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In today’s briefing:
- HK Connect SOUTHBOUND Flows (To 24 May 2024); Strong Bank Buying and Tech Selling Continues
- A/H Premium Tracker (To 24 May 2024): HK Stocks Have a BAD Week and AH Premium Rebounds In
- Merger Arb Mondays (27 May) – L’Occitane, SciClone, GA Pack, KFC Japan, CF Logistics, Best World
- Many Companies Still Consider Engagement with Investors to Be Someone Else’s Business
- China Consumption Weekly (27 May 2024): Xpeng, Tongcheng, Kanzhun, Gaotu, KE, Bilibili, and Weibo
- Warby Parker Inc (WRBY) – Friday, Feb 23, 2024
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HK Connect SOUTHBOUND Flows (To 24 May 2024); Strong Bank Buying and Tech Selling Continues
- SOUTHBOUND was again a net buyer for HK$18.6bn on strong two-way volumes. The top three net buys of the week were SOE banks. Some may be Central Huijin.
- Some of this may be driven by the dividend w/h tax cancellation on H divs and by significant H-share discounts, but high-div CNOOC was the biggest net sell.
- No end to the inflows, and HK valuations are not at a place where they would hamper continued flows. Alibaba making HK a Primary will spur more inflows over time.
A/H Premium Tracker (To 24 May 2024): HK Stocks Have a BAD Week and AH Premium Rebounds In
- The New/Better A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
- SOUTHBOUND’s buy streak continued this past week; every day was net positive. NORTHBOUND was net positive too. It is not clear how much is National Team buying. Much may be.
- AH Premia rebounded off multi-year lows, on average, this past week as Hang Seng and other HK indices fell sharply and A-shares did not fall as much.
Merger Arb Mondays (27 May) – L’Occitane, SciClone, GA Pack, KFC Japan, CF Logistics, Best World
- We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads: Yichang HEC Changjiang Pharma (1558 HK), Hollysys Automation Technologies (HOLI US), Ansarada Group Ltd (AND AU), Malaysia Airports Holdings (MAHB MK), China Traditional Chinese Medicine (570 HK).
- Lowest spreads: Chilled & Frozen Logistics Holdings (9099 JP), Mma Offshore (MRM AU), Great Eastern Holdings (GE SP), Mimasu Semiconductor Industry (8155 JP), Boral Ltd (BLD AU).
Many Companies Still Consider Engagement with Investors to Be Someone Else’s Business
- Although it’s possible to move AGM forward given the timing of financial reporting, 70% of companies will hold their AGM during the 3 days of the last week of June.
- As long as the concentration of AGM dates continues, the start of electronic provision of AGM documents should at least be accelerated to allow time to review the agenda.
- Only slightly less than 30% of prime market listed companies provide English translations of all convocation notices, including business reports and financial statements.
China Consumption Weekly (27 May 2024): Xpeng, Tongcheng, Kanzhun, Gaotu, KE, Bilibili, and Weibo
- In 1Q24, Revenues of Xpeng, Tongcheng, Kanzhun, and Gaotu grew by 62% YoY, 50%, YoY, 43% YoY and 34% YoY.
- KE’s revenue decreased by 20% YoY in 1Q24 due to the weak property market.
- Bilibili’s value added services revenue grew by 17% YoY and advertising revenue grew by 31% YoY.
Warby Parker Inc (WRBY) – Friday, Feb 23, 2024
- Warby Parker disrupted the eyewear industry in 2010 with affordable prices and innovative styles, known for their commitment to social impact
- The company has faced challenges with slowing growth and increased competition, leading to concerns about its uniqueness and disrupter status
- Critics believe that Warby Parker’s focus on technology and business model changes indicate a potential decline, making it a target for short selling.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.