Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Event-Driven

<ul>
<li>The U.S. Department of Defense announced that it has added numerous Chinese companies including Tencent and CATL as companies that work with China's military.</li>
<li>This is likely to negatively impact Tencent and CATL's prices in the next several weeks but positively impact on some of the major Korean rechargeable battery and gaming stocks.</li>
<li>The higher probability scenario at this point is for Tencent and CATL to be officially included in the Chinese Military Industrial Complex list in the coming weeks. </li>
</ul>


The U.S. Department of Defense announced that it has added numerous Chinese companies including Tencent and CATL as companies that work with China's military.
This is likely to negatively impact Tencent and CATL's prices in the next several weeks but positively impact on some of the major Korean rechargeable battery and gaming stocks.
The higher probability scenario at this point is for Tencent and CATL to be officially included in the Chinese Military Industrial Complex list in the coming weeks. 


US Defense Dept Designates Tencent and CATL as Military Companies - Impact on Korean Competitors

Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Derivatives

<ul>
<li>This Insight analyzes <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> tailor-made option strategies traded over the last five trading days on the Hong Kong Exchange. Strategy highlights and volatility insights are provided.</li>
<li>Historically low implied volatility favors bullish or bearish long volatility strategies.</li>
<li>Calendar Spreads are a popular strategy. Bulls and bears are both very active in the market, expressing their views through trades.</li>
</ul>


This Insight analyzes Tencent (700 HK) tailor-made option strategies traded over the last five trading days on the Hong Kong Exchange. Strategy highlights and volatility insights are provided.
Historically low implied volatility favors bullish or bearish long volatility strategies.
Calendar Spreads are a popular strategy. Bulls and bears are both very active in the market, expressing their views through trades.


EQD | Tencent (700 HK) - Popular Option Strategies and Top Trades, Low Vola Presents Opportunity

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>SOUTHBOUND gross trading activity was quite light the last two weeks of the year. Non-SB trading of HK was even lighter. Net buying was strong.</li>
<li>Net buying on tech was VERY big but not on <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group Holding (BABA US)</a> (small positive) or <a href="https://www.smartkarma.com/entities/meituan" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> (largest outflow). </li>
<li>Financials and High Div SOEs are back on the menu. SOUTHBOUND has been a Very Big Percentage of traded volume. </li>
</ul>


SOUTHBOUND gross trading activity was quite light the last two weeks of the year. Non-SB trading of HK was even lighter. Net buying was strong.
Net buying on tech was VERY big but not on Alibaba Group Holding (BABA US) (small positive) or Meituan (3690 HK) (largest outflow). 
Financials and High Div SOEs are back on the menu. SOUTHBOUND has been a Very Big Percentage of traded volume. 


HK Connect SOUTHBOUND Flows (To 3 Jan 2025); SB Buys InfoTech, Financials, Energy, Telecoms

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.

Equity Bottom-Up

<ul>
<li>Since the last rebalancing of our portfolio on 5th September, it has returned 13.5% vs 9.5% from MSCI-Asia-ex-Japan. Since inception (15th May), our portfolio has appreciated 20.1% vs MXASJ's 18.6%.</li>
<li>Six stocks, SK Hynix, TSMC, Samsung Electronics, Alibaba, China Hongqiao, Tencent, contributed almost the entire return of our portfolio. Overweight on Korea drove more than half the portfolio's return.</li>
<li>We turn more selective on Chinese discretionary consumption and step into the Korean defense sector. We exclude Anta Sports and Mediatek and include Hyundai Rotem and Hon Hai Precision.</li>
</ul>


Since the last rebalancing of our portfolio on 5th September, it has returned 13.5% vs 9.5% from MSCI-Asia-ex-Japan. Since inception (15th May), our portfolio has appreciated 20.1% vs MXASJ's 18.6%.
Six stocks, SK Hynix, TSMC, Samsung Electronics, Alibaba, China Hongqiao, Tencent, contributed almost the entire return of our portfolio. Overweight on Korea drove more than half the portfolio's return.
We turn more selective on Chinese discretionary consumption and step into the Korean defense sector. We exclude Anta Sports and Mediatek and include Hyundai Rotem and Hon Hai Precision.


Asian Equities: Model Portfolio Outperformed Sharply; Less China Consumption, More Korea Defence

Equity Derivatives and Volatility Specialist, Clifton Derivatives

John Ley

Equity Derivatives and Volatility Specialist

Clifton Derivatives

Independent derivative and volatility research firm focusing on events/catalysts, earnings, relative value and cross asset volatility strategies.

<ul>
<li>Communication Services had 39% of single stock option volumes vs only 22% of the open interest highlighting short expiry / speculative nature of trading.</li>
<li>Tencent and Baidu heading in opposite directions – Baidu vol on the inexpensive side vs Tencent vol.</li>
<li>Xiaomi one of only 2 optionable names trading at 52-week high (Sunny optical being the other).</li>
</ul>


Communication Services had 39% of single stock option volumes vs only 22% of the open interest highlighting short expiry / speculative nature of trading.
Tencent and Baidu heading in opposite directions – Baidu vol on the inexpensive side vs Tencent vol.
Xiaomi one of only 2 optionable names trading at 52-week high (Sunny optical being the other).


EQD | Hong Kong Single Stock Options Weekly December 16 – 20

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.

Price Gauge
52-week Range	0.00 - 0.00
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Tencent (700 HK)

US Defense Dept Designates Tencent and CATL as Military Companies - Impact on Korean Competitors

The U.S. Department of Defense announced that it has added numerous Chinese companies including Tencent and CATL as companies that work with...

Douglas Kim

EQD | Tencent (700 HK) - Popular Option Strategies and Top Trades, Low Vola Presents Opportunity

Analysis of Tencent's option strategies on the HK Exchange shows low implied volatility favoring long volatility strategies, with Calendar Spreads...

Gaudenz Schneider

HK Connect SOUTHBOUND Flows (To 3 Jan 2025); SB Buys InfoTech, Financials, Energy, Telecoms

Overall HK volumes the last two weeks of the year were low. SOUTHBOUND volumes were low but net buying continued strongly. High Div SOEs and SOE...

Travis Lundy

Asian Equities: Model Portfolio Outperformed Sharply; Less China Consumption, More Korea Defence

China's economic data (FAI & industrial growth sharply lower than expected, retail sales growth underwhelming) underscores the need for nuanced...

Manishi Raychaudhuri

EQD | Hong Kong Single Stock Options Weekly December 16 – 20

Tencent and Baidu showing contrasting price and volatility levels with Baidu implied vol looking relatively inexpensive. Xiaomi stands out as one...

John Ley

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

US Defense Dept Designates Tencent and CATL as Military Companies - Impact on Korean Competitors

The U.S. Department of Defense announced that it has added numerous Chinese companies including Tencent and CATL as companies that work with...

Douglas Kim

EQD | Tencent (700 HK) - Popular Option Strategies and Top Trades, Low Vola Presents Opportunity

​Analysis of Tencent's option strategies on the HK Exchange shows low implied volatility favoring long volatility strategies, with Calendar Spreads...

Gaudenz Schneider

HK Connect SOUTHBOUND Flows (To 3 Jan 2025); SB Buys InfoTech, Financials, Energy, Telecoms

Overall HK volumes the last two weeks of the year were low. SOUTHBOUND volumes were low but net buying continued strongly. High Div SOEs and SOE...

Travis Lundy

Asian Equities: Model Portfolio Outperformed Sharply; Less China Consumption, More Korea Defence

China's economic data (FAI & industrial growth sharply lower than expected, retail sales growth underwhelming) underscores the need for nuanced...

Manishi Raychaudhuri

EQD | Hong Kong Single Stock Options Weekly December 16 – 20

Tencent and Baidu showing contrasting price and volatility levels with Baidu implied vol looking relatively inexpensive. Xiaomi stands out as one...

John Ley

Analysis of Tencent's option strategies on the HK Exchange shows low implied volatility favoring long volatility strategies, with Calendar Spreads...