Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Q1 saw record quarterly inflows by SOUTHBOUND investors at HK$435bn, beating the previous record of Q1 2021 by more than HK$100bn. This week was +HK$37bn.</li>
<li>That's decent net buying still. Keeping that pace would mean a new record. It IS possible this excess flow is state-managed (or state-insisted as insurers up equity investment ratios).</li>
<li>Included is a summary of important China Stocks-relevant news as I saw it this week, but tariffs, retaliation, US growth prospects, etc will all matter more. </li>
</ul>


Q1 saw record quarterly inflows by SOUTHBOUND investors at HK$435bn, beating the previous record of Q1 2021 by more than HK$100bn. This week was +HK$37bn.
That's decent net buying still. Keeping that pace would mean a new record. It IS possible this excess flow is state-managed (or state-insisted as insurers up equity investment ratios).
Included is a summary of important China Stocks-relevant news as I saw it this week, but tariffs, retaliation, US growth prospects, etc will all matter more. 


HK Connect SOUTHBOUND Flows (To 28 Mar 2025); Banks and Divs Bought Again

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.

Equity Bottom-Up

Weichai Power Co Ltd H / Equity Bottom-Up

<ul><li>Weichai’s net profit in 2024 grew 27% YoY to RMB11.4bn, which is in line with our expectation.</li><li>Net profit in 4Q24 grew 19% YoY to RMB3bn, driven by 28%/13% YoY reduction of S&amp;D / R&amp;D expenses despite a flat (YoY) revenue.</li><li>Weichai proposed a final dividend of RMB0.347/shr. </li></ul>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.

Weichai’s net profit in 2024 grew 27% YoY to RMB11.4bn, which is in line with our expectation.Net profit in 4Q24 grew 19% YoY to RMB3bn, driven by 28%/13% YoY reduction of S&amp;D / R&amp;D expenses despite a flat (YoY) revenue.Weichai proposed a final dividend of RMB0.347/shr. 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.

Weichai Power (2338 HK/000338 CH) - Strong Engine Margin Expansion in 2024

<ul>
<li>AH Premia continue to fall. Spread curve torsion reverses again with narrow premia trades seeing Hs perform the best. </li>
<li>Warning signs are starting to flash on spreads. This week I have the biggest week of changes recommended that I have ever had. By a long ways.</li>
<li>This week threatens to be a very strange week geopolitically. Being smaller in crowded trades is probably a good thing.</li>
</ul>


AH Premia continue to fall. Spread curve torsion reverses again with narrow premia trades seeing Hs perform the best. 
Warning signs are starting to flash on spreads. This week I have the biggest week of changes recommended that I have ever had. By a long ways.
This week threatens to be a very strange week geopolitically. Being smaller in crowded trades is probably a good thing.


A/H Premium Tracker (To 28 Feb 2025):  AH Premia Continue to Fall; Expect Widening

<ul><li>We expect Weichai Power will gain traction in the near term, as the market has been looking for beneficiaries across the AI-related sectors.</li><li>Based on our estimates, in 2024, Weichai Power delivered 400 units of large-bore highspeed engines specifically for data centres, of which 60% were sold overseas.</li><li>We forecast sales volume in 2025E to surge 1.5x YoY to 1k units. We expect segment revenue in 2025E to reach RMB2bn, based on ASP of RMB2mn. </li></ul>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.

We expect Weichai Power will gain traction in the near term, as the market has been looking for beneficiaries across the AI-related sectors.Based on our estimates, in 2024, Weichai Power delivered 400 units of large-bore highspeed engines specifically for data centres, of which 60% were sold overseas.We forecast sales volume in 2025E to surge 1.5x YoY to 1k units. We expect segment revenue in 2025E to reach RMB2bn, based on ASP of RMB2mn. 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.

Weichai Power (2338 HK/000338 CH) - Expect Strong Volume Growth of Engines for Data Centres

<ul>
<li>AH Premia are lower over the last few weeks of holiday and this past week of heavy SOUTHBOUND buying on Tencent, telcos, and banks.</li>
<li>Finance and Tech are seeing large buying, but the really big moves over the past few weeks have been on Industrial Names (CRRC), and Materials, and Tech</li>
<li>The VERY WIDE Tech spreads such as SMIC (981), Shanghai Fudan Microelectric (1385), CHina Rail Signal (3969), and Flat Glass (6865) have been HUGE performers.</li>
</ul>


AH Premia are lower over the last few weeks of holiday and this past week of heavy SOUTHBOUND buying on Tencent, telcos, and banks.
Finance and Tech are seeing large buying, but the really big moves over the past few weeks have been on Industrial Names (CRRC), and Materials, and Tech
The VERY WIDE Tech spreads such as SMIC (981), Shanghai Fudan Microelectric (1385), CHina Rail Signal (3969), and Flat Glass (6865) have been HUGE performers.


A/H Premium Tracker (To 10 Jan 2025): Super Wide Tech Spreads Best Over Holidays and into NY.

China

Weichai Power Co., Ltd. specializes in the research and development, manufacturing and sales of diesel engines. The company's products are applicable to markets such as, heavy-duty vehicles, coaches, construction machines, vessels and power generator.

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Weichai Power Co Ltd H (2338 HK)

HK Connect SOUTHBOUND Flows (To 28 Mar 2025); Banks and Divs Bought Again

Chinese banks get their expected capital injection and the world awaits tariffs but SOUTHBOUND investors continue to buy, making for a record...

Travis Lundy

Weichai Power (2338 HK/000338 CH) - Strong Engine Margin Expansion in 2024

Net profit in 4Q24 grew 19% YoY to RMB3bn, driven by 28%/13% YoY reduction of S&D / R&D expenses despite a flat (YoY) revenue.

CMB International

A/H Premium Tracker (To 28 Feb 2025): AH Premia Continue to Fall; Expect Widening

AH Premia are again at a 5yr low. Liquid Hs outperform illiquids with wider spreads. Trades are getting crowded. Biggest slew of recommendations in...

Travis Lundy

Weichai Power (2338 HK/000338 CH) - Expect Strong Volume Growth of Engines for Data Centres

We expect Weichai Power will gain traction in the near term, as the market has been looking for beneficiaries across the AI-related sectors.

CMB International

A/H Premium Tracker (To 10 Jan 2025): Super Wide Tech Spreads Best Over Holidays and into NY.

AH Spreads tightened on average to near 5yr lows. Financials, Energy, Industrials all very tight. Tech, Materials, and Pharma remain wide. Wide...

Travis Lundy

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