Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

Brilliance China Automotive / Equity Bottom-Up

<ul>
<li>With the Hang Seng Index dipping below the 15,000 mark earlier this week, it's time to dust off some old school perspective.</li>
<li>This insight looks at Benjamin Graham's Net Nets, (current assets less current liabilities), then subtract any debt not included in current liabilities. More simply, current assets less total liabilities.</li>
<li>Graham would conclude these stocks are priced for liquidation.  Stocks discussed include <a href="https://www.smartkarma.com/entities/brilliance-china-automotive" target="_blank" data-smartkarma-citation="entities:469:1" rel="noopener">Brilliance China (1114 HK)</a>, <a href="https://www.smartkarma.com/entities/ming-yuan-cloud-group" target="_blank" data-smartkarma-citation="entities:29268:1" rel="noopener">Ming Yuan (909 HK)</a>, <a href="https://www.smartkarma.com/entities/yidu-tech-inc" target="_blank" data-smartkarma-citation="entities:29245:1" rel="noopener">Yidu Tech (2158 HK)</a>, and <a href="https://www.smartkarma.com/entities/a-living-smart-city-services-c" target="_blank" data-smartkarma-citation="entities:26728:1" rel="noopener">A-Living Smart City (3319 HK)</a>.</li>
</ul>


With the Hang Seng Index dipping below the 15,000 mark earlier this week, it's time to dust off some old school perspective.
This insight looks at Benjamin Graham's Net Nets, (current assets less current liabilities), then subtract any debt not included in current liabilities. More simply, current assets less total liabilities.
Graham would conclude these stocks are priced for liquidation.  Stocks discussed include Brilliance China (1114 HK), Ming Yuan (909 HK), Yidu Tech (2158 HK), and A-Living Smart City (3319 HK).


More Hong Kong Stocks Priced For Liquidation

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Event-Driven

Black Sesame International Holding / Event-Driven

<ul>
<li>The Hang Seng Internet &amp; IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).</li>
<li>In this insight, we take a look at the rankings of potential ADDs and potential DELs for the March 2025 index rebal event.</li>
<li>Based on the latest available data, we see four ADDs and four DELs for HSIII in March 2025.</li>
</ul>


The Hang Seng Internet &amp; IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).
In this insight, we take a look at the rankings of potential ADDs and potential DELs for the March 2025 index rebal event.
Based on the latest available data, we see four ADDs and four DELs for HSIII in March 2025.


Quiddity Leaderboard Hang Seng Internet & IT March 25: 4 Changes Likely, Some Names Have High Impact

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

<ul>
<li>Hong Kong is again trading well below its historical multiple valuation levels after the October/November correction.  Mainland investors bought a record amount the day after Trump's win.</li>
<li>
<a href="https://www.smartkarma.com/entities/kingsoft-corp-ltd" target="_blank" data-smartkarma-citation="entities:492:1" rel="noopener">Kingsoft Corp (3888 HK)</a> reported consensus beating results with its online game segment surging.  The company is benefiting from AI upgrades in its office SAAS business.
</li>
<li>
<a href="https://www.smartkarma.com/entities/precision-tsugami-china-corp" target="_blank" data-smartkarma-citation="entities:26199:1" rel="noopener">Precision Tsugami China (1651 HK)</a> posted blockbuster earnings for its 1H25 as the machine tool sector rebounds on the back of factories upgrading to intelligent manufacturing.</li>
</ul>


Hong Kong is again trading well below its historical multiple valuation levels after the October/November correction.  Mainland investors bought a record amount the day after Trump's win.

Kingsoft Corp (3888 HK) reported consensus beating results with its online game segment surging.  The company is benefiting from AI upgrades in its office SAAS business.


Precision Tsugami China (1651 HK) posted blockbuster earnings for its 1H25 as the machine tool sector rebounds on the back of factories upgrading to intelligent manufacturing.


The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (November 21)

<ul>
<li>The Hang Seng Internet &amp; IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).</li>
<li>The indicative weights for the December 2024 index rebal event will be announced later this week on Friday 22nd November 2024.</li>
<li>In this insight, we take a look at our updated flow estimates for December 2024. Separately, we have also presented our latest March 2025 index review predictions.</li>
</ul>


The Hang Seng Internet &amp; IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).
The indicative weights for the December 2024 index rebal event will be announced later this week on Friday 22nd November 2024.
In this insight, we take a look at our updated flow estimates for December 2024. Separately, we have also presented our latest March 2025 index review predictions.


Quiddity Leaderboard HSIII: ~US$160mn One-Way Flows in Dec 24; 3 ADDs/DELs in Mar 25 Likely

<ul>
<li>The Hang Seng Internet &amp; IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).</li>
<li>In this insight, we take a look at our capping flow expectations for the December 2024 index rebal event.</li>
<li>We have also presented our index change expectations for the next semiannual index review which will take place in March 2025.</li>
</ul>


The Hang Seng Internet &amp; IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).
In this insight, we take a look at our capping flow expectations for the December 2024 index rebal event.
We have also presented our index change expectations for the next semiannual index review which will take place in March 2025.


Quiddity Leaderboard HS Internet & IT: Dec 24 Flow Expectations and Mar 25 Expected ADDs/DELs

China

MYCG is a software solution provider in China with a focus on real estate. The company provides enterprise resource planning (ERP) solutions and SaaS products to property developers and other industry participants in the real estate value chain in China.

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Ming Yuan Cloud Group (909 HK)

More Hong Kong Stocks Priced For Liquidation

This note looks at Net Nets, (current assets less current liabilities), then subtract debt not included in current liabilities. Benjamin Graham...

David Blennerhassett

Quiddity Leaderboard Hang Seng Internet & IT March 25: 4 Changes Likely, Some Names Have High Impact

There could be 6x+ ADV of index buying for the top two expected inflow names. Some outflow names also could have decent impact. Estimated one-way...

Janaghan Jeyakumar, CFA

The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (November 21)

Mainland investors buying in Hong Kong peaked after Trump won the election. Kingsoft beat consensus estimates for revenue and earnings. Precision...

David Mudd

Quiddity Leaderboard HSIII: ~US$160mn One-Way Flows in Dec 24; 3 ADDs/DELs in Mar 25 Likely

Easou Technology Holdings (2550 HK) has dropped 80%+ in the last few trading days and is on the verge of missing out on HSIII addition in March 2025.

Janaghan Jeyakumar, CFA

Quiddity Leaderboard HS Internet & IT: Dec 24 Flow Expectations and Mar 25 Expected ADDs/DELs

We estimate there to be one-way capping flows of US$190mn in December 2024. This translates to a turnover of approximately 5%.

Janaghan Jeyakumar, CFA

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