In today’s briefing:
- HK Connect SOUTHBOUND Flows (To 26 Jan 2024); ETFs and High Div SOEs Again BIG Buys, Tech Sold
- A/H Premium Tracker (To 26 Jan 2024): AH Premia Still Near Multi-Yr Wides, SOEs May See New Action
- Merger Arb Mondays (29 Jan) – Shinko, JSR, Payroll, T&K Toka, Weiqiao, Hollysys, Newmark, OreCorp
- SK Hynix & The Dawn Of Custom Memory Solutions
- China Consumption Weekly (29 Jan 2024): Great Wall Motor, Huawei, Alibaba, Mixue, Nayuki
- Lightspeed Commerce: Big Wins with Big Merchants, How Their Strategy Is Changing the Game in Retail!
HK Connect SOUTHBOUND Flows (To 26 Jan 2024); ETFs and High Div SOEs Again BIG Buys, Tech Sold
- A better week for HK stocks as A-shares rebound on National Team buying, a PBOC RRR cut, and potentially other measures to boost the market. Foreigners stopped selling; that helped.
- Southbound saw decent net buying on ETFs late in the week, but otherwise the week was pretty flat in single-stock land – net buying of SOEs, selling of tech.
- Net SOUTHBOUND buying was HK$4.5bn on the week, mostly through Shanghai (interestingly, 90+% of the decent NORTHBOUND buy was also through Shanghai).
A/H Premium Tracker (To 26 Jan 2024): AH Premia Still Near Multi-Yr Wides, SOEs May See New Action
- 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 flows were small positive and NORTHBOUND flows a decent buy. AH premia stopped rising. Chinese shares bounced. SOEs being bought. Tech being sold. Tencent seeing SB outflows, still.
- New article in China Securities Journal hints at new measures on SOEs. Watch this space. Wouldn’t be short SOEs vs Privates on H/A basis.
Merger Arb Mondays (29 Jan) – Shinko, JSR, Payroll, T&K Toka, Weiqiao, Hollysys, Newmark, OreCorp
- 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 – Hollysys Automation Technologies (HOLI US), Probiotec Ltd (PBP AU), Shinko Electric Industries (6967 JP), Genetron Holdings Ltd (GTH US), JSR Corp (4185 JP).
- Lowest spreads – Tietto Minerals Ltd (TIE AU), Orecorp Ltd (ORR AU), Pact Group Holdings (PGH AU), Benefit One Inc (2412 JP), Benesse Holdings (9783 JP), T&K Toka.
SK Hynix & The Dawn Of Custom Memory Solutions
- SK Hynix reported Q423 revenues of 11.31 trillion won, up 25% QoQ and up 47% YoY
- Operating profit of 346 billion won, marking the first quarter of profit following four straight quarters of losses.
- SK Hynix is investing heavily in custom memory solutions driven by AI-related demand. It’s a far better and more profitable business model than the mainstream commodity one.
China Consumption Weekly (29 Jan 2024): Great Wall Motor, Huawei, Alibaba, Mixue, Nayuki
- Great Wall Motor’s revenue increased by 26%, but its profit increased by less than 5% in 2023.
- Huawei’s shipments increased 36% YoY in 4Q23 and was the only company to witness an increase among the top five sellers.
- Jack Ma, the founder, and Mr. Joe Tsai, the chairman, purchased Alibaba’s shares.
Lightspeed Commerce: Big Wins with Big Merchants, How Their Strategy Is Changing the Game in Retail!
- This is our first report on SaaS solutions provider, Lightspeed POS Inc.
- The focus of the company’s management during the previous earnings was on projected future growth, a steady performance in its fiscal Q2 2024, and its key goals for the year.
- The company reported revenues of $230.3m, representing a 25% increase YoY, exceeding the projected revenue outlook of $210m-$215m.
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