Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>A shares were up small on the week. The spivvier the better. HK was up better, especially among the liquid names.</li>
<li>Net SOUTHBOUND buying was +HK$21.4bn in the fourth post-holiday week vs +HK$17bn the week before. SOUTHBOUND has net bought every day since the end of Chinese New Year.</li>
<li>The flavour of SOUTHBOUND buying has been high-div SOEs for months and months. That is starting to change slightly. Tencent was a net buy the second week in a row. </li>
</ul>


A shares were up small on the week. The spivvier the better. HK was up better, especially among the liquid names.
Net SOUTHBOUND buying was +HK$21.4bn in the fourth post-holiday week vs +HK$17bn the week before. SOUTHBOUND has net bought every day since the end of Chinese New Year.
The flavour of SOUTHBOUND buying has been high-div SOEs for months and months. That is starting to change slightly. Tencent was a net buy the second week in a row. 


HK Connect SOUTHBOUND Flows (To 15 Mar 2024); Strong Net Buying on Tencent and ETFs

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

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>We believe total revenue will grow by 11% in 4Q23 and 2024.</li>
<li>We also believe the operating margin will improve slightly in 4Q23 and the following two years.</li>
<li>Tencent sold weak business to China Literature in December 2024.</li>
</ul>


We believe total revenue will grow by 11% in 4Q23 and 2024.
We also believe the operating margin will improve slightly in 4Q23 and the following two years.
Tencent sold weak business to China Literature in December 2024.


Tencent (700 HK) 4Q23 Earnings Preview: Stable Growth and Margin Improvement Will Continue

<ul>
<li>A shares were up small on the week. HK stock indices were down. </li>
<li>Net SOUTHBOUND buying was HK$17.1bn in the third post-holiday week. SOUTHBOUND has net bought every day since the end of Chinese New Year.</li>
<li>SOUTHBOUND continues to buy high-div SOEs. ex-div is still three months away, and given the new KPIs discussed late January by SASAC official, these still seem to be appropriate targets.</li>
</ul>


A shares were up small on the week. HK stock indices were down. 
Net SOUTHBOUND buying was HK$17.1bn in the third post-holiday week. SOUTHBOUND has net bought every day since the end of Chinese New Year.
SOUTHBOUND continues to buy high-div SOEs. ex-div is still three months away, and given the new KPIs discussed late January by SASAC official, these still seem to be appropriate targets.


HK Connect SOUTHBOUND Flows (To 8 Mar 2024); Big Net Buys of SOEs, Finally Tencent a Net Buy

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

<ul>
<li>WisdomTree has dropped ESG considerations while selecting stocks for the EMXSOE, CHXSOE and WTEMXC indices.</li>
<li>That results in a lot of inclusions and fewer deletions across indices that will be implemented at the close on 15 March.</li>
<li>The round-trip trade across the indices will exceed US$500m with <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> as the largest buy.</li>
</ul>


WisdomTree has dropped ESG considerations while selecting stocks for the EMXSOE, CHXSOE and WTEMXC indices.
That results in a lot of inclusions and fewer deletions across indices that will be implemented at the close on 15 March.
The round-trip trade across the indices will exceed US$500m with Tencent (700 HK) as the largest buy.


WisdomTree Indexes Special Rebalance: ESG Considerations Dropped

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

<ul>
<li>We expect Tencent to report C4Q23 revenue, IFRS op. profit and IFRS net income in line, (3.3%) and (4.9%) vs. consensus.</li>
<li>The robust topline growth was mainly contributed by fast growing WeChat VA (Video Account) and strong performances of &lt;Dream Star&gt; in December.</li>
<li>We cut our TP to HK$362 to reflect operating margin decline caused by increased sales and marketing. </li>
</ul>


We expect Tencent to report C4Q23 revenue, IFRS op. profit and IFRS net income in line, (3.3%) and (4.9%) vs. consensus.
The robust topline growth was mainly contributed by fast growing WeChat VA (Video Account) and strong performances of &lt;Dream Star&gt; in December.
We cut our TP to HK$362 to reflect operating margin decline caused by increased sales and marketing. 


[Tencent (700 HK, BUY, TP HK$362) TP Change]: Core Business Is Robust While VA Is Expanding Fast

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.

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Tencent (700 HK)

HK Connect SOUTHBOUND Flows (To 15 Mar 2024); Strong Net Buying on Tencent and ETFs

HK SOUTHBOUND Connect saw big net buying again. This week over HK$21bn. SOUTHBOUND has net bought every single day since the end of CNY. Starting...

Travis Lundy

Tencent (700 HK) 4Q23 Earnings Preview: Stable Growth and Margin Improvement Will Continue

We believe total revenue will grow by 11% in 4Q23 and 2024. Tencent sold a weak business to China Literature in December 2024.

Ming Lu

HK Connect SOUTHBOUND Flows (To 8 Mar 2024); Big Net Buys of SOEs, Finally Tencent a Net Buy

Hong Kong SOUTHBOUND Connect saw strong net buying again. SB has net purchased every day since the end of the Chinese New Year holiday. Tencent was...

Travis Lundy

WisdomTree Indexes Special Rebalance: ESG Considerations Dropped

WisdomTree has dropped ESG considerations while selecting stocks for the EMXSOE, CHXSOE and WTEMXC indices. The round-trip trade will be over...

Brian Freitas

[Tencent (700 HK, BUY, TP HK$362) TP Change]: Core Business Is Robust While VA Is Expanding Fast

Tencent's strong revenue growth driven by WeChat VA and <dream star>, but operating margin decline leads to lower price target of HK$362.</dream>

Blue Lotus Research Institute

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

HK Connect SOUTHBOUND Flows (To 15 Mar 2024); Strong Net Buying on Tencent and ETFs

HK SOUTHBOUND Connect saw big net buying again. This week over HK$21bn. SOUTHBOUND has net bought every single day since the end of CNY. Starting...

Travis Lundy

Tencent (700 HK) 4Q23 Earnings Preview: Stable Growth and Margin Improvement Will Continue

We believe total revenue will grow by 11% in 4Q23 and 2024. Tencent sold a weak business to China Literature in December 2024.

Ming Lu

HK Connect SOUTHBOUND Flows (To 8 Mar 2024); Big Net Buys of SOEs, Finally Tencent a Net Buy

Hong Kong SOUTHBOUND Connect saw strong net buying again. SB has net purchased every day since the end of the Chinese New Year holiday. Tencent was...

Travis Lundy

WisdomTree Indexes Special Rebalance: ESG Considerations Dropped

WisdomTree has dropped ESG considerations while selecting stocks for the EMXSOE, CHXSOE and WTEMXC indices. The round-trip trade will be over...

Brian Freitas

[Tencent (700 HK, BUY, TP HK$362) TP Change]: Core Business Is Robust While VA Is Expanding Fast

​Tencent's strong revenue growth driven by WeChat VA and <dream star>, but operating margin decline leads to lower price target of HK$362.</dream>

Blue Lotus Research Institute

Tencent's strong revenue growth driven by WeChat VA and <dream star>, but operating margin decline leads to lower price target of HK$362.</dream>