Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

Mandarin Oriental International / Equity Bottom-Up

<ul>
<li>Hong Kong is - very gradually - rolling back Covid restrictions</li>
<li>That's a welcome relief for tourists, and for hospitality companies dependent on tourism. </li>
<li>
<a href="https://www.smartkarma.com/entities/mandarin-oriental-international-ltd" target="_blank" data-smartkarma-citation="entities:4773:1" rel="noopener"><strong>Mandarin Oriental International (MAND SP)</strong></a> is trading cheap at 0.7x P/B against 1.8x on average (five years) pre-Covid.</li>
</ul>


Hong Kong is - very gradually - rolling back Covid restrictions
That's a welcome relief for tourists, and for hospitality companies dependent on tourism. 

Mandarin Oriental International (MAND SP) is trading cheap at 0.7x P/B against 1.8x on average (five years) pre-Covid.


Mandarin Oriental (MAND SP): Life Is Suite

HK/China Equity Long-Short

Osbert Tang, CFA

<ul>
<li>It is difficult for <a href="https://www.smartkarma.com/entities/fosun-tourism-group" target="_blank" data-smartkarma-citation="entities:27439:1" rel="noopener">Fosun Tourism (1992 HK)</a> to return to its peak and IPO share prices over the next two years. The buyback proposal represents a good exit opportunity.</li>
<li>Net profit is unlikely to go back to FY19 level even in FY26F. The derating of the Chinese equities and Fosun Group, as well as its high gearing, are barriers.</li>
<li>Its PER multiples have already aligned back to the sector average from the extremely depressed level previously. Relative to global names, it is now only at slight discounts.</li>
</ul>


It is difficult for Fosun Tourism (1992 HK) to return to its peak and IPO share prices over the next two years. The buyback proposal represents a good exit opportunity.
Net profit is unlikely to go back to FY19 level even in FY26F. The derating of the Chinese equities and Fosun Group, as well as its high gearing, are barriers.
Its PER multiples have already aligned back to the sector average from the extremely depressed level previously. Relative to global names, it is now only at slight discounts.


Thematic (Sector/Industry)

<ul>
<li>Various statistics suggested that China's tourism and hospitality industry has staged a significant recovery during the 2024 CNY holidays, with traffic surging high double-digit.</li>
<li>While consumers are more cautious about retail product spending, they are willing to spend more on traveling. Such a trend will continue to bode well for the sector.</li>
<li>We like OTAs including <a href="https://www.smartkarma.com/entities/tongcheng-travel-holdings-ltd" target="_blank" data-smartkarma-citation="entities:27363:1" rel="noopener">Tongcheng Travel (780 HK)</a> and <a href="https://www.smartkarma.com/entities/trip-com-group-ltd-23a341d0-4f63-4175-a8c5-ee990906cacd" target="_blank" data-smartkarma-citation="entities:36424:1" rel="noopener">Trip.com (9961 HK)</a> despite their YTD surge in share prices. Meanwhile, <a href="https://www.smartkarma.com/entities/air-china-ltd-h" target="_blank" data-smartkarma-citation="entities:8239:1" rel="noopener">Air China Ltd (H) (753 HK)</a> stays as the top pick.</li>
</ul>


Various statistics suggested that China's tourism and hospitality industry has staged a significant recovery during the 2024 CNY holidays, with traffic surging high double-digit.
While consumers are more cautious about retail product spending, they are willing to spend more on traveling. Such a trend will continue to bode well for the sector.
We like OTAs including Tongcheng Travel (780 HK) and Trip.com (9961 HK) despite their YTD surge in share prices. Meanwhile, Air China Ltd (H) (753 HK) stays as the top pick.


China Tourism and Hospitality Industry: Roundup of a Solid CNY

<ul>
<li>Relaxation of China's local COVID-combating measures in last two weeks has induced expectations of HK-China border opening. This is speculated to come as early as 9 Jan 2023. </li>
<li>We identify <a href="https://www.smartkarma.com/entities/china-travel-international-investment-hong-kong" target="_blank" data-smartkarma-citation="entities:3879:1" rel="noopener">China Travel International Investment Hong Kong (308 HK)</a>, <a href="https://www.smartkarma.com/entities/sa-sa-international-hldgs" target="_blank" data-smartkarma-citation="entities:20143:1" rel="noopener">Sa Sa International Hldgs (178 HK)</a> and <a href="https://www.smartkarma.com/entities/shangri-la-asia-ltd" target="_blank" data-smartkarma-citation="entities:19690:1" rel="noopener">Shangri-La Asia (69 HK)</a> as interesting names to be benefited.</li>
<li>While all have rebounded sharply lately, they are still significantly off pre-pandemic peaks back in 2018. We also like the solid financial positions of CTII and Sa Sa.</li>
</ul>


Relaxation of China's local COVID-combating measures in last two weeks has induced expectations of HK-China border opening. This is speculated to come as early as 9 Jan 2023. 
We identify China Travel International Investment Hong Kong (308 HK), Sa Sa International Hldgs (178 HK) and Shangri-La Asia (69 HK) as interesting names to be benefited.
While all have rebounded sharply lately, they are still significantly off pre-pandemic peaks back in 2018. We also like the solid financial positions of CTII and Sa Sa.


HK-China Border Opening: Here Are Some Interesting Names

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>We see 32 potential and close adds and 44 potential and close deletes for the Hang Seng Composite Index in March. Some of the stocks are close on market cap/liquidity.</li>
<li>We expect 29 stocks to be added to Southbound Stock Connect following the rebalance while 31 stocks could be deleted from the trading link and become Sell-only.</li>
<li>There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.</li>
</ul>


We see 32 potential and close adds and 44 potential and close deletes for the Hang Seng Composite Index in March. Some of the stocks are close on market cap/liquidity.
We expect 29 stocks to be added to Southbound Stock Connect following the rebalance while 31 stocks could be deleted from the trading link and become Sell-only.
There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.


HSCI Index Rebalance Preview and Stock Connect: Potential Changes in March 2025

Hong Kong

Shangri-La Asia Limited, through its subsidiaries, owns and operates hotels, and provides management and related services.  The Company also leases offices, commercial, residential and exhibition hall space.

Price Gauge
52-week Range	0.00 - 0.00
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Shangri-La Asia (69 HK)

Mandarin Oriental (MAND SP): Life Is Suite

Mandarin Oriental is trading cheap at 0.7x P/B against 1.8x on average (5 years) pre-Covid. Business will continue to improve from here. The...

David Blennerhassett

Fosun Tourism (1992 HK): Giving In

Fosun Tourism faces challenges in returning to peak and IPO share prices, making the buyback proposal a good exit opportunity due to barriers like...

Osbert Tang, CFA

China Tourism and Hospitality Industry: Roundup of a Solid CNY

China's tourism industry sees a strong recovery during the 2024 CNY holidays, with a high double-digit traffic surge. OTAs like Tongcheng and...

Osbert Tang, CFA

HK-China Border Opening: Here Are Some Interesting Names

We look into details of China Travel Intl, Sa Sa Intl and Shangri-La Asia which will potentially be benefited from impending HK-China border...

Osbert Tang, CFA

HSCI Index Rebalance Preview and Stock Connect: Potential Changes in March 2025

There could be 78 changes for the HSCI in March. That could result in 57 changes to the Southbound Stock Connect list and also have implications...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Mandarin Oriental (MAND SP): Life Is Suite

Mandarin Oriental is trading cheap at 0.7x P/B against 1.8x on average (5 years) pre-Covid. Business will continue to improve from here. The...

David Blennerhassett

Fosun Tourism (1992 HK): Giving In

​Fosun Tourism faces challenges in returning to peak and IPO share prices, making the buyback proposal a good exit opportunity due to barriers like...

Osbert Tang, CFA

China Tourism and Hospitality Industry: Roundup of a Solid CNY

​China's tourism industry sees a strong recovery during the 2024 CNY holidays, with a high double-digit traffic surge. OTAs like Tongcheng and...

Osbert Tang, CFA

HK-China Border Opening: Here Are Some Interesting Names

We look into details of China Travel Intl, Sa Sa Intl and Shangri-La Asia which will potentially be benefited from impending HK-China border...

Osbert Tang, CFA

HSCI Index Rebalance Preview and Stock Connect: Potential Changes in March 2025

There could be 78 changes for the HSCI in March. That could result in 57 changes to the Southbound Stock Connect list and also have implications...

Brian Freitas

Fosun Tourism faces challenges in returning to peak and IPO share prices, making the buyback proposal a good exit opportunity due to barriers like...

China's tourism industry sees a strong recovery during the 2024 CNY holidays, with a high double-digit traffic surge. OTAs like Tongcheng and...