Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>SOUTHBOUND was again a net buyer, for HK$9.2bn this week (now 26wks in a row of net buying), on smallish two-way volumes.</li>
<li>I've thought national team was buying banks for months. They were gone for a couple of weeks. Feels like they are back. </li>
<li>There were three ETFs in the top five SOUTHBOUND sells this past week, reversing last week. Energy, Utilities, Telecoms bought. </li>
</ul>


SOUTHBOUND was again a net buyer, for HK$9.2bn this week (now 26wks in a row of net buying), on smallish two-way volumes.
I've thought national team was buying banks for months. They were gone for a couple of weeks. Feels like they are back. 
There were three ETFs in the top five SOUTHBOUND sells this past week, reversing last week. Energy, Utilities, Telecoms bought. 


HK Connect SOUTHBOUND Flows (To 2 Aug 2024); ETFs Get Sold; Tencent, SOEs, Utilities Bought

<ul>
<li>SOUTHBOUND was again a net buyer, for HK$7.8bn this week (now 25wks in a row of net buying), on smallish two-way volumes. </li>
<li>I've thought national team was buying banks for months. This week, 1 bank showed up in the top 20 net buys after only 1 in the top ten last week.</li>
<li>There were three ETFs in the top six SOUTHBOUND buys this past week. That was unusual. Some high div SOEs got sold. </li>
</ul>


SOUTHBOUND was again a net buyer, for HK$7.8bn this week (now 25wks in a row of net buying), on smallish two-way volumes. 
I've thought national team was buying banks for months. This week, 1 bank showed up in the top 20 net buys after only 1 in the top ten last week.
There were three ETFs in the top six SOUTHBOUND buys this past week. That was unusual. Some high div SOEs got sold. 


HK Connect SOUTHBOUND Flows (To 26 Jul 2024); ETFs Get Bought, Banks Have Gone Missing

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.

Equity Bottom-Up

<ul>
<li>China announced game approval for the June batch. The number of games approved remained at a higher level than 2023.</li>
<li>The pace of China game approval appears to have accelerated to the same level as pre-tightening. Of companies that we are monitoring, none got any approval.</li>
<li>China's CADPA published a semi-annual report pointing to flattish growth of gaming revenue in the first half. </li>
</ul>


China announced game approval for the June batch. The number of games approved remained at a higher level than 2023.
The pace of China game approval appears to have accelerated to the same level as pre-tightening. Of companies that we are monitoring, none got any approval.
China's CADPA published a semi-annual report pointing to flattish growth of gaming revenue in the first half. 


Tencent/Netease: Zero for Major Names; Industry Revenue Growth Flattish in First Half

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.

<ul><li>Underpinned by the recovering games business and solid ad performance, we expect Tencent to continue to deliver solid revenue and earnings growth, with total revenue/non-IFRS net income up by 8%/33% YoY to RMB160.9bn/49.2bn in 2Q24E (vs. consensus of RMB161.8bn/48.1bn).</li><li>DnF Mobile’s performance was ahead of market expectation after its launch in May, but we expect it to mainly drive 2H24E games revenue growth given its relatively long deferral period.</li><li>Ad business was resilient on strong Weixin ad performance, while fintech business remained under pressure in 2Q24 amid macro uncertainty, in our view. </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>

Underpinned by the recovering games business and solid ad performance, we expect Tencent to continue to deliver solid revenue and earnings growth, with total revenue/non-IFRS net income up by 8%/33% YoY to RMB160.9bn/49.2bn in 2Q24E (vs. consensus of RMB161.8bn/48.1bn).DnF Mobile’s performance was ahead of market expectation after its launch in May, but we expect it to mainly drive 2H24E games revenue growth given its relatively long deferral period.Ad business was resilient on strong Weixin ad performance, while fintech business remained under pressure in 2Q24 amid macro uncertainty, in our view. 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.

Tencent (700 HK) - Earnings Growth Stability Continues

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

<ul>
<li>Douyin’ GMV increased by 300% YoY in the “June 18” sales season.</li>
<li>The revenue of a pre-IPO restaurant chain, Green Tea, increased by 55% in 2023.</li>
<li>Alibaba’s supermarket chain, Freshippo, opened 12 new stores in June.</li>
</ul>


Douyin’ GMV increased by 300% YoY in the “June 18” sales season.
The revenue of a pre-IPO restaurant chain, Green Tea, increased by 55% in 2023.
Alibaba’s supermarket chain, Freshippo, opened 12 new stores in June.


China Consumption Weekly (1 Jul 2024): Douyin, Green Tea, Alibaba, Tencent, Haidilao

China

Tencent Holdings Limited operates as an investment holding company. The Company, through its subsidiaries, provides Internet and mobile value-added services (VAS), online advertising, and e-commerce transactions. Tencent Holdings offers services to users worldwide.

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Tencent Holdings (ADR) (TCEHY US)

HK Connect SOUTHBOUND Flows (To 2 Aug 2024); ETFs Get Sold; Tencent, SOEs, Utilities Bought

SOUTHBOUND flows for HK Connect were to the net buy side for the 26th week in a row. SOEs in Energy, Telcos, and Utilities were strong. Banks too....

Travis Lundy

HK Connect SOUTHBOUND Flows (To 26 Jul 2024); ETFs Get Bought, Banks Have Gone Missing

SOUTHBOUND saw net inflow through HK Connect for the 25th week in a row. Three ETFs were in the top 6 net buys, and only one bank in the top 20....

Travis Lundy

Tencent/Netease: Zero for Major Names; Industry Revenue Growth Flattish in First Half

We analyzed the July China game approval data. Though China is approving games at an speed that is upbeat for investors, concerns remains as to...

Ke Yan, CFA, FRM

Tencent (700 HK) - Earnings Growth Stability Continues

Underpinned by the recovering games business and solid ad performance, we expect Tencent to continue to deliver solid revenue and earnings growth

CMB International

China Consumption Weekly (1 Jul 2024): Douyin, Green Tea, Alibaba, Tencent, Haidilao

Douyin’ GMV increased by 300% YoY in the “June 18” sales season. Pre-IPO restaurant chain, Green Tea’s revenue increased by 55% in 2023. Alibaba’s...

Ming Lu

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