HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>Many have missed out on the 14%, or 2,300 points, rally of the HSI in the last 9 trading days. There are still several stocks that look interesting now.</li>
<li>
<a href="https://www.smartkarma.com/entities/li-auto-inc-3dbe6187-544f-40dd-b9f9-72fba9c0110e" target="_blank" data-smartkarma-citation="entities:33811:1" rel="noopener">Li Auto (2015 HK)</a>, <a href="https://www.smartkarma.com/entities/link-reit" target="_blank" data-smartkarma-citation="entities:872:1" rel="noopener">Link REIT (823 HK)</a>, <a href="https://www.smartkarma.com/entities/china-mengniu-dairy-co" target="_blank" data-smartkarma-citation="entities:354:1" rel="noopener">China Mengniu Dairy Co (2319 HK)</a>, <a href="https://www.smartkarma.com/entities/hang-lung-properties-ltd" target="_blank" data-smartkarma-citation="entities:49:1" rel="noopener">Hang Lung Properties (101 HK)</a> and <a href="https://www.smartkarma.com/entities/galaxy-entertainment-group-limited" target="_blank" data-smartkarma-citation="entities:806:1" rel="noopener">Galaxy Entertainment Group (27 HK)</a> are massive laggards YTD.</li>
<li>As they have only experienced limited rebounds from the 19-Apr trough, they are set to catch up. Also, their earnings prospects look positive this year. </li>
</ul>


Many have missed out on the 14%, or 2,300 points, rally of the HSI in the last 9 trading days. There are still several stocks that look interesting now.

Li Auto (2015 HK), Link REIT (823 HK), China Mengniu Dairy Co (2319 HK), Hang Lung Properties (101 HK) and Galaxy Entertainment Group (27 HK) are massive laggards YTD.
As they have only experienced limited rebounds from the 19-Apr trough, they are set to catch up. Also, their earnings prospects look positive this year. 


HK Strategy: Where Are the Short-Term Opportunities?

Analyst

Steve

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/xinyi-glass-holdings-ltd" target="_blank" data-smartkarma-citation="entities:11940:1" rel="noopener">Xinyi Glass Holdings (868 HK)</a> reported FY23 results, with net profit up 5% yoy and sales up 4% yoy. </li>
<li>The company announced a final dividend of HKD0.37 per share, resulting in a full year dividend of HKD0.63 per share, which is a yield of 8%. </li>
<li>Overall the results look resilient, with auto glass segment a bit weaker than expected and float glass segment stronger than expected. </li>
</ul>



Xinyi Glass Holdings (868 HK) reported FY23 results, with net profit up 5% yoy and sales up 4% yoy. 
The company announced a final dividend of HKD0.37 per share, resulting in a full year dividend of HKD0.63 per share, which is a yield of 8%. 
Overall the results look resilient, with auto glass segment a bit weaker than expected and float glass segment stronger than expected. 


Xinyi Glass (868 HK):  Resilient FY23 Results; A Nice Dividend Play

<ul>
<li>
<a href="https://www.smartkarma.com/entities/xinyi-glass-holdings-ltd" target="_blank" data-smartkarma-citation="entities:11940:1" rel="noopener">Xinyi Glass Holdings (868 HK)</a>'s stable auto glass business is often overlooked, making up 39% of the company's gross profit in 1H23.</li>
<li>Given the current valuation of 7x 2023E PE and 1.3x 2023E PB, the risk reward is skewed to the upside, and downside is protected with the stable auto glass business. </li>
<li>The company's management has been aggressively increasing stake in the company in the last 2 months, gobbling up 11 million shares.</li>
</ul>



Xinyi Glass Holdings (868 HK)'s stable auto glass business is often overlooked, making up 39% of the company's gross profit in 1H23.
Given the current valuation of 7x 2023E PE and 1.3x 2023E PB, the risk reward is skewed to the upside, and downside is protected with the stable auto glass business. 
The company's management has been aggressively increasing stake in the company in the last 2 months, gobbling up 11 million shares.


Xinyi Glass (868 HK):  More Resilient Than Perceived

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>Feb sales came out at a strong beat both in terms of strength at 30% YoY (cons -5%), but also the timing of turning positive (cons in April).</li><li>We think the momentum would be more sustainable than market expectation as 1) our leading indicator GAIN jumped to the highest since 2021 indicating ST sales would continue to be strong.</li><li>2) Our channel check suggests home buyers are much more than pent-up demand. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Feb sales came out at a strong beat both in terms of strength at 30% YoY (cons -5%), but also the timing of turning positive (cons in April).We think the momentum would be more sustainable than market expectation as 1) our leading indicator GAIN jumped to the highest since 2021 indicating ST sales would continue to be strong.2) Our channel check suggests home buyers are much more than pent-up demand. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Property Sector – Feb sales a strong beat; Raise 2023 forecast

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

<ul>
<li>The Chinese property market is undergoing a revival story initiated by the government.</li>
<li>
<a href="https://www.smartkarma.com/entities/xinyi-glass-holdings-ltd" target="_blank" data-smartkarma-citation="entities:11940:1" rel="noopener">Xinyi Glass Holdings (868 HK)</a> main product is a key component for real estate developers.</li>
<li>Xinyi Glass has a much cleaner balance sheet compared to the property developers. </li>
</ul>


The Chinese property market is undergoing a revival story initiated by the government.

Xinyi Glass Holdings (868 HK) main product is a key component for real estate developers.
Xinyi Glass has a much cleaner balance sheet compared to the property developers. 


Xinyi Glass (868): Efficient Way to Ride Chinese Property Market Revival

China

Xinyi Glass Holdings Ltd, through its subsidiaries, produces a variety of processed glass products for automobile, construction and household applications. The Company also tenders for glass curtain wall projects and conducts installation service of glass curtain wall in China.

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Xinyi Glass Holdings (868 HK)

HK Strategy: Where Are the Short-Term Opportunities?

Li Auto, Link REIT, China Mengniu, Hang Lung Properties, and Galaxy Entertainment are massive laggards YTD but the recent rebound from the trough...

Osbert Tang, CFA

Xinyi Glass (868 HK): Resilient FY23 Results; A Nice Dividend Play

Xinyi Glass (868 HK) reported FY23 results with 5% yoy increase in net profit and 4% yoy increase in sales. The company is a solid value and...

Steve

Xinyi Glass (868 HK): More Resilient Than Perceived

I am pushing this up after only a week because of 1) news that China plans to increase budget deficit for 2023 and issue at least RMB1 trillion...

Steve

China Property Sector – Feb sales a strong beat; Raise 2023 forecast

Feb sales came out at a strong beat both in terms of strength at 30% YoY (cons -5%), but also the timing of turning positive (cons in April).

CMB International

Xinyi Glass (868): Efficient Way to Ride Chinese Property Market Revival

The Chinese property sector will be resurrected. Xinyi Glass main product, float glass, will be in much demand. Their new product, low-emission...

Henry Soediarko

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

HK Strategy: Where Are the Short-Term Opportunities?

Li Auto, Link REIT, China Mengniu, Hang Lung Properties, and Galaxy Entertainment are massive laggards YTD but the recent rebound from the trough...

Osbert Tang, CFA

Xinyi Glass (868 HK): Resilient FY23 Results; A Nice Dividend Play

​Xinyi Glass (868 HK) reported FY23 results with 5% yoy increase in net profit and 4% yoy increase in sales. The company is a solid value and...

Steve

Xinyi Glass (868 HK): More Resilient Than Perceived

I am pushing this up after only a week because of 1) news that China plans to increase budget deficit for 2023 and issue at least RMB1 trillion...

Steve

China Property Sector – Feb sales a strong beat; Raise 2023 forecast

Feb sales came out at a strong beat both in terms of strength at 30% YoY (cons -5%), but also the timing of turning positive (cons in April).

CMB International

Xinyi Glass (868): Efficient Way to Ride Chinese Property Market Revival

The Chinese property sector will be resurrected. Xinyi Glass main product, float glass, will be in much demand. Their new product, low-emission...

Henry Soediarko

Xinyi Glass (868 HK) reported FY23 results with 5% yoy increase in net profit and 4% yoy increase in sales. The company is a solid value and...