In today’s briefing:
- GA Pack (468 HK): Shandong Xinjufeng’s Offer Gets a Boost as Mengniu Sells Down
- HSCI Index Rebalance Preview and Stock Connect: Updated Potential Changes in March 2025
- EQD | Meituan (3690 HK) In the Bear’s Grip – Popular Option Strategies and Top Trades
- Bloks Group Likely To Price IPO at High End of Range: What To Expect From First Trading-Day?
- Quiddity Leaderboard HSTECH Mar 25: One High-Conviction Change; US$475mn One-Way
- EQD | Tencent (700 HK) – Popular Option Strategies and Top Trades, Low Vola Presents Opportunity
- Quiddity Leaderboard Hang Seng Index: Healthcare Is Still the Most Under-Represented Industry Group
- Fosun Tourism (1992.HK) – The Logic Behind the Share Buyback and the Outlook
- BYD (1211 HK): Vehicle Deliveries Up by 40% in 2024
- Boqi Env (2377 HK): Takeaways From The Partial Offer
GA Pack (468 HK): Shandong Xinjufeng’s Offer Gets a Boost as Mengniu Sells Down
- China Mengniu Dairy Co (2319 HK), Greatview Aseptic Packaging (468 HK)‘s largest customer, has ceased to be a substantial shareholder. Mengniu opposes the Shandong Xinjufeng offer.
- This development suggests that Mengniu has low confidence in a management competing offer and will likely shift its business away from GA Pack.
- The stake sale will help the Shandong Xinjufeng Technology Packaging (301296 CH) offer turn unconditional as it will nudge minorities to tender, partly due to GA Pack’s uncertain outlook.
HSCI Index Rebalance Preview and Stock Connect: Updated Potential Changes in March 2025
- We see 38 potential and close adds and 51 potential and close deletes for the Hang Seng Composite Index in March. Some of the stocks are close on market cap/liquidity.
- There have been many new listings in the last weeks of December. Some of them are fairly large and will be added and that increases the number of potential deletions.
- There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.
EQD | Meituan (3690 HK) In the Bear’s Grip – Popular Option Strategies and Top Trades
- This Insight analyses Meituan (3690 HK) tailor-made option strategies traded over the last five trading days on the Hong Kong Exchange. Strategy highlights and volatility insights are provided.
- The vast majority of traders opt for bearish strategies, but there are examples of contrarian trades.
- Although one-month implied volatility is historically low in its 7th percentile, it is above realized volatility. With an implied just below 40%, option premiums are significant in absolute terms.
Bloks Group Likely To Price IPO at High End of Range: What To Expect From First Trading-Day?
- Bloks Group, a founder-led toy maker and owner of trusted brand “Blokees”, will price its IPO this week. Shares are set to begin trading on January 10, 2025.
- I would expect strong first trading-day return as HK public offering was already 5,000+ times oversubscribed at high end of marketed price range.
- I believe investors are rationally optimistic about the company. Bloks Group IPO attracted a surge of retail investors, and the stock may skyrocket above IPO price on first trading-day.
Quiddity Leaderboard HSTECH Mar 25: One High-Conviction Change; US$475mn One-Way
- The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
- In this insight, we take a look at the final rankings of potential ADDs and potential DELs for the March 2025 index rebal event.
- We expect one change for the HSTECH index in March 2025 and combined with capping flows currently see US$475mn one-way flows.
EQD | Tencent (700 HK) – Popular Option Strategies and Top Trades, Low Vola Presents Opportunity
- This Insight analyzes Tencent (700 HK) tailor-made option strategies traded over the last five trading days on the Hong Kong Exchange. Strategy highlights and volatility insights are provided.
- Historically low implied volatility favors bullish or bearish long volatility strategies.
- Calendar Spreads are a popular strategy. Bulls and bears are both very active in the market, expressing their views through trades.
Quiddity Leaderboard Hang Seng Index: Healthcare Is Still the Most Under-Represented Industry Group
- The Hang Seng Index is the benchmark index for Hong Kong stocks. It follows a highly-subjective selection process which makes it difficult to predict index changes.
- In this insight, we take a look at a group of names with reasonably high likelihood of being involved in index changes during the next review in March 2025.
- The index changes for the March 2025 index rebal event will be announced after market close on 21st February 2025.
Fosun Tourism (1992.HK) – The Logic Behind the Share Buyback and the Outlook
- Without the buyback, it’s difficult to obtain reasonable market pricing by simply transferring the equity of Fosun Tourism or the equity of core assets, which is detrimental to Fosun Group.
- To maximize returns, a wiser approach is to privatize Fosun Tourism first, then at a higher valuation level to spin off, sell, relist, attract strategic investment to “rationalize” the valuation.
- Heavy assets of Taicang/Lijiang projects would be sold. For core assets Club Med/Atlantis, the future plans could be different. It’s necessary to take a look at the Share Alternative Option.
BYD (1211 HK): Vehicle Deliveries Up by 40% in 2024
- BYD’s deliveries grew by 51% YoY in December 2024 and 41% in the year 2024.
- The Brazil event will slow down overseas expansion, but overseas deliveries account for only 10% of total vehicles.
- We believe the stock has an upside of 39% and a price target of HK$356 for the next twelve months.
Boqi Env (2377 HK): Takeaways From The Partial Offer
- Back on the 23rd October, flue gas treatment play China Boqi Environmental Hol (2377 HK) announced a buyback of 15% of shares out, at HK$1.20/share, a 16.5% premium to undisturbed.
- The Offer Doc was dispatched on the 28th November, and the Offer closed on the 3rd January.
- 304.6mn shares tendered against the buyback of 150.858mn shares, or a pro-ration of 49.53%. However, how the public shareholders tendered may provide a gauge for future Hong Kong Partial Offers.
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