HK/China Equity Long-Short

Osbert Tang, CFA

Quantitative Analysis

<ul>
<li>It remains possible for 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> to generate a positive return in January 2024, given that historically there is a high 73% probability of doing so.</li>
<li>Over the last eleven years, January was also the best-performing one in five of them. Average return for these five was at 7.7%.</li>
<li>The macroenvironment is also conducive for this pattern to sustain - lower USD rates, rebound in Rmb/USD exchange rate, and more supportive measures from the Chinese government.</li>
</ul>


It remains possible for the Hang Seng Index (HSI INDEX) to generate a positive return in January 2024, given that historically there is a high 73% probability of doing so.
Over the last eleven years, January was also the best-performing one in five of them. Average return for these five was at 7.7%.
The macroenvironment is also conducive for this pattern to sustain - lower USD rates, rebound in Rmb/USD exchange rate, and more supportive measures from the Chinese government.


China Strategy: Are We Still Going to Have January Effect in 2024?

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Thematic (Sector/Industry)

<ul>
<li>700HK/ NTES/ BILI:  The NPPA has released a draft for public opinion on the &lt;Internet Game Governing Measures&gt;(-/-/-)</li>
<li>700HK/ NTES/ 002624CH/ 300299CH/ BILI:NPPA Announced December Imported Game Code Approvals(////+/+/+)</li>
<li>AMAZ/ SHEIN/ TEMU: Local merchants reportedly unhappy with some new AI features on Amazon (-/+/+)</li>
</ul>


700HK/ NTES/ BILI:  The NPPA has released a draft for public opinion on the &lt;Internet Game Governing Measures&gt;(-/-/-)
700HK/ NTES/ 002624CH/ 300299CH/ BILI:NPPA Announced December Imported Game Code Approvals(////+/+/+)
AMAZ/ SHEIN/ TEMU: Local merchants reportedly unhappy with some new AI features on Amazon (-/+/+)


[Blue Lotus Daily - TMT Update]: 700 HK/NTES/BILI/002624 CH/300299 CH/3690 HK/AMZN/PDD/Shein

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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 Bottom-Up

<ul>
<li>China announced game approval for the December batch. The number of games approved has increased compared to recent months.</li>
<li>The pace of China game approval appears to be accelerating, to the same level as pre-tightening.</li>
<li>Netease scored two approvals while Tencent scored one. Netease finished the year with the most games approved.</li>
</ul>


China announced game approval for the December batch. The number of games approved has increased compared to recent months.
The pace of China game approval appears to be accelerating, to the same level as pre-tightening.
Netease scored two approvals while Tencent scored one. Netease finished the year with the most games approved.


Tencent/Netease: Netease Tops '23 League Table with Most Games Approved

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Guangzhou Automobile Group / Event-Driven

<ul>
<li>The New and Better (5mos old) A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.</li>
<li>SOUTHBOUND and NORTHBOUND flows were both sells, respectively, but liquid Hs with H/A pairs OUT-perform As on average by 100+bp. Liquidation by overseas investors feels finished.</li>
<li><strong>STILL time to go long Hs vs As for the new year at 52wk wide discounts.</strong></li>
</ul>


The New and Better (5mos old) A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
SOUTHBOUND and NORTHBOUND flows were both sells, respectively, but liquid Hs with H/A pairs OUT-perform As on average by 100+bp. Liquidation by overseas investors feels finished.
STILL time to go long Hs vs As for the new year at 52wk wide discounts.


A/H Premium Tracker (To 22 Dec 23): Wide Premia Narrow; Narrow Premia Widen. Stay Long Hs Vs As

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of December 22nd.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We have highlighted Hong Kong Conncect flows for CNOOC and Tencent.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of December 22nd.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We have highlighted Hong Kong Conncect flows for CNOOC and Tencent.


Hong Kong Connect Flows (Dec 22nd): CNOOC, Tencent

China

Tencent Holdings Limited operates as an investment holding company. The Company, through its subsidiaries, provides Internet and mobile value-added services (VAS), online advertising, and e-commerce transactions. Tencent Holdings offers services to users worldwide.

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

Tencent (700 HK)

China Strategy: Are We Still Going to Have January Effect in 2024?

China's industrial profit growth accelerated to 29.5% YoY in Nov, from just a 2.7% increase in Oct, suggesting initial impacts from the series of...

Osbert Tang, CFA

[Blue Lotus Daily - TMT Update]: 700 HK/NTES/BILI/002624 CH/300299 CH/3690 HK/AMZN/PDD/Shein

The NPPA seeks public opinion on internet game regulations, while imported game code approvals are announced. Local merchants express discontent...

Blue Lotus Research Institute

Tencent/Netease: Netease Tops '23 League Table with Most Games Approved

China's game approval process is picking up speed, with more games approved in December. Netease emerged as the leader in game approvals for the...

Ke Yan, CFA, FRM

A/H Premium Tracker (To 22 Dec 23): Wide Premia Narrow; Narrow Premia Widen. Stay Long Hs Vs As

Large cap and liquid Hs in H/A Pairs underperformed their As by 60bp, most of that on Friday on the gaming news. High A premium pairs saw Hs...

Travis Lundy

Hong Kong Connect Flows (Dec 22nd): CNOOC, Tencent

We analyzed southbound Hong Kong connect flows in the past week and highlight Hong kong weekly flows for CNOOC and Tencent.

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China Strategy: Are We Still Going to Have January Effect in 2024?

China's industrial profit growth accelerated to 29.5% YoY in Nov, from just a 2.7% increase in Oct, suggesting initial impacts from the series of...

Osbert Tang, CFA

[Blue Lotus Daily - TMT Update]: 700 HK/NTES/BILI/002624 CH/300299 CH/3690 HK/AMZN/PDD/Shein

​The NPPA seeks public opinion on internet game regulations, while imported game code approvals are announced. Local merchants express discontent...

Blue Lotus Research Institute

Tencent/Netease: Netease Tops '23 League Table with Most Games Approved

​China's game approval process is picking up speed, with more games approved in December. Netease emerged as the leader in game approvals for the...

Ke Yan, CFA, FRM

A/H Premium Tracker (To 22 Dec 23): Wide Premia Narrow; Narrow Premia Widen. Stay Long Hs Vs As

Large cap and liquid Hs in H/A Pairs underperformed their As by 60bp, most of that on Friday on the gaming news. High A premium pairs saw Hs...

Travis Lundy

Hong Kong Connect Flows (Dec 22nd): CNOOC, Tencent

We analyzed southbound Hong Kong connect flows in the past week and highlight Hong kong weekly flows for CNOOC and Tencent.

Ke Yan, CFA, FRM

The NPPA seeks public opinion on internet game regulations, while imported game code approvals are announced. Local merchants express discontent...

China's game approval process is picking up speed, with more games approved in December. Netease emerged as the leader in game approvals for the...