HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>Surging by 19.4% since the trough on 19-Apr, the HSI is now only 3.2% shy away from the psychological resistance of 20,000. We look at some potential profit-taking names. </li>
<li>Heavy-Weights like <a href="https://www.smartkarma.com/entities/meituan" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> and <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> are among the best-performing ones YTD and since the trough. Hence they are more exposed, particularly for Meituan.</li>
<li>
<a href="https://www.smartkarma.com/entities/haidilao-international-holding" target="_blank" data-smartkarma-citation="entities:27044:1" rel="noopener">Haidilao International Holding (6862 HK)</a> and <a href="https://www.smartkarma.com/entities/enn-energy-holdings-ltd" target="_blank" data-smartkarma-citation="entities:316:1" rel="noopener">ENN Energy (2688 HK)</a> are another two on the list. Their valuations are no longer inexpensive relative to 3-year earnings CAGR.</li>
</ul>


Surging by 19.4% since the trough on 19-Apr, the HSI is now only 3.2% shy away from the psychological resistance of 20,000. We look at some potential profit-taking names. 
Heavy-Weights like Meituan (3690 HK) and Tencent (700 HK) are among the best-performing ones YTD and since the trough. Hence they are more exposed, particularly for Meituan.

Haidilao International Holding (6862 HK) and ENN Energy (2688 HK) are another two on the list. Their valuations are no longer inexpensive relative to 3-year earnings CAGR.


HK Strategy: To Sell or Not to Sell, that Is the Question

Equity Bottom-Up

<ul>
<li>China's two national port companies <a href="https://www.smartkarma.com/entities/china-merchants-port-holdings-company-ltd" target="_blank" data-smartkarma-citation="entities:15155:1" rel="noopener">China Merchants Port (144 HK)</a> and <a href="https://www.smartkarma.com/entities/cosco-shipping-ports-ltd" target="_blank" data-smartkarma-citation="entities:360:1" rel="noopener">Cosco Shipping Ports (1199 HK)</a> have underperformed, but exports have picked up. We see an opportunity here.</li>
<li>With a 9.2% increase in container throughput, CSPL even down by 4.8% YTD, underperformed CMPH by 12.9pp. There is room for it to catch up.</li>
<li>CSPL is also cheaper at 7x and 6.3x PERs for the next two years, making it more attractive on a relative basis.</li>
</ul>


China's two national port companies China Merchants Port (144 HK) and Cosco Shipping Ports (1199 HK) have underperformed, but exports have picked up. We see an opportunity here.
With a 9.2% increase in container throughput, CSPL even down by 4.8% YTD, underperformed CMPH by 12.9pp. There is room for it to catch up.
CSPL is also cheaper at 7x and 6.3x PERs for the next two years, making it more attractive on a relative basis.


China Port Pair Opportunity: COSCO Shipping Ports Vs. China Merchants Port

<ul>
<li>Many have missed out on the 14%, or 2,300 points, rally of the HSI in the last 9 trading days. There are still several stocks that look interesting now.</li>
<li>
<a href="https://www.smartkarma.com/entities/li-auto-inc-3dbe6187-544f-40dd-b9f9-72fba9c0110e" target="_blank" data-smartkarma-citation="entities:33811:1" rel="noopener">Li Auto (2015 HK)</a>, <a href="https://www.smartkarma.com/entities/link-reit" target="_blank" data-smartkarma-citation="entities:872:1" rel="noopener">Link REIT (823 HK)</a>, <a href="https://www.smartkarma.com/entities/china-mengniu-dairy-co" target="_blank" data-smartkarma-citation="entities:354:1" rel="noopener">China Mengniu Dairy Co (2319 HK)</a>, <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> and <a href="https://www.smartkarma.com/entities/galaxy-entertainment-group-limited" target="_blank" data-smartkarma-citation="entities:806:1" rel="noopener">Galaxy Entertainment Group (27 HK)</a> are massive laggards YTD.</li>
<li>As they have only experienced limited rebounds from the 19-Apr trough, they are set to catch up. Also, their earnings prospects look positive this year. </li>
</ul>


Many have missed out on the 14%, or 2,300 points, rally of the HSI in the last 9 trading days. There are still several stocks that look interesting now.

Li Auto (2015 HK), Link REIT (823 HK), China Mengniu Dairy Co (2319 HK), Hang Lung Properties (101 HK) and Galaxy Entertainment Group (27 HK) are massive laggards YTD.
As they have only experienced limited rebounds from the 19-Apr trough, they are set to catch up. Also, their earnings prospects look positive this year. 


HK Strategy: Where Are the Short-Term Opportunities?

<ul>
<li>With US inflation figures higher than expectations, there is an increase in risk that the Fed's next move may be a hike.  Some HSI constituents are set to benefit.</li>
<li>
<a href="https://www.smartkarma.com/entities/orient-overseas-international" target="_blank" data-smartkarma-citation="entities:801:1" rel="noopener">Orient Overseas International (316 HK)</a>, <a href="https://www.smartkarma.com/entities/budweiser-brewing-co-apac-ltd" target="_blank" data-smartkarma-citation="entities:28077:1" rel="noopener">Budweiser Brewing APAC (1876 HK),</a> and <a href="https://www.smartkarma.com/entities/galaxy-entertainment-group-limited" target="_blank" data-smartkarma-citation="entities:806:1" rel="noopener">Galaxy Entertainment Group (27 HK)</a> have significant USD net cash position and will be gainers.</li>
<li>
<a href="https://www.smartkarma.com/entities/sunny-optical-technology-group" target="_blank" data-smartkarma-citation="entities:13363:1" rel="noopener">Sunny Optical Technology Group (2382 HK)</a> and <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> have large China operations but they are net long on USD balance and this will make them beneficiaries.</li>
</ul>


With US inflation figures higher than expectations, there is an increase in risk that the Fed's next move may be a hike.  Some HSI constituents are set to benefit.

Orient Overseas International (316 HK), Budweiser Brewing APAC (1876 HK), and Galaxy Entertainment Group (27 HK) have significant USD net cash position and will be gainers.

Sunny Optical Technology Group (2382 HK) and Haier Smart Home (6690 HK) have large China operations but they are net long on USD balance and this will make them beneficiaries.


HK Strategy: What Are the Winners if US Hike Rates Instead of Cut?

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

<ul>
<li>Our analysis suggests container rate momentum remained +ive in March</li>
<li>Despite higher fuel expense, core container margins likely rose Y/Y in Q124</li>
<li>Our L/S pair trade? It's worked, a little, but Evergreen shares have stayed firm</li>
</ul>


Our analysis suggests container rate momentum remained +ive in March
Despite higher fuel expense, core container margins likely rose Y/Y in Q124
Our L/S pair trade? It's worked, a little, but Evergreen shares have stayed firm


Monthly Container Shipping Tracker | March Volumes Strong | Q1 Margins Likely Up Y/Y (April 2024)

Hong Kong

Orient Overseas International Ltd, through its subsidiaries, owns and leases ships, operates terminals, and provides freight forwarding and container transportation services.  The Company also develops and invests in properties, leases equipment, and invests in securities.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Orient Overseas International (316 HK)

HK Strategy: To Sell or Not to Sell, that Is the Question

HSI surges by 19.4% nearing the 20,000 resistance, potential profit-taking names include Meituan, Tencent, Haidilao, and ENN Energy due to strong...

Osbert Tang, CFA

China Port Pair Opportunity: COSCO Shipping Ports Vs. China Merchants Port

China's national port companies, CMPH and CSPL, have underperformed but with recovering throughput, there is an opportunity. CSPL is cheaper at 7x...

Osbert Tang, CFA

HK Strategy: Where Are the Short-Term Opportunities?

Li Auto, Link REIT, China Mengniu, Hang Lung Properties, and Galaxy Entertainment are massive laggards YTD but the recent rebound from the trough...

Osbert Tang, CFA

HK Strategy: What Are the Winners if US Hike Rates Instead of Cut?

HSI constituents like Orient Overseas, Budweiser Brewing, Galaxy Entertainment, Sunny Optical, and Haier Smart Home are set to gain in case the...

Osbert Tang, CFA

Monthly Container Shipping Tracker | March Volumes Strong | Q1 Margins Likely Up Y/Y (April 2024)

Container rate momentum remained +ive in March, & we believe carriers' margins probably improved Y/Y in Q124 (despite higher fuel expenses). Our L...

Tracking Traffic

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

HK Strategy: To Sell or Not to Sell, that Is the Question

​HSI surges by 19.4% nearing the 20,000 resistance, potential profit-taking names include Meituan, Tencent, Haidilao, and ENN Energy due to strong...

Osbert Tang, CFA

China Port Pair Opportunity: COSCO Shipping Ports Vs. China Merchants Port

​China's national port companies, CMPH and CSPL, have underperformed but with recovering throughput, there is an opportunity. CSPL is cheaper at 7x...

Osbert Tang, CFA

HK Strategy: Where Are the Short-Term Opportunities?

Li Auto, Link REIT, China Mengniu, Hang Lung Properties, and Galaxy Entertainment are massive laggards YTD but the recent rebound from the trough...

Osbert Tang, CFA

HK Strategy: What Are the Winners if US Hike Rates Instead of Cut?

​HSI constituents like Orient Overseas, Budweiser Brewing, Galaxy Entertainment, Sunny Optical, and Haier Smart Home are set to gain in case the...

Osbert Tang, CFA

Monthly Container Shipping Tracker | March Volumes Strong | Q1 Margins Likely Up Y/Y (April 2024)

Container rate momentum remained +ive in March, & we believe carriers' margins probably improved Y/Y in Q124 (despite higher fuel expenses). Our L...

Tracking Traffic

HSI surges by 19.4% nearing the 20,000 resistance, potential profit-taking names include Meituan, Tencent, Haidilao, and ENN Energy due to strong...

China's national port companies, CMPH and CSPL, have underperformed but with recovering throughput, there is an opportunity. CSPL is cheaper at 7x...

HSI constituents like Orient Overseas, Budweiser Brewing, Galaxy Entertainment, Sunny Optical, and Haier Smart Home are set to gain in case the...