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

Thematic (Sector/Industry)

<ul>
<li>While most HK equities are still trading at attractive valuation, it does not mean they can re-rate and many of them can remain value traps</li>
<li>However with the banking crisis, asset owners are moving their capital to Asia.  Hong Kong gov is doing everything to attract family office business</li>
<li>This, along with improving macro outlook, can drive re-rating.  BUY SHKP 16 HK and NWD 17 HK</li>
</ul>


While most HK equities are still trading at attractive valuation, it does not mean they can re-rate and many of them can remain value traps
However with the banking crisis, asset owners are moving their capital to Asia.  Hong Kong gov is doing everything to attract family office business
This, along with improving macro outlook, can drive re-rating.  BUY SHKP 16 HK and NWD 17 HK


HK Equity: 1) Strong Capital Inflow, 2) Pro-Growth Policy, 3) Better Macro Outlook to Drive Rerating

Equity Bottom-Up

<ul>
<li>Upcoming banking crisis will accelerate in the coming few weeks, it is very likely Fed will slow down rate hike or re-start a rate cut cycle</li>
<li>To position for this:  BUY Hong Kong property developers New World Development 17 HK, Henderson 12 HK, Sun Hung Kai Properties 16 HK</li>
<li>Apart from HK RE developers, buy China's name Hang Lung (101 HK) and crypto-currency (BTC and ETH)</li>
</ul>


Upcoming banking crisis will accelerate in the coming few weeks, it is very likely Fed will slow down rate hike or re-start a rate cut cycle
To position for this:  BUY Hong Kong property developers New World Development 17 HK, Henderson 12 HK, Sun Hung Kai Properties 16 HK
Apart from HK RE developers, buy China's name Hang Lung (101 HK) and crypto-currency (BTC and ETH)


Short Note: Position for Upcoming Banking Crisis, BUY Hong Kong & China Property Stocks, and BTC/ETH

<ul>
<li>PBoC just announced a RRR cut of 25bps, which is a surprise to market</li>
<li>The cut will lower average RRR from 7.8% to 7.6%, and is expected to release c. 500bn of liquidity. China’s low inflation allows more room for further RRR cuts</li>
<li>Government’s press release addresses key market concerns.  We need to monitor recovery in property market.  LONG China on easing cycle.  China property names are trading at distressed valuation</li>
</ul>


PBoC just announced a RRR cut of 25bps, which is a surprise to market
The cut will lower average RRR from 7.8% to 7.6%, and is expected to release c. 500bn of liquidity. China’s low inflation allows more room for further RRR cuts
Government’s press release addresses key market concerns.  We need to monitor recovery in property market.  LONG China on easing cycle.  China property names are trading at distressed valuation


Short Note: LONG China on Monetary Easing Cycle

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

<ul>
<li>News reports indicate that <a href="https://www.smartkarma.com/entities/china-vanke-co-ltd-h" target="_blank" data-smartkarma-citation="entities:18368:1" rel="noopener">China Vanke (H) (2202 HK)</a> is looking to place 300m shares at a price range of HK$12.93-13.20/share to raise around US$500m.</li>
<li>The 300m shares is nearly 33 days of ADV, but around 11-12% of the new shares will be bought by passive trackers early next week and provide near-term support.</li>
<li>
<a href="https://www.smartkarma.com/entities/china-vanke-co-ltd-h" target="_blank" data-smartkarma-citation="entities:18368:1" rel="noopener">China Vanke (H) (2202 HK)</a> trades cheaper than its peers on EV/Sales, EV/EBITDA and forward PE. Shorts have ticked higher in the last couple of weeks.</li>
</ul>


News reports indicate that China Vanke (H) (2202 HK) is looking to place 300m shares at a price range of HK$12.93-13.20/share to raise around US$500m.
The 300m shares is nearly 33 days of ADV, but around 11-12% of the new shares will be bought by passive trackers early next week and provide near-term support.

China Vanke (H) (2202 HK) trades cheaper than its peers on EV/Sales, EV/EBITDA and forward PE. Shorts have ticked higher in the last couple of weeks.


China Vanke (2202 HK): Placement & Index Flows

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Credit

<ul>
<li>HK corps have performed well since Nov’22, in line with the sharp rebound of the market.</li>
<li>Like peers in other space, the conviction of HK corps is lower at current valuation.</li>
<li>Nonetheless, we still see value in selected HK perps of which coupon will be reset and/or step-up upon the first call dates and issuers can access various funding channels. </li>
</ul>
<p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>


HK corps have performed well since Nov’22, in line with the sharp rebound of the market.
Like peers in other space, the conviction of HK corps is lower at current valuation.
Nonetheless, we still see value in selected HK perps of which coupon will be reset and/or step-up upon the first call dates and issuers can access various funding channels. 

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Hong Kong

New World Development Company Limited, through its subsidiaries, develops and invests in properties, provides contracting services, property management, and transportation services.  The Company also operates infrastructure business, telecommunication services, department stores, hotels and restaurants, and media and technology business.

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New World Development (17 HK)

HK Equity: 1) Strong Capital Inflow, 2) Pro-Growth Policy, 3) Better Macro Outlook to Drive Rerating

Recent banking crisis and related capital flows creates opportunities for Hong Kong. Capital inflow, pro-growth policy and improving macro...

Jacob Cheng

Short Note: Position for Upcoming Banking Crisis, BUY Hong Kong & China Property Stocks, and BTC/ETH

The coming banking crisis is to accelerate. To position for this, BUY Hong Kong real estate names as they will benefit the most. Pick high beta...

Jacob Cheng

Short Note: LONG China on Monetary Easing Cycle

China just announced a 25bps RRR cut, which is a surprise. China's low inflation allows more room to RRR cuts. Jan-Feb macro data shows...

Jacob Cheng

China Vanke (2202 HK): Placement & Index Flows

China Vanke is looking to sell 300m shares in a placement to raise US$500m. Passive index trackers will buy between 11-12% of the new shares early...

Brian Freitas

HK corps: Prefer perps for yield pick-up

HK corps have performed well since Nov’22, in line with the sharp rebound of the market. Like peers in other space, the conviction of HK corps is...

CMB International

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