HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>The Rmb6trn of the new debt swap quota may disappoint the market given the lack of one-time direct stimulus. However, the underlying implications should not be overlooked.</li>
<li>A better balance sheet and savings in interest expenses will free up the resources of local governments, benefiting <a href="https://www.smartkarma.com/entities/china-communications-construction-co-ltd" target="_blank" data-smartkarma-citation="entities:265:1" rel="noopener">China Communications Construction (1800 HK)</a> and <a href="https://www.smartkarma.com/entities/china-everbright-environment-group-limited" target="_blank" data-smartkarma-citation="entities:15946:1" rel="noopener">China Everbright Environment (257 HK)</a>. </li>
<li>Shanghai has immediately rolled out consumption coupon distribution, which is positive for companies in the restaurant, travel, movies, and sports sectors. </li>
</ul>


The Rmb6trn of the new debt swap quota may disappoint the market given the lack of one-time direct stimulus. However, the underlying implications should not be overlooked.
A better balance sheet and savings in interest expenses will free up the resources of local governments, benefiting China Communications Construction (1800 HK) and China Everbright Environment (257 HK). 
Shanghai has immediately rolled out consumption coupon distribution, which is positive for companies in the restaurant, travel, movies, and sports sectors. 


China & HK Strategy: Stock Ideas on China's Debt Swap Plan

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Bottom-Up

<ul>
<li>September's growth in activity still solid for domestic &amp; international traffic</li>
<li>Golden Week anecdotes suggests Chinese tourists remain active, but frugal</li>
<li>Trip.com has shown stellar YTD performance, but airlines offer more upside</li>
</ul>


September's growth in activity still solid for domestic &amp; international traffic
Golden Week anecdotes suggests Chinese tourists remain active, but frugal
Trip.com has shown stellar YTD performance, but airlines offer more upside


Monthly Chinese Tourism Tracker | Still-Solid Growth in September | Consider Airlines (October 2024)

<ul>
<li>By many metrics, Chinese airlines' recent performance exceeds pre-Covid levels</li>
<li>Medium-Term, ongoing int'l recovery and benign fuel prices can boost margins</li>
<li>We believe the airlines could recoup weak relative performance vs Trip.com</li>
</ul>


By many metrics, Chinese airlines' recent performance exceeds pre-Covid levels
Medium-Term, ongoing int'l recovery and benign fuel prices can boost margins
We believe the airlines could recoup weak relative performance vs Trip.com


Rebound in Int'l Demand & Benign Fuel Prices Could Support Recovery in Chinese Airlines' Share Perf

China Southern Airlines / Equity Bottom-Up

<ul>
<li>Outbound &amp; domestic travel activity continued to recover nicely in August</li>
<li>Initial reports suggest Mid-Autumn Festival travel activity was solid, too</li>
<li>After recent surge, we've cut Trip.com to HOLD; check out airlines instead</li>
</ul>


Outbound &amp; domestic travel activity continued to recover nicely in August
Initial reports suggest Mid-Autumn Festival travel activity was solid, too
After recent surge, we've cut Trip.com to HOLD; check out airlines instead


Monthly Chinese Tourism Tracker: Solid Outbound & Domestic Numbers in August | Cut Trip.com to HOLD

<ul>
<li>Media rife with narrative of booming inbound foreign tourism to China</li>
<li>But the numbers are well below historical highs, and climbing up from low base</li>
<li>Chinese tourists, not foreign, determine strength of Chinese tourism recovery</li>
</ul>


Media rife with narrative of booming inbound foreign tourism to China
But the numbers are well below historical highs, and climbing up from low base
Chinese tourists, not foreign, determine strength of Chinese tourism recovery


Chinese Inbound Foreign Tourist Arrivals Up 153% Y/Y in H124?! Much Ado About (Almost) Nothing

China

Tongcheng Travel Holdings Limited operates as an online travel agency. The Company provides transportation ticketing, accommodation reservation, value added travel products sales, and other services. Tongcheng Travel Holdings provides its services throughout China.

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Tongcheng Travel Holdings (780 HK)

China & HK Strategy: Stock Ideas on China's Debt Swap Plan

China's new debt swap quota will benefit local governments and infrastructure companies. Shanghai's consumption coupon distribution is positive for...

Osbert Tang, CFA

Monthly Chinese Tourism Tracker | Still-Solid Growth in September | Consider Airlines (October 2024)

Chinese domestic and outbound air travel continued to show solid growth in September and Q3. The airlines have managed capacity restoration well...

Tracking Traffic

Monthly Chinese Tourism Tracker: Solid Outbound & Domestic Numbers in August | Cut Trip.com to HOLD

Chinese travel activity in August continued its gradual recovery, and early reports from the recent Mid Autumn Festival suggest activity remained...

Tracking Traffic

Chinese Inbound Foreign Tourist Arrivals Up 153% Y/Y in H124?! Much Ado About (Almost) Nothing

Yes, foreign inbound travel to China has shown strong growth so far in 2024, but the numbers are rising from a very low base, and ultimately matter...

Tracking Traffic

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China & HK Strategy: Stock Ideas on China's Debt Swap Plan

China's new debt swap quota will benefit local governments and infrastructure companies. Shanghai's consumption coupon distribution is positive for...

Osbert Tang, CFA

Monthly Chinese Tourism Tracker | Still-Solid Growth in September | Consider Airlines (October 2024)

Chinese domestic and outbound air travel continued to show solid growth in September and Q3. The airlines have managed capacity restoration well...

Tracking Traffic

Rebound in Int'l Demand & Benign Fuel Prices Could Support Recovery in Chinese Airlines' Share Perf

We believe improvement in Chinese outbound demand combined with benign fuel prices could lift shares of China's large state-owned airlines,...

Tracking Traffic

Monthly Chinese Tourism Tracker: Solid Outbound & Domestic Numbers in August | Cut Trip.com to HOLD

Chinese travel activity in August continued its gradual recovery, and early reports from the recent Mid Autumn Festival suggest activity remained...

Tracking Traffic

Chinese Inbound Foreign Tourist Arrivals Up 153% Y/Y in H124?! Much Ado About (Almost) Nothing

Yes, foreign inbound travel to China has shown strong growth so far in 2024, but the numbers are rising from a very low base, and ultimately matter...

Tracking Traffic