac remains cheap....

David Blennerhassett

Swire (19 HK): On The FY25 Results, Swire Props' HK Writedowns, & Cathay Placement

Swire Pac is cheap. You could set up the stub here. Swire Props at 0.33x is also inexpensive. But HK IP continues to drag. I'd might be inclined...

David Blennerhassett

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

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