HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>The announcement of "Draft for Comments on the Regulations on the Management of off-campus Training" has led to a 43.6% rebound of the education sector from the 2024 trough.</li>
<li>The "Draft" has cleared regulatory worries on after-school tutoring of high school students and non-academic subjects. For higher education space, we like <a href="https://www.smartkarma.com/entities/china-east-education-holdings" target="_blank" data-smartkarma-citation="entities:27843:1" rel="noopener">China East Education (667 HK)</a>. </li>
<li>
<a href="https://www.smartkarma.com/entities/new-oriental-education-techn" target="_blank" data-smartkarma-citation="entities:32210:1" rel="noopener">New Oriental Education &amp; Techn (9901 HK)</a>, <a href="https://www.smartkarma.com/entities/tal-education-group" target="_blank" data-smartkarma-citation="entities:1124:1" rel="noopener">TAL Education (TAL US),</a> and <a href="https://www.smartkarma.com/entities/gaotu-techedu-inc" target="_blank" data-smartkarma-citation="entities:28069:1" rel="noopener">Gaotu Techedu (GOTU US)</a> are the most direct beneficiaries of the "Draft".</li>
</ul>


The announcement of "Draft for Comments on the Regulations on the Management of off-campus Training" has led to a 43.6% rebound of the education sector from the 2024 trough.
The "Draft" has cleared regulatory worries on after-school tutoring of high school students and non-academic subjects. For higher education space, we like China East Education (667 HK). 

New Oriental Education &amp; Techn (9901 HK), TAL Education (TAL US), and Gaotu Techedu (GOTU US) are the most direct beneficiaries of the "Draft".


China Private Education: Trigger for the Sharp Rebound, and What Follows......

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 analyzed the latest HK SFC report for aggregate short position as of Feb 16th.</li>
<li>Top short increases and decreases were tabulated for one week and four week period. </li>
<li>We highlight short changes in Boc Aviation, and Link Reit.</li>
</ul>


We analyzed the latest HK SFC report for aggregate short position as of Feb 16th.
Top short increases and decreases were tabulated for one week and four week period. 
We highlight short changes in Boc Aviation, and Link Reit.


HK Short Interest Weekly: Boc Aviation, Link Reit

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

Hygon Information Technology C / Event-Driven

<ul>
<li>The changes for the <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">SSE STAR50 (STAR50 INDEX)</a> and STAR100 Index were announced post market close on Friday.</li>
<li>The coming week is a full one with capping cutoffs, review cutoffs, announcements and implementations apart from futures expiries.</li>
<li>With China open after Lunar New Year, the National Team is back pouring money into ETFs with the largest inflows to the <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-inde" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">CSI 300</a>, <a href="https://www.smartkarma.com/entities/csi-smallcap-500-index-shang" target="_blank" data-smartkarma-citation="entities:35347:1" rel="noopener">CSI 500</a>, <a href="https://www.smartkarma.com/entities/chinext-index" target="_blank" data-smartkarma-citation="entities:25483:1" rel="noopener">ChiNext</a> and <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">STAR50</a> indices.</li>
</ul>


The changes for the SSE STAR50 (STAR50 INDEX) and STAR100 Index were announced post market close on Friday.
The coming week is a full one with capping cutoffs, review cutoffs, announcements and implementations apart from futures expiries.
With China open after Lunar New Year, the National Team is back pouring money into ETFs with the largest inflows to the CSI 300, CSI 500, ChiNext and STAR50 indices.


Index Rebalance & ETF Flow Recap: HSCEI, HSCI, HSTECH, HSIII, STTF, Top50, Div+, FXI, FnGuide

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

<ul>
<li>NTES/700 HK: Tencent's &lt;Dream Star&gt; didn't perform as well as NetEase's &lt;Eggy Party&gt; during the Spring Festival.(+/-)</li>
<li>PDD/AMZN/SHEIN: Temu search queries pass SHEIN after running Super Bowl ads (+/-/-)</li>
<li>ZTO/1519 HK/PDD/BABA: Parcel volume delivery increased ~31% during the Spring Festival period (+)</li>
</ul>


NTES/700 HK: Tencent's &lt;Dream Star&gt; didn't perform as well as NetEase's &lt;Eggy Party&gt; during the Spring Festival.(+/-)
PDD/AMZN/SHEIN: Temu search queries pass SHEIN after running Super Bowl ads (+/-/-)
ZTO/1519 HK/PDD/BABA: Parcel volume delivery increased ~31% during the Spring Festival period (+)


[Blue Lotus Daily - TMT Update]: NTES/700 HK/PDD/AMZN/SHEIN/ZTO/1519 HK/PDD/BABA

Equity Bottom-Up

<ul>
<li>On February 15, OpenAI, Google and Amazon launched respective AI advances in video LLM (SORA), long text (Gemini 1.5), and text-to-speech (BASE) abilities. The evolution speed of AI inspired awe;</li>
<li>We estimate rival equivalent of SORA, delivered over cloud, will appear in 4-6 months of time but on-device version will take years.</li>
<li>We suggest 2C AI applications, especially video, will be the prime beneficiary</li>
</ul>


On February 15, OpenAI, Google and Amazon launched respective AI advances in video LLM (SORA), long text (Gemini 1.5), and text-to-speech (BASE) abilities. The evolution speed of AI inspired awe;
We estimate rival equivalent of SORA, delivered over cloud, will appear in 4-6 months of time but on-device version will take years.
We suggest 2C AI applications, especially video, will be the prime beneficiary


[Blue Lotus Technology Sector Update]: LLM Advances Give China and US Both Opportunities

China

Kunlun Tech Co., Ltd. offers comprehensive Internet value-added services. The Company focuses on social network interactive and online game fields. Kunlun Tech also provides localized translation outsourcing and agency advertising services.

Bilibili Inc. provides online entertainment services. The Company offers a platform that covers a wide array of genres and media formats, including videos, live broadcasting, mobile games, animation, and comics. Bilibili serves customers in China.

China Ruyi Holdings Limited operates as a holding company. The Company, through its subsidiaries, focuses on online streaming video and internet community businesses. China Ruyi Holdings also manufactures and sells photographic, electronic, and multimedia accessories.

37 Interactive Entertainment Network Technology Group Co.,Ltd designs, develops, and operates mobile games and web games. The Company also provides game promotion, customer service, top-up payment, and other services. 37 Interactive Entertainment Network Technology Group conducts its businesses in China.

37 Interactive Entertainment N (002555 CH)

Zhejiang Huace Film & TV Co., Ltd. specializes in entertainment media production. The Company's products include Mandarin films, TV programs and advertisements.

Zhejiang Huace Film & Televisi (300133 CH)

Shandong Publishing & Media Co., Ltd offers publishing services. The Company publishes and sells books, textbooks, magazines, audio visuals, and other products. Shandong Publishing & Media also manufactures and sells papers.

China Telecom Corporation Limited, through its subsidiaries, provides wireline telephone, data, and Internet, as well as leased line services in China.

Creative China Holdings Limited is program production company. The Company develops programs for television and online broadcasting, and event organization in PRC.

China United Network Communications Limited provides a variety of telecommunication services, including GSM and CDMA wireless telecommunication services, international and domestic long distance communication services, data communication and Internet services, as well as paging services.

Hello Group Inc. operates as a mobile-based social networking platform. The Company enables users to establish and expand social relationships based on location and interests. Hello Group operates out of the Peoples Republic of China.

Nintendo Co., Ltd. globally develops, manufactures and sells home-use video game hardware and software in home entertainment business.  The company also produces home-game products including cards.

Sea Limited offers information technology services. The Company provides online personal computer and mobile digital content, e-commerce, and payment platforms. Sea serves customers worldwide.

World Wrestling Entertainment, Inc. operates as a media and entertainment company. The Company offers live wrestling events, television programming, music publishing, advertising, licensing, and home video streaming services. World Wrestling distributes its programs worldwide in various languages.

Endeavor Group Holdings, Inc. operates as a holding company. The Company, through its subsidiaries, offers entertainment content, as well as specializes in marketing and licensing, representation, and event management. Endeavor Group Holdings serves customers worldwide.

Roku, Inc. designs and manufactures consumer electronic products. The Company offers wireless enabled devices that stream audio and video content from the internet to home entertainment systems. Roku serves customers globally.

HYBE Co., Ltd. operates as an entertainment company. The Company provides music production, album distribution, entertainers management, publicity, planning, training, and other services. HYBE also makes television shows.

Netmarble Corporation develops and publishes mobile games. The Company develops and publishes casual games, action, sports games, strategy, simulation games, and social casino games. Netmarble offers services worldwide.

Lions Gate Entertainment Corporation develops and distributes film entertainment contents. The Company produces motion pictures, television programming, animation, and digital media. Lions Gate Entertainment serves customers worldwide.

Pearl Abyss Corp. operates as a computer games making company. The Company offers games development, games exporting, and other services. Pearl Abyss serves customers worldwide.

AMC Entertainment Holdings, Inc. operates as a holding company. The Company, through its subsidiaries, provides theatrical exhibition, movie screening, food distribution, online ticket booking, and other related services. AMC Entertainment offers movie theaters worldwide.

NetEase, Inc. operates as an leading internet technology company providing online services including content, community, communication, and commerce. The Company develops and operates online games, electronic commerce, internet media, innovative business, and other businesses. NetEase expands its businesses to Japan, North American, and other other international markets.

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NetEase (9999 HK)

China Private Education: Trigger for the Sharp Rebound, and What Follows......

The "Draft for Comments" of regulations on after-school tutoring has supported the rebound of the education sector. China East Education, New...

Osbert Tang, CFA

HK Short Interest Weekly: Boc Aviation, Link Reit

We analyzed the latest HK SFC report for aggregate short position as of Feb 16th and highlight short interest changes in Boc Aviation, Link Reit.

Ke Yan, CFA, FRM

Index Rebalance & ETF Flow Recap: HSCEI, HSCI, HSTECH, HSIII, STTF, Top50, Div+, FXI, FnGuide

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

[Blue Lotus Daily - TMT Update]: NTES/700 HK/PDD/AMZN/SHEIN/ZTO/1519 HK/PDD/BABA

NetEase's outperformed Tencent's during Spring Festival; Temu search queries surpass SHEIN after Super Bowl ads; Parcel delivery volume up 31%...

Blue Lotus Research Institute

[Blue Lotus Technology Sector Update]: LLM Advances Give China and US Both Opportunities

OpenAI, Google and Amazon launched respective AI advances in video LLM (SORA), long text (Gemini 1.5), and text-to-speech (BASE) abilities.We...

Blue Lotus Research Institute

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China Private Education: Trigger for the Sharp Rebound, and What Follows......

​The "Draft for Comments" of regulations on after-school tutoring has supported the rebound of the education sector. China East Education, New...

Osbert Tang, CFA

HK Short Interest Weekly: Boc Aviation, Link Reit

We analyzed the latest HK SFC report for aggregate short position as of Feb 16th and highlight short interest changes in Boc Aviation, Link Reit.

Ke Yan, CFA, FRM

Index Rebalance & ETF Flow Recap: HSCEI, HSCI, HSTECH, HSIII, STTF, Top50, Div+, FXI, FnGuide

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

[Blue Lotus Daily - TMT Update]: NTES/700 HK/PDD/AMZN/SHEIN/ZTO/1519 HK/PDD/BABA

​NetEase's outperformed Tencent's during Spring Festival; Temu search queries surpass SHEIN after Super Bowl ads; Parcel delivery volume up 31%...

Blue Lotus Research Institute

[Blue Lotus Technology Sector Update]: LLM Advances Give China and US Both Opportunities

OpenAI, Google and Amazon launched respective AI advances in video LLM (SORA), long text (Gemini 1.5), and text-to-speech (BASE) abilities.We...

Blue Lotus Research Institute

The "Draft for Comments" of regulations on after-school tutoring has supported the rebound of the education sector. China East Education, New...

NetEase's outperformed Tencent's during Spring Festival; Temu search queries surpass SHEIN after Super Bowl ads; Parcel delivery volume up 31%...