In today’s briefing:
- Alibaba (9988 HK): Trends in CALL Strikes and Open Interest Visualized in Animation and Charts
- Alibaba (9988 HK): Trends in PUT Strikes and Open Interest Visualized in Animation and Charts
- Technically Speaking, Breakouts and Breakdowns: HONG KONG (March 6)
- The HSI PUT: Hedging Strategies for an Overextended Rally
- Chery Auto Pre-IPO Tearsheet
- Lucror Analytics – Morning Views Asia
- Asia Real Estate Tracker (07-Mar-2025): KKR sells Seiyu to Trial Holdings for $2.5B.
- NetEase Inc.: Are Its Efforts Towards Content & Community Building in Music & E-commerce Yielding Results?
Alibaba (9988 HK): Trends in CALL Strikes and Open Interest Visualized in Animation and Charts
- While Alibaba Group Holding (9988 HK) rallied, lower in-the-money calls were closed, realizing gains, while higher out-of-the-money strikes gained popularity.
- The median strike price lagged the sharp increase in stock price. The median strike currently stands at 107.50.
- With 81% of March calls currently in-the-money and higher strikes trading at premium implied volatility, active trading is expected in the 150-170 strike range.
Alibaba (9988 HK): Trends in PUT Strikes and Open Interest Visualized in Animation and Charts
- As Alibaba Group Holding (9988 HK) rallied, put strike distribution remained largely unchanged with median strikes only rising from 80 to 85, pushing protection increasingly deep out-of-the-money.
- With most puts now deep out-of-the-money, active trading is expected in the 120-140 strike range.
- The deep out-of-the-money put strikes trade at a significant premium to at the money implied volatility. The 130 strikes trade below, offering an opportunity for an effective hedge.
Technically Speaking, Breakouts and Breakdowns: HONG KONG (March 6)
- Hong Kong continues its secular bull market and has now reached its first significant resistance in the 24k to 25k. Growth factor investing is leading in long-only investing.
- Mainland buyers continue buying Hong Kong stocks at a historic rate with buying focused in the tech sector and specifically in AI-related companies.
- Zoomlion Heavy Industry H (1157 HK) has broken its double-top formation and is at a new high. Vtech Holdings (303 HK) broke out to a new high with improving momentum.
The HSI PUT: Hedging Strategies for an Overextended Rally
- The HSI INDEX has been defying gravity, recently. It is up more than 30% from its most recent low.
- In our previous, Jan. 11th insight we highlighted very precisely the support zone (18.8k-17.5k) from where the index was poised to resume its rally (the bottom was printed at 18671).
- Our models are currently indicating a very overbought condition. Leveraging the information relayed by Gaudenz Schneider in a recent insight, we think a “HSI PUT” could make sense here.
Chery Auto Pre-IPO Tearsheet
- Chery Automobile Co. Ltd. (CACTZ CH) is looking to raise about US$1bn in its upcoming Hong Kong IPO. The deal will be run by CICC, Huatai and GF Securities.
- Chery Auto is a Chinese passenger vehicle company which designs, develops, manufactures and sells passenger vehicles, including internal combustion engine vehicles and new energy vehicles, both domestically and overseas.
- According to F&S, it was the second largest Chinese domestic brand passenger vehicle company, and the 11th largest globally, in terms of global sales volume of passenger vehicles in 9M24.
Lucror Analytics – Morning Views Asia
- In today’s Morning Views publication we comment on developments of the following high yield issuers: Health and Happiness (H&H), Geely Automobile
- In the US, the January trade deficit surged to a record high of USD 131.4 bn (USD 128.8 bn e / USD 98.1 bn p).
- Imports soared 10% to a record USD 401.2 bn (amid front-loading of imports ahead of tariffs), while exports rose 1.2% to USD 269.8 bn.
Asia Real Estate Tracker (07-Mar-2025): KKR sells Seiyu to Trial Holdings for $2.5B.
- KKR has sold Seiyu to Trial Holdings for $2.5 billion, marking a significant deal in the retail industry.
- Real estate firm Savills has appointed Mitsui Fudosan veteran Eiichiro Onozawa to head its Japan business.
- 70% of Senior Directors express confidence in data centres, despite concerns over a worsening talent shortage in the sector.
NetEase Inc.: Are Its Efforts Towards Content & Community Building in Music & E-commerce Yielding Results?
- NetEase, a major player in the global gaming industry, delivered a mixed set of results for its fourth quarter and full fiscal year 2024.
- Total net revenue reached RMB 105.3 billion ($14.4 billion), a 2% increase year-over-year, driven primarily by their online games segment which contributed RMB 83.6 billion of the total.
- Despite the growth, the increase was modest, reflecting challenges in certain areas of the company’s operations.
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