Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Quantitative Analysis

<p>This insight re-introduces a weekly monitor for H-Share/A-Share spreads.</p>
<p>The monitor will be published every weekend for the data ending the previous week. It includes all stocks where the H-Share has a 90-day average daily value-traded of US$1.0mm or more. It shows basic data per H/A spread stock by sector, with...</p>
<ul>
<li>H/A Discount,</li>
<li>movement in H/A Discount over 5 and 20 days,</li>
<li>a 52-week Z-score for the spread,</li>
<li>A chart showing evolution of the H/A spread over the last 20 days,</li>
<li>Southbound shares held (millions of shares), Net Change in Southbound (Shanghai and Shenzhen combined) shares held by millions of shares, and contribution of Net Southbound Volume to HK-traded volume over the past five days and 20 days, </li>
<li>There is also a chart showing the narrowest and widest spread and the average spread over the last three years. </li>
</ul>
<p>In the example for the H/A spreads in the <strong>Materials</strong> sector below, spreads were generally flat over the past five days and were wider by 1.5% over the past 20 days. Southbound were net buyers on average on the H side of each pair over both 5 days and 20 days. <a href="https://www.smartkarma.com/entities/shandong-gold-mining-co-ltd-61153493-5437-47ee-a8d3-aec41fb7f1da" target="_blank" data-smartkarma-citation="entities:27455:1" rel="noopener">Shandong Gold Mining Co., Ltd. (1787 HK)</a> and <a href="https://www.smartkarma.com/entities/ganfeng-lithium-co-ltd" target="_blank" data-smartkarma-citation="entities:26795:1" rel="noopener">Ganfeng Lithium (1772 HK)</a> are spreads at the relatively narrow end of their 52-week ranges, while <a href="https://www.smartkarma.com/entities/maanshan-iron-steel-h" target="_blank" data-smartkarma-citation="entities:204:1" rel="noopener">Maanshan Iron &amp; Steel H (323 HK)</a>, <a href="https://www.smartkarma.com/entities/bbmg-corp-h" target="_blank" data-smartkarma-citation="entities:2821:1" rel="noopener">BBMG Corp H (2009 HK)</a>, <a href="https://www.smartkarma.com/entities/sinopec-shanghai-petrochemical-co-ltd" target="_blank" data-smartkarma-citation="entities:17576:1" rel="noopener">Sinopec Shanghai Petrochemical (338 HK)</a>, and <a href="https://www.smartkarma.com/entities/anhui-conch-cement-co-ltd" target="_blank" data-smartkarma-citation="entities:159:1" rel="noopener">Anhui Conch Cement Co Ltd H (914 HK)</a> are at the wider end of their 52-week ranges. The average spread in the sector widened somewhat dramatically in the month of August as seen on the chart, but stabilized at the beginning of September.</p>
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<p>Commentary is offered for the major movers and influences along with market observations on the sector rotation movement and particularly significant changes.</p>
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<p>Recommendations are in highlights like this.</p>
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<p>More below the fold.  </p>
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<p><em>By the way, there are two versions of the Spread Evolution mini charts. Input is welcomed in the Discussion section as to which one is preferred (bars or lines).</em></p>
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This insight re-introduces a weekly monitor for H-Share/A-Share spreads.
The monitor will be published every weekend for the data ending the previous week. It includes all stocks where the H-Share has a 90-day average daily value-traded of US$1.0mm or more. It shows basic data per H/A spread stock by sector, with...

H/A Discount,
movement in H/A Discount over 5 and 20 days,
a 52-week Z-score for the spread,
A chart showing evolution of the H/A spread over the last 20 days,
Southbound shares held (millions of shares), Net Change in Southbound (Shanghai and Shenzhen combined) shares held by millions of shares, and contribution of Net Southbound Volume to HK-traded volume over the past five days and 20 days, 
There is also a chart showing the narrowest and widest spread and the average spread over the last three years. 

In the example for the H/A spreads in the Materials sector below, spreads were generally flat over the past five days and were wider by 1.5% over the past 20 days. Southbound were net buyers on average on the H side of each pair over both 5 days and 20 days. Shandong Gold Mining Co., Ltd. (1787 HK) and Ganfeng Lithium (1772 HK) are spreads at the relatively narrow end of their 52-week ranges, while Maanshan Iron &amp; Steel H (323 HK), BBMG Corp H (2009 HK), Sinopec Shanghai Petrochemical (338 HK), and Anhui Conch Cement Co Ltd H (914 HK) are at the wider end of their 52-week ranges. The average spread in the sector widened somewhat dramatically in the month of August as seen on the chart, but stabilized at the beginning of September.






Commentary is offered for the major movers and influences along with market observations on the sector rotation movement and particularly significant changes.

Recommendations are in highlights like this.


More below the fold.  

By the way, there are two versions of the Spread Evolution mini charts. Input is welcomed in the Discussion section as to which one is preferred (bars or lines).


Quiddity Weekly H/A: Share Spread Monitor 16 Oct 2020

HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

China Conch Venture Holdings / Equity Bottom-Up

<p>In our view, <a href="https://www.smartkarma.com/entities/china-conch-venture-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19943:1" rel="noopener">China Conch Venture Holdings (586 HK)</a> is well positioned to capture the opportunities posed by both the rise in environment protection and increase in infrastructure investment in China. Its energy preservation and environmental protection business has experienced encouraging growth while through its 17.8% holding in <a href="https://www.smartkarma.com/entities/anhui-conch-cement-co-ltd" target="_blank" data-smartkarma-citation="entities:159:1" rel="noopener">Anhui Conch Cement Co Ltd H (914 HK)</a>, it can benefit from higher cement demand driven by China's escalating infrastructure investments.</p><p>After posting a 30.1% YoY growth in 1H20, we expect outlook for its environmental business to stay promising due to: 1.) completion of pipeline projects, 2.) excellent capability to secure projects, 3.) good execution strength, 4.) positive margin outlook and 5.) solid financial position. At 7x PER and 1.3x P/B on a 12-month forward basis, we see Conch Venture inexpensive. Its average annual ROE of 20.8% for the next three years also affirms that valuations are attractive.</p>

In our view, China Conch Venture Holdings (586 HK) is well positioned to capture the opportunities posed by both the rise in environment protection and increase in infrastructure investment in China. Its energy preservation and environmental protection business has experienced encouraging growth while through its 17.8% holding in Anhui Conch Cement Co Ltd H (914 HK), it can benefit from higher cement demand driven by China's escalating infrastructure investments.After posting a 30.1% YoY growth in 1H20, we expect outlook for its environmental business to stay promising due to: 1.) completion of pipeline projects, 2.) excellent capability to secure projects, 3.) good execution strength, 4.) positive margin outlook and 5.) solid financial position. At 7x PER and 1.3x P/B on a 12-month forward basis, we see Conch Venture inexpensive. Its average annual ROE of 20.8% for the next three years also affirms that valuations are attractive.

Conch Venture (586 HK): The Best of Both Worlds

David Blennerhassett

Event-Driven

Last Week in Event SPACE: Sembcorp, Keppel, Cathay Pacific, China Conch, BHP, Swire, Huya/Douyu

China Conch Venture Holdings / Event-Driven

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<p>This week in StubWorld ...</p>
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<p><a href="https://www.smartkarma.com/entities/china-conch-venture-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19943:1" rel="noopener">China Conch Venture Holdings (586 HK)</a> continues to underperform 17.8%-held <a href="https://www.smartkarma.com/entities/anhui-conch-cement-co-ltd-094855ab-abec-4b71-956b-5bfc85e22fdd" target="_blank" data-smartkarma-citation="entities:389:1" rel="noopener">Anhui Conch Cement Co Ltd A (600585 CH)</a>, with the implied stub at its lowest level since CCV was listed in December 2013.</p>
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<p>Preceding my comments on CCV and <a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd" target="_blank" data-smartkarma-citation="entities:7196:1" rel="noopener">Haier Smart Home (600690 CH)</a> / <a href="https://www.smartkarma.com/entities/haier-electronics-group-co" target="_blank" data-smartkarma-citation="entities:4877:1" rel="noopener">Haier Electronics Group Co (1169 HK)</a>, are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
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<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
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This week in StubWorld ...




China Conch Venture Holdings (586 HK) continues to underperform 17.8%-held Anhui Conch Cement Co Ltd A (600585 CH), with the implied stub at its lowest level since CCV was listed in December 2013.




Preceding my comments on CCV and Haier Smart Home (600690 CH) / Haier Electronics Group Co (1169 HK), are the weekly setup/unwind tables for Asia-Pacific Holdcos.




These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.




StubWorld: Waste Not, Want Not. China Conch Venture's All-Time Low

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

<p>The Hang Seng Stock Connect China AH Premium Index (HSAHP) measures the absolute price premium or discount of A-shares over H-shares for the largest and most liquid mainland China companies with both A-share and H-share listings.</p><p>The HSAHP Index has fluctuated a lot over the last 10 years, reaching a high of 149.03 (A-shares trading at a 49% premium to H-shares) in July 2015 and a low of 88.97 (A-shares trading at a discount of 11% to H-shares) in July 2014.</p><p>With retail investors rushing in to equities in China and pushing stocks higher in the mainland versus their Hong Kong line, a correction in markets could see the AH premium revert by around 10% as investors head for the exit. Insurance stocks and brokerages are trading at high AH premiums and near the top of the 5 year range.</p><p>In this Insight, we look at how the HSAHP index has moved over time and identify trading opportunities where the premium is trading near the high and low end of its historical ranges.</p>

The Hang Seng Stock Connect China AH Premium Index (HSAHP) measures the absolute price premium or discount of A-shares over H-shares for the largest and most liquid mainland China companies with both A-share and H-share listings.The HSAHP Index has fluctuated a lot over the last 10 years, reaching a high of 149.03 (A-shares trading at a 49% premium to H-shares) in July 2015 and a low of 88.97 (A-shares trading at a discount of 11% to H-shares) in July 2014.With retail investors rushing in to equities in China and pushing stocks higher in the mainland versus their Hong Kong line, a correction in markets could see the AH premium revert by around 10% as investors head for the exit. Insurance stocks and brokerages are trading at high AH premiums and near the top of the 5 year range.In this Insight, we look at how the HSAHP index has moved over time and identify trading opportunities where the premium is trading near the high and low end of its historical ranges.

China AH Premium: Trade Ideas As We Near Previous Highs

China

Anhui Conch Cement Company Limited manufactures cement products. The Company produces silicate cements, slag silicate cements, composite silicate cements, cement clinkers, and other products. Anhui Conch Cement Cement markets its products throughout China and worldwide.

Price Gauge
52-week Range	0.00 - 0.00
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Anhui Conch Cement (600585 CH)

Conch Venture (586 HK): The Best of Both Worlds

China Conch Venture Holdings (586 HK)

Osbert Tang, CFA

Last Week in Event SPACE: Sembcorp, Keppel, Cathay Pacific, China Conch, BHP, Swire, Huya/Douyu

Last Week in Event SPACE ... The dynamics here make this entire exercise regarding Sembcorp Marine (SMM SP) effectively a "Virtual IPO" or a...

David Blennerhassett

StubWorld: Waste Not, Want Not. China Conch Venture's All-Time Low

This week in StubWorld ... China Conch Venture Holdings (586 HK) continues to underperform 17.8%-held Anhui Conch Cement Co Ltd A (600585 CH),...

David Blennerhassett

China AH Premium: Trade Ideas As We Near Previous Highs

The Hang Seng Stock Connect China AH Premium Index (HSAHP) measures the absolute price premium or discount of A-shares over H-shares for the...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Quiddity Weekly H/A: Share Spread Monitor 16 Oct 2020

Weekly Monitor for H-Share/A-Share spreads showing spread/discount performance, spread Z-scores, southbound buying and selling and net activity...

Travis Lundy

Conch Venture (586 HK): The Best of Both Worlds

China Conch Venture Holdings (586 HK)

Osbert Tang, CFA

Last Week in Event SPACE: Sembcorp, Keppel, Cathay Pacific, China Conch, BHP, Swire, Huya/Douyu

Last Week in Event SPACE ... The dynamics here make this entire exercise regarding Sembcorp Marine (SMM SP) effectively a "Virtual IPO" or a...

David Blennerhassett

StubWorld: Waste Not, Want Not. China Conch Venture's All-Time Low

This week in StubWorld ... China Conch Venture Holdings (586 HK) continues to underperform 17.8%-held Anhui Conch Cement Co Ltd A (600585 CH),...

David Blennerhassett

China AH Premium: Trade Ideas As We Near Previous Highs

The Hang Seng Stock Connect China AH Premium Index (HSAHP) measures the absolute price premium or discount of A-shares over H-shares for the...

Brian Freitas