HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

China Travel International Investment Hong Kong / Equity Bottom-Up

China Travel International Investment Hong Kong

<ul>
<li>
<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> has an impressive 2024 CNY with the volume and revenue of its tourist attractions increased by 46% to 123% YoY.</li>
<li>Relative to 2019 CNY, most businesses have fully recovered. 1H23 earnings is the highest since 1H20 and the market may have underestimated 2H23, providing upside surprise potential. </li>
<li>The share price is still some 30% below the peak in late-2021 when earnings have yet to recover. Also, its net cash now equals 19% of the share price. </li>
</ul>



China Travel International Investment Hong Kong (308 HK) has an impressive 2024 CNY with the volume and revenue of its tourist attractions increased by 46% to 123% YoY.
Relative to 2019 CNY, most businesses have fully recovered. 1H23 earnings is the highest since 1H20 and the market may have underestimated 2H23, providing upside surprise potential. 
The share price is still some 30% below the peak in late-2021 when earnings have yet to recover. Also, its net cash now equals 19% of the share price. 


China Travel Intl Inv (308 HK): A Laggard that Sets to Catch Up

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 analyzed the latest HK SFC report for aggregate short position as of Feb 23rd.</li>
<li>Top short increases and decreases were tabulated for one week and four week period. </li>
<li>We highlight short weekly changes in HSBC, Li Auto, Lenovo.</li>
</ul>


We analyzed the latest HK SFC report for aggregate short position as of Feb 23rd.
Top short increases and decreases were tabulated for one week and four week period. 
We highlight short weekly changes in HSBC, Li Auto, Lenovo.


HK Short Interest Weekly: HSBC, Li Auto, Lenovo

Greater China Equity Long/Short Analyst

Eric Chen

Beijing Capital International Airport (BCIA) / Equity Bottom-Up

Beijing Capital International Airport (BCIA)

<ul>
<li>Recent newsflow and company results suggest China outbound travel is on track to recover to pre-pandemic level by the end of this year.</li>
<li>China airports have different exposures to outbound travel, which largely determines the scale of their duty-free shopping business and earnings upside amidst this recovery cycle.</li>
<li>Beijing Capital Airport offers best risk/return profile among listed China airports in our view as current valuation does not fully capture even a conservative scenario of recovery in outbound travel.</li>
</ul>


Recent newsflow and company results suggest China outbound travel is on track to recover to pre-pandemic level by the end of this year.
China airports have different exposures to outbound travel, which largely determines the scale of their duty-free shopping business and earnings upside amidst this recovery cycle.
Beijing Capital Airport offers best risk/return profile among listed China airports in our view as current valuation does not fully capture even a conservative scenario of recovery in outbound travel.


China Airports: Beijing Capital Airport Offers Best Risk/Return Payoff

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>The March rebalance of the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">HSI</a>, <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">HSCEI</a>, <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">HSTECH</a> and HSIII indices will use today's closing prices to cap the index constituent weights at 8%/12%. This will lead to large flows.</li>
<li>
<a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>, <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/tongcheng-travel-holdings-ltd" target="_blank" data-smartkarma-citation="entities:27363:1" rel="noopener">Tongcheng Travel (780 HK)</a> are the biggest buys while <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba (9988 HK)</a>, <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/hsbc-holdings-plc" target="_blank" data-smartkarma-citation="entities:516:1" rel="noopener">HSBC (5 HK)</a> are the biggest sells.</li>
<li>The round-trip trade across all stocks across the four indices is estimated at HK$16.16bn (US$2.06bn).</li>
</ul>


The March rebalance of the HSI, HSCEI, HSTECH and HSIII indices will use today's closing prices to cap the index constituent weights at 8%/12%. This will lead to large flows.

Tencent (700 HK), Meituan (3690 HK) and Tongcheng Travel (780 HK) are the biggest buys while Alibaba (9988 HK), Li Auto (2015 HK),  HSBC (5 HK) are the biggest sells.
The round-trip trade across all stocks across the four indices is estimated at HK$16.16bn (US$2.06bn).


HSI, HSCEI, HSTECH, HSIII: Rebalance Flows Post Capping (Mar 2024)

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Tongcheng Travel Holdings  / Event-Driven

<ul>
<li>The Hang Seng Index, HSCEI, and HS Tech rebals were announced on 16 Feb. <a href="https://www.smartkarma.com/profiles/janaghan-jeyakumar-cfa" target="_blank" data-smartkarma-citation="accounts:3173" rel="noopener">Janaghan Jeyakumar, CFA</a> had expected GDS out, Tongcheng Travel in on HSTECH, along with the...</li>
<li>...deletion of <a href="https://www.smartkarma.com/entities/zhongsheng-group-holdings" target="_blank" data-smartkarma-citation="entities:10573:1" rel="noopener">Zhongsheng Group (881 HK)</a> in HSCEI, with a low conviction replacement of Zijin Mining, which turned out to be an add of <a href="https://www.smartkarma.com/entities/china-unicom-hong-kong-ltd" target="_blank" data-smartkarma-citation="entities:1016:1" rel="noopener">China Unicom Hong Kong (762 HK)</a>. </li>
<li>No changes to the main HSI Index, which means evolution is further delayed. Today was the day to recap the caps. Mar1 Flow estimates are included below for all three.</li>
</ul>


The Hang Seng Index, HSCEI, and HS Tech rebals were announced on 16 Feb. Janaghan Jeyakumar, CFA had expected GDS out, Tongcheng Travel in on HSTECH, along with the...
...deletion of Zhongsheng Group (881 HK) in HSCEI, with a low conviction replacement of Zijin Mining, which turned out to be an add of China Unicom Hong Kong (762 HK). 
No changes to the main HSI Index, which means evolution is further delayed. Today was the day to recap the caps. Mar1 Flow estimates are included below for all three.


Final Flows for Hang Seng, HSCEI, HS Tech on 1 March Rebal

China

China Tourism Group Duty Free Corporation Limited engages in sales of duty free goods and tax goods. The Company sells tobacco, wine and spirits, perfume, cosmetics, fashion and accessories, watches, jewelry, food, luggage products,and other products. China Tourism Group Duty Free also engages in investment and development of tourism destination commercial complexes.

China Tourism Group Duty Free Corp Ltd (601888 CH)

Huazhu Group Limited operates a hotel operator and franchisor. The Company provides hotel leasing, directly hotel operation, and co-development services. Huazhu Group mainly conducts businesses in China.

Haidilao International Holding Ltd. operates Chinese cuisine restaurant brand focusing on hot pot cuisine. The Company provides hot pots, soup bases, dipping sauces, drinks, prepared food, and other products. Haidilao International Holding opens restaurants in Taiwan, Hong Kong, Singapore, South Korea, Japan, and the United States.

Tongcheng Travel Holdings Limited operates as an online travel agency. The Company provides transportation ticketing, accommodation reservation, value added travel products sales, and other services. Tongcheng Travel Holdings provides its services throughout China.

Shenzhen Overseas Chinese Town Co Ltd invests in and manages theme parks in China.  The Company, through its subsidiaries, also provides travel agency service.

Shenzhen Overseas Chinese (A) (000069 CH)

Songcheng Performance Development Co., LTD invests, develops and operates theme parks and tourism cultural performing arts. The Company's major projects include the Sungcheng theme park and the cultural performing arts musical "The Romance of the Song Dynasty".

Songcheng Performance Development (300144 CH)

Giant Network Group Co., Ltd. develops online games. The Company mainly develops, operates, and sells computer terminal network game and mobile terminal network game products. Giant Network Group provides services in China.

Shanghai Jinjiang International Hotels Co.,Ltd. owns and operates hotels.  The Company also provides catering, business, entertainment, and other services. Shanghai Jinjiang International Hotels conducts its business in China.

Shanghai Jinjiang Internationa (600754 CH)

BTG Hotels (Group) Co., Ltd. operates a tourism business.  The Company also invests in hotel and restaurant management, as well as provides advertising and exhibition center management services.

China CYTS Tours Holding Co., Ltd. provides travel information and arrangement services.  Through its subsidiaries, the Company also manufactures medical instrument, provides system integration services for the insurance industry, and develops real estate.

Sands China Ltd. develops, owns, and operates integrated resorts, retail malls, and casinos. The Company also manages convention and exhibition halls in Macau.

Wynn Resorts, Limited owns and operates luxury hotels and destination casino resorts in Las Vegas, Nevada, Macau, and China. The Company offers amenities such as guest rooms and suites, restaurants, golf course, and an on-site luxury automotive dealership.

Galaxy Entertainment Group Limited, through its subsidiary, operates casino, hotel and other entertainment facilities in Macau. The company also manufactures sells and distributes construction materials.

Las Vegas Sands Corp. owns and operates casino resorts and convention centers. The Company operates in the United States, Macau and Singapore. Las Vegas Sand Corp's casinos offer a wide range of gaming activities and entertainment as well as overnight accommodations, while its expo centers host a wide range of entertainment shows, expositions, and other activities.

Yum! Brands, Inc, owns and franchises quick-service restaurants worldwide.  The Company develops, operates, franchises and licenses a worldwide system of restaurants which prepare, package and sell a menu of food items.

Royal Caribbean Cruises Ltd. is a global cruise company operating a fleet of vessels in the cruise vacation industry. The Company operates through brands which primarily serve the contemporary, premium and deluxe segments of the cruise vacation industry, which also includes the budget and luxury segments.

Hyatt Hotels Corp. is a global hospitality company. The Company manages, franchises, owns, and develops branded hotels, resorts and residential and vacation ownership properties around the world.

Norwegian Cruise Line Holdings Ltd. operates a fleet of passenger cruise ships. The Company offers an array of cruise itineraries as well as theme cruises, while markets its services through various distribution channels including retail and travel agents, consumer direct, international sales, as well as incentive sales. Norwegian Cruise extends its services worldwide.

Wingstop Inc. owns and operates restaurants. The Company specializes in cooked-to-order, hand-sauced, and tossed chicken wings. Wingstop serves customers worldwide.

Indian Hotels Company Limited operates The Taj Group of hotels.  The Company owns or maintains long term leases/licenses for hotels in India, in addition to International hotels.  The Group's hotels are divided into three groups: Luxury, Business, and, Leisure.

Trip.com Group Limited provides online travel agency services. The Company offers mobile applications, hotel reservations, flight ticketing, package tours, corporate travel management, and train ticketing services. Trip.com Group provides services worldwide.

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Trip.com Group (9961 HK)

China Travel Intl Inv (308 HK): A Laggard that Sets to Catch Up

CTII shows tourist attractions volume and revenue growth in 2024 CNY, with the potential for upside surprise. We believe it is unjustified that...

Osbert Tang, CFA

HK Short Interest Weekly: HSBC, Li Auto, Lenovo

We analyzed the latest HK SFC report for aggregate short position as of Feb 23rd and highlight short interest changes in HSBC, Li Auto, Lenovo.

Ke Yan, CFA, FRM

China Airports: Beijing Capital Airport Offers Best Risk/Return Payoff

China outbound travel is set to recover to pre-pandemic levels by year-end, with Beijing Capital Airport offering the best risk/return profile...

Eric Chen

HSI, HSCEI, HSTECH, HSIII: Rebalance Flows Post Capping (Mar 2024)

Tencent (700 HK), Meituan (3690 HK) and Tongcheng Travel (780 HK) are the biggest buys while Alibaba (9988 HK), Li Auto (2015 HK), HSBC (5 HK) are...

Brian Freitas

Final Flows for Hang Seng, HSCEI, HS Tech on 1 March Rebal

The Final flows for the Hang Seng March 2024 index rebalances are set based off the close of 27 February. One large change (Li Auto was expected to...

Travis Lundy

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China Travel Intl Inv (308 HK): A Laggard that Sets to Catch Up

​CTII shows tourist attractions volume and revenue growth in 2024 CNY, with the potential for upside surprise. We believe it is unjustified that...

Osbert Tang, CFA

HK Short Interest Weekly: HSBC, Li Auto, Lenovo

We analyzed the latest HK SFC report for aggregate short position as of Feb 23rd and highlight short interest changes in HSBC, Li Auto, Lenovo.

Ke Yan, CFA, FRM

China Airports: Beijing Capital Airport Offers Best Risk/Return Payoff

​China outbound travel is set to recover to pre-pandemic levels by year-end, with Beijing Capital Airport offering the best risk/return profile...

Eric Chen

HSI, HSCEI, HSTECH, HSIII: Rebalance Flows Post Capping (Mar 2024)

Tencent (700 HK), Meituan (3690 HK) and Tongcheng Travel (780 HK) are the biggest buys while Alibaba (9988 HK), Li Auto (2015 HK), HSBC (5 HK) are...

Brian Freitas

Final Flows for Hang Seng, HSCEI, HS Tech on 1 March Rebal

The Final flows for the Hang Seng March 2024 index rebalances are set based off the close of 27 February. One large change (Li Auto was expected to...

Travis Lundy

CTII shows tourist attractions volume and revenue growth in 2024 CNY, with the potential for upside surprise. We believe it is unjustified that...

China outbound travel is set to recover to pre-pandemic levels by year-end, with Beijing Capital Airport offering the best risk/return profile...