In today’s briefing:
- CATL (300750 CH): Index Inclusion Post H-Share Listing
- China TCM (570.HK) – About the Profit Warning and the Valuation Outlook
- EQD | Hong Kong Single Stock Options Weekly (January 13 – 17): Stocks at Inflection Point.
- CATL A/H Listing – Early Look – US$5bn Could Be Hong Kong’s Largest This Year
- EQD | Hong Kong Index Options Weekly (HSI and HSCEI January 13-17): Long Vol Gets a Caution Flag
- Lucror Analytics – Morning Views Asia
CATL (300750 CH): Index Inclusion Post H-Share Listing
- Contemporary Amperex Technology (CATL) (300750 CH) has announced plans for an H-share listing with media reports indicating a raise of at least US$5bn. Shareholders have approved the issuance.
- CATL (300750 CH) was designated as a Chinese Military Company earlier this year by the U.S. Department of Defense but is still not on the NS-CMIC list.
- The CATL (300750 CH) H-shares should get Fast Entry to the global indices and iShares China Large-Cap (FXI US) ETF. Inclusion in the HSCEI and HSI will take longer.
China TCM (570.HK) – About the Profit Warning and the Valuation Outlook
- The sharp performance decline of China TCM in 2024 is actually in line with our expectation. The current valuation has not yet reached its lowest point.
- China TCM can still achieve an average annual profit of RMB1 billion in the future. Together with the new management, we expect the Company to come out of the trough.
- Instead of betting on privatization again, it’s better to focus more on whether China TCM’s fundamentals would improve, which is the key factor that can support a sustainable valuation rebound.
EQD | Hong Kong Single Stock Options Weekly (January 13 – 17): Stocks at Inflection Point.
- Familiar theme across a lot of names with prices either back to the lows of range over the last 2 months or having given back all of the stimulus gains.
- Call volumes back to normal levels making up 57% of all single-stock trading. High volumes for Tencent did not repeat this weak as Tencent trading settled back to normal levels.
- Materials were the strongest sector with the median stock rising just under 6%.
CATL A/H Listing – Early Look – US$5bn Could Be Hong Kong’s Largest This Year
- Contemporary Amperex Technology (CATL) (300750 CH), one of the world’s largest battery solutions providers, aims to raise around US$5bn in its H-share listing.
- CATL is the global leader in new energy vehicle battery solutions, in China and globally, as per SNE Research. Its A-shares have been listed since 2018.
- In this note, we look at its past performance and other deal dynamics that might impact the listing.
EQD | Hong Kong Index Options Weekly (HSI and HSCEI January 13-17): Long Vol Gets a Caution Flag
- Abrupt change in course for HSI which bottomed on Monday and moved higher in a straight line the rest of the week. Price action was aided by stabilization in Tencent.
- Implied vols were softer on the week and have a fairly large spread to historic vols. Caution warranted for long vol positions as this can persist with holidays dead ahead.
- Call volumes have rebounded to normal levels with the strong price action.
Lucror Analytics – Morning Views Asia
- In today’s Morning Views publication we comment on developments of the following high yield issuers: China Vanke, Reliance Industries, Greenko Energy
- In the US, industrial production came in above estimates at 0.9% m-o-m in December (0.3% e / 0.2% revised p), supported by higher civilian aircraft production after the Boeing strike was resolved. Separately, housing starts surged 15.8% m-o-m (3.0% e / -3.7% revised p) to 1.5 mn units in December.
- Meanwhile, building permits declined 0.7% m-o-m (-2.2% e / 5.2% p) to 1.48 mn in the same month.
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