HK/China Equity Long-Short

Osbert Tang, CFA

Quantitative Analysis

<ul>
<li>Our Insight <a href="https://www.smartkarma.com/insights/is-there-a-january-effect-in-hang-seng-index" target="_blank" data-smartkarma-citation="insights:85565" rel="noopener">Is There a January Effect in Hang Seng Index?</a> correctly pointed to a strong Jan 2023. Based on historical pattern, Mar will be weak while Apr is positive.<a href="https://www.smartkarma.com/insights/smartkarma-webinar-is-there-still-hope-for-crypto-in-2023" target="_blank" data-smartkarma-citation="insights:86525" rel="noopener"></a>
</li>
<li>Macro factors including Russia-Ukraine war, Sino-US tension, disappointing US CPI and potentially weak 4Q22 corporate earnings are negative to HSI performance in Mar.</li>
<li>In Apr, focus may shift to positive factors which include improved clarity on US rate after FOMC meeting, better guidances for 1Q23 result and favourable policies after NPC/CPPCC.</li>
</ul>


Our Insight Is There a January Effect in Hang Seng Index? correctly pointed to a strong Jan 2023. Based on historical pattern, Mar will be weak while Apr is positive.

Macro factors including Russia-Ukraine war, Sino-US tension, disappointing US CPI and potentially weak 4Q22 corporate earnings are negative to HSI performance in Mar.
In Apr, focus may shift to positive factors which include improved clarity on US rate after FOMC meeting, better guidances for 1Q23 result and favourable policies after NPC/CPPCC.


What Is the Historical HSI Moves in Next Two Months, and Will It Follow This Year?

Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.In this Insight:<ol><li><a href='/entities/alam-sutera-realty-tbk-pt' target='_blank' rel='noopener'>Alam Sutera Realty</a></li><li><a href='/entities/china-sce-group-holdings-ltd' target='_blank' rel='noopener'>China SCE</a></li><li><a href='/entities/china-jinmao-holdings-group' target='_blank' rel='noopener'>China Jinmao Holdings</a></li><li><a href='/entities/lifestyle-international-holdings-ltd' target='_blank' rel='noopener'>Lifestyle International Holdings</a></li><li><a href='/entities/geely-automobile-holdings-ltd' target='_blank' rel='noopener'>Geely Auto</a></li></ol>and more...

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.In this Insight:Alam Sutera RealtyChina SCEChina Jinmao HoldingsLifestyle International HoldingsGeely Autoand more...

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.In this Insight:<ol><li><a href='/entities/wynn-macau-ltd' target='_blank' rel='noopener'>Wynn Macau Ltd</a></li><li><a href='/entities/vedanta-resources-ltd' target='_blank' rel='noopener'>Vedanta Resources</a></li><li><a href='/entities/softbank-group-corp' target='_blank' rel='noopener'>Softbank Group</a></li><li><a href='/entities/country-garden-holdings-co' target='_blank' rel='noopener'>Country Garden Holdings Co</a></li><li><a href='/entities/china-hongqiao-group-ltd' target='_blank' rel='noopener'>China Hongqiao</a></li></ol>and more...

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.In this Insight:Wynn Macau LtdVedanta ResourcesSoftbank GroupCountry Garden Holdings CoChina Hongqiaoand more...

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>China Hongqiao announced its FY22 profit warning stating an approximately 40% YoY bottom-line decline, largely in line with market expectations.</li><li>Two factors have contributed to such earnings drop including (i) rising raw materials and (ii) FX loss arising from the significant depreciation of RMB.</li><li>However, we believe the profit of the aluminum industry is expected to rebound in 2023E given the marginal cost improvement. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Hongqiao announced its FY22 profit warning stating an approximately 40% YoY bottom-line decline, largely in line with market expectations.Two factors have contributed to such earnings drop including (i) rising raw materials and (ii) FX loss arising from the significant depreciation of RMB.However, we believe the profit of the aluminum industry is expected to rebound in 2023E given the marginal cost improvement. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Hongqiao (1378 HK) – Expect a profit turnaround in 2023E

Adani Ports & Special Economic Zone / Credit

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.<ul><li><a href='#lucror-entity-246'>Adani Ports & Special Economic Zone</a></li><li><a href='#lucror-entity-1909'>China Hongqiao</a></li></ul>

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.Adani Ports & Special Economic ZoneChina Hongqiao

Morning Views Asia: Adani Ports & Special Economic Zone, China Hongqiao

China

China Hongqiao Group Ltd. manufactures aluminum products. The Company's aluminum products consist of molten aluminum alloy, aluminum alloy ingots and aluminum busbars.

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China Hongqiao (1378 HK)

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