HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

Shanghai Electric Group Company / Equity Bottom-Up

<ul>
<li>With a 37.3% rally in <a href="https://www.smartkarma.com/entities/shanghai-electric-group-company-limited-d542164d-4d5a-4ce0-b33e-5fe6bc34722c" target="_blank" data-smartkarma-citation="entities:8777:1" rel="noopener">Shanghai Electric Group Company (2727 HK)</a>'s share price in the last 5 trading days, it is poised for a correction, which is a long-term opportunity. </li>
<li>Key positive drivers include its Fanuc Robots earnings, progress in China's nuclear fusion project, solid new order momentum, and speculation on asset acquisition.</li>
<li>PER valuations are not cheap, but this is understandable due to the company's transition. However, its 1.5x P/B multiple is not outrageously expensive relative to peers.</li>
</ul>


With a 37.3% rally in Shanghai Electric Group Company (2727 HK)'s share price in the last 5 trading days, it is poised for a correction, which is a long-term opportunity. 
Key positive drivers include its Fanuc Robots earnings, progress in China's nuclear fusion project, solid new order momentum, and speculation on asset acquisition.
PER valuations are not cheap, but this is understandable due to the company's transition. However, its 1.5x P/B multiple is not outrageously expensive relative to peers.


Shanghai Electric (2727 HK): High Risk, High Return

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 analyse the changes of A-H premium on 160 stocks over the last week. The average A-H premium was 65.7% as of Dec 19th.</li>
<li>The average A-H premium changed by 2.0ppt week-on-week, led by consumer discretionary, information technology, utilities.</li>
<li>We highlight weekly changes in A-H premium for BankComm, Anjoy Foods, Cosco Shipping Development, Shanghai Electric.</li>
</ul>


We analyse the changes of A-H premium on 160 stocks over the last week. The average A-H premium was 65.7% as of Dec 19th.
The average A-H premium changed by 2.0ppt week-on-week, led by consumer discretionary, information technology, utilities.
We highlight weekly changes in A-H premium for BankComm, Anjoy Foods, Cosco Shipping Development, Shanghai Electric.


A-H Premium Weekly (Dec 19th): BankComm, Anjoy Foods, Cosco Shipping Development, Shanghai Electric

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shanghai-electric-group-company-limited-d542164d-4d5a-4ce0-b33e-5fe6bc34722c" target="_blank" data-smartkarma-citation="entities:8777:1" rel="noopener">Shanghai Electric Group Company (2727 HK)</a> (SEC) has more than doubled since Oct, riding on the Fanuc Robots acquisition and speculation of a backdoor listing of SMEE.</li>
<li>The Fanuc acquisition is very earnings accretive. The SMEE backdoor listing, if happens, will allow SEC to enter the extremely strategic and lucrative EUV lithography machine sector.</li>
<li>SEC's 3Q24 result has some improvements, but with profitability and ROE still low, there will be more newsflow on asset optimisation and restructuring. </li>
</ul>



Shanghai Electric Group Company (2727 HK) (SEC) has more than doubled since Oct, riding on the Fanuc Robots acquisition and speculation of a backdoor listing of SMEE.
The Fanuc acquisition is very earnings accretive. The SMEE backdoor listing, if happens, will allow SEC to enter the extremely strategic and lucrative EUV lithography machine sector.
SEC's 3Q24 result has some improvements, but with profitability and ROE still low, there will be more newsflow on asset optimisation and restructuring. 


Shanghai Electric (2727 HK): What Is Driving It Crazy?

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

<ul>
<li>Hong Kong Long-Only portfolio launched on October 1st with objective to generate alpha in the Hong Kong market.</li>
<li>Stocks are chosen from single stock insights as well as sector and weekly publications.</li>
<li>Positions will be adjusted once a month and the cash position will vary based on market conditions.</li>
</ul>


Hong Kong Long-Only portfolio launched on October 1st with objective to generate alpha in the Hong Kong market.
Stocks are chosen from single stock insights as well as sector and weekly publications.
Positions will be adjusted once a month and the cash position will vary based on market conditions.


Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Shanghai Electric Group Company / Event-Driven

<ul>
<li>AH spreads are basically flat on the shortened week. AH premia rose in Pharma and Tech, fell in Industrials, Finance, and Banks. </li>
<li>All eyes will be on what happens in Geneva. I personally don't expect much. </li>
<li>The data tables below update on a daily basis in the <a href="https://www.smartkarma.com/tools" target="_blank" rel="noopener">Tools</a> section of Smartkarma. The <a href="https://www.smartkarma.com/tools/quiddity/south-flow-monitor" target="_blank" rel="noopener">SOUTHBOUND Flow Monitor</a> and <a href="https://www.smartkarma.com/tools/quiddity/ah-shares-monitor" target="_blank" rel="noopener">AH Monitor</a> are both there free for SK readers.</li>
</ul>


AH spreads are basically flat on the shortened week. AH premia rose in Pharma and Tech, fell in Industrials, Finance, and Banks. 
All eyes will be on what happens in Geneva. I personally don't expect much. 
The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers.


A/H Premium Tracker (To 9 May 2025):  AH Premia Fall Small; Spread Torsion Provides Continued Alpha

China

Shanghai Electric Group Company Limited manufactures power generation equipment. The Company produces and sells thermal generator set, nuclear power units, wind power equipment, power transmission and distribution equipment, and other products. Shanghai Electric Group also manufactures environmental protection equipment.

Shanghai Electric Group Company (601727 CH)

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Shanghai Electric Group Company (601727 CH)

Shanghai Electric (2727 HK): High Risk, High Return

Shanghai Electric is set for a correction after the recent rally, but a long-term opportunity is seen. Positive drivers include Fanuc Robots'...

Osbert Tang, CFA

A-H Premium Weekly (Dec 19th): BankComm, Anjoy Foods, Cosco Shipping Development, Shanghai Electric

We analyzed A-H premium changes in the past week and highlight A-H premium changes for BankComm, Anjoy Foods, Cosco Shipping Development, Shanghai...

Ke Yan, CFA, FRM

Shanghai Electric (2727 HK): What Is Driving It Crazy?

SEC's stock surges on Fanuc Robots acquisition and potential backdoor listing of SMEE, allowing an entry into EUV lithography machine sector. Low...

Osbert Tang, CFA

HONG KONG ALPHA PORTFOLIO - Introduction

We have launched a Hong Kong portfolio with the aim to outperform HK indexes and generate alpha. Stocks are chosen from those highlighted in our...

David Mudd

A/H Premium Tracker (To 9 May 2025): AH Premia Fall Small; Spread Torsion Provides Continued Alpha

AH Premia flat on the week. Volumes are low. All eyes are on Geneva this weekend and I have no view other than to say nothing gets solved in a...

Travis Lundy

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Shanghai Electric (2727 HK): High Risk, High Return

​Shanghai Electric is set for a correction after the recent rally, but a long-term opportunity is seen. Positive drivers include Fanuc Robots'...

Osbert Tang, CFA

A-H Premium Weekly (Dec 19th): BankComm, Anjoy Foods, Cosco Shipping Development, Shanghai Electric

We analyzed A-H premium changes in the past week and highlight A-H premium changes for BankComm, Anjoy Foods, Cosco Shipping Development, Shanghai...

Ke Yan, CFA, FRM

Shanghai Electric (2727 HK): What Is Driving It Crazy?

SEC's stock surges on Fanuc Robots acquisition and potential backdoor listing of SMEE, allowing an entry into EUV lithography machine sector. Low...

Osbert Tang, CFA

HONG KONG ALPHA PORTFOLIO - Introduction

We have launched a Hong Kong portfolio with the aim to outperform HK indexes and generate alpha. Stocks are chosen from those highlighted in our...

David Mudd

A/H Premium Tracker (To 9 May 2025): AH Premia Fall Small; Spread Torsion Provides Continued Alpha

AH Premia flat on the week. Volumes are low. All eyes are on Geneva this weekend and I have no view other than to say nothing gets solved in a...

Travis Lundy

Shanghai Electric is set for a correction after the recent rally, but a long-term opportunity is seen. Positive drivers include Fanuc Robots'...