Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Hong Kong residential property prices declined 7% in 2023 and are down &gt;20% from the 2021 peak in 2021. The average price of offices also declined ~7% in 2023.</li>
<li>Scrapping property cooling measures, such as the special stamp duty applied to homes resold within 24 months, have been rumoured, to push up housing prices. </li>
<li>In today's annual budget, we got those. And then some. </li>
</ul>


Hong Kong residential property prices declined 7% in 2023 and are down &gt;20% from the 2021 peak in 2021. The average price of offices also declined ~7% in 2023.
Scrapping property cooling measures, such as the special stamp duty applied to homes resold within 24 months, have been rumoured, to push up housing prices. 
In today's annual budget, we got those. And then some. 


Hong Kong: Stamp Duties Axed; Mortgage Rules Relaxed

Equity Bottom-Up

<ul>
<li>After announcing flattish results for both parent and subsidiary, <a href="https://www.smartkarma.com/entities/hang-lung-group-ltd" target="_blank" data-smartkarma-citation="entities:50:1" rel="noopener">Hang Lung (10 HK)</a> announced Ronnie Chan is stepping down as chairman, with his son Adriel to assume the mantle. </li>
<li>Ronnie, 75-years of age, has been chairman since 1991. Adriel (42-years old) has been an ED since 2016 and vice-chairman since 2020. </li>
<li>Separately, HLG's 66% discount to NAV is wide for a straightforward parent-sub structure. The P/Bs for both HLG and <a href="https://www.smartkarma.com/entities/hang-lung-properties-ltd" target="_blank" data-smartkarma-citation="entities:49:1" rel="noopener">Hang Lung Properties (101 HK)</a> are around the lowest-ever levels. </li>
</ul>


After announcing flattish results for both parent and subsidiary, Hang Lung (10 HK) announced Ronnie Chan is stepping down as chairman, with his son Adriel to assume the mantle. 
Ronnie, 75-years of age, has been chairman since 1991. Adriel (42-years old) has been an ED since 2016 and vice-chairman since 2020. 
Separately, HLG's 66% discount to NAV is wide for a straightforward parent-sub structure. The P/Bs for both HLG and Hang Lung Properties (101 HK) are around the lowest-ever levels. 


Hang Lung Group: Ronnie Makes Way For Adriel

<ul>
<li>The data in this insight is collated from the "shareholding disclosure" link on the HKEx website</li>
<li>Often there is a corresponding HKEx announcement on the increase - or decrease - in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.</li>
<li>The key stocks mentioned in this regular insight is <a href="https://www.smartkarma.com/entities/li-ning-co-ltd" target="_blank" data-smartkarma-citation="entities:6047:1" rel="noopener">Li Ning (2331 HK)</a> and <a href="https://www.smartkarma.com/entities/meitu-inc" target="_blank" data-smartkarma-citation="entities:23573:1" rel="noopener">Meitu Inc (1357 HK)</a>.</li>
</ul>


The data in this insight is collated from the "shareholding disclosure" link on the HKEx website
Often there is a corresponding HKEx announcement on the increase - or decrease - in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.
The key stocks mentioned in this regular insight is Li Ning (2331 HK) and Meitu Inc (1357 HK).


HK CEO & Director Dealings (29 Dec 2023): Li Ning, Meitu

Sun Hung Kai Properties / Equity Bottom-Up

<ul>
<li>After <a href="https://www.smartkarma.com/entities/sun-hung-kai-properties-ltd" target="_blank" data-smartkarma-citation="entities:111:1" rel="noopener">Sun Hung Kai Properties (16 HK)</a> released its interim results, shares declined 12.7% intra-day this past Monday, touching a 14-year low, before closing down 9.5%. </li>
<li>The same day, the Kwok family increased their stake in the company, purchasing ~2.2mn shares for ~HK$175mn.  </li>
<li>SHKP is currently trading a trailing P/B of 0.36x versus its five-year average of 0.54x, and the five-year average preceding Covid of 0.68x.</li>
</ul>


After Sun Hung Kai Properties (16 HK) released its interim results, shares declined 12.7% intra-day this past Monday, touching a 14-year low, before closing down 9.5%. 
The same day, the Kwok family increased their stake in the company, purchasing ~2.2mn shares for ~HK$175mn.  
SHKP is currently trading a trailing P/B of 0.36x versus its five-year average of 0.54x, and the five-year average preceding Covid of 0.68x.


Sun Hung Kai (16 HK): The Kwoks Step In To Stem The Tide

Listed Real Estate Asia, KT Capital Group

Jacob Cheng

Listed Real Estate Asia

KT Capital Group

Principal investments and advisory firm that focuses on connecting the CIS countries with East Asia.

Principal investments and advisory firm

Henderson Land Development / Equity Bottom-Up

<ul>
<li>Henderson Land is one of the largest RE developers in Hong Kong, with investment properties portfolio in Central, as well as HK DP, China DP and IP.</li>
<li>Major share price drivers include (1) farmland conversion in Hong Kong (2) US rate hike as it has the second highest gearing among HK real estate companies</li>
<li>However, we see limited catalysts and therefore limited re-rating potential, thus bearish on the stock.</li>
</ul>


Henderson Land is one of the largest RE developers in Hong Kong, with investment properties portfolio in Central, as well as HK DP, China DP and IP.
Major share price drivers include (1) farmland conversion in Hong Kong (2) US rate hike as it has the second highest gearing among HK real estate companies
However, we see limited catalysts and therefore limited re-rating potential, thus bearish on the stock.


Henderson Land 12 HK – a Play on Farmland Conversion and Leveraged Developer - Bearish

Hong Kong

Henderson Land Development Company Limited, through its subsidiaries, develops, invests in, and manages properties. The Company also provides project management, construction, and finance services. In addition, Henderson Land Development operates department stores, hotels, and infrastructure business.

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Henderson Land Development (12 HK)

Hong Kong: Stamp Duties Axed; Mortgage Rules Relaxed

The standout beneficiaries from these latest policy measure are the usual suspects - Sun Hung Kai Properties (16 HK), Henderson Land (12 HK) - and...

David Blennerhassett

Hang Lung Group: Ronnie Makes Way For Adriel

At 0.14x P/B, its all-time low, HLG is cheap, and an outright buy could be considered. Yet Hong Kong property developers face a tough 2024 amid...

David Blennerhassett

HK CEO & Director Dealings (29 Dec 2023): Li Ning, Meitu

The data in this insight is collated from the "shareholding disclosure" link on the HKEx website. These insights also flag those companies where...

David Blennerhassett

Sun Hung Kai (16 HK): The Kwoks Step In To Stem The Tide

I can't think of a compelling reason to get exposure in SHKP here. I can think of a number of compelling reasons not to.

David Blennerhassett

Henderson Land 12 HK – a Play on Farmland Conversion and Leveraged Developer - Bearish

In this insight we conducted fundamental analysis on Henderson Land. The major share price drivers are (1) farmland conversion (2) its relatively...

Jacob Cheng

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