Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>Hong Kong Alpha portfolio gained 0.46 % in February resulting in a 2.99% underperformance to its benchmark. The portfolio has outperformed HK indexes by 53% to 75% since inception 10/1/24.</li>
<li>Hong Kong Alpha has generated 63% of its return from alpha and has a Sharpe ratio of 1.71 since inception. The portfolio's annualized mean excess return is 24%.</li>
<li>At the end of February, we reduced positions in the technology sector and added positions in the energy and building materials sectors.</li>
</ul>


Hong Kong Alpha portfolio gained 0.46 % in February resulting in a 2.99% underperformance to its benchmark. The portfolio has outperformed HK indexes by 53% to 75% since inception 10/1/24.
Hong Kong Alpha has generated 63% of its return from alpha and has a Sharpe ratio of 1.71 since inception. The portfolio's annualized mean excess return is 24%.
At the end of February, we reduced positions in the technology sector and added positions in the energy and building materials sectors.


HONG KONG ALPHA PORTFOLIO: (February 2026)

HK/China Equity Long-Short

Osbert Tang, CFA

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

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

Shenton Research

Shenton Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of September 4th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight flows for Zj Innolight, Tencent, AIA, Minimax, Knowledge Atlas, Yofc, Hua Hong Semi, CCB, Alibaba, ICBC.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of September 4th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for Zj Innolight, Tencent, AIA, Minimax, Knowledge Atlas, Yofc, Hua Hong Semi, CCB, Alibaba, ICBC.


HK Connect Flows Weekly (Sep 4th): Zj Innolight, Tencent, AIA, Minimax, Knowledge Atlas, Yofc, CCB

Equity Bottom-Up

Orient Overseas (International) / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/orient-overseas-international-limited" target="_blank" data-smartkarma-citation="entities:801:1" rel="noopener">Orient Overseas (International) (316 HK)</a>'s 23.7% decline in earnings in 1H26 is uninspiring, but market spot freight rates suggest an upturn in 2H26.</li>
<li>Its vessels on the vast majority of long-haul routes are fully loaded, and its load factor in 2Q26 has reversed four consecutive quarters of YoY decline - a positive sign.  </li>
<li>There is an earnings upgrade potential as 2H26 can easily pass the US$1bn mark. We are positive on OOIL but still prefer <a href="https://www.smartkarma.com/entities/sitc-international-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15301:1" rel="noopener">SITC International (1308 HK)</a>. </li>
</ul>



Orient Overseas (International) (316 HK)'s 23.7% decline in earnings in 1H26 is uninspiring, but market spot freight rates suggest an upturn in 2H26.
Its vessels on the vast majority of long-haul routes are fully loaded, and its load factor in 2Q26 has reversed four consecutive quarters of YoY decline - a positive sign.  
There is an earnings upgrade potential as 2H26 can easily pass the US$1bn mark. We are positive on OOIL but still prefer SITC International (1308 HK). 


Orient Overseas Intl (316 HK): It May Be Turning

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of August 21st.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight flows for Tencent, Smic, Hua Hong Semi, Meituan, Lenovo, Knowledge Atlas, Minimax, Xiaomi, Alibaba, Zijin Gold Intl.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of August 21st.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for Tencent, Smic, Hua Hong Semi, Meituan, Lenovo, Knowledge Atlas, Minimax, Xiaomi, Alibaba, Zijin Gold Intl.


HK Connect Flows Weekly (Aug 21st): Tencent, Smic, Hua Hong Semi, Meituan, Lenovo, Knowledge Atlas

Hong Kong

T.S. Lines is a container shipping company specializing in intra-Asian trade routes and niche services, offering mainline container services and specialized vessel chartering. The company provides comprehensive shipping solutions including cargo tracking, schedules, and handling of project cargo. T.S. Lines was founded in 2001 and is headquartered in Hong Kong.

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T.S. Lines (2510 HK)

HONG KONG ALPHA PORTFOLIO: (February 2026)

The war, which launched at the beginning of the month, is now into its second week and its economic effects are being reflected in global markets....

David Mudd

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

HK Connect Flows Weekly (Sep 4th): Zj Innolight, Tencent, AIA, Minimax, Knowledge Atlas, Yofc, CCB

We analyzed southbound Hong Kong connect flows in the past week and highlighted flows for Zj Innolight, Tencent, AIA, Minimax, Knowledge Atlas,...

Ke Yan, CFA, FRM

Orient Overseas Intl (316 HK): It May Be Turning

Earnings outlook for 2H26 appears to be turning up, as implied by the significantly better spot freight rates. Load factor change has also reversed...

Osbert Tang, CFA

HK Connect Flows Weekly (Aug 21st): Tencent, Smic, Hua Hong Semi, Meituan, Lenovo, Knowledge Atlas

We analyzed southbound Hong Kong connect flows in the past week and highlighted flows for Tencent, Smic, Hua Hong Semi, Meituan, Lenovo, Knowledge...

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

HONG KONG ALPHA PORTFOLIO: (February 2026)

The war, which launched at the beginning of the month, is now into its second week and its economic effects are being reflected in global markets....

David Mudd

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

HK Connect Flows Weekly (Sep 4th): Zj Innolight, Tencent, AIA, Minimax, Knowledge Atlas, Yofc, CCB

We analyzed southbound Hong Kong connect flows in the past week and highlighted flows for Zj Innolight, Tencent, AIA, Minimax, Knowledge Atlas,...

Ke Yan, CFA, FRM

Orient Overseas Intl (316 HK): It May Be Turning

Earnings outlook for 2H26 appears to be turning up, as implied by the significantly better spot freight rates. Load factor change has also reversed...

Osbert Tang, CFA

HK Connect Flows Weekly (Aug 21st): Tencent, Smic, Hua Hong Semi, Meituan, Lenovo, Knowledge Atlas

We analyzed southbound Hong Kong connect flows in the past week and highlighted flows for Tencent, Smic, Hua Hong Semi, Meituan, Lenovo, Knowledge...

Ke Yan, CFA, FRM

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