HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>State Council's announcement of China 14th 5-year Tourism Industry Development Plan recently should see positive policies and supportive measures to be rolled out over the medium term. </li>
<li>
<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>, <a href="https://www.smartkarma.com/entities/china-tourism-group-duty-free-corp-ltd" target="_blank" data-smartkarma-citation="entities:12278:1" rel="noopener">China Tourism Group Duty Free Corp Ltd (601888 CH)</a>, <a href="https://www.smartkarma.com/entities/china-travel-international-investment-hong-kong" target="_blank" data-smartkarma-citation="entities:3879:1" rel="noopener">China Travel International Investment (308 HK)</a> and <a href="https://www.smartkarma.com/entities/haichang-ocean-park-holdings-ltd" target="_blank" data-smartkarma-citation="entities:11396:1" rel="noopener">Haichang Ocean Park (2255 HK)</a> are some key beneficiaries.</li>
<li>We believe <a href="https://www.smartkarma.com/entities/air-china-ltd-h" target="_blank" data-smartkarma-citation="entities:8239:1" rel="noopener">Air China Ltd (H) (753 HK)</a> will benefit from the recovery of international air passenger as the Plan highlights the importance of promoting inbound/outbound tourism after the pandemic.</li>
</ul>


State Council's announcement of China 14th 5-year Tourism Industry Development Plan recently should see positive policies and supportive measures to be rolled out over the medium term. 

Fosun Tourism (1992 HK), China Tourism Group Duty Free Corp Ltd (601888 CH), China Travel International Investment (308 HK) and Haichang Ocean Park (2255 HK) are some key beneficiaries.
We believe Air China Ltd (H) (753 HK) will benefit from the recovery of international air passenger as the Plan highlights the importance of promoting inbound/outbound tourism after the pandemic.


Beneficiaries of China's 14th 5-Year Tourism Industry Development Plan

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

The Hang Seng Indexes Company Limited (HSIL) announced the results of its review of the Hang Seng Family of Indexes post market close on 26 February. The constituent changes will be effective after the close of trading on 12 March.For the Hang Seng Composite Index (HSCI) there are 36 inclusions and 29 deletions, taking the number of index constituents up to 500.Although there are almost no assets indexed to the HSCI, the index forms the basis of stocks that are eligible for Southbound Stock Connect. Stocks that are included in the HSCI and subsequently included in the Stock Connect program get inflows from mainland investors. Secondary Listings are not eligible for inclusion in the Stock Connect program.Of the 36 inclusions, 4 are already a part of Stock Connect by virtue of having listed A-shares, 2 are Secondary listings and will not be included in Stock Connect, 9 will be added to Shanghai and Shenzhen Stock Connect, while 21 stocks will only be added to Shenzhen Stock Connect.Of the 29 index deletions, 13 are not a part of Stock Connect, 7 will continue to remain a part of Stock Connect by virtue of having listed A-shares, while 9 will be deleted from the Stock Connect program.We identify 4 stocks that could sell off ahead of their removal from the Stock Connect Buy list, while Biotech stocks could be in focus ahead of their inclusion in the Stock Connect Buy and Sell list.

The Hang Seng Indexes Company Limited (HSIL) announced the results of its review of the Hang Seng Family of Indexes post market close on 26 February. The constituent changes will be effective after the close of trading on 12 March.For the Hang Seng Composite Index (HSCI) there are 36 inclusions and 29 deletions, taking the number of index constituents up to 500.Although there are almost no assets indexed to the HSCI, the index forms the basis of stocks that are eligible for Southbound Stock Connect. Stocks that are included in the HSCI and subsequently included in the Stock Connect program get inflows from mainland investors. Secondary Listings are not eligible for inclusion in the Stock Connect program.Of the 36 inclusions, 4 are already a part of Stock Connect by virtue of having listed A-shares, 2 are Secondary listings and will not be included in Stock Connect, 9 will be added to Shanghai and Shenzhen Stock Connect, while 21 stocks will only be added to Shenzhen Stock Connect.Of the 29 index deletions, 13 are not a part of Stock Connect, 7 will continue to remain a part of Stock Connect by virtue of having listed A-shares, while 9 will be deleted from the Stock Connect program.We identify 4 stocks that could sell off ahead of their removal from the Stock Connect Buy list, while Biotech stocks could be in focus ahead of their inclusion in the Stock Connect Buy and Sell list.

HSCI Index Rebalance & Stock Connect: Inclusions & Exclusions

Equity Bottom-Up

China Tourism Group Duty Free Corp Ltd / Equity Bottom-Up

The approvals of more players in the Hainan duty free market at end-2020 is likely to pose challenge to <a href="https://www.smartkarma.com/entities/china-tourism-group-duty-free-corp-ltd" target="_blank" data-smartkarma-citation="entities:12278:1" rel="noopener">China Tourism Group Duty Free Corp Ltd (601888 CH)</a> only in the long term, given the weaker relative competitiveness of the new entrants, CTG Duty Free's established strengths and the sustained positive growth in the overall market. Despite so, we see a trend of rise in competition in China's duty free industry, which is a threat that it cannot overlook in the long run.With the Dec (up to 28th) duty free sales value maintained a solid growth of over 150% YoY, the sustained market growth will offer CTG Duty Free a near-term buffer to competition. The low base in 1H20 as well as the limited appetite of overseas travel due to new coronavirus strains will continue to be positive factors for the company at least in the next six months.

The approvals of more players in the Hainan duty free market at end-2020 is likely to pose challenge to China Tourism Group Duty Free Corp Ltd (601888 CH) only in the long term, given the weaker relative competitiveness of the new entrants, CTG Duty Free's established strengths and the sustained positive growth in the overall market. Despite so, we see a trend of rise in competition in China's duty free industry, which is a threat that it cannot overlook in the long run.With the Dec (up to 28th) duty free sales value maintained a solid growth of over 150% YoY, the sustained market growth will offer CTG Duty Free a near-term buffer to competition. The low base in 1H20 as well as the limited appetite of overseas travel due to new coronavirus strains will continue to be positive factors for the company at least in the next six months.

CTG Duty Free Corp (601888 CH): Facing More Competition in a Rapidly Growing Market

APAC IPOs & Placements

Zhen Zhou, Toh

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 Capital Markets

Singapore Airlines / Equity Capital Markets

As global markets rebound and businesses start to feel impact of the virus outbreak, there will likely be companies looking to access capital markets to shore up their balance sheet. <a href="https://www.smartkarma.com/entities/singapore-airlines-ltd" target="_blank" data-smartkarma-citation="entities:74:1" rel="noopener">Singapore Airlines (SIA SP)</a>'s rights issue was a case in point.
In this insight, we will explore what are some Asia-Pacific companies that may breach their debt covenants and will likely look to raise capital in the near-term.

As global markets rebound and businesses start to feel impact of the virus outbreak, there will likely be companies looking to access capital markets to shore up their balance sheet. Singapore Airlines (SIA SP)'s rights issue was a case in point.
In this insight, we will explore what are some Asia-Pacific companies that may breach their debt covenants and will likely look to raise capital in the near-term.

Potential Trade Ideas - Asia-Pacific Companies that May Access Capital Markets

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

Shanghai Henlius Biotech  / Equity Capital Markets

Shanghai Henlius, a biotech subsidiary of Fosun Pharma, launched book building today to raise up to USD 477 million.
In our previous insights covering Shanghai Henlius, we have covered the company's key drug pipelines, the management, shareholders, investors, and a SOTP based valuation.
In this insight, we will provide our final thoughts on the deal based on the price range. We think the company is overvalued and would avoid the deal. 
<div>
<h2>Our coverage on Shanghai Henlius Biotech</h2>
</div>
<ul>
<li><a href="https://www.smartkarma.com/insights/shanghai-henlius-ipo-not-an-impressive-biosimilar-portfolio" target="_blank" rel="noopener">Shanghai Henlius (复宏汉霖) IPO: Not an Impressive Biosimilar Portfolio</a></li>
<li><a href="https://www.smartkarma.com/insights/shanghai-henlius-ipo-valuation-of-four-biosimilars" target="_blank" rel="noopener">Shanghai Henlius (复宏汉霖) IPO: Valuation of Four Biosimilars</a></li>
<li><a href="https://www.smartkarma.com/insights/shanghai-henlius-ipo-what-s-new-in-the-re-filed-prospectus" target="_blank" rel="noopener">Shanghai Henlius (复宏汉霖) IPO: What’s New in the Re-Filed Prospectus?</a></li>
<li><a href="https://www.smartkarma.com/insights/shanghai-henlius-ipo-thoughts-on-valuation" target="_blank" rel="noopener">Shanghai Henlius (复宏汉霖) IPO: Thoughts on Valuation</a></li>
</ul>

Shanghai Henlius, a biotech subsidiary of Fosun Pharma, launched book building today to raise up to USD 477 million.
In our previous insights covering Shanghai Henlius, we have covered the company's key drug pipelines, the management, shareholders, investors, and a SOTP based valuation.
In this insight, we will provide our final thoughts on the deal based on the price range. We think the company is overvalued and would avoid the deal. 

Our coverage on Shanghai Henlius Biotech


Shanghai Henlius (复宏汉霖) IPO: Not an Impressive Biosimilar Portfolio
Shanghai Henlius (复宏汉霖) IPO: Valuation of Four Biosimilars
Shanghai Henlius (复宏汉霖) IPO: What’s New in the Re-Filed Prospectus?
Shanghai Henlius (复宏汉霖) IPO: Thoughts on Valuation


Shanghai Henlius (复宏汉霖) IPO: Thoughts on Price Range, Cornerstone, Valuation Trap

Hong Kong

Cafe De Coral Holdings Limited, through its subsidiaries, operates quick service restaurants, fast casual dining, institutional catering and specialty restaurant chains, and food manufacturing business.

China Travel International Investment Hong Kong Limited, through its subsidiaries, operates tourist attractions, golf clubs, hotels, and other travel related activities.  The Company also provides passenger transportation as well as freight forwarding and cargo services.

China Travel International Investment Hong Kong (308 HK)

China Travel International Investment Hong Kong

Regal Hotels International Holdings Limited owns and operates hotels.  The Company also manages and invests in real estate properties as well as invests in and trades financial instruments and marketable securities.  In addition, Regal hotel operates brewery, operates restaurants, and provides travel and florist and wedding services.

Miramar Hotel and Investment Company Limited, through its subsidiaries, invests in, develops, and sells properties. The Company also owns and manages hotels, operates food and beverage business, and provides travel services.

Melco International Development Limited, through its subsidiaries, operates investment banking, financial services, technology, fine-dining, leisure and tourism, property investment, and investment businesses. The Company carries on financial service businesses under the VC CFN and VC CEF brand names.  Melco also customizes and sells trading and back office systems under the iAsia name.

Sino Hotels Holdings Limited, through its subsidiaries, operates hotels and clubs.  The Company also invests in securities and provides hotel management services.

China Star Entertainment Limited, through its subsidiaries, principally engaged in the production and distribution of films and television drama series that are based in Chinese dialect. The Company also invests the gaming promotion business, property and hotel investments.

Fairwood Holdings Limited, through its subsidiaries, operates a chain of fast food restaurants.  The Company also invests in properties.

Ajisen (China) Holdings Limited operates a chain of casual restaurants that offers Japanese ramen and Japanese-style dishes in Hong Kong and People's Republic of China.

China Energy Development Holdings Limited, through its subsidiaries, is engaged in the sale of food and beverages in Hong Kong and exploration and production of natural gas in the People's Republic of China (PRC).

China Energy Development Holdings Ltd (228 HK)

LiJiang YuLong Tourism Co., Ltd. provides travel services in Lijiang, Yunnan. The Company provides cableway transportation, bus transportation, food and beverages services, and other related tourism services.

HIDAY HIDAKA Corp. operates a chain of Oriental noodle and Chinese restaurants mainly in Saitama Prefecture.  The Company produces noodles, soup, and dumplings at its own factory.

DOUTOR NICHIRES Holdings Co., Ltd is establish through merger of DOUTOR COFFEE and NIPPON RESTAURANT SYSTEM.  The Company operates a coffee shop and restaurant chain. DOUTOR NICHIRES manages all business operations, from producing and procuring coffee beans to roasting, wholesaling, and retailing.

Biglari Holdings Inc. operates as a holding company. The Company, through its subsidiaries, invests in food and insurance companies. Biglari Holdings serves clients in the State of Texas.

Hana Tour Service Inc. wholesales a variety of travel related services.  The Company provides outbound, inbound and domestic travel packages and cooperates with credit card companies and Internet shopping malls to market its services. Hana Tour Service also works as general sales agency (GSA) of overseas cruise and rail passes.

Chuy's Holdings Inc. is a full-service restaurant concept offering a distinct menu of authentic Mexican food.  The Company operates chains throughout Texas, Alabama, Indiana, Kentucky, and Tennessee.

MOS Food Services Inc operates hamburger chain stores.  The Company started out by selling Teriyaki Hamburgers.  The Company also sells rice burgers, hot dogs, and fried chicken.  Mos Food has a branch store in Hawaii, Taiwan, and Singapore.

Lotte Tour Development Co., Ltd. provides various tour package service. The Company franchises travel agencies, offers home-based travel businesses, and provides leisure-travel information.  The Company also engages in property development and building management and operates duty-free shop business.

Lotte Tour Development Co, Ltd. (032350 KS)

Wowprime Corp manages restaurants and provides catering services varying from steaks, Japanese style cuisines to curries and vegetarian foods.

Wonderla Holidays Limited owns and operates two amusement parks in Kochi and Bangalore, India.

Fosun Tourism Group operates as a leisure focused integrated tourism group. The Company provides resorts management, tourism destinations development, and other related services. Fosun Tourism Group offers its services worldwide.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Fosun Tourism (1992 HK)

Beneficiaries of China's 14th 5-Year Tourism Industry Development Plan

China's 14th 5-year Tourism Development Plan are positive to many players in the tourism industry. We expect more favourable policies and...

Osbert Tang, CFA

HSCI Index Rebalance & Stock Connect: Inclusions & Exclusions

There are 36 inclusions/ 29 exclusions for the Hang Seng Composite Index. 9 stocks will be deleted from the Stock Connect Buy list & there are a...

Brian Freitas

CTG Duty Free Corp (601888 CH): Facing More Competition in a Rapidly Growing Market

New players to Hainan duty free market will not bring near-term impact to CTG Duty Free's leadership, but can be long-term challenges. However,...

Osbert Tang, CFA

Potential Trade Ideas - Asia-Pacific Companies that May Access Capital Markets

As global markets rebound and businesses start to feel impact of the virus outbreak, there will likely be companies looking to access capital...

Zhen Zhou, Toh

Shanghai Henlius (复宏汉霖) IPO: Thoughts on Price Range, Cornerstone, Valuation Trap

Shanghai Henlius, a biotech subsidiary of Fosun Pharma, launched book building today to raise up to USD 477 million. In our previous insights...

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)