HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<ul>
<li>Despite <a href="https://www.smartkarma.com/entities/shangri-la-asia-ltd" target="_blank" data-smartkarma-citation="entities:19690:1" rel="noopener">Shangri-La Asia (69 HK)</a>'s good share price performance YTD, it has still not yet fully reflected the strengths of and benefits from China's re-opening. More upside to come.</li>
<li>Occupancy for Hong Kong and mainland China has surged 30-45pp YoY in Mar, and with China's RevPAR for FY22 is down 56.5% from peak, we see massive rebound in profitability.</li>
<li>Share of China's EBITDA was US$258m in FY22, from US$465m in FY16-19, suggests good room for recovery. It is cheap on ~70% discount to revalued NAV, vs. 37% in FY18.</li>
</ul>


Despite Shangri-La Asia (69 HK)'s good share price performance YTD, it has still not yet fully reflected the strengths of and benefits from China's re-opening. More upside to come.
Occupancy for Hong Kong and mainland China has surged 30-45pp YoY in Mar, and with China's RevPAR for FY22 is down 56.5% from peak, we see massive rebound in profitability.
Share of China's EBITDA was US$258m in FY22, from US$465m in FY16-19, suggests good room for recovery. It is cheap on ~70% discount to revalued NAV, vs. 37% in FY18.


Shangri-La Asia (69 HK): Not yet Fully Reflected China's Comeback

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.

Quantitative Analysis

<ul>
<li>We analyze the monthly Shanghai/Shenzhen northbound Connect flows with our data engine.</li>
<li>Industrials (inflows of $3,132 million), Information Technology (inflows of $2,247 million), Health Care (inflows of $1,021 million) led the inflows.</li>
<li>We highlight flows for BOE, Wuliangye, Nari, Wanhua, Luzhou Laojiao, CMB, Longi Green, Foxconn, Ping An, Hithink.</li>
</ul>


We analyze the monthly Shanghai/Shenzhen northbound Connect flows with our data engine.
Industrials (inflows of $3,132 million), Information Technology (inflows of $2,247 million), Health Care (inflows of $1,021 million) led the inflows.
We highlight flows for BOE, Wuliangye, Nari, Wanhua, Luzhou Laojiao, CMB, Longi Green, Foxconn, Ping An, Hithink.


Northbound Flows Monthly (Mar): BOE, Wuliangye, Nari, Wanhua, Luzhou Laojiao

Thematic (Sector/Industry)

<ul>
<li>With re-opening of borders, China's tourism and hospitality industry should see encouraging earnings outlook over the next two years; and we are now only in the early stage of recovery.  </li>
<li>Online travel agencies and hotel and resorts operators including <a href="https://www.smartkarma.com/entities/tongcheng-elong-holdings-ltd" target="_blank" data-smartkarma-citation="entities:27363:1" rel="noopener">Tongcheng Travel Holdings (780 HK)</a>, <a href="https://www.smartkarma.com/entities/huazhu-group-ltd-79e0c5b5-ad55-42ed-b8d2-a2173defd0ea" target="_blank" data-smartkarma-citation="entities:33487:1" rel="noopener">H World Group (1179 HK)</a>, <a href="https://www.smartkarma.com/entities/trip-com-group-ltd-23a341d0-4f63-4175-a8c5-ee990906cacd" target="_blank" data-smartkarma-citation="entities:36424:1" rel="noopener">Trip.com (9961 HK)</a> and <a href="https://www.smartkarma.com/entities/fosun-tourism-group" target="_blank" data-smartkarma-citation="entities:27439:1" rel="noopener">Fosun Tourism (1992 HK)</a> are well positioned.</li>
<li>These companies all have sound business model, industry leadership position, solid competitive strengths, comprehensive customer coverage and, for some, meaningful global presence in their respective sub-sectors. </li>
</ul>


With re-opening of borders, China's tourism and hospitality industry should see encouraging earnings outlook over the next two years; and we are now only in the early stage of recovery.  
Online travel agencies and hotel and resorts operators including Tongcheng Travel Holdings (780 HK), H World Group (1179 HK), Trip.com (9961 HK) and Fosun Tourism (1992 HK) are well positioned.
These companies all have sound business model, industry leadership position, solid competitive strengths, comprehensive customer coverage and, for some, meaningful global presence in their respective sub-sectors. 


China Tourism and Hospitality Industry: A Year of Revenge

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of January 6th.</li>
<li>We estimate the weekly inflows to be US$2,907.9 million, led by financials, materials, information technology sectors.</li>
<li>We highlight flows for Ping An Insurance, Contemporary Amperex Technology Co.,, Wuliangye Yibin, Kweichow Moutai, East Money Information, Shenzhen Mindray Bio-Medical Electronics, Wuxi Lead Intelligent Equipment</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of January 6th.
We estimate the weekly inflows to be US$2,907.9 million, led by financials, materials, information technology sectors.
We highlight flows for Ping An Insurance, Contemporary Amperex Technology Co.,, Wuliangye Yibin, Kweichow Moutai, East Money Information, Shenzhen Mindray Bio-Medical Electronics, Wuxi Lead Intelligent Equipment


Northbound Flows (Jan 6th): Ping An Insurance, CATL, Wuliangye, Moutai, East Money

<ul>
<li>We analyze the monthly Shanghai/Shenzhen northbound Connect flows with our data engine.</li>
<li>Consumer Staples, Financials, Health Care led the inflows while Industrials , Information Technology led the outflows.</li>
<li>We highlight inflows into Wuliangye, Moutai, Ping An Insurance, China Tourism, Shenzhen Mindray,  and outflows from Yunnan Energy New Material, BJ-SH HSR, Nari Technology, Goertek.</li>
</ul>


We analyze the monthly Shanghai/Shenzhen northbound Connect flows with our data engine.
Consumer Staples, Financials, Health Care led the inflows while Industrials , Information Technology led the outflows.
We highlight inflows into Wuliangye, Moutai, Ping An Insurance, China Tourism, Shenzhen Mindray,  and outflows from Yunnan Energy New Material, BJ-SH HSR, Nari Technology, Goertek.


Northbound Flows Monthly: $4.6bn of Inflows

China

Shanghai International Airport Co., Ltd. operates Pudong Airport and Hongquiao airport in Shanghai.   The Company provides a full range of services including air traffic control, terminal management, cargo handling, advertising, space rental, and other related services.

Shanghai International Airport (600009 CH)

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Shanghai International Airport (600009 CH)

Shangri-La Asia (69 HK): Not yet Fully Reflected China's Comeback

Shangri-la Asia is an excellent play on recovery of China, where 55% of rooms are located. Its overseas assets will gain from surge in outbound...

Osbert Tang, CFA

Northbound Flows Monthly (Mar): BOE, Wuliangye, Nari, Wanhua, Luzhou Laojiao

We analyzed the Hong Kong Connect Scheme for March and highlight flows for BOE, Wuliangye, Nari, Wanhua, Luzhou Laojiao, CMB, Longi Green, Foxconn,...

Ke Yan, CFA, FRM

China Tourism and Hospitality Industry: A Year of Revenge

We are only in early stage of China's tourism and hospitality recovery, after its re-opening of borders in Jan. We identify Tongcheng, H World,...

Osbert Tang, CFA

Northbound Flows (Jan 6th): Ping An Insurance, CATL, Wuliangye, Moutai, East Money

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for Ping An Insurance, CALT, Wuliangye, Moutai, East...

Ke Yan, CFA, FRM

Northbound Flows Monthly: $4.6bn of Inflows

We analyzed the Shanghai/Shenzhen Connect Scheme for December and highlight flows for Wuliangye, Moutai, Ping An Insurance, China Tourism, Shenzhen...

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)