Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>SOUTHBOUND gross trading activity bounced sharply. Net buying increased sharply too. 9 names traded more than US$1bn. The top 3 names saw US$8.6bn of buying. </li>
<li>The trend continues to net sales of ETFs and high div SOEs. net buying is very, very broad-based. </li>
<li>I expect HK-listed tech to continue getting bought. It is something of a safe haven against Trump tariffs as they don't compete in the US much.</li>
</ul>


SOUTHBOUND gross trading activity bounced sharply. Net buying increased sharply too. 9 names traded more than US$1bn. The top 3 names saw US$8.6bn of buying. 
The trend continues to net sales of ETFs and high div SOEs. net buying is very, very broad-based. 
I expect HK-listed tech to continue getting bought. It is something of a safe haven against Trump tariffs as they don't compete in the US much.


HK Connect SOUTHBOUND Flows (To 8 Nov 2024); High-Div SOEs Sold, Tech Bought... Again

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

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>We expect operating profit will reach a record high to RMB54 billion in 3Q24.</li>
<li>We believe both Alibaba’s usage of WeChat Pay and boycotted JD.com will provide market share to Tencent.</li>
<li>We set the upside at 27% and the price target at HK$542 for the end of 2025. Buy.</li>
</ul>


We expect operating profit will reach a record high to RMB54 billion in 3Q24.
We believe both Alibaba’s usage of WeChat Pay and boycotted JD.com will provide market share to Tencent.
We set the upside at 27% and the price target at HK$542 for the end of 2025. Buy.


Tencent (700 HK) 3Q24 Earning Preview: Expecting Record High Operating Profit, 27% Upside

<ul>
<li>SOUTHBOUND had a small up week in 28% lower gross week on week. SOUTHBOUND activity is now the lowest in many weeks, not keeping up with mainland volumes.</li>
<li>ETFs were net sold, and high-div SOEs (China Mobile, CNOOC) were sold yet again. BABA, Xiaomi, Tencent, GCL were bought. </li>
<li>The buying of tech continues. I expect this to last for a while.</li>
</ul>


SOUTHBOUND had a small up week in 28% lower gross week on week. SOUTHBOUND activity is now the lowest in many weeks, not keeping up with mainland volumes.
ETFs were net sold, and high-div SOEs (China Mobile, CNOOC) were sold yet again. BABA, Xiaomi, Tencent, GCL were bought. 
The buying of tech continues. I expect this to last for a while.


HK Connect SOUTHBOUND Flows (To 1 Nov 2024); High-Div SOEs Sold, Tech Bought

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

<ul>
<li>China announced game approval for the October 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.</li>
<li>None of the companies that we are tracking got any approval for October batch.</li>
</ul>


China announced game approval for the October 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.
None of the companies that we are tracking got any approval for October batch.


Tencent/Netease: Zeroed Again After Three Months

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

<ul>
<li>We expect Tencent to report C3Q24 revenue, IFRS operating profit and IFRS net income in line, 5.7% and 7.1% vs. consensus. </li>
<li>Reason to own Tencent include: (1) company on an up game product cycle, (2) ample advertising inventory to benefit from GAI, (3) investor-friendly corporate culture. </li>
<li>With consumption uptick in C4Q24 and beyond, we see improvement in Tencent’s FinTech business. Temporary content shortage hurt Long Form Video this quarter. </li>
</ul>


We expect Tencent to report C3Q24 revenue, IFRS operating profit and IFRS net income in line, 5.7% and 7.1% vs. consensus. 
Reason to own Tencent include: (1) company on an up game product cycle, (2) ample advertising inventory to benefit from GAI, (3) investor-friendly corporate culture. 
With consumption uptick in C4Q24 and beyond, we see improvement in Tencent’s FinTech business. Temporary content shortage hurt Long Form Video this quarter. 


[Tencent (700 HK, BUY, TP HK$508) TP Change]: Upswing Performance & Cornerstone of the Sector

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 8 Nov 2024); High-Div SOEs Sold, Tech Bought... Again

SOUTHBOUND was a Very Big Buyer of HK shares last week. Given the movement in ADRs after the close because of no fiscal stim, one should expect...

Travis Lundy

Tencent (700 HK) 3Q24 Earning Preview: Expecting Record High Operating Profit, 27% Upside

We expect operating profit will reach a record high in 3Q24. We believe both Alibaba’s usage of WeChat Pay and boycotted JD.com will provide market...

Ming Lu

HK Connect SOUTHBOUND Flows (To 1 Nov 2024); High-Div SOEs Sold, Tech Bought

SOUTHBOUND was a net buyer, again. Volumes were lower. High-div SOEs - so well bought in the early part of the year - are being liquidated in...

Travis Lundy

Tencent/Netease: Zeroed Again After Three Months

We analyzed the game approval issued by NPPA for Chinese online game players for the month of October. None of the stocks we are tracking got any...

Ke Yan, CFA, FRM

[Tencent (700 HK, BUY, TP HK$508) TP Change]: Upswing Performance & Cornerstone of the Sector

Tencent expected to report strong Q3 results, reasons to own include up game cycle and advertising inventory, potential growth in FinTech...

Blue Lotus Research Institute

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HK Connect SOUTHBOUND Flows (To 8 Nov 2024); High-Div SOEs Sold, Tech Bought... Again

SOUTHBOUND was a Very Big Buyer of HK shares last week. Given the movement in ADRs after the close because of no fiscal stim, one should expect...

Travis Lundy

Tencent (700 HK) 3Q24 Earning Preview: Expecting Record High Operating Profit, 27% Upside

We expect operating profit will reach a record high in 3Q24. We believe both Alibaba’s usage of WeChat Pay and boycotted JD.com will provide market...

Ming Lu

HK Connect SOUTHBOUND Flows (To 1 Nov 2024); High-Div SOEs Sold, Tech Bought

SOUTHBOUND was a net buyer, again. Volumes were lower. High-div SOEs - so well bought in the early part of the year - are being liquidated in...

Travis Lundy

Tencent/Netease: Zeroed Again After Three Months

We analyzed the game approval issued by NPPA for Chinese online game players for the month of October. None of the stocks we are tracking got any...

Ke Yan, CFA, FRM

[Tencent (700 HK, BUY, TP HK$508) TP Change]: Upswing Performance & Cornerstone of the Sector

​Tencent expected to report strong Q3 results, reasons to own include up game cycle and advertising inventory, potential growth in FinTech...

Blue Lotus Research Institute

Tencent expected to report strong Q3 results, reasons to own include up game cycle and advertising inventory, potential growth in FinTech...