Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Derivatives

<ul>
<li>Over the past five trading days, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> multi-leg option strategies showcased a variety of approaches. Strategy highlights are provided.</li>
<li>Calendar and Diagonal Spreads make up a quarter of all strategies. Several examples are presented incorporating upfront cost, upfront credit, or zero-cost combinations. </li>
<li>While there is a bias towards bullish strategies, 26% of all strategies express a market-neutral view in the form of Straddles, Strangles, Butterflies or Condors.</li>
</ul>


Over the past five trading days, Tencent (700 HK) multi-leg option strategies showcased a variety of approaches. Strategy highlights are provided.
Calendar and Diagonal Spreads make up a quarter of all strategies. Several examples are presented incorporating upfront cost, upfront credit, or zero-cost combinations. 
While there is a bias towards bullish strategies, 26% of all strategies express a market-neutral view in the form of Straddles, Strangles, Butterflies or Condors.


Tencent (700 HK): Strategic Insights and Top Trades from HKEX Options Trading

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>A week after the State Council issued "Several Opinions" (关于加强监管防范风险推动资本市场高质量发展的若干意见》), the CSRC <a href="http://www.csrc.gov.cn/csrc/c100028/c7474875/content.shtml" target="_blank" rel="noopener">announced</a> Friday five capital market cooperation measures with HK Connect. The goals are to increase cross-border investor flows.</li>
<li>They include: a broader range of ETFs in Connect, including REITs in both directions, include RMB counters in Southbound, improve mutual recognition of funds, increasing China IPOs in Hong Kong.</li>
<li>RMB Dual Counters Southbound-eligible will take time. They have some homework, but it is on the "To Do" list "as soon as possible and smoothly." Watch impact on H/A Pairs.</li>
</ul>


A week after the State Council issued "Several Opinions" (关于加强监管防范风险推动资本市场高质量发展的若干意见》), the CSRC announced Friday five capital market cooperation measures with HK Connect. The goals are to increase cross-border investor flows.
They include: a broader range of ETFs in Connect, including REITs in both directions, include RMB counters in Southbound, improve mutual recognition of funds, increasing China IPOs in Hong Kong.
RMB Dual Counters Southbound-eligible will take time. They have some homework, but it is on the "To Do" list "as soon as possible and smoothly." Watch impact on H/A Pairs.


RMB Dual Counter Trading Is Coming - This Changes AH Relationships

Chief Executive Officer, Emmer Capital Partners Limited

Manishi Raychaudhuri

Chief Executive Officer

Emmer Capital Partners Limited

Emmer Capital Partners is an Asia Pacific focused financial advisory firm engaging in strategic financial asset allocation advice, bespoke thematic research and advising early-stage companies and connecting them to investors. Emmer Capital provides macro-economic and multi-asset investment strategy inputs to institutions, family offices, private wealth managers, private equity, and corporate boards directly and through independent research platforms. Emmer Capital also advises a wide range of startup companies on fund raising and business strategy. Emmer Capital's active engagement with the print and electronic media reaches a broad spectrum of investors across the globe.

Cross Asset Strategy

<ul>
<li>As the earnings season draws to a close, we look at Asian markets'/sectors' EPS estimate progression during the reporting season and earlier. Specifically, we search for upward or downward inflections.</li>
<li>Korea and Taiwan had the strongest EPS upgrades during this reporting season, despite the trade uncertainties. Philippines, Indonesia, Malaysia also had decent upgrades. HK/China and India continue to be downgraded.</li>
<li>Korean and Taiwanese technology, Korean industrials, HK Technology Services had strong upgrades. So did Singapore and Philippines financials, and Thailand Communications - the latter two with a long upgrade history.</li>
</ul>


As the earnings season draws to a close, we look at Asian markets'/sectors' EPS estimate progression during the reporting season and earlier. Specifically, we search for upward or downward inflections.
Korea and Taiwan had the strongest EPS upgrades during this reporting season, despite the trade uncertainties. Philippines, Indonesia, Malaysia also had decent upgrades. HK/China and India continue to be downgraded.
Korean and Taiwanese technology, Korean industrials, HK Technology Services had strong upgrades. So did Singapore and Philippines financials, and Thailand Communications - the latter two with a long upgrade history.


Asian Equities: Taking Stock After the Result Season: Where Are EPS Estimates Rising and Falling?

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.

Equity Bottom-Up

<ul>
<li>China announced game approval for the May batch. The number of games approved remained at a higher level than 2023.</li>
<li>The pace of China's game approval appears to have accelerated to the same level as pre-tightening.</li>
<li>Of the companies that we are monitoring, none of them got approval for domestic games but a handful approvals of imported games save their day.</li>
</ul>


China announced game approval for the May batch. The number of games approved remained at a higher level than 2023.
The pace of China's game approval appears to have accelerated to the same level as pre-tightening.
Of the companies that we are monitoring, none of them got approval for domestic games but a handful approvals of imported games save their day.


Tencent/Netease: None Gets Approvals for Domestic Games

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

<ul>
<li>Tencent reported C1Q25 rev., IFRS op. profit, and IFRS net inc, in-line, (3.1%), (5.6%) vs. our est. and 3.8%, (2.3%), (4.9%) vs. cons. </li>
<li>As predicted, Tencent maintained a transitional game quarter well, going forward new game launches shall fill the pipeline while recovering consumption helping on advertising and fintech. </li>
<li>We raised our TP to HK$584 for better outlook and place Tencent back to the TOP BUY list. Our TP implies 21x PE.</li>
</ul>


Tencent reported C1Q25 rev., IFRS op. profit, and IFRS net inc, in-line, (3.1%), (5.6%) vs. our est. and 3.8%, (2.3%), (4.9%) vs. cons. 
As predicted, Tencent maintained a transitional game quarter well, going forward new game launches shall fill the pipeline while recovering consumption helping on advertising and fintech. 
We raised our TP to HK$584 for better outlook and place Tencent back to the TOP BUY list. Our TP implies 21x PE.


[Tencent (700 HK, BUY, TP HK$584) TP Change]: C1Q25 Review: Outperformance in Low Game Season

China

Tencent Holdings Limited operates as an investment holding company. The Company, through its subsidiaries, provides Internet and mobile value-added services (VAS), online advertising, and e-commerce transactions. Tencent Holdings offers services to users worldwide.

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Tencent Holdings (ADR) (TCEHY US)

Tencent (700 HK): Strategic Insights and Top Trades from HKEX Options Trading

Tencent's multi-leg option strategies feature a mix of bullish, bearish and market-neutral approaches, including Calendar and Diagonal Spreads....

Gaudenz Schneider

RMB Dual Counter Trading Is Coming - This Changes AH Relationships

1 year+ after the CSRC said it was working towards expanding HKD RMB dual counter trading in HK, making RMB counters eligible, last month through...

Travis Lundy

Asian Equities: Taking Stock After the Result Season: Where Are EPS Estimates Rising and Falling?

Asian markets' EPS est show strong upgrades in Korea and Taiwan, while HK/CN & India continue to be downgraded. KR & TW Tech, HK Tech Services, SG...

Manishi Raychaudhuri

Tencent/Netease: None Gets Approvals for Domestic Games

We analyzed the game approval issued by NPPA for Chinese online game players for the month of May. Game approvals for large players are slow so far...

Ke Yan, CFA, FRM

[Tencent (700 HK, BUY, TP HK$584) TP Change]: C1Q25 Review: Outperformance in Low Game Season

Tencent's Q1 performance meets expectations, with new game launches and recovering consumption driving future growth. Analysts raise target price...

Blue Lotus Research Institute

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Tencent (700 HK): Strategic Insights and Top Trades from HKEX Options Trading

​Tencent's multi-leg option strategies feature a mix of bullish, bearish and market-neutral approaches, including Calendar and Diagonal Spreads....

Gaudenz Schneider

RMB Dual Counter Trading Is Coming - This Changes AH Relationships

1 year+ after the CSRC said it was working towards expanding HKD RMB dual counter trading in HK, making RMB counters eligible, last month through...

Travis Lundy

Asian Equities: Taking Stock After the Result Season: Where Are EPS Estimates Rising and Falling?

​Asian markets' EPS est show strong upgrades in Korea and Taiwan, while HK/CN & India continue to be downgraded. KR & TW Tech, HK Tech Services, SG...

Manishi Raychaudhuri

Tencent/Netease: None Gets Approvals for Domestic Games

We analyzed the game approval issued by NPPA for Chinese online game players for the month of May. Game approvals for large players are slow so far...

Ke Yan, CFA, FRM

[Tencent (700 HK, BUY, TP HK$584) TP Change]: C1Q25 Review: Outperformance in Low Game Season

​Tencent's Q1 performance meets expectations, with new game launches and recovering consumption driving future growth. Analysts raise target price...

Blue Lotus Research Institute

Tencent's multi-leg option strategies feature a mix of bullish, bearish and market-neutral approaches, including Calendar and Diagonal Spreads....

Asian markets' EPS est show strong upgrades in Korea and Taiwan, while HK/CN & India continue to be downgraded. KR & TW Tech, HK Tech Services, SG...

Tencent's Q1 performance meets expectations, with new game launches and recovering consumption driving future growth. Analysts raise target price...