Equity Research Analyst - Long-Short

Raj S, CA, CFA

Equity Bottom-Up

<ul>
<li>Policy clarity and domestic GPU shift remove key overhangs; China’s AI build-out proceeding under self-reliance base case.</li>
<li>AI token usage doubling every 3–6 months makes hyperscaler capex upgrades inevitable over the coming quarters - a key catalyst driving order wins.</li>
<li>VNET’s 400 MW annual additions and REIT monetisation support 25–30% EBITDA CAGR per consensus; re-rating to 13-15x EV/ EBITDA from current 11x EV/EBITDA implies potential of 90% upside.</li>
</ul>


Policy clarity and domestic GPU shift remove key overhangs; China’s AI build-out proceeding under self-reliance base case.
AI token usage doubling every 3–6 months makes hyperscaler capex upgrades inevitable over the coming quarters - a key catalyst driving order wins.
VNET’s 400 MW annual additions and REIT monetisation support 25–30% EBITDA CAGR per consensus; re-rating to 13-15x EV/ EBITDA from current 11x EV/EBITDA implies potential of 90% upside.


VNET Group (VNET US) - Re-Rating On: Clarity on Chips, Geopolitics, and Hyperscaler Capex

Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Derivatives

<ul>
<li>
Implied Volatility Trends: One-month implied volatility is currently cheap, trading in its 14th percentile, while <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> approaches its twelve-months high.</li>
<li>
Skew and Term Structure Dynamics: A pronounced skew smile and a relatively flat term structure make spreads and calendar / diagonal spreads attractive strategies.</li>
<li>
Open Interest Distribution: Liquidity can be found in the monthly May expiry and the Quarterly expiries. The historically low implied volatility facilitates longer term positions.</li>
</ul>



Implied Volatility Trends: One-month implied volatility is currently cheap, trading in its 14th percentile, while Tencent (700 HK) approaches its twelve-months high.

Skew and Term Structure Dynamics: A pronounced skew smile and a relatively flat term structure make spreads and calendar / diagonal spreads attractive strategies.

Open Interest Distribution: Liquidity can be found in the monthly May expiry and the Quarterly expiries. The historically low implied volatility facilitates longer term positions.


Tencent (700 HK): Strategies to Navigate Low Volatility and A Flat Term Structure

<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

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.

<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 (700 HK)

VNET Group (VNET US) - Re-Rating On: Clarity on Chips, Geopolitics, and Hyperscaler Capex

Please check the recent upgrade note we published on VNET (link below). The thesis has only become stronger post the 3Q (execution, leverage, no...

Raj S, CA, CFA

Tencent (700 HK): Strategies to Navigate Low Volatility and A Flat Term Structure

Tencent is approaching its 12-month high and implied volatility is cheap. The skew smile and flattish term structure make spreads attractive.

Gaudenz Schneider

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

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

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VNET Group (VNET US) - Re-Rating On: Clarity on Chips, Geopolitics, and Hyperscaler Capex

Please check the recent upgrade note we published on VNET (link below). The thesis has only become stronger post the 3Q (execution, leverage, no...

Raj S, CA, CFA

Tencent (700 HK): Strategies to Navigate Low Volatility and A Flat Term Structure

Tencent is approaching its 12-month high and implied volatility is cheap. The skew smile and flattish term structure make spreads attractive.

Gaudenz Schneider

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

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....

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