HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>With US interest rate trending up, many of the Hong Kong blue chips are exposed to higher interest expenses from their outstanding debt. We look into who are less vulnerable.</li>
<li>
<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>, <a href="https://www.smartkarma.com/entities/budweiser-brewing-co-apac-ltd" target="_blank" data-smartkarma-citation="entities:28077:1" rel="noopener">Budweiser Brewing Company APAC (1876 HK)</a>, <a href="https://www.smartkarma.com/entities/xinyi-solar-holdings-ltd" target="_blank" data-smartkarma-citation="entities:318:1" rel="noopener">Xinyi Solar (968 HK)</a>, <a href="https://www.smartkarma.com/entities/power-assets-holdings-ltd" target="_blank" data-smartkarma-citation="entities:788:1" rel="noopener">Power Assets (6 HK)</a> and <a href="https://www.smartkarma.com/entities/mtr-corp" target="_blank" data-smartkarma-citation="entities:13289:1" rel="noopener">MTR Corp (66 HK)</a> are found to be more immunized.</li>
<li>Most have large cash balance, low leverage and more fixed rate debt. GEG, Bud APAC and Xinyi Solar may even benefit from higher interest income given net cash position.  </li>
</ul>


With US interest rate trending up, many of the Hong Kong blue chips are exposed to higher interest expenses from their outstanding debt. We look into who are less vulnerable.

Galaxy Entertainment Group (27 HK), Budweiser Brewing Company APAC (1876 HK), Xinyi Solar (968 HK), Power Assets (6 HK) and MTR Corp (66 HK) are found to be more immunized.
Most have large cash balance, low leverage and more fixed rate debt. GEG, Bud APAC and Xinyi Solar may even benefit from higher interest income given net cash position.  


Rising US Interest Rate: A Look at Which HK Blue Chips Are Less Vulnerable

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

China Power International / Equity Capital Markets

<ul>
<li>China Power International is looking to raise up to US$436m via a top-up placement.</li>
<li>The stock is up more than 274% over the past year, with most of the gains having come over the past few months.</li>
<li>In this note, will we talk about deal dynamics and run the deal through our ECM framework. </li>
</ul>


China Power International is looking to raise up to US$436m via a top-up placement.
The stock is up more than 274% over the past year, with most of the gains having come over the past few months.
In this note, will we talk about deal dynamics and run the deal through our ECM framework. 


China Power International Placement - Won't Do Much for Funding Capacity Expansion

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ck-hutchison-holdings-ltd" target="_blank" data-smartkarma-citation="entities:132:1" rel="noopener">CK Hutchison Holdings (1 HK)</a>'s implied stub and the simple ratio (CKH/ <a href="https://www.smartkarma.com/entities/ck-infrastructure-holdings-l" target="_blank" data-smartkarma-citation="entities:163:1" rel="noopener">CK Infrastructure Holdings (1038 HK)</a>) are currently at an all-time low.</li>
<li>The market is assigning US$1.2bn <em>less</em> for the stub ops subsequent to the announcement and completion of tower sales in Austria, Denmark, Ireland, Sweden, and Italy.</li>
<li>CKH's business diversification, both by geography and segment, continues to provide a strong and stable cashflow.</li>
</ul>



CK Hutchison Holdings (1 HK)'s implied stub and the simple ratio (CKH/ CK Infrastructure Holdings (1038 HK)) are currently at an all-time low.
The market is assigning US$1.2bn less for the stub ops subsequent to the announcement and completion of tower sales in Austria, Denmark, Ireland, Sweden, and Italy.
CKH's business diversification, both by geography and segment, continues to provide a strong and stable cashflow.


2022 High Conviction: CK Hutchison (1 HK) Trading At Its Widest Ever Level

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

<ul>
<li>The December rebalance of the HSI, HSCEI and HSTECH indices will use today's closing prices to cap the index constituents at 8%. This will lead to large flows.</li>
<li>The largest passive outflows as a result of capping will be on <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> and <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> due to their weight exceeding 8% in all three indices.</li>
<li>There are large funding outflows (in terms of days of ADV to trade) on quite a few Hong Kong property stocks as well as stocks from the financials sector.</li>
</ul>


The December rebalance of the HSI, HSCEI and HSTECH indices will use today's closing prices to cap the index constituents at 8%. This will lead to large flows.
The largest passive outflows as a result of capping will be on Meituan (3690 HK) and Tencent (700 HK) due to their weight exceeding 8% in all three indices.
There are large funding outflows (in terms of days of ADV to trade) on quite a few Hong Kong property stocks as well as stocks from the financials sector.


HSI, HSCEI, HSTECH: December Rebalance Flows Post Capping

FWD Group Holdings / Equity Capital Markets

<div><p>FWD, a pan-Asian life insurer founded by Richard Li, aims to raise up to US$3bn in its US IPO. </p></div><div><p>FWD is a pan-Asia life insurer operating in ten markets including Hong Kong (and Macau), Thailand (and Cambodia), Japan, the Philippines, Indonesia, Singapore, Vietnam and Malaysia. Southeast Asia markets contributed over 40% of its Value of New Business (VNB) in 2020. It had served over 9.9m customers as of Jun 21.</p></div><div><div>In our previous note, we spoke about the positive  and negatives aspects of the deal in our earleir notes, <a href="https://www.smartkarma.com/insights/fwd-pre-ipo-the-positives-growing-fast" target="_blank" rel="noopener">FWD Pre-IPO - The Positives - Growing Fast</a> and <a href="https://www.smartkarma.com/insights/fwd-pre-ipo-the-negatives-strategy-remains-unclear" target="_blank" rel="noopener">FWD Pre-IPO - The Negatives - Strategy Remains Unclear</a>.</div></div><p></p><p>In this note we will undertake a peer comparison.</p>

FWD, a pan-Asian life insurer founded by Richard Li, aims to raise up to US$3bn in its US IPO. FWD is a pan-Asia life insurer operating in ten markets including Hong Kong (and Macau), Thailand (and Cambodia), Japan, the Philippines, Indonesia, Singapore, Vietnam and Malaysia. Southeast Asia markets contributed over 40% of its Value of New Business (VNB) in 2020. It had served over 9.9m customers as of Jun 21.In our previous note, we spoke about the positive  and negatives aspects of the deal in our earleir notes, FWD Pre-IPO - The Positives - Growing Fast and FWD Pre-IPO - The Negatives - Strategy Remains Unclear.In this note we will undertake a peer comparison.

Hong Kong

CK Hutchison Holdings Limited holds all of the non-property businesses of the Cheung Kong Group and the Hutchison Group, including ports and related services, telecommunications, retail, infrastructure, energy, and movable assets leasing operations.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

CK Hutchison Holdings (1 HK)

Rising US Interest Rate: A Look at Which HK Blue Chips Are Less Vulnerable

We look at what companies in the Hang Seng Index are more immunized to the rising US interest rate environment; and found the top five are with...

Osbert Tang, CFA

China Power International Placement - Won't Do Much for Funding Capacity Expansion

China Power International is looking to raise up to US$436m via a top-up placement. In this note, we will run the deal through our ECM framework.

Sumeet Singh

2022 High Conviction: CK Hutchison (1 HK) Trading At Its Widest Ever Level

C KH is inexpensive, versus historical levels, and when compared to peers. Net of CKI, the marker is assigning HK$9bn less for the stubs ops after...

David Blennerhassett

HSI, HSCEI, HSTECH: December Rebalance Flows Post Capping

The Dec rebalance of the HK indices will use today's closing prices to cap the stocks at 8%. Meituan and Tencent will see large outflows due to...

Brian Freitas

FWD Pre-IPO - Peer Comparison

FWD, a pan-Asian life insurer founded by Richard Li, aims to raise up to US$3bn in its US IPO. In this note, we will undertake a peer comparison.

Sumeet Singh

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)