In today’s briefing:
- HK Connect SOUTHBOUND Flows (To 15 Mar 2024); Strong Net Buying on Tencent and ETFs
- [KE Holdings (BEKE US, BUY, TP US$24) Review]: Investor Friendly & Best-In-Class…Reiterate BUY
- Mainland Connect NORTHBOUND Flows (To 15 Mar 2024): Biggest Net Buying in a While, CATL a Big Buy
- A/H Premium Tracker (To 15 Mar 2024): Liquid AH Premia Starting to Narrow
HK Connect SOUTHBOUND Flows (To 15 Mar 2024); Strong Net Buying on Tencent and ETFs
- A shares were up small on the week. The spivvier the better. HK was up better, especially among the liquid names.
- Net SOUTHBOUND buying was +HK$21.4bn in the fourth post-holiday week vs +HK$17bn the week before. SOUTHBOUND has net bought every day since the end of Chinese New Year.
- The flavour of SOUTHBOUND buying has been high-div SOEs for months and months. That is starting to change slightly. Tencent was a net buy the second week in a row.
[KE Holdings (BEKE US, BUY, TP US$24) Review]: Investor Friendly & Best-In-Class…Reiterate BUY
- KE Holdings’ (BEKE) reported C4Q23 revenue 6.2%/7.5% above our est./cons.. Its non-GAAP net income miss our est. by 8.3%, due to bad debt write-off and year-end bonus
- Although recovery in new home market remains muddy, we view Beike’s commitment to deliver 5% yield through dividend and stock buyback as investor friendly.
- We reiterate BUY rating and maintain TP at US$24/ADS .
Mainland Connect NORTHBOUND Flows (To 15 Mar 2024): Biggest Net Buying in a While, CATL a Big Buy
- The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
- Last week saw NORTHBOUND net BUY RMB 32.8bn of A-shares on decent volume after one RMB-3bn week following 5 weeks straight of net buying total RMB +63bn. Foreigners are in.
- The volume now is back to chasing momentum, but given so much net buying, much of it appears to be passive plus a CATL kicker.
A/H Premium Tracker (To 15 Mar 2024): Liquid AH Premia Starting to Narrow
- 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 a net buyer every day since the end of Chinese New Year. NORTHBOUND a huge net buyer this week, now net buyers in size (RMB +93bn) over 7 weeks.
- For the first time in a while, AH premia among liquid stocks fell convincingly. Narrow AH premia pairs saw Hs outperform more than wide AH premia Hs (vs As).
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