HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<ul>
<li>The spin-off of the value-added business (VAS) of <a href="https://www.smartkarma.com/entities/china-gas-holdings-ltd" target="_blank" data-smartkarma-citation="entities:14315:1" rel="noopener">China Gas Holdings (384 HK)</a> may add HK$0.22-0.83/share to the stock price, or 3.4-12.8%, based on our initial assessment.</li>
<li>VAS generated an operating profit of HK$1.58bn in FY24, up by 5.7% YoY. It is significant to China Gas as this accounted for 23.5% of its total segment profit.</li>
<li>The share price has not reacted much to the news because weak Chinese equity market and uncertainties on the upcoming 1H FY25 result. Once cleared, we see good upside.</li>
</ul>


The spin-off of the value-added business (VAS) of China Gas Holdings (384 HK) may add HK$0.22-0.83/share to the stock price, or 3.4-12.8%, based on our initial assessment.
VAS generated an operating profit of HK$1.58bn in FY24, up by 5.7% YoY. It is significant to China Gas as this accounted for 23.5% of its total segment profit.
The share price has not reacted much to the news because weak Chinese equity market and uncertainties on the upcoming 1H FY25 result. Once cleared, we see good upside.


China Gas Holdings (384 HK): Assessing the Spin-Off of Value-Added Business

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 weekly Hong Kong Connect flows with our data engine for holding position as of October 18th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight flows for Alibaba, CCB, SMIC, China Mobile, ICBC, Meituan, HKEx, Kuaishou Technology, CICC, Citic Securities.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of October 18th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for Alibaba, CCB, SMIC, China Mobile, ICBC, Meituan, HKEx, Kuaishou Technology, CICC, Citic Securities.


Hong Kong Connect Flows (Oct 18th): Alibaba, CCB, SMIC, China Mobile, ICBC, Meituan, HKEx

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

Midea Group Co Ltd A / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/midea-group-co-ltd-a" target="_blank" data-smartkarma-citation="entities:16185:1" rel="noopener">Midea Group Co Ltd A (000333 CH)</a> priced its H Share at HK$54.80 to raise HK$31,014 million (US$4.0 billion) in gross proceeds. The H Share will be listed tomorrow.</li>
<li>The H Share listing price implies an AH discount of 21.4% at the A Share price of RMB63.51. This compares to <a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd-b3ef445f-0f54-4586-8c58-9073de98d60e" target="_blank" data-smartkarma-citation="entities:31105:1" rel="noopener">Haier Smart Home (6690 HK)</a>'s AH discount of 13.8%.</li>
<li>Futu grey market data shows that the H Shares closed 5.1% higher at HK$57.60. Our valuation analysis suggests that the H Share listing price is attractive.</li>
</ul>



Midea Group Co Ltd A (000333 CH) priced its H Share at HK$54.80 to raise HK$31,014 million (US$4.0 billion) in gross proceeds. The H Share will be listed tomorrow.
The H Share listing price implies an AH discount of 21.4% at the A Share price of RMB63.51. This compares to Haier Smart Home (6690 HK)'s AH discount of 13.8%.
Futu grey market data shows that the H Shares closed 5.1% higher at HK$57.60. Our valuation analysis suggests that the H Share listing price is attractive.


Midea Group H Share Listing (300 HK): Trading Debut

<ul>
<li>
<a href="https://www.smartkarma.com/entities/midea-group-co-ltd-a" target="_blank" data-smartkarma-citation="entities:16185:1" rel="noopener">Midea Group Co Ltd A (000333 CH)</a> has launched its H Share listing at HK$52.00-54.80 per share. Pricing will be on 13 September, and the listing on 17 September.</li>
<li>We previously discussed the listing in <a href="https://www.smartkarma.com/insights/midea-group-h-share-listing-latest-updates-points-to-a-business-in-rude-health" target="_blank" data-smartkarma-citation="insights:157653" rel="noopener">Midea Group H Share Listing: Latest Updates Points to a Business in Rude Health</a> and <a href="https://www.smartkarma.com/insights/midea-group-h-share-listing-ah-discount-views" target="_blank" data-smartkarma-citation="insights:157868" rel="noopener">Midea Group H Share Listing: AH Discount Views</a>. </li>
<li>Our valuation analysis suggests that the H Share listing range is attractive. We would participate in the listing.</li>
</ul>



Midea Group Co Ltd A (000333 CH) has launched its H Share listing at HK$52.00-54.80 per share. Pricing will be on 13 September, and the listing on 17 September.
We previously discussed the listing in Midea Group H Share Listing: Latest Updates Points to a Business in Rude Health and Midea Group H Share Listing: AH Discount Views. 
Our valuation analysis suggests that the H Share listing range is attractive. We would participate in the listing.


Midea Group H Share Listing (300 HK): Valuation Insights

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Pop Mart International Group L / Equity Bottom-Up

<ul>
<li>Bearish sentiment in Hong Kong declined during the carry trade sell off.</li>
<li>Low Volatility, High Dividend and Value factors have continue to be profitable strategies in Hong Kong.</li>
<li>
<a href="https://www.smartkarma.com/entities/pop-mart-international-group-l" target="_blank" data-smartkarma-citation="entities:29016:1" rel="noopener">Pop Mart International Group L (9992 HK)</a> , <a href="https://www.smartkarma.com/entities/techtronic-industries-co-ltd" target="_blank" data-smartkarma-citation="entities:4561:1" rel="noopener">Techtronic Industries (669 HK)</a> and <a href="https://www.smartkarma.com/entities/giant-biogene-holding-co-ltd" target="_blank" data-smartkarma-citation="entities:35950:1" rel="noopener">Giant Biogene (2367 HK)</a> all reported solid operating and financial news leading to BUY recommendations.
</li>
</ul>


Bearish sentiment in Hong Kong declined during the carry trade sell off.
Low Volatility, High Dividend and Value factors have continue to be profitable strategies in Hong Kong.

Pop Mart International Group L (9992 HK) , Techtronic Industries (669 HK) and Giant Biogene (2367 HK) all reported solid operating and financial news leading to BUY recommendations.



BUY/SELL/HOLD: Hong Kong Stock Updates (August 12)

United States

JS Global Lifestyle Company Limited provides household appliances. The Company offers pressure and induction cookers, air fryers, countertop grills, upright and robotic  vacuums, water purifier, ventilator, thermos, and other related products. JS Global Lifestyle serves customers worldwide.

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JS Global Lifestyle (1691 HK)

China Gas Holdings (384 HK): Assessing the Spin-Off of Value-Added Business

China Gas' spin-off of value-added services could boost the stock by 3.4-12.8%, with VAS contributing 23.5% of total segment profit. Weak market...

Osbert Tang, CFA

Hong Kong Connect Flows (Oct 18th): Alibaba, CCB, SMIC, China Mobile, ICBC, Meituan, HKEx

We analyzed southbound Hong Kong connect flows in the past week and highlighted flows for Alibaba, CCB, SMIC, China Mobile, ICBC, Meituan, HKEx,...

Ke Yan, CFA, FRM

BUY/SELL/HOLD: Hong Kong Stock Updates (August 12)

Hong Kong markets were resilient during the carry trade global sell off losing less than 2%. Pop Mart and Techtronic posted good results for 1H...

David Mudd

Price Gauge

52-week Range

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China Gas Holdings (384 HK): Assessing the Spin-Off of Value-Added Business

​China Gas' spin-off of value-added services could boost the stock by 3.4-12.8%, with VAS contributing 23.5% of total segment profit. Weak market...

Osbert Tang, CFA

Hong Kong Connect Flows (Oct 18th): Alibaba, CCB, SMIC, China Mobile, ICBC, Meituan, HKEx

We analyzed southbound Hong Kong connect flows in the past week and highlighted flows for Alibaba, CCB, SMIC, China Mobile, ICBC, Meituan, HKEx,...

Ke Yan, CFA, FRM

Midea Group H Share Listing (300 HK): Trading Debut

The H Share listing and Futu grey market price imply an AH discount of 21.4% and 17.4%, respectively, which is attractive compared to Haier, its...

Arun George

Midea Group H Share Listing (300 HK): Valuation Insights

Midea has launched its H Share listing. Our valuation analysis suggests that the range is attractive, so we would participate in the listing.

Arun George

BUY/SELL/HOLD: Hong Kong Stock Updates (August 12)

Hong Kong markets were resilient during the carry trade global sell off losing less than 2%. Pop Mart and Techtronic posted good results for 1H...

David Mudd

China Gas' spin-off of value-added services could boost the stock by 3.4-12.8%, with VAS contributing 23.5% of total segment profit. Weak market...