HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>YTD, the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index (HSI INDEX)</a> has gained 4.8%, possibly kick-starting the January effect for 2026.</li>
<li>Over the last 13 years, January has been the only month to register as the best one in a year five times, with an average return of 6.7%. </li>
<li>If we count all the months of January since 2014, its average return is 1.6%, putting it the third-best-return month after July and November.</li>
</ul>


YTD, the Hang Seng Index (HSI INDEX) has gained 4.8%, possibly kick-starting the January effect for 2026.
Over the last 13 years, January has been the only month to register as the best one in a year five times, with an average return of 6.7%. 
If we count all the months of January since 2014, its average return is 1.6%, putting it the third-best-return month after July and November.


China Strategy: January Effect, Believe It or Not?

Equity Bottom-Up

GigaDevice Semiconductor  / Equity Bottom-Up

GigaDevice Semiconductor Inc. manufactures and distributes non volatile memory devices. The Company produces and sells memory cards, controllers, flash chips, integrated circuits, and other products. GigaDevice Semiconductor also operates goods and technology import and export, import and export agency, and other businesses.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/gigadevice-semiconductor" target="_blank" data-smartkarma-citation="entities:46238:1" rel="noopener">GigaDevice Semiconductor (3986 HK)</a>'s grey market price of HK$224.8 is 38.8% higher than the IPO price. This means a PER of 53.5x for FY26, simply too stretched for us. </li>
<li>The grey market price represents a 68-77% FY26 PER premium to the most-expensive peers, namely <a href="https://www.smartkarma.com/entities/microchip-technology-inc" target="_blank" data-smartkarma-citation="entities:8788:1" rel="noopener">Microchip Technology (MCHP US)</a> and <a href="https://www.smartkarma.com/entities/texas-instruments-inc" target="_blank" data-smartkarma-citation="entities:18804:1" rel="noopener">Texas Instruments (TXN US)</a>. </li>
<li>Our fair value range is HK$204-238, based on the HA discount for 2025 IPOs and the current overall HA discount, implying limited upside potential.</li>
</ul>



GigaDevice Semiconductor (3986 HK)'s grey market price of HK$224.8 is 38.8% higher than the IPO price. This means a PER of 53.5x for FY26, simply too stretched for us. 
The grey market price represents a 68-77% FY26 PER premium to the most-expensive peers, namely Microchip Technology (MCHP US) and Texas Instruments (TXN US). 
Our fair value range is HK$204-238, based on the HA discount for 2025 IPOs and the current overall HA discount, implying limited upside potential.


GigaDevice (3986 HK): Its Just Too Demanding

Lonking Holdings Ltd. designs, manufactures and sells wheel loaders and infrastructure machinery in the People's Republic of China.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lonking-holdings-ltd" target="_blank" data-smartkarma-citation="entities:3944:1" rel="noopener">Lonking Holdings (3339 HK)</a>, as the leader in wheel loader, should see strong profit as industry sales grew 30% in Dec 2025 and 18.4% in FY25.</li>
<li>Export will be an important driver with the government's push for overseas expansion of high-end manufacturing. In FY25, industry export sales reached 51.5% of total. </li>
<li>Net cash, including investments, equals HK$2.06/share, 66.8% of the share price. This provides room for higher dividend and highlight its value. </li>
</ul>



Lonking Holdings (3339 HK), as the leader in wheel loader, should see strong profit as industry sales grew 30% in Dec 2025 and 18.4% in FY25.
Export will be an important driver with the government's push for overseas expansion of high-end manufacturing. In FY25, industry export sales reached 51.5% of total. 
Net cash, including investments, equals HK$2.06/share, 66.8% of the share price. This provides room for higher dividend and highlight its value. 


Lonking (3339 HK): Another Great Year, with 67% of Share Price Is Net Cash

Knowledge Atlas Technology (Zhipu AI) / Equity Bottom-Up

Beijing Zhipu Huazhang Technology Co. Ltd. offers technology services. The Company provides general models of cognitive intelligence, artificial intelligence systems, and others. Beijing Zhipu Huazhang Technology also conducts advertising releasing, software sales, and other businesses.

Knowledge Atlas Technology (Zhipu AI) (2513 HK)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/beijing-zhipu-huazhang-technology-co-ltd-knowledge-atlas-technology" target="_blank" data-smartkarma-citation="entities:44500:1" rel="noopener">Knowledge Atlas Technology (2513 HK)</a>'s debut is lukewarm, and currently trading on 37.8x P/S for FY27, it is close to fairly valued. </li>
<li>
<a href="https://www.smartkarma.com/entities/minimax-group-inc" target="_blank" data-smartkarma-citation="entities:46185:1" rel="noopener">MiniMax (100 HK)</a>'s B2C focus and its 3-year revenue CAGR of 126.8% (vs. 63.9%) warrants FY27 P/S of 55.1x, up from 48.8x as its peer <a href="https://www.smartkarma.com/entities/moore-threads-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:40221:1" rel="noopener">Moore Threads (688795 CH)</a> rallied. </li>
<li>Our fair value of <a href="https://www.smartkarma.com/entities/minimax-group-inc" target="_blank" data-smartkarma-citation="entities:46185:1" rel="noopener">MiniMax (100 HK)</a> equals a 45% premium to <a href="https://www.smartkarma.com/entities/beijing-zhipu-huazhang-technology-co-ltd-knowledge-atlas-technology" target="_blank" data-smartkarma-citation="entities:44500:1" rel="noopener">Knowledge Atlas Technology (2513 HK)</a>, justified by its above-sector momentum and "winner-take-all" characteristics.</li>
</ul>



Knowledge Atlas Technology (2513 HK)'s debut is lukewarm, and currently trading on 37.8x P/S for FY27, it is close to fairly valued. 

MiniMax (100 HK)'s B2C focus and its 3-year revenue CAGR of 126.8% (vs. 63.9%) warrants FY27 P/S of 55.1x, up from 48.8x as its peer Moore Threads (688795 CH) rallied. 
Our fair value of MiniMax (100 HK) equals a 45% premium to Knowledge Atlas Technology (2513 HK), justified by its above-sector momentum and "winner-take-all" characteristics.


Knowledge Atlas (2513 HK) & MiniMax Group (100 HK): Comparison, Debuts and Implications

Cathay Pacific Airways / Equity Bottom-Up

Cathay Pacific Airways Limited operates scheduled airline services. The Company also provides related services, including airline catering, aircraft handling, and engineering.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/air-china-ltd-h" target="_blank" data-smartkarma-citation="entities:8239:1" rel="noopener">Air China Ltd (H) (753 HK)</a> has disposed of a 1.61% stake in <a href="https://www.smartkarma.com/entities/cathay-pacific-airways-ltd" target="_blank" data-smartkarma-citation="entities:243:1" rel="noopener">Cathay Pacific Airways (293 HK)</a> at HK$12.22. After this, it will remain CX's second-largest shareholder.</li>
<li>Assuming an end-Mar completion of Qatar Airways' stake buyback, EPS will be enhanced by 1.7% and 3.7%, respectively, slightly lower than previously estimated.</li>
<li>Sustained uptrend in passenger traffic and load factor will support earnings. With 16% ROE for FY25-27, its 1.3x 12-month forward P/B is inexpensive.</li>
</ul>



Air China Ltd (H) (753 HK) has disposed of a 1.61% stake in Cathay Pacific Airways (293 HK) at HK$12.22. After this, it will remain CX's second-largest shareholder.
Assuming an end-Mar completion of Qatar Airways' stake buyback, EPS will be enhanced by 1.7% and 3.7%, respectively, slightly lower than previously estimated.
Sustained uptrend in passenger traffic and load factor will support earnings. With 16% ROE for FY25-27, its 1.3x 12-month forward P/B is inexpensive.


Cathay Pacific (293 HK): Stay Positive Despite Small Disposal by Air China

Osbert Tang is an equity analyst with over 20 years of experience with focuses on China transport, infrastructure, industrials and utilities sectors. He has been based in Shanghai since 2003, accumulated nearly 20 years of on-ground knowledge on the Chinese economy and financial markets, and has a wealth of contacts with China corporates and government entities. 

Osbert has received votes from top-tier institutional investors and has been a highly-ranked transport and infrastructure analyst in the Asiamoney, Institutional Investors and Greenwich surveys. In addition to his extensive experience with international investment banks including RBS, ABN AMRO (both served as Shanghai Chief Representative), Paribas Asia Equity, Maybank Kim Eng and DBS Securities, he has been a senior analyst with Moody’s Investors Service with focus on ratings of China infrastructure and related LGFV issuers. He has also worked in the area of strategic development at Sun Hung Kai Properties Limited. 

Osbert holds a BBA from the Chinese University of Hong Kong, an MBA from the University of Texas at Austin and a MSSc in Applied Psychology from the City University of Hong Kong. He was accredited with the CFA charter in 1997, and is a member of both British Psychological Society and Hong Kong Psychological Society.

Osbert Tang, CFA
HK/China Equity Long-Short

China Strategy: January Effect, Believe It or Not?

The HSI has gained 4.8% YTD, potentially signalling a January effect for 2026. Over the last 13 years, January has been the best-performing month...

Osbert Tang, CFA

GigaDevice (3986 HK): Its Just Too Demanding

GigaDevice's grey market price is 38.8% higher than IPO, leading to a FY26 PER of 53.5x, with limited upside potential compared to peers, even...

Osbert Tang, CFA

Knowledge Atlas (2513 HK) & MiniMax Group (100 HK): Comparison, Debuts and Implications

Debut of Knowledge Atlas is lukewarm, trading close to fair value at 37.8x P/S for FY27, while MiniMax's B2C focus and strong revenue growth...

Osbert Tang, CFA

Cathay Pacific (293 HK): Stay Positive Despite Small Disposal by Air China

Air China sells stake in CX but remains the second-largest shareholder. EPS to be enhanced by 1.7-3.7% after Qatar Airways buyback. Traffic...

Osbert Tang, CFA

China Strategy: January Effect, Believe It or Not?

​The HSI has gained 4.8% YTD, potentially signalling a January effect for 2026. Over the last 13 years, January has been the best-performing month...

Osbert Tang, CFA

GigaDevice (3986 HK): Its Just Too Demanding

​GigaDevice's grey market price is 38.8% higher than IPO, leading to a FY26 PER of 53.5x, with limited upside potential compared to peers, even...

Osbert Tang, CFA

Lonking (3339 HK): Another Great Year, with 67% of Share Price Is Net Cash

​Lonking poised for strong profit growth as wheel loader sales surge, driven by export and government spending. Its solid net cash position,...

Osbert Tang, CFA

Knowledge Atlas (2513 HK) & MiniMax Group (100 HK): Comparison, Debuts and Implications

​Debut of Knowledge Atlas is lukewarm, trading close to fair value at 37.8x P/S for FY27, while MiniMax's B2C focus and strong revenue growth...

Osbert Tang, CFA

Cathay Pacific (293 HK): Stay Positive Despite Small Disposal by Air China

​Air China sells stake in CX but remains the second-largest shareholder. EPS to be enhanced by 1.7-3.7% after Qatar Airways buyback. Traffic...

Osbert Tang, CFA

The HSI has gained 4.8% YTD, potentially signalling a January effect for 2026. Over the last 13 years, January has been the best-performing month...

GigaDevice's grey market price is 38.8% higher than IPO, leading to a FY26 PER of 53.5x, with limited upside potential compared to peers, even...

Lonking poised for strong profit growth as wheel loader sales surge, driven by export and government spending. Its solid net cash position,...

Debut of Knowledge Atlas is lukewarm, trading close to fair value at 37.8x P/S for FY27, while MiniMax's B2C focus and strong revenue growth...

Air China sells stake in CX but remains the second-largest shareholder. EPS to be enhanced by 1.7-3.7% after Qatar Airways buyback. Traffic...