Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>The Hong Kong Alpha portfolio gained 5.79% in July, outperforming its benchmark by 0.30%.  The portfolio has outperformed Hong Kong indexes by 52% to 74% since inception.</li>
<li>The portfolio's largest exposures are in the industrial, financial, and technology platform sectors. The portfolio has no exposure to the materials or energy sectors.</li>
<li>The portfolio has generated a Sharpe ratio of 1.20 since inception, compared with 0.69 for the benchmark.  The portfolio's annualized mean excess return is 19.4%.</li>
</ul>


The Hong Kong Alpha portfolio gained 5.79% in July, outperforming its benchmark by 0.30%.  The portfolio has outperformed Hong Kong indexes by 52% to 74% since inception.
The portfolio's largest exposures are in the industrial, financial, and technology platform sectors. The portfolio has no exposure to the materials or energy sectors.
The portfolio has generated a Sharpe ratio of 1.20 since inception, compared with 0.69 for the benchmark.  The portfolio's annualized mean excess return is 19.4%.


<ul>
<li>The Hong Kong Alpha portfolio beat the Hong Kong indexes in June and was flat to its benchmark with a loss of 6.98%.</li>
<li>The Hong Kong market experienced heavy selling in the second half of June, as both foreign and mainland investors reduced their exposure.</li>
<li>At the end of June, we sold positions in the electric utilities, technology, consumer, and property sectors. We added positions in the broker, biotech, telecom, and industrial sectors.</li>
</ul>


The Hong Kong Alpha portfolio beat the Hong Kong indexes in June and was flat to its benchmark with a loss of 6.98%.
The Hong Kong market experienced heavy selling in the second half of June, as both foreign and mainland investors reduced their exposure.
At the end of June, we sold positions in the electric utilities, technology, consumer, and property sectors. We added positions in the broker, biotech, telecom, and industrial sectors.


<ul>
<li>The Hong Kong Alpha portfolio gained 9.7% in May, outperforming its benchmark by 10.57%.  The portfolio has outperformed Hong Kong indexes by 57% to 75% since its inception in 10/2024.</li>
<li>The portfolio has a Sharpe ratio of 1.37 since its inception, with a mean excess annualized return of 21% and a beta of 1.2.  </li>
<li>At the end of May, we sold our remaining positions in the mining and materials sectors and added positions in the power, consumer and property sectors.</li>
</ul>


The Hong Kong Alpha portfolio gained 9.7% in May, outperforming its benchmark by 10.57%.  The portfolio has outperformed Hong Kong indexes by 57% to 75% since its inception in 10/2024.
The portfolio has a Sharpe ratio of 1.37 since its inception, with a mean excess annualized return of 21% and a beta of 1.2.  
At the end of May, we sold our remaining positions in the mining and materials sectors and added positions in the power, consumer and property sectors.


<ul>
<li>
The Hong Kong Alpha portfolio posted a -0.5% return for April. Since its inception, the HK Alpha portfolio has outperformed the HK indexes by 38.69% to 60.42%.  </li>
<li>Overall alpha generation remains at 64% of overall returns.  The Sharpe ratio for the portfolio is 1.15, compared with 0.89 for the benchmark.</li>
<li>As the US retreats from its war in Iran, we have repositioned the portfolio by adding exposure to the AI-related tech sector, including platform, agentic, and hardware.</li>
</ul>



The Hong Kong Alpha portfolio posted a -0.5% return for April. Since its inception, the HK Alpha portfolio has outperformed the HK indexes by 38.69% to 60.42%.  
Overall alpha generation remains at 64% of overall returns.  The Sharpe ratio for the portfolio is 1.15, compared with 0.89 for the benchmark.
As the US retreats from its war in Iran, we have repositioned the portfolio by adding exposure to the AI-related tech sector, including platform, agentic, and hardware.


HK/China Equity Long-Short

Osbert Tang, CFA

Equity Capital Markets

Shenzhen Transsion Holdings / Equity Capital Markets

<ul>
<li>The H-share IPO of <a href="https://www.smartkarma.com/entities/shenzhen-transsion-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:58740:1" rel="noopener">Shenzhen Transsion Holdings (2636 HK)</a>, a smart device and mobile Internet service provider, appears to provide some upside at the maximum IPO price.</li>
<li>Its earnings have recovered sharply in 1H26, and for FY25-28F, it is expected to achieve an EPS CAGR of 30.2% as it expands its market and products.</li>
<li>We value it at 12.5x FY26 PER, 10% discount to <a href="https://www.smartkarma.com/entities/tcl-electronics-holdings-limited" target="_blank" data-smartkarma-citation="entities:15654:1" rel="noopener">TCL Electronics (1070 HK)</a>, implying a fair price of HK$43.73, or 12.7% upside.  </li>
</ul>


The H-share IPO of Shenzhen Transsion Holdings (2636 HK), a smart device and mobile Internet service provider, appears to provide some upside at the maximum IPO price.
Its earnings have recovered sharply in 1H26, and for FY25-28F, it is expected to achieve an EPS CAGR of 30.2% as it expands its market and products.
We value it at 12.5x FY26 PER, 10% discount to TCL Electronics (1070 HK), implying a fair price of HK$43.73, or 12.7% upside.  


Shenzhen Transsion (2636 HK) IPO: Still Some Upside

China

ZTE Corporation develops and markets switches, access servers, videoconferencing systems, mobile communication systems, data communication devices, and optical communication devices.  The Company also offers networking solutions for setup, refurbishment and optimization of networks.

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Zte Corp A (000063 CH)

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