In today’s briefing:
- Actionable Trade: CNOOC H-Share 883HK – Strong SB Flow, A/H Prem, Low Valuation & Multiple Catalysts
- A Noteworthy Long Short Setup: Ecopro BM & Posco Future M
- The Mosaic Company: K3 Project and Distribution Market Share Driving Growth – Key Drivers
Actionable Trade: CNOOC H-Share 883HK – Strong SB Flow, A/H Prem, Low Valuation & Multiple Catalysts
- Southbound will close for 3 days due to holiday, we view it as a good time to buy the stock on short-term momentum
- Investment thesis for CNOOC is similar to China Mobile: Strong southbound flows and A/H premium to narrow to support H share price
- Valuation is attractive. Potential share buybacks and trading dual counter (to narrow AH gap) are the upcoming catalysts
A Noteworthy Long Short Setup: Ecopro BM & Posco Future M
- Currently, the market cap of Ecopro BM surpassed Posco Future M. As a result, Ecopro BM is in a position to replace Posco Future M in the K-New Deal rebalancing.
- They are direct peers with a high price cointegration. We should consider using the rebalancing event of this index as an inflection point from a Long Short pair trading perspective.
- The likelihood of Ecopro BM being included in the Solactive Lithium Index in October could potentially increase the expected return of taking this Long Short position more preemptively.
The Mosaic Company: K3 Project and Distribution Market Share Driving Growth – Key Drivers
- The Mosaic Company has its results just around the corner and it would be interesting to evaluate its last financial performance.
- The company had delivered mixed results in the last quarter with below par earnings.
- Besides that, the company has expanded its MicroEssentials offering in phosphates by increasing capacity at its Riverview site.
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